Taiwan-based Macronix produces mainly Non-Volatile Memory (NVMs) storage devices, such as flash drives and read-only memory (ROM) chips. JLT had the opportunity to speak to Macronix’s risk manager, Alex Lin, to find out how JLT and the insurance industry are matching up to Macronix’s risk management expectations.
Macronix is the leading integrated device manufacturer in the Non-Volatile Memory (NVM) market, with large clients like Nintendo, Foxconn and SAMSUNG etc. What is your strategy to keep your lead?
The high quality of our products keeps our clients coming back, but it’s also about maintaining a clear understanding of the value we provide through our products. This knowledge of our value-add has allowed us to remain relevant in our competitive industry.
To distinguish ourselves from the competition, we emphasise research and development (R&D) by investing an average of 15-20% of our annual turnover into this area of our business. A portion of our research activities are not bound to contributing to the company’s performance, and this gives our researchers the creative space to develop cutting-edge technology.
I would also highlight 3 areas of Macronix’s business that give us an advantage:
- We embrace the benefits of automation, such as its ability to introduce a higher level of discipline to our work.
- Our wealth of accumulated data. Macronix has been accumulating data for 29 years, which gives us the edge over our competitors when it comes to harnessing the potential of Big Data.
- We choose how we wish to distinguish ourselves from competitors. We’ve always strived to make pathways into the most advanced fields, including aerospace and defence. Now, Macronix is the only Flash Integrated Circuits providers in the field of aerospace and defence in the world and, as such, we have many customers in the United States and Zhongshan Research Institute in Taiwan.
What are the top risk concerns that you have at the moment?
It is a challenge to stay in this leading position and I believe our commitment to R&D differentiates us from our competitors.
As a risk manager, I’m always concerned about the risks that come with day-to-day operations and our bigger aspirations. Some of my top concerns are:
- An economic slowdown coupled with a slow recovery. This is a major risk that could decimate our business if we don't navigate through it wisely.
- Failure to innovate and meet our customers’ needs. We constantly invest in Research &Development, yes, but technology changes rapidly and we have to keep coming up with better, relevant products to catch up to our customers’ evolving needs.
- Failure to attract and retain top talent. I think this is true for most industries, especially very competitive ones. Talent can move to competitors easily if we are not strategic or doing enough to remain attractive to them.
- Property Damage and resultant Business Interruption loss. Macronix deals primarily with tangible products, so this is a risk that I am particularly concerned about. Thankfully, a solid RM taskforce and risk-transfer methods like insurance give me some peace of mind.
- Manufacturing Errors & Omissions loss.
What do you look out for in the good broker and risk consultant?
It is important for brokers to have a robust number of talents in their organisations who listen to their clients’ requirements. Risk consultants need to have a deep understanding of the clients’ operation, as it enables them to better help the risk manager’s strategies and work.
Is the insurance industry responding adequately to the changing needs of their clients?
I don't think so. More can be done in Enterprise Risk Management (ERM), Risk Consultancy and Loss Prevention Engineering to cater to clients’ requirements. Insufficient insurance education of clients has led some businesses to misunderstand or deprioritise insurance. There are also inefficiencies in placement and claims.
What can insurers and brokers do better to help risk managers?
Train more ERM Risk Consultants, Loss Prevention Engineers, Retail and Wholesale brokers, etc. to effectively deal with risk management (RM), insurance and claims issues. Additionally, they should be assisting Risk Managers to promote RM and insurance concepts to their companies.
Communicate more with Risk Managers. That is the only way they can deliver service that blows our expectations out of the water.
What advice would you give to risk managers today?
It is vital to obtain high-level/ senior management support. This will help with establishing a formal risk management task force. Either way, for every RM meetings, set out clear objectives. These can be platforms to discuss suggest RM ideas and systems.
I am a firm believer of holding regular, targeted RM education and training. It is always advisable to obtain the risk consultant and Loss Control Engineers’ assistance, especially when a crisis strikes, such as an earthquake or any other loss event.
What is next for Macronix — what new technologies do you hope to develop in order to adapt or capitalise the changes brought about by the Fourth Industrial Revolution?
We wish to strengthen our Big Data capabilities, this means better data collection and utilisation. Of course, we want to continue investing in R&D.
For further information, please contact Graham Edwards, Regional Director of Sales and Marketing at Graham_Edwards@jltasia.com.