1. Supply Chain Risk as a Potential Performance Enabler
6th Annual
Global Supply Chain Excellence Summit

2. Industrial Supply Chain
Steve McElhiney – EWI Re

3. Contran Controlled Units
Contran Corp (Private Corporation)
NL Industries (NYSE & NL)
Valhi, Inc. (NYSE: VHI) Holding Co
Kronos (NYSE: KRO) Chemicals
CompX (NASDAQ: CIX) Security Products, Marine
Keystone (Private Co) Steel and Wire
Basic Management, Inc. Utilities and Land Development

4. TPIC Business Model – A Risk Opportunity
What is a Captive?
Risks into Captive
Process
Self Insurance Use Reinsurance to Manage Severity Risk Customized Coverages
Invest Reserves
Use Intensive Risk Management to Lower Losses
30 Year Captive, Capital has Grown at 15% CAGR
Global Property
Global Casualty
Avoid WC
No Third Party Business (Legacy)
Opportunistic Uses
Custom Coverage
Analytics & Exposures
Reinsurance Placement
Claims Processes
Manage as a Prototypical Insurance Company

5. Supply Chain Risks – Our Story
Industrial Conglomerate – global (North American & EU)
Trends
US Industrial renaissance due to technology and automation
Re-shoring underway
Shortages in skilled labor employment (a risk)
Protectionist policies (a global risk)
Risks
Inter-connected Supply Chain (ERP)
Traditional CAT perils (a changing threat environment)
Cyber risks (connected technologies)
Opportunities
Automation and technology efficiencies
Holistic Risk Management coupled with traditional “blocking and tackling”
Supply Chain risk alignment

6. Supply Chain Risks Fire protection and Business Interruption losses
Traditional Risks
CAT – the “frequency of severity” trend
Exposures – North America – EQ, Wind, Tornado/Hail, Flood; EU – Flood
Industrial Risks
Fire protection and Business Interruption losses
Workers Compensation
General Liability – difficult US tort environment
Supply Chain inter-dependencies
Contingent Business Interruption
Emerging Risks – All through the Supply Chain
Cyber
Terrorism
Pandemic

7. The Internet of Things The generally unknown revolution in progress
Immensely improving industrial processes
Defined:
Embedded Objects connect to internet
Embedded sensors
Real-time data exchanged
History and the acceleration of progress - why

8. The Internet of Things
A “game changer” for capital intensive industries
Improved decision making
The risk nexus
Safety sensors
Insurance: movement from a historical statistical based model to individual fact based pricing – real time data vs “inspections”
Cost and efficiency improvements
Distribution/logistics/Fleet management improvements

9. The Internet of Things
Machine communications and potential “machine learning”
Industrial optimization
Proactive asset management
Improved infrastructure integration

10. The Internet of Things - Risks
Partner dependencies (“just-in-time”)
Cloud dependencies
Cloud is secure; however, individual apps that are cloud based may not be
Mobile device dependencies

11. 6th Annual
Global Supply Chain Excellence Summit
Thank You!