Inside Risk with Carol Arendall, US Foods
US Food's vice president of risk management's job might better be described by the proverb, “If you can’t stand the heat, get out of the kitchen.”
By Eric Gilkey
With approximately $22 billion in annual revenue and 25,000 employees, US Foods provides products and services to restaurants and other commercial businesses on a staggering scale. The company lives by the motto, “keeping kitchens cooking,” but Vice President of Risk Management and CLM Fellow Carol Arendall’s job might better be described by the proverb, “If you can’t stand the heat, get out of the kitchen.”
Q. Talk about your career and how you came to work in risk management at US Foods.
A. I started my career right out of college in corporate risk management as a risk analyst, and I have stayed in risk management my entire career. Most of my time was spent as a risk manager for several large retailers. When I was offered the opportunity to join US Foods in 2009, I jumped at the chance knowing that my years in retail with a broad claims background would serve me well in this position.
Q. What is your overall approach to risk management?
A. I like to think my approach to risk management is one of embedding risk management into the business by advising and collaborating with our internal partners. Our goal is to balance the need for leaders to be empowered to take action with the need to fully examine the risks associated with a request and offer mitigation suggestions before proceeding. As a result, risk management has a high degree of visibility within US Foods, and internal partners collaborate with us.
Q. What is your day-to-day life like as vice president of risk management?
A. We have 25,000 employees and operate a fleet of 6,000 tractor trailers, so claims management is a big part of my day-to-day activities. When an employee is injured on the job, we want to ensure that they receive the best possible medical care. We partnered with JND Healthcare, a nurse case management vendor, to do telephonic nurse triage at claims inception to be sure that we are properly navigating the initial medical aspect of the claim. For simple claims, we may have a nurse on the file for 10 days. For more complex cases, we keep the nurse on the file for the duration to ensure appropriate medical care.
Q. Describe some of the risks you manage.
A. The two most important risks are the safety of our employees and of other drivers out on the road. Our drivers log 240 million miles annually and we want every mile to be a safe one. Nothing is more important than safety.
Q. What has been your biggest risk-related success?
A. We have had tremendous success on claims closures by driving early case resolution. Our in-house litigation team identifies cases early on and targets them for alternate dispute resolution before we go too far down the path of discovery. Our in-house claims specialists also drive workers’ compensation claims closures with weekly competitions to see who can close the most claims each week.
Q. Have you ever taken a risk and turned it into an opportunity?
A. I regularly go out into the field to solicit feedback from our operations group to see how well the risk management team is meeting their needs. They have provided constructive feedback that we have incorporated into our claims management process, which has resulted in improved claims management for the field and improved claims performance on the claims portfolio. You have to be nimble and willing to change your process to meet the evolving needs of the business.
Q. What kinds of claims do you encounter?
A. The average US Foods warehouse selector lifts 30,000 pounds per shift—the equivalent of two killer whales—while the average driver lifts almost 16,000 pounds a day. Not surprisingly, we see a number of sprains and strains. Our safety team created a stretching program for our warehouse workers that resulted in a 10 percent reduction in sprains and strains in the first year. We have now deployed a similar program for our drivers.
Q. What role, if any, do predictive analytics play in managing risk at your company?
A. I am big proponent of using data to help improve performance. We know down to the day and hour of when workers’ compensation or auto claims are more likely to occur, and we know which claims are more likely to result in surgeries. We then use our claims data to feed back into our safety and risk mitigation programs. We are more focused on eliminating the risk of claims than predicting claims outcomes.