In all businesses there are risks; from the small service delay to the major catastrophe!!
Unfortunately most of us think of risk in terms of the major disaster and by the way its a professional risk managers responsibility to calculate and determine what ‘could’ happen.
This kind of thinking is costing the supply chain a lot of wasted time and resource. For the sake of a few minutes, lifting up our heads and looking beyond current challenges, we can very easily use the concept of risk management in quick and easy ways to avoid future issues in the supply chain or the product..
Identifying a potential hazard for your product, social/ environmental compliance and supply chain operation can be done through various team meetings. Once hazards have been agreed then the following elements in determining the risks are vital to unlocking the potential benefits:
How Serious is it (death being the most serious)
Frequency ( how many times it could happen)
Can it be detected ( Can the hazard be seen)
Formal risk analysis has mainly been the domain of the engineers and number crunchers and has not been used enough in practical ways by operational teams. Its worse in the UK where the above 3 elements have not always been applied, resulting in some poor and very often media ridiculed decisions in governmental departments. (no more conker fights in the schoolyard).. This has resulted in 40% higher costs for UK health and safety management when compared with Germany.
All parts of the supply chain can on a daily basis conduct simple but formal risk analysis. They can easily determine the hazards and then using the above 3 elements calculate the risks and what preventive actions if any, are to be prioritised and implemented!! This need not be complicated, time consuming or costly to do!! The savings and improved service levels will be tremendous in terms of; improved cost management, vendor efficiency, employee job satisfaction and customer service levels.
Find the best, simple and effective method for your organisation to conduct risk analysis; try not to use the engineering and number crunching solutions. Its probably best to avoid the methodology used by UK government departments!!
As part of our Good Business Growth training offers, RVA conducts PRAS – Risk Analysis training. With all our training courses, this is conducted in a very practical and fun way.. Please click here for more details.