Operational risk tries to identify and manage risks for people, processes, and systems; it is a discipline and behavior that needs to be put in place. As such, a framework to control the process is recommended. The framework is a set of integrated tools, processes, and mitigation strategies that assists a company
in managing, measuring, and monitoring operational risk.
- Visibility, Optimization, and
In this blog we will discuss the execution process.
In order to be successful in mitigating risk, management must formulate a plan for applying the selected controls, and provide the necessary time, materials, education, and personnel to implement the controls and measures.
Having a well trained work force is essential to operating effectively & efficiently in today’s operating environment. The work force has to be given the tools
(training) & information that are needed to do their jobs safely. Given the large amount of information that a modern workforce needs to be kept up to date and re-educated on, class room training is becoming cost prohibitive. An additional concern is the effectiveness of training, , classroom training is generally
less effective than “hands-on” training and training too early is less effective than training “at the time of need”. Consequently e-learning, self-study programs,
and other virtual training models and platforms, are becoming part of an organization’s education and human resources landscape. These courses, along with regulated exams / certifications are part of the workers individual skills profile. These profiles are used in allocating the work to the appropriate employee (e.g. ensuring the employee has the correct skill to do the job).With the amount of technical information required to be given to the average worker (e.g. engineering drawings, mechanical procedures steps, operational instructions, and safety instructions, to name a few), companies are turning to solutions that integrate this information in work packages that can be presented to the worker in multiple ways (mobile devices, paper, fixed displays, 3d modeling, etc.). Having all the required information at hand is an essential part of risk mitigation strategies in a manufacturing environment.
Even with all the best assortments, mitigation strategies, and training in world implemented, it is not possible to avoid all risk, incidents or operational risk events will occur. These events and their impact need to be managed. The information contained in these events identifies potential areas for improvement, current risk exposures, and are part of the source information that makes up the key performance indicators that management relies upon for decision making.
Usually such a process (the management of incidents) has the following characteristics:
- Incident Detection & Recording
- Classification and Initial Support
- Investigation & Diagnosis
- Resolution & Recovery
In a lot of cases the solution that manages incidents can also be used to record safety observations, and other events (e.g. near miss – an event that could have caused loss or injury, but for some reason did not). These non-incident events are also important for defining a basis for leading indicators, to reduce future losses and prevent unwanted events.
Fig1 : Incident and Safety Observation Recording
Fig 2: Near Miss Display and Alerts for an Area Manager
Fig 3: An example of an Incident Report
This posting is the eleventh of a series of blogs discussing various factors of operational risk management as it pertains to manufacturing organizations. Please feel free to comment and discuss this series.
For those of you just joining this blog here are links to the earlier postings
Part 6:ORM- Framework – Governance
Part 7 ORM- Framework – Planning