Achieve operational excellence and continuity with a standardized operational risk management program.

Aberdeen_Optimizing_Organizational_Performance_Operational_Risk_Management_August2017_report_image
Unlike other types of risk, operational risk is not something that is willingly incurred or revenue- driven. In addition, a focus on personal safety is not enough to mitigate operational risk. For example, incidents due to machinery injury, corrosion, metal fatigue, or fires, have demonstrated the necessity of concentrating on process safety. Indeed, companies can improve operational risk management by employing the right skillset to establish and enforce appropriate risk management processes and strategies.

6 Steps To Operational Risk Management 

lign

Establish Contingency Policies and Escalation Procedures

Risk management is an ongoing process throughout the life of a manufacturer. As a part of documenting and preventing risk, lessening the probability of adverse events requires setting a contingency plan that is established through company policy and includes a series of actions or escalation procedures should an adverse event occur.

Standardize Risk Assessment across the Enterprise

Companies must define their propensity for risk in a manner that accounts for workforce protection, asset management, environmental impact, and business implications. To some extent, risk assessment is subjective based on the individuals view of an event. Establishing a procedure that removes this bias will help the entire organization understand the severity of risk levels.

Adapt technology that fits your people and processes

Add solutions that are easy to use and integrate with your current process. Keep in mind that any new solution will require training, which should be considered a critical part of integration. Use simulation to reduce errors and enable functionality that fits with the existing process.

Align operational data with financial data

Understand the financial impacts of adverse events by aligning operational and financial data. The bottom line for every manufacturer is to remain profitable. That means understanding the financial impact of various scenarios. With this understanding of the operational link to financial impact, manufacturers can prepare and hopefully prevent the financial damage of an adverse event.

Fully commit to the process

A successful implementation of an effective operational risk management program requires buy-in from top management right down to associates.

Keep everyone on the same page

Communication across R&D groups, third-party vendors, and manufacturing will ensure success.