Did you ever notice that there was a difference between risk management and risk assessment?Most people aren’t sure, but there is.
In my years in Supply Chain, strangely many people did not discuss risk within their decisions made or risk that may occur in their surroundings. I’d say this came down to one major element and that element was time. But more and more, we see the demand for safety and the demand for cost reduction, which in itself demands time spent on assessing risk within your supply chain. Time is also not an excuse for putting aside safety related risks.
Note the difference.
Risk assessment is merely categorising and assuming something will go wrong and thereby working towards improving the likely hood of the risk, by reducing the likelihood.
Risk management is typically where something will occur, but your efforts are to either remove or reduce its impact to the area you manage.
Risks come in a few forms to name a few.
If it is going to happen in the future, you need to risk manage the problem because you know it will occur. The order of preference is to first manage the risks that you know will happen or ‘Risk Manage’ them. If you want to be a great Supply Chain leader though, adding a problem to a risk management spreadsheet will take you a long way to impressing your boss, especially if you attribute a possible cost to it. You just need to make sure you mitigate it though. (Hint – Under promise, over deliver)
If you are unsure of when the risk will occur, then you need to place it on your to do list, but it is a secondary element that requires your focus, not your primary. Once you get around to the risk that may occur in the future, then you can risk assess it and work an order of priority.
Yes, it is a tragedy when any one gets hurt in the workplace or worse. But if something has not been ‘risk assessed’ it my mean that no one knew the event may actually occur. No one knows what they don’t know. So don’t feel threatened if something that was unforeseen was not first risk assessed.
Once an injury or safety breach does occur though, it should now automatically be placed through a risk management process, it may not be executed right away, other risks my take priority. but it is something that needs to be ‘managed’ and not assessed to its likelihood of occurring.
Within your supply chain though to manage risks, you too can do a few quick things to improve your business.
Written by
Matthew Wragg; MAEZ
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