Module 1 Section G Flashcards
Resiliency
-ability to return to a position of equilibrium after experiencing an event that causes operational results to deviate from expectations
Risk Management
-identification, assessment, prioritization of risks followed by coordinated and economical application of resources to minimize , monitor, and control probabolity and/or impact of unfortunate events or to maximize realization of opportunities
-uncertain outcomes can be negative threats/vulnerabilities or positive opportunities
Risk Tolerance
-org’s or stakeholder’s readiness to accept a threat or potential negative outcome in order to achieve its objectives
-related to nature of business
-affected by org’s leadership style, culture, resources
Risk Register
-report that has summary information on qualitative risk analysis, quantitative risk analysis, and risk response planning
-register contains all identified risks and associated details
Risk Management Process
-first 3 steps involve identifying risks, assessing them, and responding to them
-4th step reflects implementation of any risk control measures that mauy have been chosen
-5th step - feedback loop to ensure continuous improvement of the risk management process
-entire process depends on 2 activities
- continuous communication and feedback
- monitoring and assessment - may be periodic review of preparedness to respond to risk and after-action debriefs that examine effectiveness of control measures
pg. 1-234
Failure Mode and Effects Analysis (FMEA)
-method used to evaluate a design process to identify and rank potential failures
-looks at product or service failures and rates them for:
1. probability of failure
2. degree of severity
3. likelihood of escaping detection
-probability of detection value is likelihood failure will escape detection
-higher risk priority number (RPN) –> most risk impact
Operations Risks
- **external **e.g. pandemic affects market supplu and demand (COVID)
- environmental e.g. natural disasters disrupt transportation in supply chain
- **technical **e.g. information system fails or is breached by an external party
- **organizational **e.g. employees’ health is hurt/helped
Risk Matrix
-formed by 2 axes, for probability of occurrence and magnitude of impact
pg. 1-240
Risk Acceptance
-decision to take no action to deal with a risk or an inability to format a plan to deal with the diesk
-common response when risk has low impact
-may be chosen when no effective response can be devised
-orgs with high risk tolerance may use this method more often
Risk Avoidance
-changing plan to eliminate risk or to protect plan objectives from its impact
-often used when impact of a risk is considered too severe to tolerate
e.g. health risks for using particular material in manufacturing may have been proven in several reputable studies
Risk Mitigation
-reducing exposure to risk in terms of either its likelihood or its impact
-may be used when impact and probability are moderate, when possibility of success in mitigation is high, or when costs of mitigation are low relative to impact
-mitigation approaches sometimes use redundancy (backup capability to reduce effects of breakdowns)
Risk Transfer
-transfer of all or some part of a risk to 3rd party
-when org. insures its property, it is transferring the risk to another party, the insurer
Example: when retailer chooses 3PL to deliver goods to customers, it transfers risk associated with owning truck fleet, employing drivers, operatinf fleet
Contingency Planning
-process for creating a document that specifies alternative plans to facilitate success if certain risk events occur
e.g. what to do if a chemical spill happens –> teams will don protective gear kept on hand, shut down ventilation and drainage systems, follow procedures for notifying supervisors
