Risk Management Industry Applications
Risk management is the implementation of strategies to minimize harm in the workplace. In all regulated industries, risks must be continuously managed in order to ensure the safety of workers, consumers and all other beings in the workplace.
Risk management principles and standards are outlined in legislation and must be adhered to. Tools and applications are readily available for industries to implement them accordingly. Supply chain risk management is based on continuous risk assessment in a supply chain industry, and the measures taken to manage both everyday and exceptional risks. The overall objective is to reduce vulnerability of persons to these risks, and ensure this is the norm.
Essentially, risk management is a means of applying certain tools and procedures in an industry setting in order to deal with risks that may be caused by – or impact upon – logistic-related activities or resources in the supply chain itself.
Risk Assessment in Energy, Mining and Construction
Energy (including power, utilities), mining and construction sectors are among the most high-risk industries in operation. Each of these industries must carry out risk assessment according to a specific set of criteria, including: – Identification of all health and safety hazards (existing and potential) at the site – Consideration of the type of work, nature of the workplace and conditions of work- Ranking of risks as decided by employer and health and safety committee/representative- Rank each hazard according to its assigned level of risk – Analysing root cause of highest-ranking hazards through a systematic process examining the contributing factors and their relationships. – Comparing hazards for the site in question (in order of priority) to others in the same industry. This can be done using a recent risk assessment. This allows the operator to understand and confirm that all hazards have been considered.
Supply Chain Risk Management in Energy, Power Generation and Utilities
Risk management in the energy sector is paramount, and a comprehensive and enterprise-wide risk strategy is imperative. Power and energy companies face significant risks: oil spills or damage to a rig can have severe environmental impact, while blackouts due to mechanical faults, weather, and human error can seriously hinder power supply.
Risk management in these areas must account for price fluctuations, sustainability of energy and fuel reserves, environmental factors, trade, global supplier networks and physical operations.
Risk Assessment in Energy
- Managing Volatility: Methods such as hedging and commodity trading can help to offset price risks and the negative impact of adverse market conditions. Commodity price volatility is typically most important variable in forecasting earnings before interest and taxes for energy organizations.
- Mitigating Underlying Risks: Monitoring and managing credit risks, market risks, operational risks and legal risks involve studying specific elements in the energy value chain, identifying patterns in supply and demand, and evaluation of acceptable levels of risk. Data mapping can allows organizations to integrate available risk data and establish means of calculating these risks.
Risk Management in Mining
Comprehensive risk management within mining must include analysis of engineered systems and earth structures, dam safety risk assessments, human health and ecological risk assessment, and other enterprise risk assessment and management.
In mining risk management, the mine operator’s responsibilities include developing and implementing a safety management system that can identify and eliminate hazards that pose health and safety risks to workers.
Risk Assessment in Mining
Risk assessment in mining construction sectors involve the use of several tools:
- Mine Water Balance: The right balance of water has a major impact on safety. Too much water and too many contaminants may result in non-compliance with the mine’s discharge criteria, while too little water may fail to keep the process plant operating and/or transport tailings to the impoundment. It is essential to establish a probability distribution function of parameters such as precipitation, evaporation and seepage.
Tailings impoundment failure: Weak foundations, liquefaction of tailings; overtopping; piping; slope instability, erosion, washout and excess seepage are all major risks that must be taken into account on a case-by-case basis.
Risk Management in Construction
Construction risk management covers a broad spectrum of risks. Occupational risks and hazards refer to the high possibilities of injury, whether due to worker behavior, methods or technologies used. Weather is also a recurring factor of natural risk. Financial risk is also involved, particularly regarding unmanaged growth, poor sales, inflation, trade, economical issues, and resources. Project risk includes poor project management and/or company policies (or lack of application), poor calculation of time and resources. Natural risks must also be considered, including those that may damage construction sites such as earthquakes, flooding and other events.
Risk Assessment in Construction
Assessing risks in the construction sector involves several tools:-
- Software: Building design, project management, accounting and other assessment strategies are not only more efficient with the right software program, but risk is minimized.
- Training: Educating workers in how to use specific machinery and materials reduces the risk of error.
- Technology: Innovations in technology and methods has mitigated and sometimes even eliminated certain risks in the construction industry. For example, poor weather can now be handled with the use of prefabricated building modules. Modules also help to reduce construction time on site. Safety hazards are also reduced with the use of drones, while building information modeling can help to identify and minimize risks before they become real.
SpotSee Risk Management Products
SpotSee’s range of impact sensors and recorders are essential tools for preventing mishandling.
Impact monitors such as the SpotBot Cellular, ShockLog Satellite and ShockLog 298 are designed to assess for potentially damaging impact events, allowing supply chain managers to identify pending problems and take action.
Similarly, temperature recorders such as ColdMark and WarmMark Temperature assess the potential for problems during the shipping and handling stages of the temperature-sensitive cold chain. Check out our risk management products and more!