Operations Management

1. 1

2. 2

3. 3
Performance

4. 4

5. Goals of SCRM
embedding risk management within the
function of supply chain management.
ensuring appropriate resources,
systems, facilities and infrastructure for
SCRM, etc.
Aims of SCRM
6
4

6. •Balanced decisions are possible,
including reference to risks.
Operations that are too risky or financially
unsound are avoided.
Risks are identified before events actually
occur and create a crisis.
Early assessment of risks allows for
better planning, prioritization and
allocation of resources.
Imaginative responses can be developed
when there is enough time
Alternative responses to risks can be
designed, evaluated, compared and
planned.
BENEFITS
OF RISK
MANAGEMEN
T
5

7. Steps in Risk Management
Preparation
Monitoring
and Control
Identification
to give a list of risks
Analysis
to prioritize the list of risks
Response
to design a response for each risk
8
7
6

8. Some Principles
of SCRM
Principle 1:
Diversification
reduces risk
Principle 2:
SCRM must
be proactive
Principle 3:
SCRM is always
cyclical rather
than linear
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9. Plan-Do-Check-
act cycle
PLAN DO CHECK ACT
8

10. EXAMPLES OF RISK
MANAGEMENT SOFTWARES
PSI2000
for health and
safety risks
KWI
for the energy
sector
Bancdirection
s
to help financial
institutions
assess
investment
@RISK
which is an
add-in for
spreadsheet
s
9

11. S-Crisk Anal
Implemented by
logistics
companies in
Eastern Europe
Develops a detailed
map of the logistics
activities
Developed by
Szchewski
Software
10

12. Guidance given by the software
Probability of Risk
Occurance
Scale of Potential
Threats
Conducts extensive
What-If-Analysis to
select most
appropriate
Nature of the risk to
the organization
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13. Summary
Risk management
originally developing
through gambling,
insurance and actuarial
studies. this role has
developed into other
business functions
including logistics
The supply chain is
particularly vulnerable to
risk, and supply chain risk
management is clearly
growing in importance. The
overall aim of SCRM is to
ensure uninterrupted flows
of materials, but there are
many more immediate
goals for good SCRM.
It is difficult to describe actual
procedures for SCRM such as the
need to balance operational
efficiency and risk, take a proactive
approach to risk management
12

14. Case:
Tornado
IPT Case
Study
The Tornado Integrated Project Team (Tornado IPT)
is part of the UK Ministry of Defence’s (MoD’s)
Defence Equipment and Support (DE&S)
organisation.
It is responsible for the provision of logistical support
and capability development for the RAF Tornado F3
(Air Defence Variant) and the GR4 (Ground
Reconnaissance) fleet until 2025.
13

15. Safety risk management has always
been of paramount importance at
Tornado IPT and it was recognized
that a similar rigor needed to be put
in place to manage risks and issues
that could impact all areas of IPT's
business.
Risks could be like
Carrier delays and non
performance.
Failure in frequent to & fro
movement of various equipments &
parts
Failures in Factory
Acceptance Test, Trials,
Display/ Exhibition
15
14

16. Solution
•After a comprehensive evaluation and assessment
phase, Tornado IPT selected Predict! Risk Controller as
best meeting its requirement.
•Risk Decisions have worked closely with Tornado IPT to
configure Predict! and develop custom templates for
management reporting.
•Risk Decisions provided regular coaching and support
to ensure that every member of the team has the latest
risk management skills.
15

17. •The decision-making
process is now risk-
based, ensuring risk is
managed at the level
where it can be
influenced.
•Predict! has aided the
Tornado IPT in working
more effectively with
industry partners and
customers alike, with
access and visibility of
the shared risk register
being provided to all
stakeholders.
•An upgradation to this
IPT has provided
greater visibility and
improved management
of cross platform risks.
•The assistance
provided by Risk
Decisions has played a
major role in helping us
develop confidence in
our forecasts.
BENEFIT
S
16

18. EXAMPLE 1
HYDRO
POWERPLANT
CONSTRUCTION
■ Identification - A major risk in this case is delay
of schedule which is generally caused due to
rain.
■ Analysis of risk - We analyze various historical
data, forecasts, etc. to find that there is an
overall possibility of 10 days of rain.
■ Ranking the risk - Then we rank the risk on the
basis of risk potential which is the product of
risk probability & risk impact.
■ Treating the risk - We calculated loss of 10
working days and planned things accordingly.
■ Monitoring the result & reviewing the risk. 17

19. (C) Risk Potential = Risk Probability (A) x Risk Impact
(B) Risk Impact= (𝑎*𝑛/𝑁*𝐴) × 100 (Where a= constant
expressing the weight assigned to each response from 1 to
5, n= impact of each response, N= total number of
responses, A= highest weight (i.e. 5 in this case)
(A) Risk Probability= (𝑎*𝑛/𝑁*𝐴) × 100 (a= constant
expressing the weight assigned to each response from 1
to 5, n= probability of each response, N= total number
of responses, A= highest weight (i.e. 5 in this case)
18

20. 19

21. Treating the risk – Then we
treat the risks on a priority
basis first dealing with the risks
in the red zone with high
exposure.
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22. ■ Monitoring the result &
reviewing the risk:
Risk management is an ongoing and
iterative process which should be
conducted throughout the lifecycle
of a hydroelectric project. We will be
monitoring the results of each
iteration, review the methodology
and better it for further mitigation
of risks on the next iteration.
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23. THANK
YOU