Behind every successful risk management is a routine- an example from BP supply chain risk

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Repeated success in risk management is not by chance but because the organization has a routine in place.

There are some key data that are captured, the key data points are reviewed and action is clearly laid out and communicated both down the organization and across. Sounds simple but seems hard to do particularly in turbulent times when individuals just want to hold on to their jobs.Here's an example of how you set up a supply chain risk routine for say a bottleneck item. Bottleneck items are those that may not cost much but if they fail your costs can skyrocket (think of the BP blowout preventer which is ultimately costing a great deal to BP, the Gulf  etc.). A simple routine like:

  • What is the bottleneck item?
  • Are the quality specs clear and is there enough tolerance at the inspection stage?
  • Is there a feedback routine when the item is in use?(think of the chunks of the valve that was floating up)
  • Is there a rapid supply response?
  • Is the process clearly defined for each step and are individuals clearly identified. You can think of at least four functions (procurement,quality inspection,production,finance) and multiple contractors as in the case of BP.

In summary, risk routines are never  within one location, department or organization but serve the purpose of smoothing out the organizational silo problem.

Can it be done ? Sure  and at real low cost and quickly -if you decide to actively manage risk. Contact StratoServe.

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