How to Define and Build a Proactive Risk Management Plan
There’s an increasing rate of change in the weather right now. From hurricanes to earthquakes to tropical storms, they are all a force of direct urgency with consequences on both commercial and social aspects.
Now more than ever, it is important to consider how one process has an impact on the next. With increasing oversight on compliance regulations and standards, it is easy to stay in line with regulatory overhead. However, when disaster strikes it is not as simple without the right tools.
Organizations today are more complex and their global footprint on locations around the world, coupled with mergers and acquisitions, requires the utmost attention in terms of safety and compliance. This is partly due to disparate trends occurring from the environment.
A company must be able to address the impact on quality, compliance and safety on both a local and national level. Technology can help a company maintain a compliance while facing complexity and change. With automation capable of critical compliance needs, companies can streamline emergency contingency preparedness plans in the event they are necessary.
When disaster strikes, a company could lose any number of locations, halt production, lose revenue and employees could lose their jobs so it is critical that plans are set in place for critical measures before events strike to keep businesses, employees and the public safe.
Environmental Health and Safety (EHS) Management Software aids in creating:
A Centralized Location for Emergency Preparedness: A crisis can strike in the matter of minutes. Having the right tools helps companies stay on track and soften the aftermath. In the event of a natural disaster, having a crisis management application allows documents to be sorted out in a timely manner. Having a centralized location for all documents related to a specific crisis type including contact information, necessary procedures, environmental protections, data transfers and notifications with different elements helps prepare for the blow.
A Workflow-Enabled Management of a Crisis: Having the tools to ensure who is responsible for what allows users to rely on the system instead of panicking. EHS software solutions offer unparalleled workflow capabilities with intelligent business rules that help drive this process. When companies incorporate a workflow-based crisis management system, they can initiate the process and ensure the right people will be there to help manage the situation, especially in the event things escalate. The same will go for evacuating and switching locations, which is accounted for as well.
Drills and Preparedness Activities: Conducting drills throughout the year is important so when disaster does strike, your team is prepared. However, it is easy to get caught up in the day to day routine. With EHS Management tools, from the simplest fire drill to a major natural disaster, employees can be prepared. Crisis Management provides the ability to conduct regular drills on various types of disasters, and measure performance on them. The better prepared you are for an event, the easier it is to ensure that if the real event ever occurs everyone is prepared.
Integrated Training and Document Control: Having the right procedures and instructions in place to ensure that all areas are secure in the event of a disaster helps companies remain in tune with corporate responsibility as well as social.
It is important to have a preparation and contingency plan in place in the event of natural disasters because although these events cannot be avoided, the damage of the outcome can potentially be alleviated or at least cleaned up faster.
However many records there may be, keeping them in a controlled environment is critical. Linking all relevant documents to emergency plans ensures that employees are knowledgeable on the possibilities and from there can be trained on what actions to take. Integrated processes are what drive any management system. Centralizing processes within Document Control and ensuring the processes are properly trained on is key to ensuring a speedy recovery to a crisis. Emergency situations happen, but with emergency preparedness plans it is possible to plan for the best probable outcome.
Revisions and Change Management: Plans change, it happens. With new procedures and potential emergencies, it is important to have the ability to initiate change as quickly as it pops up. This involves a dedicated workflow to allow proper personnel to review and approve such changes.
When it comes to emergency management, chancing outcomes and placing them on a whim, is not the most environmentally responsible tactic. With a system in place that facilities an intelligent workflow, change management can change outcomes and even save lives, especially in times of danger.
Change Management helps decide who needs to be involved—who is leading the effort? Who needs to be involved in order for the program to be successful? Who knows the most about the condition? It helps determine the vision and communicate the benefits regularly. Collaborating on the ideal future helps keep employees on the same page, but also guides the project and makes it possible to explore different options to achieve the same goal by managing the processes.
Change Management can help streamline the transition and control the flow of work in which deadlines are managed to keep actions on track. Finally, it helps address the human element. When talking about devastating events, it is important to gauge success or failure and consider the human element. This is a huge variable, so anticipating the human element may help companies prepare better. Being prepared for different possibilities is the best route for success.
Taking a Proactive Approach
Some companies don’t think about disasters until they happen. Then they are then left scrambling to recover. Mapping out possible scenarios with contingency plans before they happen helps you to stay in control.
Some key steps to building a weather-related risk management plan are to:
Identify key suppliers and stakeholders: Some of the most important things to assess in an emergency plan are the location, the method of transportation and how this may impede delivery, if the operation can continue as normal if the delivery is delayed or cancelled and of course, the severity and frequency of any possible events. It is also important to assess the weather-related risk.
Risk Management tools like the Risk Matrix or Bowtie Model help determine quantitative value for each risk including supplier, stakeholder, environment and each scenario. For example, a snowstorm that may only interfere with business hours for a day or so would be much less devastating than a major catastrophic hurricane or earthquake.
Use Data to Your Advantage: A contingency plan prioritized by risk level ensures that the risks are well thought out. They allow administrators to evaluate and reevaluate using the risk tool to see the impact of change.
Take the Subjectivity Out of Risk: Applying risk management to weather-related events allows companies to create a strategy. Although it may not protect companies from everything, it can streamline an efficient decision to create the ultimate outcome.
Of course, at the end of the day, tools are only tools but humans are not recording machines and that is how risk tools help. The events humans see and analyze with attempts to reconstruct are not as practical as we’d think.
- Patterns can be seen in random events – looking for a random order that cannot be found subjectively.
- There’s only a basic understanding – inserting only our understanding of a process, instead of the facts which leads to a subjective conclusion.
- Group-thinking leads to a similar consensus – great minds think alike. Therefore, it is easy to become influenced by the opinions of others, it’s human nature!
- Including risk tools in operational compliance – in quality, EHS and compliance, risk is found throughout business operations.
Looking at these areas, a company may find areas where risk assessment makes sense and with viable tools can be used in areas like:
Production Planning: As a company defines and designs processes, building risk management into an operational context ensures that the process is benchmarking risk along the way. It enables an organization to build risk management into not only change, but around Failure Modes and Effects Analysis (FMEA). From a safety aspect, a company having plans built around job safety and incorporating this into each job step ensures what the overall risk really is.
Manufacturing: Companies are always producing data. Collecting the data, however is another story. Including risk management into operations allows companies to collect production data and help uncover trends in production events, while gauging the severity and frequency. From an EHS standpoint, incidents and accidents happen. Risk Assessment and management tools in the manufacturing process help serve as a decision-making agent to help filter the severity and criticality of such events which in turn make better and more informed decisions.
Post Production: Fostering continuous improvement helps drive business to be more efficient and operate in a more streamlined and compliant manner. When adverse events are threatening sustainability, risk tools can help build improvement initiatives and filter data by risk to ensure the most critical events are handled first.
Risk Management can also be built into the supply chain which creates a holistic approach of communication and allows a company to determine where there is higher risk. With compliance moving toward a risk-based focus and the occurrence of natural disasters, it is important to get involved and be prepared.
Focusing on the right tools will take a certain level of subjectivity out of the equation, by virtue of historical data and quantitative tools. Many companies will assemble a “Risk Team” to ensure that decisions are made properly by fine-tuning their risk picture to create accurate results. Risk is common and with risk terminology, a common understanding toward complex issues can be built and interpreted within all levels of the organization.