The term operational risk is defined as the continuous cycle which involves risk identification, risk assessment, management, and execution of appropriate risk control strategies, that results in the reduction, avoidance, or acceptance of risk. In its simplest form, the management of an operational risk consists of identifying a set of activities that carry a risk-related risk with them (e.g., a company that manufactures a specific product will be required to implement a safety measure for the product when it leaves the factory) and making certain that those activities are carried out in compliance with the legal requirements and/or regulatory policies and procedures in force. See drivingoe.com. Operational risk management has been applied in various fields as a way of reducing and eliminating operational risks associated with those fields. For example, there have been a number of studies and projects in different industries to examine the risk of a company using a particular chemical in its production processes and to determine the extent to which there is a chance that the chemical may present a danger. As part of the study, the company's manufacturing process is subjected to a series of tests to determine the probability that it will produce a hazardous substance. The tests show that a significant amount of the risk is due to the chemical itself, not to the company or the process it uses. As a result, the company can make changes that reduce the likelihood of the chemical occurring and therefore lower its potential risk. Those changes include changing the procedures by which the chemical is made and stored, making it more difficult to obtain a chemical that is more easily obtained. Another example of an operational risk involves the requirement of a safety measure that must be followed by all employees who use or access a hazardous material. However, the amount of safety measure required often exceeds the ability of the company to meet the requirement. There are also situations in which the requirements are so stringent that the company would not be able to meet them and therefore could not reduce the possibility of a hazardous substance being used or obtained. Operational risk management focuses on the risk of those activities and procedures that can lead to an increase in the risks associated with the product, but does not address the risks of those activities and procedures that are responsible for reducing the risks. For example, if a company has a safety plan in place that includes a requirement that a safety gear must be worn at all times when operating machinery in a plant, but fails to enforce that requirement, there is no reduction in the risks associated with that machine. Similarly, the risks of an employee failing to follow a safety rule or procedure, especially one that requires that employees should never climb over or operate in a dangerous area, are ignored and are not considered in determining whether or not the safety risk of that particular activity is a cause of the increase in the risks. For more click this link. Safety is an issue of utmost importance and is a vital concern, but many companies do not recognize the importance of reducing or eliminating safety related risks. There are some examples of risks that are considered in the context of operational risk management: a business will be required to provide information concerning the hazards of equipment, chemicals and other items, but the company must still demonstrate the benefits associated with a product in the event that a hazard is present. Additionally, a business will be required to provide information about the safety of a procedure, but the business will not be expected to demonstrate the benefits of the procedure in the event that it is needed. See more here: https://youtu.be/fasCVhMce3U
0 Comments
Leave a Reply. |
|