Explanation

All risk management processes follow the same basic steps, although sometimes different jargon is used to describe these steps. Together these 5 risk management process steps combine to deliver a simple and effective risk management process.

Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that might affect your project or its outcomes. There are a number of techniques you can use to find project risks. During this step you start to prepare your Project Risk Register.

Step 2: Analyze the risk. Once risks are identified you determine the likelihood and consequence of each risk. You develop an understanding of the nature of the risk and its potential to affect pro-ject goals and objectives. This information is also input to your Project Risk Register.

Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by determining the risk magni-tude, which is the combination of likelihood and consequence. You make decisions about whether the risk is acceptable or whether it is serious enough to warrant treatment. These risk rankings are also added to your Project Risk Register.

Step 4: Treat the Risk. This is also referred to as Risk Response Planning. During this step you assess your highest ranked risks and set out a plan to treat or modify these risks to achieve acceptable risk levels. How can you minimize the probability of the negative risks as well as enhancing the opportunities? You create risk mitigation strategies, preventive plans and contingency plans in this step. And you add the risk treatment measures for the highest ranking or most serious risks to your Project Risk Register.

Step 5: Monitor and Review the risk. This is the step where you take your Project Risk Register and use it to monitor, track and review risks.

Explanation

The bullwhip effect (or Forrester effect) is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.

Seasonal demand: consumer interest in purchasing particular products only during a specific peri-od within the calendar year.

OPITZ is a coding system used to form Groups in Group Technology philosophy of Manufactur-ing.

The Pareto Curve is the shape created when the bars of a Pareto Chart are progressively summed and the points joined together. The final curve ends at 100% of items in the chart, which means that you can then draw a line across at 80% and ' bounce ' it down to find the bar which, when combined with all bars to its left, will give 80% of all items.

Explanation

Kanban ( 看板 ) (signboard or billboard in Japanese) is a scheduling system for lean manufacturing and just-in-time manufacturing (JIT).

Poka-yoke ( ポカヨケ , [poka yoke]) is a Japanese term that means " mistake-proofing " or " inadvertent error prevention " . A poka-yoke is any mechanism in any process that helps an equipment operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur.

Kaizen is a concept referring to business activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Kaizen ( 改善 ) is the Sino-Japanese word for " improvement " . Kaizen also applies to processes, such as purchasing and logis-tics, that cross organizational boundaries into the supply chain.

Muda ( 無駄 , on ' yomi reading) is a Japanese word meaning " futility; uselessness; wastefulness " , and is a key concept in lean process thinking, like the Toyota Production System (TPS) as one of the three types of deviation from optimal allocation of resources (the others being mura and muri). Waste reduction is an effective way to increase profitability.

Just-in-Time (JIT) inventory management minimizes stock levels by synchronizing orders with production schedules, which:

Reduces holding costs : Less inventory means lower costs for storage and management.

Increases cash flow : Reduced stock levels free up working capital.

Whole-life asset management supports JIT as a cost-saving measure, focusing on maintaining lean inventories while meeting production needs.

Explanation

The product code is often the key to obtaining documentation relating to products.

Product codes are often use to link to internal processes. Some computerised inventory systems trigger alerts when specific items or volume are ordered - this could be an out-of-stock warning or potential volume errors.

In many cases, an organisation will use its own product code system. The organisation constructs a code that is effective and fits with its software and the variety of items covered. So these codes may or may not comply with any international standards (such as GS1 specifications, ISO standards, etc.). As organisations make up the code themselves, the codes may look identical to others. For example, SKU414675 reveals that it is used for many items, including the following:

- A UK wholesaler ' s six-pack of branded cola

- An Australian snack food

- UK flower seeds

- An Italian desk sold in Japan

- A Brazilian light fitting

Outsourcing involves contracting a third party to manage storage or logistics functions, which allows the company to concentrate on core business activities. In this case, outsourcing the warehousing needs aligns with whole-life asset management, as it optimizes resources and mitigates the challenges of limited storage capacity.

Explanation

If the planning and mitigation measures fail and redundant or obsolete stock is identified, it needs to be removed from the current inventory location as quickly as possible. There are some methods to deal with these types of stock. The worst case scenario is disposal to landfill, which is inadvisable if it can be avoided, both from environment point of view and the financial costs of such disposal.

For example, the problem of obsolete pesticides remains extremely serious and urgent. Many of the stocks identified continue to deteriorate thereby giving rise to an ever escalating source of severe pollution and posing a threat to human health, the environment and development in particular. To reduce the impact of obsolete pesticides on environment, FAO initiated a project in Yemen in which a total of 262 tonnes of obsolete pesticides were removed from 20 different sites and successfully disposed of between March and June 1996. The major field operation was completed in six weeks during which period almost all obsolete pesticides were brought to a central location and subsequently shipped to the United Kingdom for incineration.