The Risk Management Cycle

Risk Management
Do we need it?
Dipankar Acharya
07.08.2014
Do we identify, analyse and manage our
Risks correctly and scientifically?
We need to >
•Identify Risks
•Assess Risks
•Control Risks
The Risk Management Process
Identification
Monitoring
Evaluation
Mitigation
The Risk Management Cycle - Identification
Identification
Monitoring
Evaluation
Mitigation
• Peril- An event/Occurrence.
Eg: Flood, Fire
• Hazard - Probability of the
peril to happen . Eg: Proximity
of house to a River, Use of
Flammable Liquids
• What are the hazards…
• Where are the hazards….
• Risk- effect of the peril on the
asset . Eg: Flood damage, Fire
loss.
• Risk includes both the event
which will give rise to some
loss as well as factors which
may have an impact on the
loss.
The Risk Management Cycle - Evaluation
Identification
Monitoring
Evaluation
Mitigation
• How could the hazard affect us
• What would the hazard do
• When could the risk affect us
• What could the risk cost
• Who would the risk affect
The Risk Management Cycle - Mitigation
Identification
Monitoring
Evaluation
Mitigation
• How can the risk be mitigated..
• What steps can be taken to reduce the
impact of the risk to the business
• Mitigation strategies are:
– Avoid
– Transfer – physically or financial impact
– Reduce impact of risk
The Risk Management Cycle - Monitoring
Identification
Monitoring
Evaluation
Mitigation
• Has the mitigation action had the desired
affect
• Is the risk changing…
• Have actions been taken…
• Does the mitigation alter the risk…
Risks Exposures in
monsoon to cargo in transit.
18
Moisture damage to cargo in transit
Rain Water Damages – The problems at hand
Rain Water Damages – Recommendation for mitigation
Rain Water Losses
Use of torn & worn out Tarpaulin
Rain Water Losses
In adequate covering of truck
Rain Water Losses
Use of Single and torn Tarpaulin resulted in Loss
Rain Water Losses
Improper stacking – results in aggravation of loss
Rain Water Losses
Boxes which are received in un hygienic wet condition
Out of 360 boxes , 141 boxes condition found to be rejected
Rain Water Losses
Out of 320 bags, 266 bags were damaged.
Wet damage leading to a further aggravation of loss.
Different consignments of sugar were
dispatched from the supplier .
There was damage to a few bags in each
truck load.
When the sound and the water-damaged
bags were stored together, the moisture
from the damaged bags affectedthe sound
bags resulting in aggravation of loss.
Inadequate packing and stacking during transit in wet weather
leading to damage
The consignment was loaded in half–
body open trucks which is not sufficient
to carry cartons of double stacking for
long distances. Due to the half body
open truck and effect of moisture,
cartons opened up during transit due to
severe jerks/jolts this resulted in severe
damages to the consignment.
Damage due to entry of water through opening
The plastic wrapping inside the
carton had a space at its mouth in a
way as to expose the cargo to the lid
of the carton. This facilitated the
entry of moisture, water and foreign
particles directly in the material.
Recommendations for mitigating wet damages to the cargo
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Use of Double Tarpaulin.
Use of large tarpaulin instead of two separate tarpaulin to cover one truck.
Cover Truck with one or more number of plastic sheet and then with tarpaulin.
Use Pallets / Discarded Sheets of Water / Plastic Sheets at floor of the trucks.
Arrange use of closed body trucks and wrap valuable cargo in plastic or shrink wrap.
Cart cargo in shed premises.
For FCL use moisture bags since humidity is likely to be as high as 90%
For all consignments cargo needs to be labeled on both sides with water proof
markers
Allow plenty of lead time to accommodate unscheduled delays since there is port
congestion in monsoons
Slightly wet or damaged cargo should be kept away from other dry cargo specially
at container freight stations.
All wooden cases and pallets should be fumigated to prevent moulds, moisture and
dampness to the cases.
Ensure right packing as per the nature of the cargo.
Post loss surveys
Its difficult to eliminate all the risks,
but we need to ensure we have
taken all the precautions and done
a cost – benefit analysis. We need to
identify, evaluate, mitigate and
monitor the risks at hand.