HAZARDS VERSUS RISKS
It is important to put the terms “hazard” and “risk” into context. A hazard is any circumstance, condition, or event which challenges or prevents the organization from achieving its Mission Statement. A risk applies the factors of probability, likelihood, and timeliness to each hazard. For example:
To a human, encountering a lion is a hazard. A human encountering a lion at the zoo is a hazard, but it is low risk. A human encountering a lion in the African wilderness is a hazard, but it is high risk
The factor to define risk is what you perceive to be the likelihood or probability of your organization encountering that hazard within the coming 3 years. The scale for the Probability Score is below:
In addition to probability, another factor to define risk is impact to the organization. The Impact Value will assess how effectively the risk challenges or prevents the organization from achieving the Mission Statement without the need for additional investment. The Impact Value scale is below:
(H) High Impact: Achieving the Mission Statement is unlikely without major investment in additional tools or resources.
(M) Medium Impact: Achieving the Mission Statement is still likely, but some investment in additional tools or resources will be required.
(L) Low Impact: Achieving the Mission Statement is likely with no investment in additional tools or resources.
RISK MITIGATION STRATEGIES
Internal risks are caused or created by the organization’s own policies or practices. External risks are put upon the organization through outside influence. For our purposes, a Risk Mitigation Strategy includes any investment of additional tools or resources an organization might obtain to reduce either the Probability or the Impact of a risk. The Krypt Business team will analyze the risk factors of the hazards most commonly identified in the survey in order to develop effective Risk Mitigation Strategies for our clients.
How can Krypt help you?
Krypt is an SAP preferred partner and has assisted in the success of global businesses across industries & geographies. We have helped businesses through the successful integration & implementation of SAP IBP, SAP GTS, SAP TM & SAP EWM. If your organization regularly requires to plan supply chain activities on a weekly or monthly basis in advance, then Krypt can help you implement/integrate SAP IBP to quickly analyze & respond to any scenario in near real-time using an informed decision.
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