Operational Risk Management 1 Overview Operational Risk Management

  • Slides: 21
Download presentation
Operational Risk Management 1

Operational Risk Management 1

Overview § Operational Risk Management (ORM) • Definition • Purpose and Goal • Principles

Overview § Operational Risk Management (ORM) • Definition • Purpose and Goal • Principles 2

Overview (Continued) § ORM Process § Step 1: Identify the Hazards • Step 2:

Overview (Continued) § ORM Process § Step 1: Identify the Hazards • Step 2: Access the Risk • Step 3: Analyze Risk Control Measures • Step 4: Make Control Decisions • Step 5: Implement Risk Controls • Step 6: Supervise and Review ORM Responsibilities • 3

Definition § ORM is a logic-based, common sense approach to making calculated decisions on

Definition § ORM is a logic-based, common sense approach to making calculated decisions on human, materiel, and environmental factors before, during, and after Air Force mission activities and operations, i. e. , onand off-the-job 4

Purpose and Goal § Purpose: To enable commander’s, functional managers, supervisors, and individuals to

Purpose and Goal § Purpose: To enable commander’s, functional managers, supervisors, and individuals to maximize operational capabilities while minimizing risks § Goal: To enhance mission effectiveness at all levels, while preserving assets and safeguarding health and welfare 5

Principles 1. Accept no unnecessary risk 2. Make risk decisions at the appropriate level

Principles 1. Accept no unnecessary risk 2. Make risk decisions at the appropriate level 3. Accept risk when benefits outweigh the costs 4. Integrate ORM into Air Force Doctrine and Planning at all levels 6

ORM 6. Supervise and Review 5. Risk Control Implement 4. Make Control Decisions 1.

ORM 6. Supervise and Review 5. Risk Control Implement 4. Make Control Decisions 1. Identify the Hazards 2. Assess the Risks 3. Analyze Risk Control Measures 7

Step 1: Identify the Hazards § Any real or potential condition that can cause

Step 1: Identify the Hazards § Any real or potential condition that can cause injury, illness, death to personnel or damage to or loss of equipment or property • Purpose: Identify as many as possible • Ideas on how to identify hazards 8

Step 2: Assess the Risks § § § Probability and severity of an undesirable

Step 2: Assess the Risks § § § Probability and severity of an undesirable event that could result from the hazard Three Components of Risk Methods and Tools 9

Step 3: Analyze Risk Control Measures § § Investigate specific strategies and tools that

Step 3: Analyze Risk Control Measures § § Investigate specific strategies and tools that reduce, mitigate, or eliminate the risk Effective control measures reduce or eliminate one of the three components (probability, severity, or exposure) of risk 10

Step 4: Make Control Decisions § § The earlier in the process risk controls

Step 4: Make Control Decisions § § The earlier in the process risk controls are implemented, the cheaper the cost Control decisions must be made at the appropriate level • Safety advisors and consultants do not control the necessary resources to implement the control decisions 11

Step 5: Implement Risk Controls § § § Assets must be made available to

Step 5: Implement Risk Controls § § § Assets must be made available to implement to specific controls Inform the personnel in the system of the risk management process results and subsequent decisions To be effective, control measures must be implemented in an appropriate and understandable way 12

Step 6: Supervise and Review § § ORM process continues throughout the life cycle

Step 6: Supervise and Review § § ORM process continues throughout the life cycle of the system, mission, or activity Once controls are in place, the process must be periodically re-evaluated to ensure their effectiveness 13

Step 6: Supervise and Review (Continued) § § Supervise: Monitor the operation to ensure

Step 6: Supervise and Review (Continued) § § Supervise: Monitor the operation to ensure the controls are effective and remain in place Review: Changes in the system should be recognized, and appropriate risk management controls must be applied 14

Responsibilities § § Starts with the commander Supported by the staff Implemented by the

Responsibilities § § Starts with the commander Supported by the staff Implemented by the supervisors Rests with all individuals 15

Operational Example § RAF Lakenheath Runway needed extensive repairs • Temporary operations were moving

Operational Example § RAF Lakenheath Runway needed extensive repairs • Temporary operations were moving to RAF Honnington • How did the personnel safely accomplish this move with the use of ORM? 16

Questions? 17

Questions? 17

Summary § Operational Risk Management (ORM) • Definition • Purpose and Goal • Principles

Summary § Operational Risk Management (ORM) • Definition • Purpose and Goal • Principles 18

Summary (Continued) § ORM Process § Step 1: Identify the Hazards • Step 2:

Summary (Continued) § ORM Process § Step 1: Identify the Hazards • Step 2: Access the Risk • Step 3: Analyze Risk Control Measures • Step 4: Make Control Decisions • Step 5: Implement Risk Controls • Step 6: Supervise and Review ORM Responsibilities • 19

ORM 6. Supervise and Review 5. Risk Control Implement 4. Make Control Decisions 1.

ORM 6. Supervise and Review 5. Risk Control Implement 4. Make Control Decisions 1. Identify the Hazards 2. Assess the Risks 3. Analyze Risk Control Measures 20

ORM provides a logical and systematic means of identifying and controlling risk. It does,

ORM provides a logical and systematic means of identifying and controlling risk. It does, however, require individual and organizational dedication to it’s basic precepts, along with the discipline to apply them on a continuing basis. 21