The subject of this publication is the assessment of risk associated with the implementation of logistics processes. The procedure for implementing the risk management process for logistics processes and the method of its analysis in internal audit have been described. To present considerations in this area, the authors used the knowledge and experience gained during the conduct and participation in audit tasks and while building the risk management process of the examined Organization from scratch.
Since every enterprise wants to manage effective processes, risks can and should be controlled through an appropriate management system. Introducing a comprehensive approach to risk management in logistics processes allows for:
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assessing the state of logistics in the enterprise,
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identifying opportunities to improve logistics processes and reduce their operating costs,
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determining the directions of changes and estimating the expected effects at the level of strategic enterprise management.
Risk management in logistics processes
In order to reliably conduct the analysis, it is necessary to collect data that allows for the identification of risk factors and the determination of the probability and degree of their impact, so that tools used in the risk management and internal audit process can be applied and their practical use demonstrated. As a result of the observations made, analyses applied, and interviews with employees, the necessary information was collected to prepare a risk register, risk matrix, and individual process paths.
The research began with identifying the general goal of risk management for logistics processes in the examined Organization, its connection with personnel documentation, the applied management strategy, and conducted audits. Then, based on interviews with employees, the scope of competencies and responsibilities for individual job positions was established.
The analysis of this data was necessary to define uniform terminology in all areas of the enterprise’s operation and to estimate the timelines and frameworks for risk management of logistics processes in the Organization.
Determining the risk occurring in the Organization
Risk management in logistics processes requires the development of procedures that systematize the activities performed, document decisions made, and maintain clear control paths. This enables due diligence in identifying, analyzing, and managing risk.
The scope of the research included:
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risk identification,
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determining the causes and effects of the identified risk,
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establishing the causes of risk,
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determining the impact of risk on the operation and functioning of logistics processes and the Organization,
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assessing the type and category of risk,
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linking risk to the Organization’s goals.
The risk identification stage in the conducted research began with defining strategic and operational goals, the degree of their connection with the implemented logistics processes, and determining the threats occurring within them. Then, the identified goals and threats were placed in the risk register. Table 1 presents a fragment of the risk register with the identified goals and threats of the examined Organization. It also included the functioning control mechanisms. Based on the identified risk, in combination with the functioning control mechanism, an analysis was performed to determine the probability of its occurrence and the degree of impact.
After identification, the identified threats were plotted on a risk matrix. Figure 1 shows the risk matrix with risk areas placed on it, taking into account their point values.
The article comes from the journal “Logistyka” 3/2009.