The Risk Management Strategy and Process - Assignment Example

Question one i) Designed capa It is the predetermined number of units of the facility can hold produced, receive for a period. In other words, it is a theoretical maximum number of units that a given industry can produce in a particular period under normal conditions. In this case, manager prefers to work at a capacity of 80%. Therefore, the designed capacity is computed as 80/100*20,000 = 16,000 kg laundry. ii) Effective capacity It is the ability that an industry or rather a firm is willing to achieve given the present operating constraint. The adequate size is frequently lesser than the designed capacity since the facility might have been designed by dissimilar product mix than how is presently being produced. The new site will allow Johnsons to expand its base of operation by 50% hence the effective capacity (50+80)% = 130%. (130/100) * 20000 = 26,000kg. iii) Actual output It is the maximum number of produce that an industry can produce in a given period. The real production is affected by a number of factors such as process factors, process factors, and operational factors. In this case, there is poor workplace planning the effective capacity is 60% capacity. Therefore the effective capacity is 60/100*20000kg = 12,000kg. iv) Utilization It is the maximum number of hours that is expected to be taken by an absolute work center that is the amount of time the work center is active. It is calculated by dividing actual output by design capacity then multiplied by 100. (Actual output/ Design capacity) * 100% (12,000/16,000) * 100% = 75% v) Efficiency It is measured as (the actual output / effective capacity multiplied) * 100%. Can also be measured as Efficiency = (actual rate of production / standard rate of production) * 100%. (12,000/26,000) * 100% = 46.15% Options to manage i) Actual output The actual output can be maintained by provision of training and developing employees. Training entails giving employee’s relevant skills and expertise to improve work efficiency. Development on the other hand aims at providing learning opportunities to enable employees develop to maintain the actual units of output. Policies and procedures should be clearly defined to minimize sub-optimization of some production processes. Workers should be selected scientifically to meet the work required and work demand such as the ability to withstand long working hours and carry heavy loads in the industry. ii) Utilization Identifying gap opportunities and improve on them by discussing with the management on the effective way to enhance their expertise so that the industry fully utilize the resource. To implement some of the forms of time recording so as to use the employees in capturing in timesheets for easy understanding of the utilization and consequent utilization of workers. iii) Efficiency of resources available Build urgency for change in the industry for the employees to accept any change that leads to enhancement of efficiency. The need for human resource in the industry should be accurately be forecast in order to minimize wastage of resources. Keeping the business transport smooth always for efficient supply of resources by the suppliers to the industry. Question two Project description The project is all about the start and completion of a business project to enhance production capacity of the organization. Vision statement To devote customers with superior high-quality product at a low production cost Project objectives  To make it sure that the project is implemented within time frame To increase the efficiency of human resource and material resources To reduce the risks associated with the implementation of the project Scope management The project scope will sufficiently stipulate what the project needs to accomplish in order to deliver the desired output. The scope management helps in avoiding challenging projects with the increasing scope and rowdy requirements. It stipulates what is included and what is not included in the plan, make controls of what should be added to the project or be removed. Project scope and constraints The dry cleaning industry lifeline consists of keeping healthy relationship to customers, offering the best services which make the industry a flourishing industry. With the future being kept in mind, and the expansion of the site, industrial expansion by 50% must be the successful future. The project considers a number of constraints of which in this case, three constraints that should be addressed are time, scope, and cost. The constraints form a project management triangle. Cost: the project should be kept within a predetermined budget. Many factors that can change include labor (employees’ wages) and risk. Because of the nature of management triangle, the cost can as well be affected by scope and time. In the same way, cost concerns time and scope. Time: time should also be kept within a predetermined budget. The time factor should be held in the schedule. The vital factors that can affect the time include natural disaster and planning issues. Scope: the project will look more for what is to be added and what should be maintained in the project. Changing the project will change the cost and time will create more potential problems. Quality management The quality management includes all the process that is necessary to ensure the project satisfies the needs that are to be undertaken. It encompasses the activities of the management functions that could determine the objectives, quality assurance, quality improvement, and quality policy within quality system. Quality standards The standards describe industry, agency or regulatory project performance that should be followed in the assessment process of the project. These quality standards will be used as a benchmark to assess whether or not the objective conditions are met. Identify each quality standard that is directly affected by the project and not to the actual product. Consequently, define tools of measure i.e. project status or project review. Agency or customer satisfaction The assessment of customer feelings over the on- going project, how team members acts on project should be done. This is of great benefit as it will give a feedback on how successful the project is faring on. Risk management and issue management A risk is any uncertain event or may be a condition that if occurs, has an adverse impact on the project objectives. The issue, on the other hand, is a matter in question that is not entirely settled and still under discussion. The risks and effects should be mitigated in a similar manner. Creating a project management in itself is risk mitigation. A temporary dry cleaning industry shall be established and deliver products that have superior qualities to attract the customers. Communications to the stakeholders about the risks that exist in the industry also keep them in the loop and therefore reduce the impact. By making a point of accepting that indeed the risks are there can enable structure the effective ways of avoiding specific risk. By providing a structure for the organization, counterproductive chaos can be reduced. Risk management strategy The approach involves methods of risk identification, risk analyzing, risk mitigation and reported. The tools such as project management plan and templates, risk management plan are developed. Project risk identification Organizational risks: these are risks that are associated with project organization. They are mainly caused by unrealistic deadline, lack of the support from stakeholders, funding changes, lack of organizational history, and lack of understanding of risks, delaying decisions, and poor initiation strategy. Resource risks: these are risks associated with the human resource. They include the staff and the skills and competence of the employees. Lack of staff experience causes them, staff resignations, different personalities, personal and family illness, and some workers going for vacation, involvement of diversified contractors, inadequate resources and unavailability of adequate workforce. External risks: the external risks include the suppliers and vendors in the economic environment. They are caused by grievances by suppliers over the timing, quality and lack of incentives. Other causes include major staff issues, misunderstanding pertaining the requirements, incomplete work statements and weather issues. Planning risks: these are risks that associated with the planning process of the project. They include complexity of the scheme and uncertainty of the project itself. These risks are fundamentally caused by lack of efficient planning, poor estimation, lack of planning diligently, lack of anticipation of the program, poor project definition, lack of proper training process, setting unrealistic targets and unfavorable regulatory changes. Technical risks: these are risks of reliability on the project and other technical requirements. They include poor management needs, complexity of designs, the scope creep, technology readiness, lack of documentation, lack of adequate technical support, lack of environmental testing and cutting edge components. The risk management process The Risk process The risk planning Identification of risk Qualification Risk Quantification risk Risk response Monitoring and controlling Definition Decision on how to approach risk planning activities of management Includes determination of risks likely to affect the project Analyzing conditions and prioritize their effect Measurement of the likelihood and consequences of risks and determine their effects. Includes development of techniques and procedures to reduce threats an increase opportunities Monitoring the remaining risks, identify new risks, produce risk decreasing plans and determining their effects. Inputs The organization policies and the risk tolerance of the industry. The management plan, classification of risks, past information, assessment of the risk. The project estimation. Management plan of risks, identification of risks, assumptions to be made, the impact and the scales of probability. The risk management plan The list of most prioritized risk Judgment of experts Management risk plan, risk ranking, likelihood of achieving the cost, objectives and time. Management risk plan Response risk plan Progress reviews, the scope changes and project communication. Tools & technologies Planning for the meetings Documentation of reviews, assumption analysis and the checklists. The impact of rating risks The interviews The avoidance, acceptance, mitigation and transfers Audits of risk response, risk review meetings. Outputs The risk management plan Identification of risk triggers Risks ranking, a list of prioritizing risks from high to low Probability analysis, prioritization of risks that are quantified, the probability of achieving Response to risks, planning mitigation and contingencies. Working on plans, making corrective actions, changing the requests and updating risk form. Communication strategy This approach focuses on the issue of informing the stakeholders, the project team, the executive teams and other interested parties. The communication strategy includes communication matrix, the status meetings, and project status reports. End stage report Product review The products have not yet fully been approved as they are not handed over to the operational department, therefore, a certain percentage of products were approved. The quality records reveal that the planned activities were completed. The records were completed and approved, and the customers were ready to accept the products. The project manager’s report Review of the business case The benefit realized was satisfactory increase in the production of the product. On the other hand, the risks involved in the project were even more than the predetermined ones. This was due to a dynamic nature where the project operates. Review of the project objectives The goal in time, the scope, quality, and benefits were met while the goal of risk was not adequately covered. Consideration of the team performance The team work performed below their capacity for the fear that they could overwork themselves and also this would have led to the production of more output at the same wage rate. The stakeholders were communicated to for the risks that are involved in the industry. The residual benefit from the project was an increase in the output that consequently resulted to rise in the actual production. Recommendations The project was active such that there were no materials both human and material that went into the waste. The management should continue to train the workforce and implement the use of machines to increase the efficiency of the organization. Lesson report Risks and issues Some rowdy risks were not curbed due to their systematic nature of their occurrence. Such risks are external risks associated with suppliers and the government regulations that are put in place to regulate the operations of business organizations. Forecast Based on the project cost, time, and scope, more of these limiting factors should be scaled up for future sufficient and successful implementation. Read More