1 Operational Operational Risk Management Risk Management
Jan 19, 2016
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Operational Risk Operational Risk ManagementManagement
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OverviewOverview
Operational Risk Management (ORM) Definition
Purpose and Goal
Principles
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Overview (Continued)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
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DefinitionDefinition
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., on- and off-the-job
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Purpose and GoalPurpose 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
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PrinciplesPrinciples
1. Accept no unnecessary risk2. Make risk decisions at the appropriate level3. Accept risk when benefits outweigh the costs4. Integrate ORM into Air Force Doctrine and Planning at all levels
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ORMORM1. Identifythe Hazards
2. Assessthe Risks
3. Analyze Risk ControlMeasures
4. MakeControlDecisions
5. Risk ControlImplement
6. Superviseand Review
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Step 1: Identify the Step 1: Identify the HazardsHazards
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
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Step 2: Assess the RisksStep 2: Assess the Risks
Probability and severity of an undesirable event that could result from the hazard
Three Components of Risk Methods and Tools
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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
Step 3: Analyze Risk Step 3: Analyze Risk Control MeasuresControl Measures
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Step 4: Make Control Step 4: Make Control DecisionsDecisions
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
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Step 5: Implement Risk Step 5: Implement Risk ControlsControls
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
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Step 6: Supervise and Step 6: Supervise and ReviewReview
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
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Step 6: Supervise and Step 6: Supervise and Review (Continued)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
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ResponsibilitiesResponsibilities
Starts with the commander Supported by the staff Implemented by the supervisors Rests with all individuals
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Operational ExampleOperational 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?
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Questions?Questions?
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SummarySummary
Operational Risk Management (ORM) Definition
Purpose and Goal
Principles
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Summary (Continued)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
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ORMORM1. Identify1. Identifythe Hazardsthe Hazards
2. Assess2. Assessthe Risksthe Risks
3. Analyze 3. Analyze Risk ControlRisk ControlMeasuresMeasures
4. Make4. MakeControlControlDecisionsDecisions
5. Risk 5. Risk ControlControlImplementImplement
6. Supervise6. Superviseand Reviewand Review
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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.