Crisis Management

OPERATIONS MANAGEMENT

Developed from writings related to

‘My little Black Book’ for New or Inexperienced Managers

© 2011 Ralph Bateman

OPERATIONS MANAGEMENT …within fabrication and manufacturing Industries.

Part four:

Crisis management through risk assessment.

A crisis situation can arise in any area and quickly affect the entire operation. It can also adversely affect how your customers perceive you as a supplier, ultimately affecting future business relations.

As the responsible person, It can possibly end your career.

To better understand a crisis, the Merriam – Webster® dictionary describe it as…

OPERATIONS MANAGEMENTComing to the realization and belief that the business your managing is suddenly in crisis will be shocking to you.

Your immediate feelings will include disbelief, anger, frustration and even fear...

CRISIS MANAGEMENT

a: An unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome <a financial crisis>

or

b: A situation that has reached a critical phase <the environmental crisis>

CRISIS MANAGEMENT

On the subject of ‘Crisis Management’, Let’s begin by asking when was the last time you asked your functional reports to identify the single greatest risk they see to Production operations within their department?

I’d guess you’ve had more meetings than you’d like or consider productive, but I’d also guess that the subject of risks to your operations was not specifically raised.

When the average crisis costs corporations tens of millions of dollars in repair and recovery costs each year, I’d suggest your ignoring one of the most important aspects of you’re new found responsibility… Risk Assessment.

As managers, it’s incumbent on us to regularly carry out risk identification and assessments of all areas that can spawn crisis within our organization.

CRISIS MANAGEMENT

While there are volumes written on this subject, far and beyond the best way to manage any crisis of course… is to avoid it.

If you haven't addressed the subject in a while, I’d recommend that within the next few days, you arrange a staff meeting with all your functional department heads and make a simple request of each..

“Please give me the single most critical issue that you believe exists in your department that has the potential to stop or restrict production due to a safety, operational or quality issue”

I’d further recommend that this topic be included into your monthly staff meeting as a means to give visibility to the current concerns that you or your staff has relative to areas of risk.

CRISIS MANAGEMENT

Knowing what crisis potential exist allows us to plan ahead and mitigate that risk before it develops.

Unfortunately, there are many situations that can blind side us to such operational negatives. These can include periods of increased output, (production spike) periods of reduced production, rapid unexpected growth, unexpected (key) equipment failure and loss of skilled resources etc.

In almost every case, its fair to say that the effects of crisis can be mitigated by proper planning.

As an Operations Manager, its incumbent on you to not only maintain an awareness of the potential for crisis, but act to safeguard stakeholder interests by understanding the areas of potential risk and

how to mitigate them.

CRISIS MANAGEMENT

The onset of crisis is primarily a breakdown in Planning or Process.

It’s also a sign of disengaged management

Knowing the mechanics of the operation that you’re now responsible for will come through the experience you brought to the position and the tenure you will achieve in this new role.

While your developing tenure, its important for you to use your experience initially to ensure that an unexpected crisis does not arise and potentially cut short that tenure.

Whether you’re finding yourself in crisis, appointed to recover from an existing crisis or simply hired into a new operations management role, get engaged by conducting an initial risk assessment.

CRISIS MANAGEMENT

Are we engaged?

Of course, we all believe we’re engaged, but are we really, or is that just our belief?

To be engaged we need to be:

Actively FOCUSED on the issues

Directly INVOLVED in their outcomes

Always DRIVEN to achieve positive results

Really

>

CRISIS MANAGEMENT

Having asked your direct reports the question, you’ll find it enlightening to read the responses they give.

Without realizing it, your reports may have just given you one of their goals for the upcoming review period.

The goal of course being to mitigate the risks that each have identified.

Before turning the page, try it for yourself by noting what you consider to be the greatest risk to production operations… then compare it to what your direct reports considered the threats to be..

CRISIS MANAGEMENT

If you found it a little difficult to immediately identify and write down what you see as the most critical threat to your operation, then I’d suggest your operation is already at an elevated risk.

Multiple threats will exist that if not identified and addressed,have the potential to jump out and bite you… more often than not when you least expect it!

So, let’s begin by identifying those areas where crisis causing threats, (CCT’s) can and do exist.

CRISIS MANAGEMENT

One of the top three areas where operational (and business) crisis arise is in the area of…

QUALITY

OK, so you probably guessed quality was up there, but when was the last time that you really did carry out a fact finding risk assessment like

this?

If you did so within the past three months,

Well Done!

But now its time to repeat the exercise.

Determining that a potential for crisis exists before it occurs is good management practice.

CRISIS MANAGEMENT

If you don’t think quality issues can cut short your career,

Think Again!

La right LLC.

QUALITY

Quality in many work environment is often used as an off the cuff remark without genuine substance.

However, you put yourself, your colleagues and your company at risk by ignoring this important area of operations.

During my many years experience involved with steel production and processing, I’ve witnessed four major $mm dollar hits companies have had

to endure due to poor quality arising from careless, apathetic and disengaged management

…the most recent being at the end of 2012.

CRISIS MANAGEMENT

Note that quality does not simply affect product..

It’s in the very processes we use, and the disciplines we enact in maintaining those

processes.

QUALITY

right LLC.La

… and satisfy yourself that its sufficiently robust to catch issues before a valued customer does.

Remember also..

Safety and Profitabilityis a

Quality operation!

CRISIS MANAGEMENT

One of your first tasks as a new Op’s Manager?

Check your Quality Management Program…

QUALITY

If you’d like to review the full PowerPoint presentation, just drop me a line and I’d be pleased to share it with you.

[email protected]

La right LLC.