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Manufacturing companies are constantly searching for solutions that can improve business performance and enhance their operations. In today’s highly competitive market, success for manufacturers hinges on developing a business strategy that will minimize costs and create a
culture of continuous improvement. A key component of that strategy involves carefully calculating risks.
As an ISO 9001 certified contract manufacturer, risk management is woven into our business. The following five steps are used when completing our risk assessment:
- Identify. What are the risks to your manufacturing company? Are there internal or external factors affecting the way you do business?
- Analyze. Which risk has the potential for a bigger impact on your bottom line? What is an acceptable amount of risk? What risks can you control, and which are decided by other parties?
- Plan. How can particular risks be mitigated or eliminated altogether? Which risks are “low-hanging fruit,” meaning easy to solve? Which solutions require more time and resources? How do solutions need to be communicated across your company? Who needs to be notified?
- Implement. Carry out the planned solutions. Ensure that all relevant team members are involved and engaged.
- Audit. The most essential step. Did the plan work? What could improve? Solicit feedback from everyone affected and make the necessary adjustments.
Risk-based thinking is a means of knowing and planning for the unknown. Manufacturing companies who use this approach can potentially reap the following benefits:
- A proactive, lean mindset from empowered employees
- Consistent quality products
- Higher customer satisfaction
- Increased efficiency and reduced waste
- Stable operations that are able to effectively respond to changes in the manufacturing industry
By considering risk throughout your manufacturing company, your customers can be confident that they will receive a quality product with on-time delivery. Since change is constant and can occur suddenly, ongoing efforts to continually improve and carefully calculate risks are required. Defining what characteristics can set a company apart—today and in the future—is critically important. With risk management, your manufacturing business is better prepared to improve processes, develop future leaders and turn a higher profit.