Case study
A manufacturing company had to relocate staff from one of its buildings after a car skidded off the road and crashed into the side of it, causing structural damage.
Ironically, the risk had been identified previously, but the installation of bollards as a countermeasure had not been carried out due to the cost.
Fortunately, a high-tech production line making critical components, previously housed in the building, had been relocated a few weeks previously for other operational reasons, otherwise the impact would have been far greater.
Residual risk
It’s impossible to totally eliminate risk and there will almost always be some level of risk remaining after we’ve implemented our countermeasures. This is often referred to as residual, or net, risk (gross risk being that which exists before mitigation). As discussed previously, the aim is to end up with a level of residual risk that we’re willing to accept.
It’s also possible that reducing risk in one area might actually have the effect of increasing the level of risk elsewhere. Examples might include:
• A business employs a factoring company to aid cash flow, but customers are upset by the factoring company’s methods of chasing payments, resulting in customer dissatisfaction and a negative impact on reputation.
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Consolidation of premises and facilities to reduce costs and improve efficiency reduces resilience and results in a single point of failure.
• Moving the production of products or components overseas to increase competitiveness results in a reduction in quality and an increase in failure rates.
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Training staff to enhance skills, increase productivity and reduce operational errors makes them more marketable and increases the risk of losing staff to competitors.
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