The disruptions wrought by the pandemic caught industries unprepared. The interruption in the supply chain created unprecedented challenges for the industries. As many countries imposed strict lockdowns, the movement of raw materials and other essentials required for manufacturing dried up. The lack of risk assessment was singularly responsible for many companies going bankrupt during and after the pandemic. If companies had developed a risk matrix to analyze and assess the level of risk to help flawless decision-making and execution, they might have overcome the challenges during the pandemic. This blog discusses the importance and ways of developing risk management for uninterrupted business processes.
In the last two decades, the world has changed faster than at any other time in history. The rapid technological advancements, coupled with major scientific breakthroughs in quantum computing and artificial intelligence, have changed the nature and character of our world. Furthermore, the world is now not neatly divided into developed, developing, and poor countries. Globalization has ensured the yoking together of economies like never before. Thanks to interdependent economies, change in one part of the world will have reverberations in the entire world. In a tightly-knit world, risk management is unavoidable lest a company wants to be caught unprepared during challenging times. One of the biggest lessons of the pandemic is to anticipate challenges before they present themselves and develop a robust response to them. Qualityze Risk Management Software empowers decision-making by anticipating challenges and developing unique solutions. Our years of experience and expertise in risk management give us an enviable ability to analyze current trends to tease out future challenges.
Do you use a mobile phone or landline? The answer, obviously, is the mobile phone. Now, ask your employees what they use. They, too, use mobile phones. Nobody uses a landline in today’s world, which is characterized by technological progress by leaps and bounds. What would happen if non-state or state-sponsored actors knocked out mobile networks? All your workforce would lose communication, bringing the entire business process to an abrupt halt.
Risk management is the ability to foresee what is yet to happen and have contingency plans to deal with them. Ensuring your employees have landline connections is risk management.
One of the most significant risks pharmaceutical companies faced during Covid-19 was the rapid reduction of prescription medicines. The pandemic-induced lockdowns and travel restrictions contributed to a decrease in the number of people visiting hospitals. A robust risk management would have ensured an uninterrupted supply of medicines by leveraging online opportunities. However, the lack of a risk management process meant the industry was caught off guard and didn’t understand a rapidly evolving issue. Qualityze’s AI-powered, flexible risk management helps you identify, monitor, and mitigate risks to optimize business processes.
Another challenge faced by pharmaceutical companies is the rise of generic drug manufacturers. The generic drugs available in the market have significantly reduced the profits of pharmaceutical companies, forcing them to adopt new methods and strategies to manage their risks. The best way to manage risks posed by increasing competition is to spread risks by investing in other companies. Risk transfer is another method to manage risk in the pharmaceutical industry.
Risk Identification: It is a process of identifying risks. The method involves a comprehensive analysis of potential risks. Once risks have been identified, risk evaluation compares each risk and anticipates their impact on the businesses. The magnitude of the risk determines the development of risk management strategies to limit its effects.
Risk Analysis: Once risks have been identified, they are analyzed for their potentially disruptive impact. The comparison of risks to find out their real impact is called risk analysis and assessment. Qualityze Risk management reduces the impact of risks by studying their magnitude and offering unique solutions to overcome them.
Risk Mitigation: It is the third step in the risk management process. Risk mitigation is planning and developing a response to reduce threats. A risk management team studies in detail all the challenges that might impact the manufacturing of a product and offers solutions to overcome them. CAPA – Corrective and Preventive Action – is a part of risk management. It takes preventive measures to mitigate risks during manufacturing and comes up with corrective measures in the event of an issue. Qualityze CAPA Management Software reduces the threats of risks by offering unique solutions to your challenges.
Risk management is not a one-time solution. It is a repetitive process that must adapt and change whenever required. It is a dynamic process, evolving to keep pace with a world in flux.
Related Article: How to Avoid CAPA-Related Pitfalls on Your Compliance Journey?
Risk management strategy is a process to deal with risks. Strategizing for risk management is dynamic and depends on the situation. The best risk management strategy is one that eliminates the risk. But if risk elimination is not possible, one must try to minimize the impact of risk by transferring and spreading it.
Risk elimination means not being a part of activities that may lead to risks. For example, not investing in restive regions of the world eliminates the risks posed by war. However, risk elimination is not always possible due to globalization. Even if a company doesn’t invest in war-torn regions, there is no guarantee it will be able to protect itself from developments in those regions. Today’s supply chain is more complicated than ever before. The supply of different components needed for manufacturing goods comes from the different areas of the world. The entire manufacturing process might halt even if one cog in the wheel is removed.
The war in Ukraine has proved that it is very challenging to shield yourself from developments in other countries. The fraught relationship between China and Taiwan is another example to illustrate how risk elimination could be easier said than done. It is not plausible not to invest or engage with Taiwan thanks to its expertise in microchips, an indispensable component in manufacturing computers, mobiles, and other electronic gadgets.
Risk sharing is the second-best option after risk elimination. If you can’t eliminate risk, spread it. A diverse investment portfolio is an example of risk spreading. The more places you invest in, the more you spread your risks.
Risk transfer is another strategy in Risk Management. Buying insurance for your capital goods and other business processes is an example of risk transfer. Risk transfer is a process of transferring the costs of risks to a third party.
Qualityze Risk Management Software assists you in every step of risk management. It develops a comprehensive risk management strategy and finds the best solution for your unique challenges. From identifying to eliminating, sharing, transferring, and managing risks – Qualityze empowers your business processes for the best possible results.
Risk Management standards develop strategic processes. The strategic processes begin with the set objectives of an organization, identifying risks, and offering the best risk mitigation practices. Standards are defined and developed by agencies closely coordinating with organizations, promoting common goals. The creation of common goals enables the best risk management processes. ISO 31000 is an international standard enforcing principles and guidelines to streamline risk management.
Robust risk management is a prerequisite to organizational success. The world is changing fast, and one needs to be vigilant against risks. Pharmaceutical and manufacturing industries are vulnerable to disruptions in the supply chain, geopolitical instability, cyber-attacks, and rising competition from others. Robust risk management is not an option today. It is a necessity to remain profitable in business.