Game of Risk anybody?: Mick Jackson

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It’s that time of year (at least at the time of writing this) when business plans and budgets need to be completed. Probably in common with other organisations our plan places a high premium on the assessment and management of risk in all its shapes and forms.

The process we follow at Skills for Logistics involves not only identifying and quantifying the impact of the risk but also identifying counter-measures and contingencies associated with each risk. The best analogy I have heard for these is:

The risk: Your chip pan catching fire.

The impact: Damaged chips, chip pan, kitchen, house (depending on severity).

Counter Measures: Purchase a Fire Blanket and keep it next to the stove.

Contingencies: Phone the Fire Brigade and run like the wind!

It occurred to me on going through this process that many of the risks facing logistics companies today involve change. Maybe it is changes in the market place, maybe it’s changes in the products or service on offer, maybe it’s changes in technology, maybe it’s changes in the economy or the political environment. Maybe it’s the changes that will occur as a result of the much-aired sustainability debate.

All of these examples will have an impact of one size or another on the business of most logistics companies whether own account or third party. What links them all is the potential role of skills development to provide credible and effective counter measures.

The point of counter measures is that their need is identified and quantified and they are there to take down off the shelves as the warning signals start to come through. At the risk of overplaying the metaphors they are the things done to stop the horse bolting as opposed to locking the stable door and chasing the escaping beast.

Whichever change from the above list kicks in, the counter measures to limit its impact (or make the most of the opportunity) are skills related. Understanding the skills mix required to meet each of these eventualities will enable the workforce to be developed to meet the challenge rather than people either working sub-optimally or being replaced through an expensive recruitment process.

Much is talked in logistics about the relative merits of lean vs agile and it is fair to suggest that flexibility of skills available is an important element of a company in an agile supply chain.

Understanding the skills mix necessary to carry out current operations in the current environment has to be the start point for this. Continued monitoring of how they will need to change as, say technology changes seems to be a prudent counter measure. This in turn may reduce the impact of the step change needed by the workforce as new technology kicks in.

So is skills development a luxury that can only be afforded by the well off or is it a prudent means of mitigating risks that may have a big impact on your business?

Well a fire blanket is a darn sight cheaper than a new kitchen!

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