Uses of Efficient Frontier Analysis in SRM

ITS 835 Chapter 22 JAA Inc.

A Case Study in Creating Value from Uncertainty

Dr. William Souza

Introduction

Business background

Initial steps

Evolution of Risk Management

Introduction of ISO 31000 and HB 436 to JAA

Bringing everything together

Business Background

JSS is a clothing wholesaler and retailer

Founded in 1972

Went public in 1998

Three operating segments

• U.S. wholesale

• U.S. retail

• International (wholesale and retail)

57 retail stores in 10 countries

Initial Steps

Strategic objectives

Maintain market leadership

Sustain technology leadership

Strengthen global presence

Deliver quality service

A leader in compliance with all laws and regulations

Establish a governance system

Multiple committees, each with specific responsibilities

Governance Framework

Evolution of Risk Management

Lack of strategic risk management led to many problems

Communication

Missed/lost opportunities

Lack of commitment to objectives

Declining quality

Identified gaps in risk management Engaged in aggressive internal training

Soft skills

Team building

Management planning

Introductions of ISO 31000 and HB 436

JAA adopted ISO 31000

HB 436 provided extensive implementation guidance

ISO 31000 was basically an upgrade of the framework

JAA was already using

ISO 31000 framework formalized JAA’s ERM

Defined organization and process

Using Context for Risk Criteria

Bringing Everything Together

Risk Map

Risk Attitude