Wk 2 - Risk Management Breakdown Structure Paper

Risk management should not be an item that is overlooked when considering a new project let alone expanding suppliers. The company that I have selected to use as a basis for expanding suppliers into China is a small machining business. The company deals mostly with taking orders from customers that require tight tolerances of the metal and other materials that are being machined into various parts for different reasons. Some of the applications that the company makes parts for are for weapons systems for different Department of Defense companies, as well as other small businesses such as watch companies. This paper will cover the following risk management topics for, objectives and goals, tools and techniques, organizational roles and responsibilities for effective risk management for the project as well as information sources that will be used for the project, documentation, and the role of risk management in the project planning process.

• Describe the objectives and goals, tools and techniques, and organizational roles and responsibilities for effective risk management for the project.

The primary objective of the company's project is to successfully identify and utilize a supplier within China. These objectives will include identifying and mitigating any risk that might be inherent in dealing with not only a new supplier but a vendor from a different country. Another objective of the project would be to have back up plans so that if those risks were to happen, the company would have a strategy to deal with those risk. The goal that the project must meet to be considered successful is to not only find a reliable supplier for the project but to come in within the budget constraints as well. The tools that will be used to identify and select the proper suppliers will be the internet, traveling and various mailing system. The techniques that will be utilized for the suppliers will be held to the same standards that are required in the United States. Some of the tools and techniques that are used in risk management include ideas that are utilized to assist in controlling risk in an organization or a project. The tools that facilitate the identification, assessment, reduction or elimination of these risks. The tools might be formal or informal. The tools and techniques involved in this project include the following: flowcharts, checklists, standards, SWOT analysis as well as data gathering. The tools used are dependent on the risks identified. The risk management process will not be considered successful without the cooperation of the organization. A lot of assistance is vital from the other departments within the organization. The managers from the various departments should provide any information required by the risk manager so that he can evaluate it and pinpoint any risk exposures. Awareness should also be created among supervisors and employees of their responsibility in the stoppage of loss as well as their obligation to be accountable for following processes, attending risk control gatherings, and provide any advanced training.

• Describe various information sources that may be used by the project team for risk identification.

The risk identification process that is used will help identify the risks that may have an effect on the project and document their points. Historical information on previous projects carried out can be very resourceful such as previous project recordings. The company's department that was involved in previous projects should have preserved records of the project outcomes; this could be very helpful in identifying risks. These reports could be final project reports or risk reaction plans. Also, designed lessons learned that define problems and their solutions or availability through the understanding of the project participants or other groups in the organization.

• Identify and describe the risk management documentation that will be required for the project. Examples include RMP and risk management log or register.

Managers should look at risk registers as management techniques through a revision and updating procedure that recognizes, evaluates and handles risks to acceptable levels. The register offers a framework in which issues that are a threat to the delivery of the expected advantages are prevented. Activities are then initiated to reduce the possibility and the potential effect of particular risks. It is usually a list that consists of all the risks recognized at the start of the project as well as at the time the project is undertaken. The risk register categorizes the risks by the possibility of happening and the significance of the effect on the project. The register also contains the plans from the beginning of every high-level risk and the following results. Its components are as follows: an individual identifier of every risk, an explanation of every risk and the way it could have an impact on the project, an evaluation of the possibility it will happen and the possible significance of the effect if it actually happens, that is low medium or high, a classification of every risk in a risk evaluation table, the person in charge of managing the risk and a list of the intended mitigation activities. The register should be available the whole time the project is taking place. Some alterations could often be made as the current risks are categorized further regarding the success of the mitigating strategy and other risks are recognized. The main aim of a risk register is to offer a valuable instrument for the management and reduction of risks that are recognized before and throughout the project, to record risk reduction as well as management approaches being followed in reaction to the recognized risks and their classification regarding possibility and significance. Offering the trustees, management board as well as funders a written outline from which the status of risk can be described is another purpose. It also ensures that giving of risk management issues to key investors takes place. It offers a platform for delivery of feedback to inspire the participation of the main stakeholders. It identifies the activities required for the execution of the risk management plan and related costs. The development of a risk register usually comes when the following has taken place. Preliminary risks must be recognized and classified regarding possibility and significance at the very start of the project. The risk evaluation usually forms part of the project proposal, and when the project is finally approved, the risk register is created.

• Explain the role of risk management in the project planning process.

The risk management process requires a good understanding of the project, key stakeholders, the various categories of risk management actions or their sources and either of the documents as follows; project proposal, project business case or project business plan. Effective risk management acts a key part in the success of a project. They go hand in hand. It is critical to have a well-coped and measured approach to project risks. It provides the opportunity to recognize risks and decide on how best to handle risks as well as other events that are unexpected on the project. Risk management has an impact on all parts of the project as the budget, the timetable, the scope, the decided level of quality, communications and stakeholder participation, the success when the projects outcome is executed among others. Risks could be dimensional. They could be either positive, that is, opportunities or negative which means they need to be mitigated. Risk management is about those activities that demonstrate that risk management is a top priority for the project management team. Risk management is like being aware constantly of things that might occur, having a consensus on the strategies for all risks as well as working to prevent adverse risks from happening while at the same time coming up with the best out of the opportunities of positive risks. Risk management should be conducted from the beginning of the project, regularly discussed and evaluated and have all members of the project team participating. Every identified risk needs to be evaluated. The evaluation should be completed by the stakeholders and all parties involved in the decision-making process with the project.

In conclusion, using the various tools and techniques for risk management while planning a project, as well as evaluating the risk management plan during the project can help insure that risk are mitigated and sometimes even completely alleviated. The roles and responsibilities of all key personnel involved with the project play a strong part in making sure that the right decisions are made throughout the project and should keep open communications throughout and even after the completion of the project. Completing these risk management task will guarantee the success not only for the current project but future projects as well.

· Risk Breakdown Structure