Question

Scenario:
You have recently gained employment as a Trainee Engineering Manager with a large multinational company which manufactures electrical machines and transducers, including transformers, motors, generators, sensors and actuators.
Your line manager has tasked you with creating a report to indicate your level of knowledge in engineering management.

Activity
You have specifically been instructed to provide written solutions to the following question.

a) Compare a range risk management practices and quality management theories and identify how they can improve management processes within the engineering industry? Which activities will improve management strategies? How do you think management strategies may be improved in certain circumstances or situations?

Answer 1

Risk Management Practices:

All organizations are confronted with risks that have the potential to negatively affect their business. Risk management practices in the financial services sector focus on identifying, measuring and analyzing those threats to reduce material, reputation, opportunity and other costs.

Risk analysis is primarily concerned with prioritizing and classifying. The main categories of risk to consider are

1. Strategic, for example a competitor coming on to the market strategic risks are those risks associated with operating in a particular industry. They include risks arising from merger and acquisition activity, changes among customers or in demand, industry changes, research and development.

2. Compliance risks are those associated with the need to comply with laws and regulations. They also apply to the need to act in a manner which investors and customers expect, for example, by ensuring proper corporate governance.

3. Financial risks are associated with your business' financial structure and systems and the transactions your business makes.

Identifying financial risk involves examining your daily financial operations, especially cash flow. If your business is too dependent on a single customer and they became unable to pay you, this could have serious implications for your business' viability. See our guide on how to identify potential cash flow problems.

4. Operational risks are associated with your business' operational and administrative procedures.

Risk evaluation allows you to determine the

• significance of risks to the business and decide to accept
• the specific risk or take action to prevent or minimize it.
• Risk evaluation allows you to determine the significance of risks to the business and decide to accept the specific risk or take action to prevent or minimize it.

There are four ways of dealing with, or managing, each risk that companies have identified. we have to accept it, transfer it, reduce it, and eliminate it.

As a result, the process of risk management:

I. Improves decision-making, planning and prioritization.

II. Helps you allocate capital and resources more efficiently.

III. Allows you to anticipate what may go wrong, minimizing the amount of fire-fighting you have to do or, in a worst-case scenario, preventing a disaster or serious financial loss.

IV. Significantly improves the probability that you will deliver your business plan on time and to budget.

Quality management is a firm-wide management philosophy of continuously improving the quality of the products/services/processes by focusing on the customers’ needs and expectations to enhance customer satisfaction and firm performance.

I. Errors or mistakes in the processes can also be figured out and corrected on time.

II. The processes are improved by means of controlling the processes periodically and monitoring data by initiating quality management continuously.

III. Effective knowledge and quality management design minimize the negative effects on the environment. Furthermore, as the processes become prevention oriented, costs are reduced and profit of the firm increases.

IV. There are mixed results about the relationship between quality management practices and performance.

Management strategies may be improved by implementing the following techniques:

• The risk controls should be monitored for their effectiveness.
• The identification and evaluation processes should be reviewed regularly and whenever significant change occurs.
• The risk management process should be audited periodically to make sure weaknesses are identified and addressed and to enable continual improvement.
• Effective training in management and improvement in quality bring success for the firms. Since training is positively related to performance. Because it is directly related to reducing production development time, waste of inventory, work in process, cost, delivery times, employee turnover, and complaints from customers.

• Customer complaints should be used as input to improve our processes; we have to measure customer satisfaction systematically and regularly for initiating more flexible products.

Please like and let us know.