Question

TASK: As a transportation System Designer I want you to think about how do you mitigate transportation delays. Expected, Anticipated and Unanticipated? A ship having to wait a week or more to discharge could destroy profits and I need you to come up with a few great ideas, then bring them to the discussion forum.

Objective: Figuring out the solution before the real problem saves money.

Answer 1

Transportation systems are designed to operate under defined conditions. Yet, disruptions such as those caused by an accident or by a storm are rather common and well mitigated. On occasion, a disruption at a much high scale takes place to the extent that the safety or security of a whole region or nation is compromised. Transportation is often considered a critical infrastructure since a disruption in one of its components can have significant impact on the economic and social well being of a region of a nation. An effective way to assess how critical an infrastructure is would be to consider the impacts its removal would have on the flows and activities it services. From an economic standpoint, the impacts of disasters are dependent on three factors; 1) the nature and level of incidence of disasters; 2) the level of exposure of populations and infrastructures and; 3) the level of vulnerability of populations and infrastructures.

Risk Management
When you’re planning your project, risks are still uncertain: they haven’t happened yet. But eventually, some of the risks that you plan for do happen, and that’s when you have to deal with them.

Managing risks on projects is a process that includes risk assessment and a mitigation strategy for those risks. Risk assessment includes both the identification of potential risk and the evaluation of the potential impact of the risk. A risk mitigation plan is designed to eliminate or minimize the impact of the risk events—occurrences that have a negative impact on the project. Identifying risk is both a creative and a disciplined process. The creative process includes brainstorming sessions where the team is asked to create a list of everything that could go wrong. All ideas are welcome at this stage with the evaluation of the ideas coming later.

After the risk has been identified and evaluated, the project team develops a risk mitigation plan, which is a plan to reduce the impact of an unexpected event. The project team mitigates risks in various ways:

• Risk avoidance
• Risk sharing
• Risk reduction
• Risk transfer

Each of these mitigation techniques can be an effective tool in reducing individual risks and the risk profile of the project. The risk mitigation plan captures the risk mitigation approach for each identified risk event and the actions the project management team will take to reduce or eliminate the risk.

As the project progresses and more information becomes available to the project team, the total risk on the project typically reduces, as activities are performed without loss. The risk plan needs to be updated with new information and risks checked off that are related to activities that have been performed.

Understanding where the risks occur on the project is important information for managing the contingency budget and managing cash reserves. Most organizations develop a plan for financing the project from existing organizational resources, including financing the project through a variety of financial instruments. In most cases, there is a cost to the organization to keep these funds available to the project, including the contingency budget. As the risks decrease over the length of the project, if the contingency is not used, then the funds set aside by the organization can be used for other purposes.

To determine the amount of contingency that can be released, the project team will conduct another risk evaluation and determine the amount of risk remaining on the project. If the risk profile is lower, the project team may release contingency funds back to the parent organization. If additional risks are uncovered, a new mitigation plan is developed including the possible addition of contingency funds.

It is true that no supply chain is immune from disruptions; however, there are steps you can take to mitigate disruptions in transporting your cargo and minimize the impact to your business.

The potential ripple effects caused by disruptions in the transport of your goods are greater the more connected global supply chains and the economies that support them become. Whether it is a hurricane or other natural disaster, labor unrest, or even trade disputes, the movement of your cargo will likely be disrupted or delayed at some point. It is true that no supply chain is immune from these disruptions; however, there are steps you can take to mitigate the risks and minimize the impact to your business.

There are four basic ways to handle a risk.

1. Avoid: The best thing you can do with a risk is avoid it. If you can prevent it from happening, it definitely won’t hurt your project. The easiest way to avoid this risk is to walk away from the cliff, but that may not be an option on this project.
2. Mitigate: If you can’t avoid the risk, you can mitigate it. This means taking some sort of action that will cause it to do as little damage to your project as possible.
3. Transfer: One effective way to deal with a risk is to pay someone else to accept it for you. The most common way to do this is to buy insurance.
4. Accept: When you can’t avoid, mitigate, or transfer a risk, then you have to accept it. But even when you accept a risk, at least you’ve looked at the alternatives and you know what will happen if it occurs. If you can’t avoid the risk, and there’s nothing you can do to reduce its impact, then accepting it is your only choice.