Risk Management Plan for JM Transport

This Risk Management Plan outlines the hazards and areas of risk that JM Transport is exposed to, along with the benefits of a Risk Management Plan and the legislative framework. It also includes a risk assessment and treatment plan.

Zane Thomson
S3711556
RISK MANAGEMENT PLAN
FOR
JM Transport
07-05-2018
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TABLE OF CONTENTS
Section 1 Introduction......................................................................................................... 3
What Is Risk Management?............................................................................................. 3
What are the benefits of a Risk Management Plan?........................................................3
The Legislative Framework.............................................................................................3
Section 2 Risk Management in JM Transport.......................................................................4
What are the main hazards and areas of risk that the organisation is exposed to?........4
Insurance........................................................................................................................ 4
Strengths/weaknesses of the current Risk Management Process....................................4
Section 3 Risk Assessment..................................................................................................5
Risk Identification............................................................................................................ 5
Section 4 Risk Treatment Plan............................................................................................ 6
Key Responsibilities and Timeframes..........................................................................6
Communication and Participative arrangements.........................................................6
Monitoring and Evaluation........................................................................................... 6
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Section 1 Introduction
What Is Risk Management?
Risk management is a process used to address the risks involved in a wide range
of activities, including financial, commercial and environmental risks. It is also
used to eliminate or minimise health and safety risks to people at workplaces.
What are the benefits of a Risk Management Plan?
Risk-management programs provide both the strategic basis and the operational
framework for handling crisis within your company, as well as providing a parent
policy for crisis management.
o Many of the real risks facing JM Transport cannot be extracted from
a textbook, a comprehensive risk management program leverages a
team of experts to identify and provide a deeper understanding of
all types of risks.
o Build a better defense to class actions. If JM Transport was to be
taken to court by an employee or an external entity, they often rely
on their ability to convince the court that the defendants have been
negligent. This is harder to prove when the company can point to a
risk management program that is in place to minimize these risks.
o Get credit for cooperation. Many regulatory agencies have policies
where they give credit to companies under investigation for having a
risk management program in place. Having the risk management
program in place at JM Transport, we want to make sure the risk is
not due to a systematic breakdown within the company.
o Reducing JM Transport’s liability, regulators and shareholders within
JM Transport increasingly view litigation risk as a business liability.
Reducing litigation risk upfront makes JM a more attractive
investment.
o Provides support and insights to the board of directors at JM, as
board members may find it difficult to identify risks outside their
areas of expertise and experience, a risk management plan provides
resources and advisory services to make them better able to
discharge their duties.
The Legislative Framework
Briefly describe the purpose of each of the following legislation areas and how they might
apply in the context of risk management in the organisation. You should name in full the
relevant act / regulation / code (e.g. 2004 OHS Act, Victoria) in addition to explaining
relevance to JM Transport’s risk management.
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 AS/NZS 4360:2004 Risk management (superseded by AS/NZS ISO 31000:2009)
Duty of care: Wrongs and Other Acts (Law of Negligence) Act 2003 Act No. 102/2003
Mental harm, the liability of public authorities and damages for injury or death.
 company law
Act No. 61 of 1998 as amended This compilation was prepared on 1 November 2005
[This Act was amended by Act No. 63 of 1998 and Act No. 156 of 1999]
This gives JM Transport legal security to their business involving contracts and registration of titles.
 contract law

 environmental law explain what the act is
 freedom of information
 industrial relations law
 privacy and confidentiality Equal opportunity
The objectives of the Equal Opportunity Act 2010 are to encourage the identification and
elimination of discrimination, sexual harassment and victimisation and their causes, and to
promote and facilitate the progressive realisation of equality. This relates to JM Transport as it
eliminates all discrimination in the work force.
Section 2 Risk Management in JM Transport
What are the main hazards and areas of risk that the organisation is
exposed to?
Describe hazard and risk areas under each of the following sub-headings: (max. 2
paragraphs per sub-heading)
 Political
Taxes- if the government decides to increase tax rates in Australia, the price of
importing and exporting goods will increase, causing net-profits of logistics
companies too decrease.
Variation in commodity prices due to political reasons, fuel price variation and oil
rates all have a political risk to a business that includes exporting and exporting
of products. GST is also included in these risks to a business.
Bilateral trade- Bilateral trade agreements-The government of Australia has strong bilateral ties
with different countries like the USA and the Asian countries. This bilateral ties would provide the
companies operating in Australia opportunities to expand their operations in foreign markets and
maximize their revenue generation. Bilateral ties with foreign countries lead to expansion of trade
between Australia and its trading partner nations. This expanding trades would lead to large scale
export and import of goods which would necessitate services of logistics companies. These factors
would evidently lead to expansion of business of the logistics sector of Australia. However, terrorism
and bureaucratic disturbances are capable of disrupting business operations of business organisations
including the ones involved in logistics industries (Christopher 2016).
 Economic
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If the economy experiences a recession or a downturn, compnaies will be under huge
financial risk and pressure from the market. Per capita income- Australia is a booming economy
and experiencing large scale industrialisation. The country is country is experiencing high per capita
income which means people have more disposable income to buy expensive goods and services. This
leads to increase of demand for goods which boosts production of goods in the Australian economy.
This in turn leads to import of more goods which necessitates the use of logistics companies (Monczka
et al. 2015).
Availability of resources- The market of Australia is economically advanced which provides immense
resources to the commercial organisations. First, the country has an excellent network of banking and
non-banking institutions which provide the business organisations with financial capital. Moreover, the
people in Australian have disposable income which they can invest in securities market (Stadtler
2015). This factor gives opportunities to the business organisations to raise immense capital both from
the domestic and institutional investors which in turn boosts their operations. The economy of Australia
has a rate of literacy which provides the commercial organisations highly qualified human resources
which boost the productivity of the latter.
International currency exchange rates-The industries like logistics and warehousing are involve in
helping business organisations import and export goods. This brings them under direct impact of the
foreign currency exchange rates (Govindan, Soleimani and Kannan 2015
 Social
The people in the Australian society prefer using premium and expensive goods. This boosts the
demand for goods in the economy which in turn invites more participation of logistics companies to
import those goods. Moreover, the society in Australia has people from different origins like Asian,
European and African other than Australian origin people. These different ethnic groups have diverse
tastes and preferences which also boost business of the logistics companies as discussed (Johnston
and Marshall 2016).
Legal- Incoterms-The logistics industry of Australia comes under influence of incoterms or
International Commercial Terms. This is because they are involved in export and import of goods to
and from other countries. This brings them under impact of laws in operations in different countries.
International agreements- The companies involved in international operations come under direct
impact of the international agreements. These agreements cover diverse areas like banking, human
resources, technology sharing and water sharing (Blanco. and Ponce Cueto 2015).
 Technological
If new technological advancements are introduced it can be risky to parties who introduce
or do not introduce the new technology in their company. For example if the companies
that do not introduce the new technologies into there workforce it can potentioly lose
customers as cliental may choose to go with the company that have newer technology as
they will be more efficient and cost effective.
Data theft-Data theft is posing a serious risk before the business organisations across sectors
including logistics and warehousing. The logistics companies often have to share business sensitive
data with their client companies. The illegal groups often intrude into the data bank and steal
information of serious importance like financial data and international contracts (Stapleton et al. 2014).
Policy- The policies form the basis of the operations of the logistics companies and are also one of
the main risk factors to them. The change of government policies like increase in freight charges may
lead to unexpected increase in the expenditure of these companies. Similarly, change in international
policies can like imposing ban on Australian goods can also lead to repudiation of export contract. This
change of national and international policies pose serious risk to the business of logistics organisations
(Gasper 2016).
 Property-
Property poses serious threats to the operations of the companies especially logistics companies.
The logistics companies in their warehouses store inflammable goods which can catch fire or
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explode, thus causing loss of resources. These fires and explosions also cause financial loss
which hit the financial base of these companies (Blanco. and Ponce Cueto 2015).
Personnel- Lack of ethics and dishonest personnel often leak sensitive business data, thus causing
huge losses to the business organisations including logistics companies. These unethical practices
also result in loss of clients and market goodwill, thus creating long term business risks for the
companies (Singer et al. 2017).

Insurance
What types of insurance does the organisation have as part of its Risk Management
strategy? (list a minimum of 5 types of insurance and the risks each is designed to
address)
 Building Insurance: property damage protection for practices with their own
premises
Property Risk, this is to cover for any damage caused to the building in an accidental
manner
 Loss-of-Profit Insurance: protection of profit lost through damage to property
caused by fire or other insurable acts (includes coverage of staff wages and
sometimes costs of alternative premises)
Property Risk, this is for any insurable acts that occur within the workplace, covering the
unforseen events
 Personal Accident and Illness Insurance: same protection as provided through
personal Workplace Injury Insurance
Personnel risk, risks and hazards occurred by employees who has fallen victim to a
hazardous outcome.
 Life Insurance: financial security for the family of the insured deceased
Personnel, this is insurance to cover for the family of the employee who has died,
providing financial security.
Providing financial stability to families of the victim who has life has been claimed in a
workplace accident. This is a must for employees working in the logistics injury as there is
risks involved in the job.
 Trauma Insurance: financial security for the family of a person who suffers or is
diagnosed with serious health trauma
Strengths/weaknesses of the current Risk Management Process
Briefly describe the existing process and suggest at least 2 things that work well and at
least 2 things that could be improved and why. You will need to make assumptions about
what is currently done well and what might be improved (as per the following sections).
You are considering the Risk Management approach of the business here rather than
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specific risks. You might consider using a SWOT analysis supported by explanation. You
may also consider this from the perspective of moving the business to a new site.
(200 to 300 words)
Strengths:
1. Financially strong.
2. Has high market position.
3. Serves international clients
4. Has modern a fleet of trucks
Weaknesses:
1. Risk management strategy is not strong.
Opportunities:
1. Can spread into new markets.
2. Can serve new clients
3. Can expand into new areas like marine
logistics
Threats:
1. Faces competition from bigger logistics
companies
2. Dependent largely on government
policies.
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Section 3 Risk Assessment
Risk Identification
Risk Likelihood of
occurrence
Impact /
Consequence
Priority
for
treatme
nt
H/M/L
Suggested Treatment Who is
responsibl
e for
action
Action
by
date
Fatigue
Likely as truck
driver’s drive
for a long
amount of time
without sleep.
Severely
injured or even
a possible
fatality
High
Pulling over and having
a 15-minute powernap
whilst on route to your
destination.
Allowing time for rest
previous to staring
work.
Truck
driver
(feeling
tired and
fatigued on
route)
Immed
iately
Faulty
Indicator on
vehicle
Likely due to a
lack of
maintance
provided by the
business.
Could result in
a severe
accident
injuring
innocent
bystanders.
Legal
consequences
(police/authorit
y)
High
Monitoring all vehicles
on a regular basis
ensuring each vehicle is
roadworthy.
Truck
driver
(noticing
the faulty
indicator)
and the
business
owner.
Immed
iately
Driving under
the influence
Unlikely due to
the risks
involved, still
possible
though.
Loss of lives to
drivers and
innocent road
users/pedestria
ns. Unlikely due
to
consequences
involved.
High
Having an interlock
installed in each truck.
Will have truck drivers
think twice before
drinking alcohol/taking
illicit substances and
driving.
Truck
driver and
company
owner not
taking
enough
proportion
with this
matter.
Every
couple
month
s
Manual
Handling of
heavy
weights
Very likely as
employees in
the warehouse
lift objects
regularly
Severe injury,
loss of work
and possible
permanent
injury.
High
Having proper lifting
techniques displayed
around the warehouse,
so employees are
constantly reminded of
the importance. High
level of training
involving the dangerous
of lifting heavy goods.
Business
owner/man
ager of
warehouse
and
employee.
Immed
iately
Working at
heights
Likely as
drivers of
trucks regularly
climb onto and
off their vehicle
and fall.
Severely
injured,
possible days
off work and
worst case
scenario
permanent
disability
High
If the worker is required
to access the load from
the top of the vehicle
appropriate fall
protection needs to be
in place.
Business
owner
(investing
in fall
protection)
Immed
iately
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Section 4 Risk Treatment Plan
In this section you will develop an action plan for treating the risks identified in the above
table. Use the following sub-headings as a guide. (100 to 200 words each section)
1. Internal and external stakeholders
Who has a stake in the Risk Treatment Plan and what are their potential issues? (show for
each identified risk)
2. Key Responsibilities and Timeframes
(you have nominated the basic information in the above table – you may expand on that
here)
3. Communication and Participative arrangements
How will you ensure that relevant stakeholders are on board with the plan and continue
to participate in risk management processes? (this answer will be common to all
identified risks in above table)
4. Monitoring and Evaluation
How will the Risk Treatment Plan be monitored and evaluated? (this answer will be
common to all identified risks in above table)
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References:
Blanco, E.E. and Ponce Cueto, E.M., 2015. Modeling the cost of international trade in global supply
chains.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Coşar, A.K. and Demir, B., 2016. Domestic road infrastructure and international trade: Evidence from
Turkey. Journal of Development Economics, 118, pp.232-244.
Gasper, D., 2016. Ethics of development.
Govindan, K., Soleimani, H. and Kannan, D., 2015. Reverse logistics and closed-loop supply chain: A
comprehensive review to explore the future. European Journal of Operational Research, 240(3),
pp.603-626.
Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–Definition,
measure and modeling. Omega, 52, pp.119-132.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Ho, W., Zheng, T., Yildiz, H. and Talluri, S., 2015. Supply chain risk management: a literature
review. International Journal of Production Research, 53(16), pp.5031-5069.
Ho, W., Zheng, T., Yildiz, H. and Talluri, S., 2015. Supply chain risk management: a literature
review. International Journal of Production Research, 53(16), pp.5031-5069.
Johnston, M.W. and Marshall, G.W., 2016. Sales force management: Leadership, innovation,
technology. Routledge.
Martí, L., Puertas, R. and García, L., 2014. The importance of the Logistics Performance Index in
international trade. Applied economics, 46(24), pp.2982-2992.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply
chain management. Cengage Learning.
Singer, A., Jetter, A., Ellsworth, L., Gray, S., Zhang, P. and Laraichi, M.O., 2017. Policy Scenarios for
Fire-Adapted Communities: Understanding Stakeholder Risk Perceptions in Ashland, Oregon.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Stapleton, D.M., Pande, V. and O'Brien, D., 2014. EXW, FOB OR FCA? Choosing the right Incoterm
and why it matters to maritime shippers. Journal of Transportation Law, Logistics, and Policy, 81(3),
p.227.
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