Lawrence Lloyd

June 1, 2008

1 Min Read
Risk Mitigation Pays Dividends, Report Finds


Keys for Risk Mitigation

Standardize processes for managing risks.

Invest in capabilities to highlight nonconformances in real time.

Link operational metrics to financial metrics.

Integrate manufacturing solutions with risk solutions.

A recent market research report indicates that risk mitigation plays a critical role in a manufacturing company's success. The report found that best-in-class manufacturers follow a risk-based approach that has resulted in the following benefits as compared with other manufacturers:

  • 11% increase in products manufactured to specifications.

  • 40-hour-earlier response time to nonconforming shipments.

  • 10% less asset downtime.

  • A reduction of 1.5 standard deviations in production process variability.

The report, titled “Mitigating Risks in Global Manufacturing Operations,” was published by the Aberdeen Group, a Boston-based market research firm. The results are based on an analysis of 250 manufacturers.

“To efficiently manage manufacturing operations, manufacturers must have capabilities to manage and mitigate risks from key areas such as supplier nonconformance, quality and compliance management, asset management, employee health and safety, environmental concerns, and time-to-market deadlines,” says Mehul Shah, a research analyst with Aberdeen's Global Manufacturing Practice.

Many companies use software products to automate certain processes and mitigate risks in manufacturing operations. For example, some suppliers offer automated software that identifies and quantifies high-risk events. Doing so can lead to streamlined quality management systems. In some cases, manufacturers can identify and subsequently prevent the most critical risks by using flexible rules-based work flows. For additional information on Aberdeen's report, visit

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