The desired outcome would be to improve quality and communication between all parties involved in the supply chain, which then reduces the risk of losing customers. The objective is to reduce process risk by directly working with suppliers. For example, the use of this approach is said to help establish a strong communication channel throughout the supply chain. In other words, the process risk in the supply chain may be mitigated through collaboration. Īnother possible approach would be to implement a collaborative approach within the operational processes of a business. This approach does not completely eliminate process risk, yet it is a tool for the evaluation of the overall risk exposure so that the company may be able track and manage the risk linked to the overall business processes. The use of events logs can help risk managers oversee and evaluate a consolidated database with all associated process risk. Furthermore, information systems aid in gathering information about process risk events.Įvent logs is one approach to mitigate process risk. Certain business practices applied to its processes, such as standardization, is an example of how to minimize operational risk. It is difficult to eliminate all process risk due to the high dependency on complex environments and the high input of human resources. Any informational error or inaccurate input of data within the documents may overall weaken the effectiveness of financial contracts, and this form of risk may also overlap other risk, such as legal risk. For instance, banks generate a mass amount of documentations.
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