Risk management is one of the fundamental elements of an effective aviation risk management system. Most of us manage risk in our everyday activities, but certainly not in a formal, structured process.
Aviation service providers that implement ICAO compliant SMS programs structure risk management according to best industry practices. These practices most commonly have these risk management cycle phases:
Identify & Report Hazards: Identify whether potential risk exits and report it using formal hazard reporting tools (paper based, Web reporting forms, audits, gap analysis, etc). SMS Pro has a free Web-based hazard reporting form with automatic email notifications.
Additional capabilities of SMS Pro's hazard reporting tool includes:
- Ability to be customized with minimal costs to capture additional data elements;
- Predefined Web-based hazard reporting forms for flight operations, maintenance and more;
- Quick report for users who are pressured for time and need to submit a "quick hazard report;"
- Offline mode for operators with poor Internet connections or high bandwidth costs.
Assess Risk: Determine severity and probability of risk using a risk matrix like SMS Pro's Customizable Risk Matrix. When potential risk is negligible (low to medium severity, low likelihood of occurrence), no additional actions may be necessary unless the issue repeatedly occurs. However, if the risk could cause injury or damage to users and equipment, continue reactive risk management strategies.
Based on the severity of the reported issue and the type of issue, you may also elect to use SMS Pro™ to:
- Set a targeted closure date (so issue doesn't remain open forever);
- Report issue to regulatory authorities or client (when required by contract).
Classify Risk: The best risk management software packages offer simple, yet flexible methodologies to classify risk. We have to understand risks before we can manage them effectively, so aviation service providers incorporate risk classification systems. Classifying risks (or reported issues) provides safety managers the means to both identify and control risk, which is a major element of aviation risk management. SMS Pro™ provides a very comprehensive, yet flexible risk classification system to identify risk and for generating reports to communicate risk to the entire organization.
Corrective/Preventive Action Plan: Determine how to control the identified risk based on the risk's severity and likelihood of occurrence. Come up with various alternatives and perform a cost/benefit analysis when necessary.
Mitigate or Transfer: Implement corrective/preventive actions formulated in the previous phase to combat the identified risk. Reassess the risk after all corrective/preventive actions have been implemented. If the risk is not within acceptable levels, return to the previous phase and develop additional corrective/preventive actions and then implement them. If these corrective/preventive actions fail to mitigate risk to acceptable levels, continue analyzing the risk to determine actions to bring the identified risk to an acceptable severity level.
Track: Once risks have been mitigated to an acceptable severity level or transferred, risks should be tracked to ensure the implemented corrective actions remain effective and control of the risk. Furthermore, you must ensure that as time passes, the implemented corrective actions do not aggravate the risk they were designed to mitigate. Whenever previously identified risks reappear, the risk management cycle should begin again, starting with the analysis phase.