Risk Analysis

In order to understand these terms: risk management and risk management system, it is necessary first to define the concepts related to the risks. Risk is defined as calculation forecast emergence of negative events (hazards) that cause loss or calculation forecast emergence of positive events (opportunities/chances), which bring us benefits.

Risk is a condition in which there is a possibility of negative deviations from the desired outcomes that we expect or hope will happen. In terms of business, risk is an unfulfillment of desired business objectives and it must include threats and opportunities from the environment that can potentially contribute to the growth and development of the PBS, but prevent development, and thus endanger the very survival of a PBS. The risk, in the broadest sense, is a particular danger, uncertainty, loss, or the uncertain future event that may have unintended consequences. The concept of risk comprises three elements:

• The perception that something might happen.

• Probability that something happens.

• The consequences of what might happen.

Risk consequences on the planned garment production are:

• exceeding the framework of the assessment of production costs,

• exceeding the requested date of making

• not acquiring the quality of clothing.

Tracking disorders and disturbances in production, their systematization and statistical methods can lead to the sizes which belong to risk and can be included in the calculation.

The risk may appear:

•  because of placement of low bids in the market and
• in production compared to the size of the series that is produced.

Activities for achieving goals in the process of preparation and production:

•  knowledge of market and adapting to conditions ,
•  finding real costs,
• designing the organization of production for each garment,
•  undertaking organizational and technological measures that will enable the production according to the planned costs,
• continuous control of production costs and
• creating a base of information for management of a PBS on the basis of production control.

Read more: Management of Technology Systems in Garment Industry, Woodhead Publishing Limited, Cambridge, Oxford, New Delhi,  2010.