This paper highlights the importance of Strategic Enterprise Risk Management and Enterprise Resource Management to ensu...
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
Strategies, Enterprise Risk and Resource Management to Enhance Performance & Achieve Business Excellence in Coal Mining Industry Suresh Devrao Gharde Sr. Manager (Mining/Quality (Mining/Quality Control) Western Coalfields Limited, Nagpur, Maharashtra (India) E-mailID:sdakgharde@g E-mailID:
[email protected] mail.com
Abstract This This paper paper highli highlight ghtss the import importanc ancee of Strate Strategic gic Enterp Enterpris risee Risk Risk Mana Manage geme ment nt and and Ente Enterp rpri rise se Reso Resour urce ce Mana Manage geme ment nt to ensu ensure re Mine Mine Safe Safety ty,, its its moni monito tori ring ng and and Risk Risk Mana Manage geme ment nt alon along g with with optimum management of available resources to enhance organizati organizational onal performanc performance, e, profitabil profitability ity and and ulti ultima mate tely ly to attain Business Excellance in Coal Mining Industry. It stre tresse sses on need need to deve devellop a sim simple ple roa roadma dmap for for develo developme pment nt of Safety Safety Manage Managemen mentt Plan, Plan, easily easily underst understand andabl ablee by all concerned, aligned with the expectations of mine safety Legi Legisl slat atio ion n & miss missio ion n / visi vision on of the the orga organi niza zati tion on and and give givess on overv overvie iew w of occu occupa pati tion onal al Heal Health th and and Safe Safety ty frame framewo work rk in Indi Indiaa wit with spec specia iall refe refere renc ncee to coa coal mini ining activ ctiviities ties and offe offers rs an insi insigh ghtt to offi office cers rs worki working ng in risk risk mana manage geme ment nt depa depart rtme ment nt need need to reto retool ol,, re-e re-equi quip p and and fully fully upda update te them themse selv lves es to meet meet the the late latest st deve devellopme opment ntss to shou shoullder der ent entire ire resp respon onsi sibi bili lity ty of fool foolpr proo oof f Emerge Emergency ncy Prepar Preparedn edness ess & Respo Respone ne System Systemss for ensuri ensuring ng safet safety y of men, machine and materials deployed therein.
initial version. The submitted typeset scripts of each contribution must be in their final form and of good appearance because they will be printed directly. The document you are reading is written in the format that should be used in your paper. Coal Mining Scenario in India and across the Globe :
Coal Coal Mini Mining ng in Indi Indiaa is a majo majorr econ econom omic ic acti activi vity ty whic which h cont contri ribu bute tess sign signif ific ican antl tly y to the the econ econom omy y of Indi India. a. Coal oal is reg regard arded as the the back backbo bone ne of powe ower gener enerat atio ion n in India. There is huge demand of power in India. Coal acco accoun unts ts for for abou aboutt 67% 67% of the the tota totall ener energy gy cons consum umpt ptio ion n in
th
India. India has the 4
larg larges estt rese reserv rves es in the the worl world d and and
coal coal cont contri ribu bute tess 7% GDP GDP grow growth th amon among g cont contri ribu buti tion on by mini mining ng indu indust stry ry,, in Indi Indian an econ econom omy. y. Expo Expone nent ntia iall ener energy gy dem demand and has has to be met met for for nat nationa ionall gro growth, wth, deve devellopm opment ent and welfare of the society as a whole.
Keywords: Enterprise , Business Excellence, Coal Mining, Risk and Resource Management, Mines Safety, Monitoring, Cons Conseq eque uenc nce, e, prob probab abil ilit ity, y, Risk Risk Asse Assess ssme ment nt,, Miti Mitiga gati tion on Plan Plan,, Risk Rating, Roles & Responsibilities, Quality Control Deptt., Insifnificant, minor, major, Catastropee, Compliance, Resultant Risk, Strategic, Risk Identification, Operations, Risk Management Structure, Risk Analysis, Zero accident potential, Business Excellence, Excellence, exposure, likelihood. likelihood.
Mine Safety & Monitoring :
Coal Coal is strat tratif ifie ied d & carb arboniz onized ed rema remain inss of plan lant material at depth from earth surface under state of equi equillibr ibrium ium whic which h gets gets disr disru upte pted duri during ng ext extract ractio ion n and strata movement like roof / side fall, subsidance, slope failures / land slides etc.
1. Introduction The text must be in English. Authors whose English lang langua uage ge is not not thei heir own own are cert certai ainl nly y requ equest ested to have have thei theirr manu manusc scri ript ptss chec checke ked d (or (or co-a co-aut utho hore red) d) by an Engl Englis ish h native native speake speaker, r, for lingui linguisti sticc correc correctne tness ss before before submis submissio sion n and in its final version, if changes had been made to the
Mechanized extraction in U/G & Opencast mining gives rise to additional rise in accidents due to mate materi rial al hand handli ling ng & mini mining ng equi equipm pmen ent, t, blas blasti ting ng,, othe others rs mining related hazards like gas & coal dust explosion, oxygen deficiency, inundation, fires, moving parts of
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
mach machin ine, e, subs subsid iden ence ce and and heal health th haza hazard rdss due due high high pres pressu sure re,, temper temperatu ature, re, noise, noise, dust dust inadeq inadequat uatee lighti lighting, ng, electr electric ic shock shock etc. Further unsafe Act, unsafe condition, human & instrumental error, lack of skill add to it. Acci Accide dent nt do not not happ happen en,, they they are are caus caused ed.. Indi Indire rect ct cost of accidents are 4 times of direct cost. Mine Safety Moni Monito tori ring ng and and Risk Risk Mana Manage geme ment nt is a cont contin inuo uous us proc proces esss and and is carr carrie ied d out out to find find caus causes es of acci accide dent nts/ s/Ri Risk sk/d /dis isas aste ter r and suggest remedial measures to reduce impact of risk/m risk/mish ishaps aps and to develo develop p approx approxima imate te health health and Safety Safety Management System.
of vari variou ouss stak stakeh ehol olde ders rs with withou outt jeop jeopar ardi dizi zing ng empl employ oyee eess and customer satisfaction along with good governance. Increase in margin of profit by Strategic Enterprise Risk and optimum Resources Management faci facili lita tate tess the the orga organi niza zati tion on to fulf fulfil illl its its Ende Endeav avou ourr not not only only to expand / diversify its business activities but also cor corpor porate ate soci social al resp respon onssibi ibilitie itiess and and thus hus cont contrribu ibute to conti continuo nuous us improv improved ed corpor corporate ate image image in global global market market and capabilities to acquire maximum market share and contri contribut butee to sociosocio-eco econom nomica icall develo developme pment nt of the countr country y and thus, ultimately achieve the Business, Excellence while facing challenges of global competition.
Enterprise Resource Management :
st
Econ Econom omy y is gene genera rate ted d by abil abilit ity y to face face risk risk.. 21
cent centur ury y will will be domi domina nate ted d by leve levera ragi ging ng new new tech techno nolo logi gies es as know knowlledge edge is pow power but but know know-h -how ow to depl eploy inpu inputs ts is weap weapon on in glob global aliz ized ed and and libe libera rali lize zed d comp compet etit itiv ivee mark market et place. Mist Mistak akes es are are cost costly ly-s -so o cost costly ly that that they they can can forc forcee out of business an organization once seen as industry leader and power house. Mana Manage geme ment nt of risk risk and and opti optimu mum m mana manage geme ment nt of enterprise resources helps alleviate mistakes and emphasizes on the roles and contributions of various reso resour urce cess as crit critic ical al inpu inputs ts for for sust sustai aina nabl blee oper operat atio ions ns.. It req requir uires stra strate teg gic think hinkin ing g and and strat trateg egiies for effe ffectiv ctivee impl implem emen enttati ation to atta attain in the obje objecctive tivess impla mplan nting ting the objectives vision and mission of organization. Strat Strategi egicc planni planning, ng, Enterp Enterpris risee Risk Risk and Enterp Enterpris risee Resource Management are all interlinked and inte interd rdep epen ende dent nt on each each othe other. r. Stra Strate tegi gicc plan planni ning ng is base based d on fore foreca cast stin ing g and and opti optimu mum m deci decisi sion on maki making ng from from vari variou ouss alte altern rnat ativ ives es avai availa labl blee base based d on asse assess ssme ment nt of vari variou ouss risk riskss whic which h on orga organi niza zati tion on is faci facing ng and and like likely ly to come come acro across ss.. Strategic planning for Enterprise Risk and Enterprise reso resour urce ce mana manage geme ment nt not not only only inte integr grat ates es / stri strike ke bala balanc ncee between calculated Risk & Safety with productivity but are also be used as a very good tool for reduction of costs and and valu valuee enha enhanc ncem emen entt by way way of allo allowi wing ng prio priori riti tiza zati tion on of allo alloca cati tion on of scar scarce ce reso resour urce ces, s, appl applic icat atio ion n of cont contro rols ls at vari variou ouss stag stages es ther thereb eby y cutt cuttin ing g cost costs, s, redu reduci cing ng wast wastag ages es,, enco encour urag agin ing g high high stan standa dard rdss of Tota Totall Qual Qualit ity, y, adhe adhere renc ncee & comp compli lian ance ce to lega legall and and stat statut utor ory y requ requir irem emen ents ts with with work work persons participative management techniques, health, safe safety ty,, envi enviro ronm nmen ent, t, prot protec ecti tion on & cons conser erva vati tion on with with stri strict ct and techno-economical system development of the organi organizat zation ion,, result resulting ing in increa increased sed profit profitabi abilit lity y and wealth wealth
Enterprise Risk Management is a new form of business intelligence: the critical link between strategic planning and performance management. Enterprise Risk Management needs to be a key element in strategic deci decisi sion ons. s. It is abou aboutt how how Ente Enterp rpri rise se Risk Risk Mana Manage geme ment nt is inte integr grat ated ed into into busi busine ness ss plan planni ning ng for for exam exampl ple, e, reso resour urce ce allo alloca cati tion on and and inve invest stme ment nt deci decisi sion on.. For For comp compan any y in risk risky y business ERM is not just a necessity, its a competitive advantage. Strategic Enterprise Risk and Resource Mana Manage geme ment nt play playss a sign signif ific ican antt role ole in work work we do with ith comm commun unit itie iess and and gove govern rnme ment nt wher wheree we oper operat ate. e. It deri derive vess a deta detaiiled fram framew ewor ork k that that invo nvolve lves all all poli politi tica call elem elemen entt and and stak stakeh ehol olde ders rs.. It is very very robu robust st prog progra ram m that that affe affect ctss the the oper operat atio ion nal and and stra strate tegi gicc plan planss and and lies ies to com complia plian nce; ce; depending on degree of systemization and disciplined implementation.
2. Strategic Enterprise Risk Management : Hazard: is a sour ource of pote otenti ntial harm harm or a situ situaation tion with with a potential to cause cause loss. Risk: It may be defined as ‘The chance of something happ happen enin ing g that that will will have have an impa impact ct upon upon obje object ctiv ives es of the the orga organi niza zati tion on.. It is meas measur ured ed in term termss of cons conseq eque uenc nces es and and probability i.e. i.e. Risk = Consequences X Probability Risk Rating = Consequences X Probability X Exposure. Consequence:- It is outcome of an event/situation i.e. Positive/negative. Probability:- It is likelihood of a specific outcome happening depending on exposure of that situation. Expr Expres esse sed d as a numb number er betw betwee een n 0 and and 1 with with ‘0’ ‘0’ indi indica cati ting ng an imposs possib iblle out outcom come and and ‘1’ ‘1’ indi ndicat cating ing an outc utcome ome is cert certai ain n i.e. i.e. rare rare like likely ly,, less less like likely ly,, poss possib ible le,, impo imposs ssib ible le but but
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
here for ease of calculation purpose we take 1 to 5. Risk identificat identification ion:- It is the the proc proces esss of dete determ rmin inin ing g what what can happen, why and how. Ris Risk Assessment:- It is a process that involves measurement of risks to determine priorities and to enab enable le iden identi tifi fica cati tion on of appr approp opri riat atee leve levell of risk risk trea treatm tmen entt to mitigate it.
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Identifin ifing g / Ass Assess Ris Risk : Risk Risk asse assess ssme ment nt can can
be done using number of techniques, such as inspections, audit, task/activity or situation Anal Analys ysis is,, brai brains nsto torm rmin ing g in work work grou group, p, Qual Qualit ity y circ circle les, s, outc outcom omee of cons consum umer erss meet meet & feed feedba back ck from them. ●
A method of analysing possible causes of defined unwa unwant nted ed even events ts,, by star starti ting ng with with unwa unwant nted ed event, identifying possible causes, then anal analys ysin ing g the the fact factor orss to thos thosee caus causes es etc etc unti untill “root causes” have been identified.
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Hazard and Operability Studies : A sys systema temati ticc revi revieew of the conse onsequ quen encces and and
Risk Risk Rati Rating ng:- It is to categorize the level of risk such as severe, major, minor or extreme, high moderate & low. Risk Risk Mana Manage geme ment nt Stru Struct ctur uree & org organiz anizat atio ion: n: - It is systematic application of management policies, procedures, practices, standard operating practices to the task taskss of iden identtifyi ifyin ng, anal nalyzi yzing, ng, asse ssessi ssing, ng, treat reatiing and and monitoring risk. In Coal Coal Indi India, a, the the risk risk mana manage geme ment nt orga organi niza zati tion on consists of formation of risk management committee, where one of the Senior most Board Member is the chai chairm rman an of Risk Man Managem agemen entt Comm ommitte itteee fol followe owed by two two Dire Direct ctor orss of the the Boar Board( d( One One inde indepe pend nden entt dire direct ctor or and and oth other from from the org organi anizat zation ion) as membe emberrs of the the ape apex risk risk management committee who have control on sub risks management committees of each subsidiaries. In each subsidiary, the risk management comm commit itte teee cons consis ists ts of Chie Chieff Risk Risk Offi Office cerr (Chi (Chief ef Gene Genera rall Manager- Safety & Conservation) as chairman of the committee with under whom each functional head of Subs Subsid idia iary ry Head Head Quar Quarte terr have have to nomi nomina nate te one one risk risk owne owner r and and othe otherr miti mitiga gati tion on plan plan owne owner. r. Exec Execut utiv ivee-In In-- Char Charge ge for for non routine transaction is also nominated and similar framework is to be formed at each area level.
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Analysis
:
Work Risk Assessment and Control :
Whic Which h is a pro proces cess for ident dentif ifyi ying ng pote otenti ntial production or maintenance incidence and losses and use a matrix approach to define risk risk leve levells from rom esti estima mate tess of conse onsequ quen ence cess and likelihood. ●
method od of exam examin inat atio ion n What if Anal What Analys ysis is : A meth of the consequences of a wide range of type of occu occurr rren ence ces, s, draw drawn n from from a comp compre rehe hens nsiv ivee chec checkl klis istt desi design gned ed to suit suit the the part partic icul ular ar type type of operation.
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Pare Pareto to Prin Princi cipl ples es : It was intod ntoduc uced ed by Dr.
J.M. Juron (Noted for his work in Quality Management) an Italian economist. That majority of the wealth of the country is concentrated in the hands of few of the fami famili lies es.. It help helpss to focu focuss on impo import rtan antt task tasks, s, the one with potential to produce most benefits.
Meanss to clea clearl rly y defi define ned d the the Esta Establ blis ish h cont contex extt : Mean particular taks, issue or situation and underlined risk that one is trying to resolve as part of risk management and activities.
Tree
likelihood of different process or system abn abnorm ormalit alitie ies, s, such such as exce excess ssiivel vely high high or low low flow flow,, pres pressu sure re,, temp temper erat atur uree etc. etc. It can can be adapted to wide range of types of industry and operation. It is a foundation for mach machin iner ery y haza hazard rd iden identi tifi fica cati tion on(M (MHI HI)) and and potential human error identification(PHEI) identification(PHEI)..
Risk Control:- Risk Control is the part of risk management, which involves the provision of policies, standards and procedures to eliminate, avoid or minimize adverse risk facing an enterprise. Risk Management Process : It is systematic and scientific process which helps to iden identi tify fy,, prio priori riti tize ze,, miti mitiga gate te,, moni monito torr and and repo report rt risk risk (as (as per ISO 31000 & COSO, AS4360). It aims to reduce likelihood and impact of mishaps of all kinds, Risk Management process includes :
Fault
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Other techniques are Flowchart and Depe Depend nden ency cy Anal Analys ysis is,, Insp Inspec ecti tion on ,Aud ,Audit it &
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
Sampling, Questionnaires and checklist, SWOT SW OT and and PEST PESTLE LE Anal Analys ysis is,, Delp Delphi hi,E ,Eve vent nt Tree Tree Anal Analys ysis is,, Rapi Rapid d Rank Rankin in,, Fail Failur uree Mode Mode and Effec Effects ts Criti Critical cally ly Analys Analysis, is, Failu Failure re Mode Mode and Effect Effectss Analys Analysis, is, Incide Incident nt Invest Investiga igatio tion, n, Ind Indust ustry Benc Benchm hmar arki king ng,, Busi usines ness Impa Impact ct Analysis, Dependency Modelling, BPEST(Business, Political, Economic, Soci Social al,, Tech Techno nolo logi gica cal) l) anal analys ysis is,, Stat Statis isti tica call Infe Infere renc nces es,, Meas Measur ures es of Cent Centra rall Tend Tenden ency cy and Dispersion. Ex:- Majority of the sales revenues of
comp compan any y will will come come from from a smal smalll prop propor orti tion on of the consumers. :- Majo Majorrity ity of qual qualiity comp omplai laints nts abou aboutt a product will result from a small proportion of the causes. :- Majo Majori rity ty of the the prod produc ucti tivi vity ty loss loss will will be caused by a small proportion of the causes. :- Most of the risk faced by an organi organizat zation ion/en /enter terpri prise se will will arrive arrive from from a few of the causes. :- Most of the effects/impacts are due to a few few of the the caus causes es i.e. i.e. 80% 80% prob proble lems ms/r /ris isks ks are are due to only 20% of the causes. -
D(4)(Unlikel
L
L
M
H
E
L
L
M
H
H
y/ Less likely) E(5) (Rare) Conceivable but unlikely
Legend : E: Extr Extrem emee Risk Risk : Imme Immedi diat atee Acti Action on Requ Requir ired ed,, Risk Score. H : High Risk : Senior Management Attention needed. M : Mode Modera rate te Risk Risk : Mana Manage geme ment nt Resp Respon onsi sibi bili lity ty must must be specified. L : Low Risk : Management by routine procedures. Scale of Exposure : Continuous = 5
Frequent (daily) = 4 Seldom (weekly) = 3 Usual (Monthly) = 2 Occasional
=1
The next step in Enterprise Risk Management cycl cyclee : is to prov provid idee an esti estim mate ate of res result ultant ant risk, isk, in term termss of con consequ sequeence nces and like likelliho ihood. od. A risk isk grid matrix is used to provide a qualitative & quantitative measure of risk magnitude. Using the equations the values can be used used to calc calcul ulat atee Risk Risk scor scoree of risk risk eval evalua uati tion on and and prioritization.
Risk Risk Assess Assessmen mentt and Priori Prioritiz tizati ation on : It invo involv lves es
assessing the relative priority of each risk to arrive at the key risks as ‘Risks That Matter’ (RTM (RTM). ). This This invo involv lves es cons consid ider erin ing g the the pote potent ntia iall impact and likelihood of occurrences of the risks. Likelihood
Consequences Insign
Minor
Mod
Major
Catastro
ificant
2
erate
4
phe
1 A(1)(Almost
3
5
M
H
E
E
E
B(2)Likely
M
H
H
E
E
C(3)(Modera
L
M
H
E
Certain)
E
Risk Score = Consequence X Likelihood. Risk Score = Consequence X Probability X Exposure.
Involv lves es desi design gn,, Design of Risk Mitigation Plan : It Invo implementation of activities that manages risk to an accept acceptabl ablee level. level. After After identi identific ficati ation on and priori prioritiz tizing ing Risk; Risk; Desi Design gn of Risk Risk Miti Mitiga gati tion on plan plan is requ requir ired ed for for addr addres essi sing ng (tre (treat atme ment nt)) the the Risk Riskss that that matt matter er (RTM (RTM), ), whic which h incl includ udes es deve develo lopm pmen entt of miti mitiga gati tion on cont contro rols ls and and an acti action on plan plan for for implem implement enting ing the mitiga mitigatio tion n contro controll along along with with mitiga mitigatio tion n owner and his responsibilities with timeline, Risk Management plan has to reviewed and approved by the Chief Risk Officer.
te Possible)
Risk Risk trea treatm tmen entt is the the sele select ctio ion n and and impl implem emen enta tati tion on of appr approp opri riat atee opti option onss for for deal dealin ing g with with Risk Risk.. Typi Typica call lly, y, the the
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
option comprises of: Acceptance Reduction ● ● Transfer ● On-going management ● Reta Retain in the the risk risk (Res (Resid idua uall Risk Risk whic which h may require financing)
Proper documentation and record keeping of various activities of risk management
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To desi desig gn Risk Risk Miti Mitiga gattion ion Plan Plan (RMP) RMP),, the conce oncept pt of "Hierarchy of Control" helps to frame it.
Remove/Eliminate. Remove/Eliminate. Subst ubstit itut ute, e, sub substa stance nce, proc rocess ess, equ equipm ipment, ent, ● working/Substitution working/Substitution method. Engineering/isolation Engineering/isolation –Resign and separation. ● ● Admi dminis nistrat tratiiveve-Train rainiing Skill kill dev develo elopme pment, nt, follow Standard Operating Procedure(SOP), DGMS circulars, do’s don'ts systematize operation, strict adherence to coal mines act, rules, regulations, bye-laws Protectio Protection-Fi n-Fire re fighting, fighting, calibrat calibration ion of laborator laboratory y ● and rescue apparatus. Human Behavior, Compliance of directives ● Office, Memorandum of MOEF & CC,CCO, SPCB, CPCB etc. development of culture on business ethics. ●
Not Note : Somet ometim imes es comb combin inat atio ion n of cont contro rols ls are are appl applie ied, d, if one method of control is inadequate. Fina Financ ncia iall impa impact ct of vari variou ouss risk riskss need need to be calc calcul ulat ated ed for analysing ing and taking corrective action to reduce them. Roles and Responsibilities : Everyone in an entity has some responsibility for ente enterp rpri rise se risk risk mana manage geme ment nt.. The The Chie Chieff Exec Execut utiv ivee Offi Office cer r is ultimately responsible and assumed the ownership. Other managers support the entity’s risk management philosophy, promote compliance with its risk appetite, and manage risks within their spheres of responsibility cons consis iste tent nt with with risk risk tole tolera ranc nces es.. Othe Otherr enti entity ty pers person onne nell are are resp respon onsi sibl blee for for exec execut utin ing g ente enterp rpri rise se risk risk mana manage geme ment nt in acco accord rdan ance ce with with the the esta establ blis ishe hed d dire direct ctiv ives es and and prot protoc ocol ols. s. The board of directors provide important oversight to ente enterp rpri rise se risk risk mana manage geme ment nt,, and and is awar awaree of and and conc concur urss with the entity’s risk appetite. A number of external parties, such as customers, vendors, business partners of joint ventures, if any, external auditors, regulators and financial analysts often provide information useful in effecting enterprise risk management, but they are not resp respon onsi sibl blee for for effe effect ctiv iven enes esss of, of, nor nor are are they they a part part of, of, the the entity’s enterprise risk management. -
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Documentation, Recording and Reporting :
st
Should be done from 1
esta establ blis ishi hing ng cont contex ext, t, stag stages es of
Risk isk Ide Identi ntifica ficati tion on to last last stag stagee of Risk Miti Mitiga gattion ion Plan; an; empl employ oyee ee/c /cus usto tome merr comp compla lain ints ts,, feed feedba back ck/s /sug ugge gest stio ion n on vari variou ouss orga organi niza zati tion onal al matt matter erss risk risk and and reso resour urce ce matt matter erss shou should ld be impl implem emen entted and moni onitor tored to enabl nablee fur further ther succ succes essf sful ul revi review ew at freq freque uent nt inte interv rval alss and and take take prev preven enti tive ve and corrective action time to time towards attaining orga organi niza zati tion onal al goal goalss keep keepin ing g in view view the the visi vision on,, miss missio ion n of the organization and attain business survival and excellence in coal mining industry and meet all stak stakeh ehol olde ders rs requ requir irem emen ents ts and and ulti ultima mate tely ly ensu ensure re nati nation onal al growth. Risk Monitoring and Reporting : ● Review the effectiveness of risk mitigation for the Risks That Matters(RTM). Key tasks are as follows. ► Review RTMs and effectiveness of their mitigation plans. ► Dete Determ rmin inee and and oper operat atio iona nali lize ze corr correc ecti tive ve acti action on where applicable, and ► Prov Provid idee an over overal alll Risk Risk Mana Manage geme ment nt rati rating ng for for the the RTMs in the Risk Reporting. Provide risk reports to the CRO (Chief Risk Officer); the key tasks are as follows: ► Prep repare are and and appro pprove ve the risk isk repo report rtiing pac pack for for CRO's office; ► Pres resent ent the the resu resullts of Risk Mana Manage geme ment nt to CRO office. ●
Sugge uggessted ted acti ctions ons tha that might ght be taken aken as a res result ult of foresaid reports depends on position and roll of the parties involved i.e. Board of Directors, Senior Management, Other Entity Personnel, Regulators, Professional Organization and Educators.
(III) Statutory Requirement of Safety, Monitoring & Enterprise Risk & Resource Management : Ente Enterrpris prisee : It is an entity i.e. a project/activity that involves many people and that is often difficult/risky, formed to attend certain sets of objectives. Example : Coal India Limit imiteed, Maharatna public sector undertaking and world largest producer of coa coal acc account ountss for for 81.9 81.9 % of Indi ndia’s a’s tot total coa coal prod produc ucti tion on having following mission and vision and management
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
policy, also adopts risk and resource management as a tool for for deve develo lopm pmen entt of appr approp opri riat atee heal health th and and safe safety ty syst system em and optimum utilization of enterprise resources, cost redu reduct ctio ion n by way way of prop proper er wast wastee mana manage geme ment nt tech techni niqu ques es to enhance productivity and profitability of the orga organi niza zati tion on,, ulti ultima mate tely ly to achi achiev evee busi busine ness ss exce excell llen ence ce in com compet petitiv itivee and and vol volatil atilee globa loball busi busine nesss envi enviro ron nment ment alon along g with with its its corp corpor orat atee soci social al resp respon onsi sibi bili liti ties es to empo empowe wer r India and enable life’s. Mission: To pro produce duce and and marke arkett the plan lanned ned quant uantit ity y of coal coal and and coal coal prod produc ucts ts effi effici cien entl tly y and and econ econom omic ical ally ly in an eco-friendly manner with due regard to safety, conservation and quality. Vision: To emerge as a global player in the primary ener energy gy sect sector or comm commit itte ted d to prov provid idee ener energy gy secu securi rity ty to the the country by attaining environmentally & socially sus sustai tainab nable grow growtth thro hrough ugh best best prac ractice ticess from from mine mine to market. Management Policy : ● Assured quality of coal supplies Optimum utilization of available resources. ● ● ●
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Compliance to requirements of coal sector. Continual improvement in our system performance. Compliance of legal and other subscribed obligations. Prevention of environmental pollution. Prom Promot otin ing g envi enviro ronm nmen enta tall cons consci ciou ousn snes esss amon among g all concerned. Carry Carrying ing out activi activitie tiess regard regarding ing corpor corporate ate social social responsibilities.
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and ILO Convention No.155 d) DGMS DGMS Circ Circul ular ar-T -Tec ech h 13/2 13/200 002 2 i.e. i.e. requ requir irem emen entt of safety management system etc. e) To adhere and comply the targ target et/o /obs bser erva vati tion on/o /obj bjec ecti tive vess stip stipul ulat ated ed by ISO ISO 9000 & ISO 14001 certification agency. f) National policy on safety, health and the environment (HSE) at work place declared on th 20 February 2009. g)
Statutory Requirements:
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Clau Clause se 49 of(S of(SEB EBI/ I/CF CFD/ D/DI DIL/ L/CG CG/1 /1/2 /250 504/ 4/12 12/1 /10 0 dated 29/12/204 & 2014 that as per corporate gove govern rnan ance ce,, the the top top 100 100 list listed ed comp compan anie iess by way way of mark market et capi capita tali liza zati tion on made made it mand mandat ator ory y that that ente enterp rpri rise se risk risk mana manage geme ment nt shou should ld be carr carrie ied d out out at stipulated interval and report should be submitted after compliance without fail. The listing Agreement of securities and Exchange Board of India mandates : Annexure I (IV) (C) : The company shall lay down down proc proced edur ures es to info inform rm Boar Board d Memb Member erss abou aboutt the risk risk assess assessmen mentt and minim minimiza izatio tion n proced procedure ures. s. This This proc proced edur uree shal shalll be peri period odic ical ally ly revi review ewed ed to ensu ensure re that that exec execut utiv ivee mana manage geme ment nt cont contro roll risk riskss
through a properly defined framework. Anne Annexu xure re I (IV) (IV) (F): (F): As part part of dire direct ctor orss repo report rt or as an addi additi tion on ther theret eto, o, a mana manage geme ment nt disc discus ussi sion on and analysis report should form part of the Annual Report to the shareholders. As per Companies Companies Act 2013:Under section 134 (3) (n) (Report by Board of Directors) will include a statement indicating development and implementation of risk mana manage geme ment nt poli policy cy for for the the comp compan any, y, incl includ udin ing g iden identi tifi fica cati tion on ther therei ein n of vari variou ouss elem elemen ents ts of risk risk,, if any, which in the opinion of the Board may threaten the existence of the company. Under Section 177(Evaluation by Audit Committee): Evaluation of internal financial control and risk management system of the company. th Compliance of 9 conf confer eren ence ce on Safe Safety ty in Mine Miness
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Recommendation in Aug-2004 of the Treadway Commission Committee of sponsoring orga organi niza zati tion onss (COS (COSO) O) issu issued ed its its Ente Enterp rpri rise se Risk Risk Mana Manage geme ment nt fram framew ewor ork k both both to sati satisf sfy/ y/ev eval alua uate te thei theirr inte intern rnal al cont contro roll need needss and and to move move towa toward rdss a fuller rush management process. Occupational Safety and Health (OSH) Legi Legisl slat atio ion n incl includ udin ing g Mine Miness ActAct-19 1952 52 and and rule ruless & regulations framed thereunder to provide heal health th,, safe safety ty and and well well bein being g of pers person onss empl employ oyed ed in mines. The Act regulates the working cond condit itio ions ns and and envi enviro ronm nmen entt in mine miness with with a view view to make work more human and to provide for meas measur ures es to prev preveent acci accide dent ntss & occ occupat upatio ion nal diseases and requires provision of some basic amenities to mine workers.
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Determine risk profile of the organization.
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Cost Benefit Analysis. Bett Better er Mana Manage geme ment nt of unce uncert rtai aint ntie iess impa impact ctin ing g organizational performance. Safeg feguar uard com compan panies ies, val values ues and and stak stakeehol holder der interest. Stra Strate tegi gicc & Cont Contin inge genc ncy y Plan Planni ning ng and and opti optimu mum m Decision Making. To atta attain in Zero Zero Acci Accide dent nt Pote Potent ntia ial, l, Zero Zero Qual Qualit ity y Tole Tolera ranc nce, e, Zero Zero Defe Defect ct Assu Assura ranc nce, e, Tota Totall Qual Qualit ity y Managemen Management, t, Reduce Reduce Environme Environmental ntal Pollution Pollution by application of clean coal technologies etc. Aligning risk appetite and strategy. Enhancing risk response decisions. Reducing operational surprises and losses. Identifying and managing multiple and cross-enterprise cross-enterprise risks. Seizing opportunities. Improving deployment of capital. To ensu ensure re relia eliabi billity ity and and com complia plian nce with laws laws and regulations within the entity’s control to achieve the set objectives i.e. strategic, operational, reporting and compliance.
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While enterprise risk management provides impo import rtan antt bene benefi fits ts,, limi limita tati tion onss exis exist. t. In addi additi tion on to factor factorss discus discussed sed above, above, limita limitatio tions ns result result from from the realities that human judgment in decision maki making ng can can be faul faulty ty,, deci decisi sion onss on resp respon ondi ding ng to risk risk and and esta establ blis ishi hing ng cont contro rols ls need need to cons consid ider er the the rela relati tive ve cost costss and and bene benefi fits ts,, brea breakd kdow owns ns can can occu occur r because of human failures such as simple errors or mistakes, controls can be circumvented by coll collus usio ion n of two two or more more peop people le,, and and mana manage geme ment nt has the ability to override enterprise risk management decisions. These limitations preclude a board and management from having absolute assurance as to achievement of the entity’s objectives. In addition to this other limitations are : Time con consum suming ing & cont ontinuo inuous us proc proceess and and not not once-off activity. Site specific system development. Educat ucated ed expe experi rien encced and and sel self motiv otivaated ted cros crosss functional team needed.
Reasons for failure of Enterprise :
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Failure to understand the core business principle/expertise. principle/expertise. Unrela Unrelated ted,, divers diversifi ificat cation ion and invest investmen ments ts before before comp comple lete te acqu acquis isit itio ion n such such as land land for for the the proj projec ects ts and socio-political litigations. Lack of vision and inability to foresee problems/risks. Poor discipline and control mechanism and anal analyt ytic ical al info inform rmat atio ion n syst system em,, load loadin ing g the the firm firm with heavy debts. Comp Compan anie iess stic sticki king ng with with old old obso obsole lete te stra strate tegi gies es and technology. Impr Impro oper per chang hangee manag anagem emen entt as per per cha change nge in global business environment. Unhapp Unhappy y employ employees ees (Perm (Permane anent nt and Contra Contractu ctual) al) due to disputes resulting contract failures and false implication of officers in cases and subjected to punishment. False projection of target and quality of coal in project reports compared to what is actual. Forc orceful eful tran transsfer fer/app /appllica ication tion of tech techno nollogy ogy to Indian Mines from foreign instead of custom customiza izatio tion n of equipm equipment ent with with existi existing ng mining mining,, geology and project specific requirements. Planning not merging with operations practically. Fail Failur uree in upda updati ting ng the the empl employ oyee ees’ s’ know knowle ledg dge, e, skills and imparting jobs specific training at frequent intervals. Fail Failur uree in appr apprec ecia iati tion on of inno innova vati tion on,, rese resear arch ch & deve devellopm opment ent and and boos boosti ting ng moral oral of empl mploye oyees and their recognition. Cust Custom omer er’s ’s unsa unsati tisf sfac acti tion on and and fail failur uree of time timely ly settlement of their grievances. Improp Improper er projec projectt relate related d foreca forecasti sting ng and ensuri ensuring ng rel reliabi iabillity ity and and feas feasiibil bility incor ncorre rect ct & unti untime mely ly deci decisi sion on,, plan planni ning ng,, orga organi nizi zing ng,, impl implem emen enta tati tion on and and opti optimu mum m util utiliz izat atio ion n of ente enterp rpri rise se reso resour urce cess and cost control techniques. Inco Incorr rrec ectt flow flow of info inform rmat atio ion n and and mark market et surv survey ey & organizational system failures. Incompetent work force and delegation of powers, accountability accountability and responsibility. responsibility. Poor industrial relations and human resource development.
(IV) Example of Risk Identification, Risk Measurement, Risk Ranking and Risk
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
Categorization for Enterprise Risk Management: Risk Identification: 1)
Major Elements Responsible for Risk :
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Intr Introd oduc ucti tion on of narr narrow ow grad gradee band bands/ s/sl slab abss widt width h i.e. i.e. GCV GCV (Gro (Gross ss Calo Calori rifi ficc Valu Value) e) conc concep eptt in plac placee of earlier (UHV) Head Value Concept and contamination of coal during extraction from mines having thin shale bands and frequent geological disturbances.
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Sub Elements/Causes of Risk : Earl Earlie ierr UHV UHV basi basiss grad gradin ing g syst system em has has broa broadb dban and d
width/slab varying from 600 to 1100 Kcal/kg compared to existing narrow/small band widt width/ h/sl slab ab i.e. i.e. in newl newly y intr introd oduc uced ed GCV GCV conc concep eptt varyi arying ng onl only by 300 Kcal cal/kg /kg bet between een each each band band i.e. G9 grade has GCV band of exceeding 4600 Kcal/kg and not exceeding 4900 Kcal/kg. 3) -
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Resultant Risks & Risk Measurement Increase in events of grade slippage as per
bands/slab causing frequent customers complaints/grievances. Bloc Blocki king ng of huge huge sale saless reve revenu nuee of the the comp compan any y with with cust custom omer erss e.g. e.g. if ther theree is grad gradee slip slippa page ge in case of power sector/FS /FSA customer from G9 (RS.1 (RS.132 320/T 0/T)) to G11( G11(Rs Rs.97 .970/T 0/T)) grad grade, e, then then loss loss per ton to be incurred by mining comp ompany/ any/ccredi reditt note note rais aised by custo ustome merr will will be rupees Rs.350/T. Suppose in a XYZ XYZ area, AAP target of production and dispatch is 1000000 T/Annum then the project will incu incurrred red a los loss of 35 Cror Crore/ e/y year. ear. Thus Thus havi having ng a nega negati tive ve fina financ ncia iall impac impactt on the the orga organiz nizat atio ion n which in turn has overall negative ive impa mpact on prof profit ita abili bilitty and and grow growtth of the the organ rganiz izat atio ion n and other related elements. Increased litigation matters due to failure to supply agree and declared grade of coal to customers. Shift Shifting ing custom customers ers to new market market places places result resulting ing in poor dispatches due to poor customer satisfaction. Furthe rtherr degr degrad adat atiion of qual qualit ity y of coal coal in stoc stocks ks
due due to seas season onal al chan change ges, s, atmo atmosp sphe heri ricc expo exposu sure re and and fire firess etc etc in term term affe affect ctin ing g prof profit itab abil ilit ity y of the the organization and stake holders value. Negative impact on market image of the organization. Non compliance of office memorandum of MOEF MOEF & CC and and Cent Centra ral/ l/St Stat atee Poll Pollut utio ion n Cont Contro roll Board and Coal Controller Organization dire direct ctiv ives es stat statin ing g prod produc ucti tion on and and supp supply ly of coal coal having less than 34% ash content to power houses. Raising of credit notes in crore of rupees by customer. Redu Reduci cing ng proj projec ectt reve revenu nuee of the the orga organi niza zati tion on on pretext of stone compensation and over sizing. 4) Risk Ranking and Risk Categorization: As per the parameters : Consequences = 4 Probability = 4 Exposure =3 Therefore, Risk score = 48 As per this risk score the Risk Ranking is = High Risk. Risk Risk Cate Catego gory ry:: Strategic Risk, Operational Risk and Financial Risk. 5)
Risk Risk Mit Mitig igat ation ion Plan Plan :
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Treatment and control mechanism : Substitute the GCV concept with earlier UHV concept or increase in range/width of bands in
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GCV concept as far as practicable. (Substitution) Selective Blasting and Mining (Engineering/Isolation) Introd Introduct uction ion of mechan mechaniza izatio tion n after after proper proper projec projectt review and planning i.e. surface miner deployment. Inst Instal alla lati tion on of Onli Online ne Ash Ash Anal Analyz yzer er with with sort sorter er to sepa separa ratte coa coal havi having ng less less tha than 34% 34% Ash Conte ntent from that of having more than 34% Ash content. Regular shale/stone picking and crusher maintenance. Imparting training for skill improvement of supervisors and machine operators. Transparency in delivery order allotment and adhere to business ethics during dispatches of coal and sampling as per FSA/BIS Standards (Administration and Human behavior) Procedure and Action Plan :
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
C.C.O/Ministry of coal/Coal Company/Coal Customers initiative needed to make policy deci ecision sion afte afterr grad gradee reas easses sessmen smentt exer exerci cise se for for seams of various mines and review FSA following principle of “BIG RANGE-BIG QUALITY-BIGGER SAVINGS” Quality Control Procedures and Circulars. Conducting quality control drives/workshop/seminar/surprise inspection/quality inspection/quality talk on grade improvement. Invi Inviti ting ng sugg sugges esti tion onss from from empl employ oyee ees, s, cust custom omer erss and stakeholders. Proj Projec ectt revi review ew on base base of grad gradee reas reasse sess ssme ment nt and and physio - mechanical studies for change of technology, method of mining etc. Revising sale price of coal as per grade and adding washing cost if coal is send to washery. Scheduled maintenance of crusher to increase availability. Insensitive scheme for quality production. Digitalization and system development by laun aunchi ching web por portal tal and and apps apps for for edg edge of doi doing business with customers. Formation of ‘Sampark Group’ for with inter nteraactio ction n with cust ustome omer, benc benchm hmar arki king ng and branding of coal product. Responsibility : CCO, Ministry of Coal, CIL and Subsidiary i.e.(WCL) management, operations level manage managemen ment, t, GM(QC GM(QC), ), GM(S&M GM(S&M), ), ISO, ISO, Intern Internal al Audit uditor orss, Front ront line line supe superv rviisor sors, blas blastting ing crew rew and machin machinee operat operators ors,, GM(Sy GM(Syste stem) m),, GM(Exc GM(Excv), v), GM(P&P), GM(Production) and IR, ASM, Manager (E&M), VTO, GM(HRD) Time Frame & Review Frequency: Once in a quarter i.e. (3 Months) and daily for operational elements. -
(V) Type of Major Risk in Coal Mining Industry: By its very nature, coal mining operations are fraught with various risks. i) Hazardous/safety risks: Acci Accide dent ntss & disa disast ster erss and and inju injuri ries es due due to vari variou ouss mini mining ng oper operat atio ions ns,, unsa unsafe fe cond condit itio ion, n, unsa unsafe fe act, act,
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huma human n fail failur ure, e, equi equipm pmen entt fail failur ure, e, roof roof fall fall,, side side fall, fall, explos explosion ion,, inunda inundatio tion, n, fires, fires, over over confid confidenc ence, e, pollution and health risk, slide of over burden and coal benches, subsidence etc. i i) Operational Risks: Secu Securi rity ty risk risk,, supp supply ly chai chain n and and logi logist stic ic,, poli politi tica call and social risk, industrial relation and trading enviro environme nment, nt, techno technolog logy, y, enviro environme nmenta ntal, l, change change management, failure in retention of great employees, access to energy and input cost, productivity, vendor management, market and credit risk, change in customers requirement, capital project execution, terrorism. iii) Financial Risk : Insurance and taxation, historic liabilities, investment in joint venture, assess and cost of capita capital, l, accoun accountin ting g and report reporting ing standa standard, rd, capita capitall structure, liquidity and credit/cash flow, coal price and foreign exchange/currency exposure, fixe fixed d asse assets ts,, CAPE CAPEX X deci decisi sion on,, Inte Intern rnal al Cont Contro rol, l, frauds etc. iv) Strategic Risk : Soci Social al lice licens nsee to oper operat ate, e, comp compet etit itio ion n risk risk and and reputational risk, CSR, Public Perception, Company strategy, vision and objectives, gove govern rnme ment nt poli policy cy and and regu regula lato tory ry enfo enforc rcem emen ent, t, shar sharin ing g the bene benefi fit, t, rese reserrve and and reso resour urce cess risk risk,, assess to infrastructure, industry structure, margin-protection and profitability, orga organi niza zati tion onal al cult cultur ure( e(et ethi hics cs/m /mor oral al/c /cor orru rupt ptio ion n risk) v) Support system Risk : IT infra nfrasstruc tructture ure and and appl appliicat cation, ion, soft oftware are viru viruse ses, s, hack hackin ing g of data data,, busi busine ness ss cont contin inui uity ty and and disaster recovery, information security. vi) Project Risk : Project planning and execution, resource availability. vii) Compliance Risk : Lega Legal, l, safe safety ty and and secu securi rity ty risk risk,, prop proper erti ties es and and concessions, standard business conducts, corp corpor orat atee gove govern rnan ance ce,, stat statut utor ory y and and gove govern rnme ment nt regulations and fines/penalty for violation. viii) Risk due to change in strategic leadership and improper change management: ix) Risk due to poor managerial economics and research.
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
(VI) BENEFITS: The benefits of applying risk management are: Identification of the key risks associated with particular activities activities related to quality coal production. A more structured basis for planning and ● decision-making. Impro Improved ved abilit ability y for identi identifyi fying ng opport opportuni unitie tiess and ● grasping the benefits that flow from those opportunities i.e. from mine to market w.r.t. coal quality. ● A means of demonstrating duty of care and effe effect ctiv ivee Corp Corpor orat atee Gove Govern rnan ance ce.. Grea Greate terr open openne ness ss and and transparency of decision-making and customers satisfaction and retaining and increasing inflow of customer in competitive global environment. ● Impr Improv oved ed visi visibi bili lity ty of the the ongo ongoin ing g mana manage geme ment nt process. ● Impr Improv oved ed deli delive very ry/d /dis ispa patc tch h of coal coal at chea cheape perr of landed cost to customers. Enha Enhanc nced ed emer emerge genc ncy y and and cont contin inge genc ncy y plan planni ning ng ● and face challenges of global market. Redu Reduct ctio ion n in insu insura ranc nce/ e/cr cred edit it note notess on pret pretex extt of ● stone stone and grade grade slippa slippage ge and freigh freightt demurr demurrage ages/p s/prem remium iumss for the organization. ● Proper risk management will lead to improved performance in key areas of health, safety and envi enviro ron nment mentaal dama damage ge,, ass asset loss oss/da /damage mage,, prod produc ucttion ion disruption, and legal liability, productivity, sales and marketing of coal as there will be timely inflow of cash due to assured Quality sale of coal. Better documentation of risks and acceptable ● strategies for dealing with those risks. Enhanced "corporate memory" and corporate ● image. ● Sugge Suggesti sting ng remedi remedial al measur measures es and precau precautio tionar nary y steps to reduce and attempt to attain ZTL (Zer (Zero o Tole Tolera rabl blee Limit Limit)) w.r. w.r.t. t. coal coal qual qualit ity y or Zer Zero o Defect Defect in Qu Qual alit ity y(ZDQ (ZDQ)) of coal coal i.e. i.e. 100% 100% grad gradee mate materi rial aliz izat atio ion n and achieve goal of ISO objectives to ensure customer satisfaction. Incr Increa ease se prod produc ucti tion on and and prod produc ucti tivi vity ty and and qual qualit ity y ● of coal and ensure customer satisfaction. Increase efficiency and profitability of ● organization. Reduce ducess direc irectt and indi ndirect rect cos cost due due to decr ecreas ease ● in comp compen ensa sati tion on/c /cre redi ditt note notess rece receiv ived ed from from cust custom omer er etc. etc. and minimizes losses and wastage of resources. Impr Improv oves es mora morale le of work work pers person onss and and crea create tess self self ● motivated workforce and reduces percentage of abse absent ntee eeis ism m and and good good moni monito tory ry stat status us of orga organi niza zati tion on to promote incentive ●
Sche Scheme mess and and welf welfar aree faci facili liti ties es and and R&D R&D inpu inputs ts for for furt furthe her r betterment. ● Enha Enhanc nces es over overal alll perf perfor orma manc ncee and and conf confid iden ence ce in work ork per person sons and cre create ate comf omforta ortab ble, le, har harmonio onious us,, rich rich work environment. ● Esta Establ blis ishe hess stan standa dard rdiz ized ed and and docu docume ment nted ed work work procedures with commitment to produce and dispatch declared and agreed coal supply as per FSA. Assi Assign gnm ment ent of well well defi efined ned resp respon onsi sib bilit ility y and ● acco accoun unta tabi bili lity ty for for coal coal qual qualit ity y amon among g mine mine empl employ oyee eess and and increased awareness. Adherence and compliance to statutory ● requirements i.e. MOEE & CC and pollution control boards; CCO, ISO and coal ministry. ● Cont Contri ribu bute tess to grow growth th of Nati Nation onal al econ econom omy y and and well being of society as a whole. ● Improves image of organization and assist in obta obtain inin ing g majo majorr shar sharee of mark market et and and fulf fulfil illl stak stakeh ehol olde ders rs implicit needs and face challenges of global competitions. Prom romotes otes harm harmon oniious ous ind indust ustrial rial rela relati tion onss and and ● minimizes grievances and public interest litigations.
VII) Enterprise Resources Management : Busi Busine ness ss Ente Enterp rpri rise sess requ requir ires es diff differ eren entt kind kindss of reso resour urce cess as vita vitall inpu inputs ts for for thei theirr succ succes essf sful ul oper operat atio ions ns.. In the the era era of incr increa easi sing ngly ly glob global aliz ized ed,, comp compet etit itiv ivee busi busine ness ss envi enviro ronm nmen ent, t, adeq adequa uate te appr apprec ecia iati tion on of the the role roless play played ed by various resources and the efforts to be made for their opt optimum imum depl deplo oyme yment and and util utiliz izat atiion pose pose chal hallen lenging ging tasks before the enterprise manager. Enterprise Resource Management is a generic concept of business management and administration thro throug ugh h the com compos posite ite proce rocess ss invo invollved ved in acq acquis uisitio ition n, depl deploy oyme ment nt and and util utiliz izat atio ion n of vari variou ouss avai availa labl blee reso resour urce cess in optim optimum um propor proportio tions. ns. Effici Efficient ent and effect effective ive utili utilizat zation ion of depl eployed oyed resou esourc rces es pose ose chal halleng lengin ing g task asks befo before re the the enterprise management and key functionaries, since fulf fulfil illm lmen entt of thes thesee task taskss at a reas reason onab able le/a /acc ccep epta tabl blee leve levell are are also also crit critic ical al in succ succes essf sful ully ly runn runnin ing g the the Ente Enterp rpri rise se in a viable and sustainable regime. While the primary objective of a business enterprise is to earn a reasonable returns on the capital depl deploy oyeed, to be rea realize lized d thr through ough gener enerat atio ion n of sale aleabl able products and services, adequate attention is also needed to mana manage ge effe effect ctiv ivel ely y and and util utiliz ized ed opti optima mall lly y the the avai availa labl blee resources as well as the assets generated out of it, since thes thesee reso resour urce cess and and asse assets ts form form the the very very foun founda dati tion on of the the ente enterp rpri rise se oper operat atin ing g stru struct ctur ures es.. Degr Degrad aded ed/d /det eter erio iora rate ted d reso resour urce cess and asse ssets will ill sure surelly lea lead to the the weake eakeni nin ng of this structure and may cause sickness and eventual collapse. There are large of cases of such failure due to mism ismanag anagem emen ent/ t/in ineeffic fficiient ent mana manage geme ment nt of avai availlabl able
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
reso resour urce ces, s, in spit spitee of good good mark market et pros prospe pect ctss and and stan standi ding ng.. Implem Implement entati ation on of tools tools and techni technique que of risk risk manage managemen mentt and and opt optimum imum utili tiliza zattion ion of ente nterpr rprise ise res resour ources ces in a way way becomes one of the important focal attributes of total qual qualit ity y mana manage geme ment nt and and busi busine ness ss exce excell llen ence ce proc proces esse sess towa toward rdss atta attain inin ing g busi busine ness ss effe effect ctiv iven enes esss acro across ss the the enti entire re organization by producing best and acceptable results. Thus Thus,, impl implem emen enta tati tion on of risk risk mana manage geme ment nt tool toolss and and tech techni niqu ques es and and mana manage geme ment nt of ente enterp rpri rise se reso resour urce cess is a stru struct ctur ured ed and and disc discip ipli line ned d appr approa oach ch alig aligni ning ng stra strate tegy gy,, process, people, technology, resources and knowledge with with purpos purposee of evalua evaluatin ting g and managi managing ng the uncert uncertain aintie ties, s, the enterprise faces as it creates values. Economy is generated by abilit lity to face risk.
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21
century will be dominated by leveraging new
technologies as knowledge is power but know-how to deploy inputs is weapon in globalized and liberalized competitive market place. Mist Mistak akes es are are cost costly ly – so cost costly ly that that they they can can forc forcee out out of busi busine ness ss an orga organi niza zati tion on once once seen seen as indu indust stry ry lead leader er and power house. Management of risk and optimum management of ente enterp rpri rise se reso resour urce cess helps alleviate mistakes and emphasizes on the roles and contributions of various reso resour urce cess as crit critic ical al impu imputs ts for for sust sustai aina nabl blee oper operat atio ions ns.. It req requir uires stra strate teg gic think hinkin ing g and and strat trateg egiies for effe ffectiv ctivee impl implem emen enttati ation to atta attain in the obje objecctive tivess impla mplan nting ting the vision and mission of organization.
VIII) Various methods Resource Management:
of
Enterprise
Resource categorization, planning and deployment Mech Mechan aniz izat atio ion, n, Auto Automa mati tion on & prop proper er pers person on at ● proper place at proper time. ● Technological development, innovation & research and use of modern management tools and techniques Strategic leadership and change management. ● ● Organizational knowledge development and reorganization of structure Corruption risk mitigation policy ● ● Maximizing use of natural resources. Successful mobilization and full capacity ● utilization of industrial resources. Budgetory and inventory control ● ● Appl Applic icat atio ion n of IT tool tools, s, TQM, TQM, CPM, CPM, PERT PERT,, Time Time and Motions study and other methods of productivity impr improv ovem emen entt such such as main mainte tena nanc ncee sche schedu dule le,, simp simpli lify fyin ing g complex material handling circuits. Waste Management & Asset Management and ● Marketing Strategy ●
Ergonomics strategies etc. ●
and
Resource
Reengineering
IX) Analysis and Interpretation : 'Ris 'Risk k Ass Assess essment ment and and Risk Risk Manag anagem emen entt', is the essential element of Tota Totall Qu Qual alit ity y Mana Manage geme ment nt (TQM) and and also also cont contri ribu bute tess grea greatl tly y towa toward rdss achi achiev evin ing g the the obj object ectives ives of the the orga organi niza zattion ion by assi assist stiing, ng, manag anager erss to manage risk and not being managed by risk or react to risk. Manage Managemen mentt of safety safety issues issues based based on assess assessmen mentt of risk risk not not only only inte integr grat ates es safe safety ty with with prod produc ucti tivi vity ty but but also also can be used as a very good tool for reduction of cost. The system stands on the premises that all risks need not be elim elimin inat ated ed and and diff differ eren entt cont contro roll meas measur ures es can can be adop adopte ted d for different levels of risks. The key here is to aim for ALARA (as low as reasonably achievable), which eve eventua ntuall lly y depe depen nds on cost ost consi onside derratio ations ns.. The syst ystem allows prioritization of allocation of scarce resources ther thereb eby y cutt cuttin ing g cost costss and and redu reduci cing ng wast wastag ages es.. This This assu assume mess great importance in the current Indian scenario. The othe otherr meri erits of the syst systeem are are it is crea creatted by mine operators themselves through considerable brainstorming. This approach lets the mine operators feel the ownership of the system, something that is not cast upon them by the experts, government agencies for outs outsid ider ers, s, henc hencee chan chance cess of succ succes essf sful ul impl implem emen enta tati tion on is much more. In this system grey areas are minimized, resp respon onsi sibi bili liti ties es for for acti action onss are are pinp pinpoi oint nted ed and and scop scopes es for for auditing and improvement are always present. Thus, Risk and Resource Management is nece necess ssar ary y for for prac practi tici cing ng mini mining ng engi engine neer erss to cont contro roll risk risk effect effective ively ly and ensure ensure mining mining operat operation ionss econom economica ically lly and profitably by using basic techniques and methods of risk and resource management.
X) Conclusion : The underlying premise of enterprise risk and reso resour urce ce mana manage geme ment nt is that that ever every y enti entity ty exis exists ts to prov provid idee valu valuee for for its its stak stakeh ehol olde ders rs.. All All enti entiti ties es face face unce uncert rtai aint nty, y, and and the the chal halleng lengee for for manag anagem emen entt is to det determi ermine ne how muc much uncertainty to accept as it strives to grow stakeholder value. value. Uncert Uncertain ainty ty presen presents ts both both risk risk and opport opportuni unity, ty, with with the the pota potant ntia iall to erod erodee or enha enhanc ncee valu value. e. Ente Enterp rpri rise se risk risk and and reso resour urce ce mana manage geme ment nt enab enable less mana manage geme ment nt to effe effect ctiv ivel ely y deal deal with with unce uncert rtai aint nty y and and asso associ ciat ated ed risk risk and and oppo opport rtun unit ity, y, enhancing the capacity to build value. Thes Thesee capa capabi bili liti ties es inhe inhere rent nt in ente enterp rpri rise se risk risk and and resource management helps management achieve the enti entity ty’s ’s perf perfor orma manc ncee and and prof profit itab abil ilit ity y targ target etss and and prev preven entt loss loss of resour resources ces.. Enterp Enterpris risee risk risk manage managemen mentt helps helps ensure ensure effective reporting and compliance with laws and regulations, and helps avoid damage to the entity’s
International Journal of Commerce Commerce and Management Studies(IJCAMS) Studies(IJCAMS) Vol.2,Issue No.1, 2017
reputa reputatio tion n and accoci accociate ated d conseq consequen uences ces.. In sum, sum, enterp enterpris risee risk risk and and reso resour urce ce mana manage geme ment nt help helpss an enti entity ty get get to wher wheree it wants to go and avoid pitfalls and surprises along the way. ThusMana Managi ging ng Risk Risk and and Reso Resour urce cess opti optima mall lly y will will alwa always ys rema remain in,, besi beside dess othe otherr crit critic ical al fact factor ors, s, a cent centra rall focu focuss for for overal producing ing overalll Ent Enterp erpris risee Manage Managemen mentt for produc best / acceptable results and achieve the set goals and obje object ctiv ives es and and ulti ultima mate tely ly atta attain in Busi Busine ness ss Exce Excelle llenc nces es in Coal Mining Industry.
XI) Acknowledgement : The The author author acknow acknowled ledges ges the suppor supportt provid provided ed by the the mana manage geme ment nt of We West ster ern n Coal Coalfi fiel elds ds Limi Limite ted, d, Nagp Nagpur ur;; Indian School of Mines, Dhanbad, Institute of Public Ente Enterp rpri rise ses, s, Hyde Hydera raba bad; d; NIET NIETI, I, Mumb Mumbai ai,, IICM IICM,, Ranc Ranchi hi and and CIMF CIMFR, R, Dhan Dhanba bad d & Nagp Nagpur ur.. rega regard rdin ing g coll collec ecti tion on of data and ultimately preparation of the paper for presentation.
References : Enterprise Resource Planning – Alexis Leon Enterprise Resource Management – D.J. Syam ● ● Enterprise Resource Planning – Rahul Altekar Risk Risk Mana Manage geme ment nt Hand Handbo bool ol for for mini mining ng indu indust stry ry ● – Prof. Mark Tweedle Accid ccideent: nt: Causes uses,, Inv Invest estiga igation tion,, Preve eventi ntion – ● James Thornhill Strategic Planning – Susan Borksdale & Teri ● Lund ● Corporate Strategic Management - R.M. Shrivastava ● DGMS Safety Circulars Journals Journals on Productiv Productivity, ity, Performa Performance nce Evaluati Evaluation on ● and and ERM ERM from from Inst Instit itut utee of Publ Public ic Ente Enterp rpri rise se – Hyde Hydera raba bad, d, Indian Indian Produc Productiv tivity ity Counci Council, l, Mumbai Mumbai,, Natio National nal Instit Institute ute of Industrial Engineering, Mumbai. ● Analy nalyttical ical data data from rom MIS, IS, Coal oal Ind India Limited ited,, Kolkata, IICM, Ranchi ● Mining Journals and periodicals. Safety Management - C.P. Singh ● ● Enterprise Risk Management – John Fraser & Betty J. Simkins. Simp Simple le Tool Toolss & Tech Techni niqu ques es for for Ente Enterp rpri rise se Risk Risk ● Management – Robert J. Chapman. ●
