I’ve been scratching the surface of contingency planning lately and have been asked how an organization can better identify risks that might require contingencies. In many cases, and for many companies, the process of risk identification comes from ‘tribal knowledge’ and experience of senior managers. While these domain experts can provide valuable input, there are other tools that can enable anyone to help identify risks and potentially manage them. One of my favorites is dependency mapping or benefits dependency mapping.
Dependency mapping is used in project management, application development, system architecture, and many more disciplines. There are software packages to help with it, but even a simple whiteboard and post-it-notes can suffice to get started. The concept is simple: what is needed to perform a given step in a process, and where do those items come from?
If you are making widgets, what are the raw materials for them? Where do those materials come from? Once you have the starting map for your process, you can elaborate and add detail. How are the materials delivered? How much of each material is stored on-site? What is the lead-time for deliveries?
As you build the map, you will naturally identify risks. Suppose a sprocket is in short supply or has a long-lead-time; what can you do about it? What if the supply dries up? What if orders for widgets increase by 10%?
Each of these risks, once identified, can then be planned for, even if the plan is simply to accept the risk. As an additional benefit, you should have a well-documented process once the map is complete that can help with a wider range of business problems, such as training, process management, forecasting, and more.
