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Risk Management
Process Implementation in
Mauritian Manufacturing Companies
Mr D S Callychurn
Lecturer, Faculty of Engineering,
University of Mauritius
d.callychurn@uom.ac.mu
Introduction
The future is naturally unpredictable as randomly
occurring events unfold in random ways to influence
the society, individuals and businesses. With the
endeavor to have a better control of things, man has
studied factors contributing to several events, and with
time, he basically found that the occurrence of some
events can be predicted and the impact of some can
either be quantified or qualified so as to give a
reasonable measure of scale. These events and/or their
underlying factors have been termed risk. The
common opinion about risk is that it can be a threat or
an opportunity; therefore it is neither good nor bad.
For instance, to a home owner in coastal South
Carolina, the risk of hurricane damage is horrifying, but
to the seller of lumber, sand bags, and weather radios
in the same area, that very same risks of hurricanes
constitutes their livelihood (Culp 2001). For
manufacturing companies, risk is present across the
entire product life cycle - from the design conception
to the development process. For such businesses, risk
can cause delays in operations, reduce capacity, cause
loss of assets, be detrimental to the health and safety
of employees, and more.
In todays world of complex operations and machinery,
man has sought to mitigate risks for the benefit of
everyone. The continual and fast development of the
technology, has given rise to a high level of risks and
uncertainties. Thus various industries use different
quantitative and qualitative techniques in managing and
simulating the effects of risk in their operations. Thus
the need for safety: financially or the health of
employees, public and environment has made many
companies to use risk management process (Motah,
2008).
However many companies in Mauritius, which is a small
developing economy, have failed to recognize
impending disasters which could have been avoided if
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Mr V K Jhumun
BEngg Manufacturing Engineering,
Faculty of Engineering, University of Mauritius
vij0509krsna@hotmail.com
necessary measures had been taken in time. In fact,
most local companies do not use the appropriate tools,
methods and processes to manage their growth which
often go in hand with escalating risk factors. In addition,
adequate and relevant training with regards to safety at
work are not provided to personnel. As the business
leaders vouch only by profitability, the price to pay has
been very high. For the past five years, the level of
incident and injury has been relatively high and the
severity of injuries ranging from minor to fatal
(death).
Risk Management Process (RMP) is a new philosophy
for most Mauritian companies and for that reason
suppliers do not impose RMP as a mandatory
procedure for the overall safety of products and
processes. Therefore the onus is on the Mauritian
companies to integrate RMP into their core business
processes. This paper aims at determining the actual
trend of manufacturing companies about the awareness
and principles of the Risk Management Process with
regards to their assessment and control. Before going
into the subject matter into more detail, defining some
of the terms used throughout this paper becomes
important.
Risk
Risk is present in every action we undertake in our
daily life. It may represent opportunities as well as
threats. According to Federal Aviation System
Handbooks (2000), risk is defined as the probability and
severity of accident or loss from exposure to various
hazards including to people and loss of resources. Risk
can also be defined as The possibility of injury, loss or
environmental incident created by a hazard, the
significance of risk is a function of the probability of an
unwanted incident and the severity of its consequence.
(Wilson, Cutcheon, Buschann, 2003).
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Heldman, Baca and Jansez (2007) suggested four
categories of risks namely; technical/quality
/performance risks, project management risks,
organization risks and external risks.
Hazard
In the world of industrial safety and risk management,
hazard is defined as the potential of a machine,
equipment, process, material or physical factor in its
working environment to cause harm to people,
environment, assets or production. Furthermore,
accident is termed as an undesired event that is
believed to be beyond the control of man, whereas
incident is referred to as undesired event that does or
could result in injury to people, damage to the
environment or loss of assets. (Wilson, Mc Cutcheon,
Buxhann, 2003).
Risk Management
The existence of risk brought about the concept of risk
management. Indisputably risk management has over
the recent years grown to be the heart of numerous
organizations strategic management. It is the process
whereby organizations pedantically address the risks
affixed to their activities with the aim of achieving
sustained advantage within each activity and across the
portfolio of all activities.
Figure 1: Risk Management Goal (FAA, 2001)
According to the Australian and New Zealand Standard
(2004) on risk management , it is defined as a
systematic application of management policies,
procedures & practices, tasks to establish the context,
identifying, analyzing, evaluating, treating, monitoring
and reviewing risks. In addition it is a reiterative
process of well defined steps which, when taken in
sequence enables continual improvement in decision
making by providing management with a greater insight
into organizational risks and their impact.
The basic steps of the risk management process are;
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1. Identify and Categorise the risk ;
2. Assess and Prioritize the risk;
3. Take control decision and Implement risk control
4. Monitor and review
The benefits of a fully integrated Risk Management
Process are as follows:
Improve decision making and planning
Improve the probability of the delivery of the
business plan, within the time frame and enhance
competitive edge
Allow to anticipate problems
Successful at both developing new products and
processes and improving existing ones
Enable the firm to increase the quality of its
product and processes
Decrease the product development time and cost
Increase in public acceptance of the organisations
products and processes.
Occupational Health and Safety Act 2005
Recognizing the important of risk management, the
Ministry of Labour, Industrial Relations and
Employment of Mauritius introduced the Occupational
Health and Safety Act 2005, the aims of which are as
follows:
Promote decent work
Protect the safety and health of any employee
against any risk at his workplace
Vulgarise any information on safety and health
This act enables the protection of workers against new
Figure 2: Occupational Health & Safety Chart
hazards derived from various fields in their working
environment. It is a mandatory act for both private and
public organizations further requiring that any serious
injuries occurring in a workshop shall be immediately
reported to the concerned ministry.
It also states that for every employer of 50 employees
or more, a safety committee must be set up, whose
main function is to promote the cooperation between
the employer in achieving and maintaining a safe and
healthy working environment.
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The Study the workplace was also questioned during the

survey.
This paper aims at determining the actual trend of
manufacturing companies about the awareness and Risk Hazards & Control
principles of the Risk Management Process with Questions were designed to determine the types
regards to their assessment and control. To carry out of hazards that may prevail in manufacturing plants
this study, a survey was conducted among a sample and how they were identified and dealt with.
population of 50 manufacturing companies classified as Furthermore, the use of the appropriate control
small, medium and large enterprises. based upon the measures was also questioned during the survey.
number of employees of the organization. The new
Data Collection
SMEDA ACT (2009) on the definition of small, medium
and large enterprise was not considered since it was The questionnaires were administered to companies
based on the turnover of the company and this piece upon appointment with the General Managers,
of information was difficult to find at the time of the Production Managers or Production Engineers. Data
study. Companies were randomly picked from the was collected during the period of mid December
Mauritius Export Directory 2007-2008 booklet and 2009 to the end of January 2010 with a satisfactory
thereafter classified as explained above. The various response rate as shown in table 1.
types of companies considered as being part of the Table 1: Response rate per sector
manufacturing sector are illustrated below: Sector Response Rate (%)
1 Textile Industry 75
Figure 3: Selection of the sample population 2 Fabricated Metal Products 66
3 Wood and Wood Products 100
4 Chemicals and Chemical Products 83
5 Plastic Industry 83
6 Printing Industry 50
7 Footwear Industry 33
8 Others 100

Data Analysis
Following the survey conducted in the various sectors
of the manufacturing industry, as illustrated in the
table above, the following main findings were
obtained:
Awareness of the Risk Management Process
It was found that 78 % of the companies have
heard about the risk management process and the
Questionnaire Used remaining 22% were not even aware of its
existence. However, the concept of RMP is
Primary data was collected during the survey through relatively new to most of them and they did not
a questionnaire containing 19 questions; 7 were closed have much information at their disposal of its
ended, 10 were dichotomous, 1 was open ended and 1 importance and benefits, and more importantly
was of the rating scale type. The questionnaire was about how to implement RMP. In fact, it was found
used to collect information with regards to the that most companies were only focusing at profit
following: making, at all cost, even at the detriment of the
Risk Management Process safety of their employees.
Some questions were set based upon the definition
of risk management process, awareness of risk Awareness of the risks associated with the
management process and responsibility of senior operation in the factory
management. The survey reveals that 89 % of the companies are
fully aware of the risks involved from the design to
Personnel the production of any particular product while the
The questions in that section were set to remaining 11 % of the companies were partially
determine the active involvement of workers in aware of the risks associated with their daily
their place of work and whether they were capable operations.
of carrying out their work safely
Communication
The communication system for better promoting in

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Types of risks familiar to the companies
From the study, the risks were classified as follows:
Table 2: Risk Category and Percentage Level
Type of Risks Percentage (%)
1 Market Risk
2 Technical/Quality/Performance Risk
3 External Risk
4 Operational/Process Risk
5 Legal Risk
6 Credit Risk
7 Liquidity Risk
8 Stability Risk
9 Model Risk
Based on the above table, it can be seen that companies
face all types of risk, from market risk to model risk. It
can also be deduced that Market Risk and
Technical/Quality/Performance risks were those that
were most present in the daily operations of the
companies surveyed.
Accordance to Occupational Health & Safety Act
(OHSA) 20005
According to the Mauritian legislatives, all
manufacturing companies must be in accordance with
Occupational Health & Safety Act (OHSA 2005).
However, it was found that only 70% of the companies
interviewed abide totally to the act, whereas 30% only
partly meet the requirements of the Act..
Health and Safety application at the workplace
According to the Occupational Health and Safety Act
2005, all the employees of the companies should abide
to the health and safety policy of the organization. Of
the companies that were surveyed, 30 of them ensured
that the workers, visitors, customers and
subcontractors respect the safety policy of the
organization when they are in their premises. The
remaining companies enforced health and safety
policies only on the employees. It was even observed
Table 3: Types of Hazard & Frequency
Type of Potential Hazard Frequency
Percentage(%)
Exposure to noise 25
Dust 22
Injury while handling or carrying 19
Hazards from dyes/chemicals 14
Slips & trips 14
Hit by moving or falling objects 11
Fumes from welding or gas cutting 10
Fall from height 7 20
Confined space 2 5
Asbestos 0 0
None 3 8
that there was no safety policy in one of the companies
surveyed.
Potential Hazardous conditions or hazardous
substance in the workplace
76 When asked about the potential hazardous conditions
76 that exist in the workplace, it was found that among all
73 those that are shown in the table below, noise and dust
were more frequent.
73
This gave a clear indication that workers were not
51 using adequate Personal Protective Equipment (PPE)
38 which often leads to injury, e.g. from handling
35 operations, slips or trips, working at height, and more.
11 Reporting injuries to the Ministry of Labour,
19 Industrial Relations and Employment
In accordance to the Occupational Health & Safety Act
2005, companies should report serious injuries to the
Ministry of Labour, Industrial Relations and
Employment. During this study, it was found that 72 %
of the companies surveyed abide by this rule . and 3 %
do not report serious bodily injuries. Furthermore, 25
% of the companies interviewed have never had any
sort of serious bodily injuries or cases of illness caused
by working conditions.
Analysis and Risk Management Process (RMP)
Risk Management Process was found to a relatively
new concept among the Mauritian manufacturing
companies surveyed. The survey revealed that 76% of
the manufacturing companies surveyed were not
equipped with a proper Risk Management Process. To
facilitate adoption of RMP systems, this paper proposes
Figure 4: Tailored Risk Management Process
Descending
68
59
51
38
38
30
27
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a tailored RMP model which includes the following
important points:
Management Level
The top management shall be committed towards the
implementation of an effective Risk Management
Process. Management shall be able to set and
communicate a clear vision for the company which
shall natively embrace the objectives of the
organization as well as its health and safety policy. It is
the role of the management to set up a committee,
involving all hierarchical levels, i.e. top management ,
middle management and workers from the operational
level. All the issues pertaining to risk management
process shall be discussed at the level of this
committee with the aim of identifying gaps in
occupational health and safety, discussing corrective
and preventive measures, sharing best practices and
following up on actions taken.
Training
The concept of Risk Management Process (RMP) shall
be fully understood by the personnel and it is the duty
of management to provide relevant and regular training
to its staff . Training is an intermediate and obligatory
process if a company wants to achieve excellence with
RMP. The survey observed that 84% of employees were
not trained to make use of their normal sensors to
detect immediate abnormalities in their work and
working environment. The training shall therefore
disseminate knowledge about the selection and the use
of the appropriate tools and techniques to anticipate
problems during RMP so that staff are able to identify,
categorize, assess and prioritize risks. Through proper
training, any early symptoms of undesirable or
dangerous events could be detected by the employees
and reported to the management. Qualified personnel
must thereafter ensure that the necessary control
measures and actions are undertaken to mitigate the
risks.
Risk Identification
The next step in the Risk Management Process is the
Risk Identification phase. Hazards can either be
reported to the risk management committee or it can
be anticipated on the shop floor. Risk Identification
mainly consist of two phases: the identification of risk
and the classification of risk.
Identification of risks consists of using hazard
identification tools to identify potential risks. In fact, in
medium to large companies, the person responsible for
identifying these risks is the Health and Safety Officer.
Hazard near miss reporting system to report and
correct incidents can also be used to detect potential
risks. All the risks shall be identified by the committee
at this stage before moving to the next step of the
process.
The second phase of the identification of risk process
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is the classification of the risks into related groups. The
committee shall then be able to categorize potential
hazards into risk categories. The working group shall
record the date of occurrence, and a typology of the
related risk and records shall be kept and updated
throughout the whole process.
A company implementing RMP enables skilful workers
to identify risks during their daily operations so that
problems and faults are be detected at an early stage.
With a proactive approach as opposed to a reactive
one, hazards will be anticipated instead of waiting for
them to occur whereby the number of injuries and
incidents will drop considerably. Also workers will start
to develop a sense of ownership and alertness while
doing their respective tasks.
Risk Assessment
The next step, following the identification of risk, in the
risk management process is to further assess and
categorize the risk. The committee shall gather
information with regards to the nature of the hazard
and its potential impact, i.e. types of injuries etc. A risk
assessment table shall be used to assist the team
members in assessing the risk. The likelihood of each
element of risk shall define the probability of each
situation actually occurring and consequence termed
as the extent of the damage that can be caused. The
terms used to categorize likelihood are: very likely,
likely, unlikely and highly unlikely).Terms like fatal, major,
minor and negligible shall be used to define the
consequence of the injury, etc.
Risk assessment will be conducted on a weekly basis
once the RMP system has been implemented. The
concept of anticipating problems will enable risks to be
identified and assessed more frequently during the
early stage of the implementation.
Risk Control
Once the risk has been assessed, the next step of the
RMP is to investigate the specific strategies and tools
that will mitigate or eliminate the risk. In fact, the
elimination method is the safest one as the risk will
disappear from the system. Different alternatives shall
be proposed by the committee to the management. It
is important that companies vote for a specific budget
when performing risk control.
Monitor & Review
The last process of the RMP is the Monitoring and
Reviewing of the risk control strategies. The process
shall be periodically reassessed to ensure the
effectiveness of the controls. The committee must
ensure that all the required resources are allocated to
individuals while reviewing the control measures.
The integration of a RMP system shall enable workers
at all levels to accomplish their respective role to
ensure that control is maintained over time. By doing
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this, there shall be a reduction in the number of
incidents, injuries, illness and undesirable events.
Record of the daily inspections, methods used to assess
risk, control measures implemented, training session,
and involvement of staffs should be kept and readily
available for reference
Conclusion
The aim of this study was to determine the trend of
the awareness of Risk Management Process in
manufacturing companies. In that context 50
manufacturing companies from different sectors were
surveyed using a questionnaire of 19 questions. The
survey results reveal that companies lack knowledge of
RMP, its benefits and more importantly how to
implement a reliable RMP system. The study also finds
that companies fail to fully identify risks that occurs
regularly in their current operating environment, and
that many are not fully complying with the
Occupational Health and Safety Act 2005. The paper
therefore suggests that the current situation requires
urgent attention.
To help companies move towards a risk management
culture, a tailored Risk Management Process was
developed. The tailored RMP consists of the following
phases: Management Level, training, risk identification,
risk assessment, risk control and the last phase being
monitoring and reviewing. The aim of this Risk
Management Process is to encourage active
involvement of each individual in the plant at each
process. This means that the top management will have
the responsibility to define clear objectives and mission
of the company and communicate same to all the
employees which in turn will have to abide by the RMP.
Relevant training should be provided in that context so
that workers are able to carry out their tasks safely.
The employees should also be equipped with relevant
tools to collaborate in a proactive risk management
mechanism which anticipates problems before they
occur and/or cause any harm to the company. The
RMP proposes the setting up of a safety committee and
additional processed encouraging staff in the company
to express their views and worries with regards to
their daily routine work.
An effective RMP usually results in higher product
quality and enhanced production process reliability..
Plant capacity improves as the factory makes more
efficient use of resources and the companies naturally
become more competitive on the market. RMP also has
a positive effect in building company reputation.
This study provides with a sound overview of the state
of affairs within the manufacturing sector in Mauritius.
Further studies are therefore required to assess the
situation at a national level (across various sectors).
Additional ways in which RMP can be promoted so as
to seed a risk management culture across the country
46
should also be investigated.
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