Risk Management

Introduction

There is still no formal, universally accepted definition of the term “risk”. Generally, the term is mostly associated with unpleasant things that can happen or uncertain outcome (for example, in gambling). For managers, risk is something that can interrupt or disrupt the normal activity plans – for example, whether the new product would sell in the planned scope, or the project would be completed on time, whether raw material prices would rise, or the procurement of goods would be delayed, etc.
By definition, supply chain management includes activities related to the exchange and movement of materials and information from suppliers of raw materials to the end user. In addition, supply chain managers are faced with a significant number of risks: from small delay in delivery to the interruption of the entire chain. Problem is that supply chain managers generally work to improve service and efficiency without thinking that the risks are thereby generated. In fact, the tendency is that the chains are becoming more efficient, and therefore more at risk. In the supply chain, if one of the participants in the supply chain is at risk, it poses a risk for all its participants. Its effects are cumulative and therefore the small risks for each participant in the chain are a major problem for the supply chain. The risk in supply chains can occur in all events related to the movement of materials and information.
The consequences of the implementation of risk may be prevented delivery, late delivery or damaged goods. However, this is only the initial effect – for example, delayed delivery of raw materials can halt production, increase the cost of engaging in alternative forms of transport, negatively affect the business relationships between the partners in the chain and so on .The main factors that contribute to the increased risk are:
a) focusing on effectiveness, not on efficiency;
b) centralization of production and distribution;
c) reliance on cooperation;
d) reducing the number of suppliers;
e) globalization of supply chain;
f) variability of demand and customer requirements;
g) insufficient transparency and control mechanism;
h) factors that are specific to a network.
Risk and uncertainty

Key functions in the management of events, inter alia, are the following: financing and budgeting, risk management and insurance, organizing competitions, registration, volunteer management and finally, marketing of events.
Celmer defined risk as follows: “The risk is the uncertainty caused by the possibility of a miscarriage of a goal in the realization of selected variants of decisions.” It is believed that no certain situations in which complete or partial lack of information enable states of the object and the environment. Unlike no certainty, risk is the level of confidence (ie no conviction) economic entity in security realization of its objectives. Risk is the chance (probability of danger) of unwanted damage, loss or deviations associated with a specific business venture (decision) .People have essentially existential need to live in an organized community and to plan their activities in order to achieve their business ideas and projects. Also they have the need to distribute the results of their work in order to ensure their survival through business undertaken in the conditions of uncertainty and incomplete information. If entrepreneurship is to be successful in such conditions, if conditions for the realization of an event are to be ensured, the risk must be constantly analyzed and controlled in all its aspects: production, commercial, financial, market, social, political, institutional, international and other aspects, because virtually all of the above risks could affect the achievement of business objectives and results. In all business processes due to no security and no predictability of future events in any environment, but also in the context of developing a specific project or the organization of an event, various dangers of unwanted and unpredictable situations appear, the dangers that can never be absolutely avoided and which can, to a greater or lesser extent, jeopardize company’s business or the realization of an event (material or moral damage, etc.).