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This grants the leaseholder a right to occupy the land for a fixed period of time, typically for 99, or years. Usually, the lease will impose restrictions on the use to which the land can be put. The landlord may also specify that repairs be carried out by the occupier, and that rates and taxes be paid. Apart from the use of land to build upon, either to use or to sell, it may be a more direct source of wealth, for a mining or agricultural company, for example.

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Activity 8 5 mins Try to list three aspects you need to consider when managing a work area. To give you a start, equipment access is one consideration. Access to equipment Where equipment is needed to carry out a task, it should be in a position where team members can get to it without hindrance. The workspace layout should be designed so that the most frequently used equipment is in the foreground, while rarely used items are further from the work area. Again, safety needs to be borne in mind: it can sometimes be unsafe to make equipment too accessible.

Movement of people For safety reasons, people need to be able to move about freely in their workplace. In addition, if individual paths cross too frequently, work processes may become slow and inefficient. Orderliness and appearance A well-managed workspace will be free of clutter and dirt, in order a to make the work atmosphere more agreeable, and more productive; and b to reduce hazards from fire and accidents.

The overall appearance of the workplace will almost certainly have an effect on morale, and on the response of visitors. Polish and paint can work wonders in this regard. Siting of materials As with equipment, thought needs to be given to the placing of work materials, with the efficiency of the workteam in mind. Different teams work in different ways, and each team leader has to consider which would be most effective. Materials are sometimes subdivided into raw materials, components and consumables.

Consumables are items that are used up in a work process, and do not necessarily form part of the final product. Examples are cleaning materials, glue, paper documents, masking tape, pens and pencils. Components are parts, often having themselves been manufactured from raw materials, which go to make a larger assembly.

One component of a door is its handle; some of the components of an electric lawn-mower are the rotating blades, the motor, the cable and the on-off switch; engines, wings and fuselage are all aircraft components. Raw materials are basic substances that are processed in order to manufacture products. Paper is used to make books; silicon is a raw material in the manufacture of transistors; leather is a necessary material for many kinds of shoes; sheet metal is pressed and formed to make car bodies.

Of course, materials are needed in all organizations, not only manufacturing ones. Market gardeners use fertilizer and seeds; transport companies need vehicle spare parts, fuel and log books; financial advisers are likely to use lots of paper and printer toner; locksmiths have key blanks, oil and metal parts; county councils use large quantities of all kinds of materials.

The main problem usually associated with the management of materials is in getting them into the right place at the right time, while keeping costs to a minimum.

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This problem is the focus of our attention in the next two sessions. How would you match our later list of nine resources against these three? Answer by ticking the appropriate boxes in the table. The management of resources involves: 1 2 what you want to achieve; making 3 4 to achieve it; the necessary resources; locating and those resources; 5 the resources; 6 and organizing the resources to best effect.

All the words in the answer were mentioned in the session. Obtain 7 letters. Employment bodies 13 letters. Implements, machines, etc. Where organizations are housed 9 letters. These are useful for making things with 5 letters. DOWN 1. A most precious resource 6 letters. Materials that can be used or eaten 11 letters. Resources are the means by which goods and are produced 8 letters. Detailed description of what has to be done 13 letters.

The capacity for activity or work 6 letters. Anything one has to do 3 letters. We sometimes make these things before we start work 5 letters. Land and other resources are in short supply 5 letters. Labour, toil, effort or drudgery 4 letters. On which buildings are constructed 4 letters. Answers to these questions can be found on pages — They are certainly special, and must be treated as individuals. The only reasons for carrying operating stocks is that the material is needed, and that supply cannot be exactly matched with demand.

But for many, perhaps most, organizations, a store is a critical function: badly run, it can bring a company to its knees. So far as materials are concerned, the problem is to get the correct goods, of the required quality, in the right place at the right time. Obviously, planning is needed in order to achieve this. As these plans proceed, there will come a point when the following can be said. Now how can we get each specific item in the required place at the specified time? A very large organization may be able to pass on the problem to its suppliers by using just-in-time methods.

As we will discuss in Session C, the concept of just-in-time means that the organization is very specific in what it demands of its supplier. Instead they must buy, and take delivery of, materials in advance of when they are needed. They have to check them to see that the goods are of acceptable quality, and then keep them in stock by placing them in a storage area, where they can be held in good condition until they are wanted. It follows that: stock is a buffer between supply and demand, or between the suppliers and the users.

Suppliers 24 Stock Users Session B 2. Until then, it is a cost: the longer it stays in store, the bigger the cost. Try to think of two kinds of cost, and say when and how they are incurred. This is a nuisance, because that money could be doing something more useful, such as improving handling facilities or training the workforce.

If the organization has had to borrow the capital that is tied up in stocks, the interest will have to be paid. Stock needs space, and space costs money.

Warehouses and stockrooms have to be designed and built; rent and rates may have to be paid. Racking, handling equipment and control systems have to be bought, installed and maintained. The more space used, the bigger the cost. There is also the work involved: the more stock, and the bigger the storage area, the more staff are needed to run and maintain it. You may also have thought of another reason why stocks are a cost and an expense: losses and deterioration.

Even with the best-organized and bestdesigned storage facilities, there is a risk of them losing their value — usually 25 Session B called shrinkage. The longer the stock remains in store, the greater the risk of losses from these causes. Activity 11 3 mins How might a part be made useless through becoming obsolete that is, going out of date? Some, for example the spare parts for old machines, may become useless when the machines are replaced. To sum up: for all the reasons we have discussed, organizations: aim to keep the minimum stocks in the minimum space for the minimum time.

What can go wrong when this principle is applied? It is expensive to hold too much stock, but what is potentially even more damaging to an organization is that insufficient goods are available when they are needed. Having stocks too high is bad news; having stocks too low may be worse news. One way to do this is to make sure that the oldest stock is used first. It obviously helps to use the oldest stock before the newest. The technique that demonstrates this principle is referred to as: first in, first out FIFO or stock rotation. The idea is that the first consignment of a particular item to be received in the stores should also be the first to be issued.

There will, of course, be times when it is necessary to use newer stock before old, perhaps because there might be small differences in the newer stocks that affect how they can be used. Nevertheless, FIFO rotation is an important principle for stores management. A more important reason for rotating stock, however, is to help reduce costs.

The basis of the system is described in the figure below, and there are many variations to be found. The tag or slip will be passed to the appropriate department to reorder the item. A variation frequently used with stationery and printed forms is to insert a reorder slip at an appropriate point within the pack. When this level is reached, the re-ordering process will begin. Activity 12 5 mins If you can, identify an item of stock from your workplace that is controlled, or could be controlled by a two-bin system. Suggest a reason why this system is suitable for that stock. The major advantage of two-bin and similar systems is that cost savings are gained.

For one thing, records, such as material requisition notes or job cards, are not usually required. Also, stock control labour costs are generally low. The two-bin system is simple to operate, provided two key questions are answered correctly. What triggers the reordering process? If the organization gets these answers wrong, it may have problems with under-stocking or over-stocking. If there are 50 reams of paper in stock at the beginning of the month, more are purchased on the 15th of the month and 34 are issued during the month, the closing stock at the end of the month should be as follows.

This can be physically verified, if required. During the week, were delivered by a supplier, and were issued by stores. During the month, 60 were purchased, and at the end of the month 70 were still in stock. The answers to this Activity can be found on page Again, however, we have to make compromises, because management itself costs money. An organization must find the right balance between the cost of controlling stock and the losses incurred as a result of not controlling it. At its simplest, ABC analysis is a means of categorizing items of stock on the basis of their usage value.

For example, a DIY store will stock items ranging from very expensive power tools, to middle-range merchandise such as tins of paint, to small packets of screws. These goods will vary in their popularity, as well as their cost and price. ABC analysis is a modification of the Pareto principle, or the 80 : 20 rule as it is often known. Pareto was a nineteenth-century Italian philosopher and economist who showed that the bulk of value is likely to be held by a very small proportion of the total items. While Pareto was originally concerned with wealth, his principle was found to occur in so many other situations that the term 80 : 20 rule was coined.

Generally, for example, in any store, about 20 per cent of all the items held will account for about 80 per cent of the usage value. Activity 14 2 mins Tick which of the following categories should have the greater attention and give reasons for your choice: 32 a the 20 per cent of the stock that produces 80 per cent of the value of sales or issues. Generally, the items in category a would be given more consideration because the relatively small number of them produce a far greater proportion of the income.

The absence of one item in this category could well have a serious effect on production or customers. However, the items in category b may also be important. For example, the effect of running out of invoice forms might be very inconvenient. The conclusion must be that all items require an effective stock-control system, but that for some the system need not be so complex or costly.

In the DIY store, high-priced power tools may not sell in large quantities, but they are likely to represent a fairly high percentage of total sales. It therefore makes sense to spend more money on accounting for these items, and protecting them from would-be shoplifters, than say counting the number of nails in stock. Which has the greater usage value? The answer is as follows. They are critical from the financial viewpoint. Category B items are medium in both number and usage value.

Category C items are high in number, but have low usage value. In a typical workplace, the percentage of items in each of the categories A, B, and C might be as follows. B 10—30 10—20 Medium number and usage value: medium to close control. C 50—60 5—10 High number of items, low usage value: less frequent control.

Session B 6 mins Activity 16 In your workplace, try to identify three stock items: one of high cost value and low quantity issues or sales; one of medium cost and quantity; one of low cost and high quantity use. Calculate their usage values. ABC analysis consists of the following steps. There is no hard and fast rule for setting boundaries between categories, and this will be a management decision.

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Suppose a lorry arrives at the door, and you are told by the driver that he or she has brought some materials for you. What would be the first few things you would do? However, it would be useful to look first in some detail at two documents that are normally used in a manual system.

This should help you to appreciate many aspects of stores documentation. For stores records purposes it is essential that these two transactions do not get confused. In both cases a record must be made of the transaction. A goods received note GRN is usually completed. A goods returned note or debit note is the document used in this case. The information that appears on these documents must be sufficient for everybody concerned to understand the full details of transaction. Although each company will have its own particular design for its goods received notes and goods returned notes, there are a number of pieces of information that must always be shown.

The goods received note GRN These obviously vary from one organization to another but all contain basically the same information. The order number relating to the delivery Sometimes an order is delivered in several batches, perhaps over a number of days or even weeks. The order number is used to match each goods received note with the original order.

Here is an example of a goods received note that you might like to compare with whatever is used in your workplace. Carrier Order No. Description For office use Ledger No. Reference No. Counted and checked by: Bin No. The way things are done in your own organization will depend on its size and the way it is run. Sometimes a copy will be given to the department wanting the goods, to let them know they have arrived. If the goods are being returned from outside the organization then stores will need to complete a goods returned note that can be matched up to the original sales order and to any other documentation relating to the return.

This might include, for instance, a note from the salesman authorizing the return. Activity 20 2 mins Suggest two items of information that should appear on a goods returned note, which do not appear on a goods received note. On page 43 is an example of a typical goods returned note. Copies are often colour-coded, to help ensure that each department gets the correct copy. Quantity Supplier Order No. Description Reference No. Bin No. This is the most visible aspect of stores work, and it is often the activity by which others in the organization will judge you.

Again, it is helpful to look at the documentation procedures. One version of a materials requisition form is shown below. Toys For You Ltd. As with goods received documents, three copies are typically required: the person or department making the requisition needs a copy; as does the stores; and the department whose job it is to cost work also needs a copy. You might also have included the method of return post, rail, road transport, etc.

This saves money, space and work, and reduces shrinkage. The minimum stock is the lowest possible level you should hold to avoid any danger of running out. It is not the same as the re-order level: it is lower. Sometimes, a safety stock level is set slightly below the minimum stock level. The organization will aim to re-order so that the stock issued during the lead time, while awaiting delivery, does not eat into the safety stock. According to this diagram answer the following questions. This is a very regular pattern — rather unrealistic, in reality — in which the reorder point is a stock level of 40, the lead time for delivery is three days, the order quantity is 40, and the minimum stock level and in practice, the safety stock is In the real world, the rate of use of the stock would vary, so that stock levels would sometimes rise above 40, and the re-order quantity might have to be changed on occasions.

Sometimes it would be necessary to use part of the minimum stock. The point of having a safety or minimum stock is that it can be used: it is there for use in an emergency. A more realistic diagram is shown on page You can see that one delivery was late, taking four days instead of three.

In a computerized stores system, the following actions typically take place on receipt of goods into stores. It may also pass on this information to others who need to know, by sending messages to their computer terminals. Session B 5 A goods received note will be generated by the computer, and copies printed out in the areas where they are required. This may not take the form that we have looked at, but may instead be printed or displayed as a summary report of all items received during a certain period.

A very modern system may be even more automated, and involve little, if any, keying in of data or paper printouts. In the stores area, the message will be automatically processed and relevant information, such as the warehouse location of the item s ordered, will also be shown. Orders might be consolidated so that, if three different people have ordered the same item, stores personnel can collect all the orders in one visit rather than wearing their legs out with three visits!

How could the system be improved? Presumably Widgets are only available in a specific range of colours and specific sizes: the form should therefore offer the user only the options that are actually available. It would be much better to force the user to enter a specific date. You may have identified additional problems, including the title of the screen. Robots are especially useful where repetitive but precise movements need to be made. One example of a robot is the automated guided vehicle AGV.

This is typically employed in moving heavy or palleted goods around a warehouse. Alternatively, the AGV may be free-ranging, and kept under control via a computer that sends radio signals. Robots such as AGVs hold several advantages where the initial expense can be justified. Work is generally done more consistently, and faster, than by humans. Their ability to operate with precision usually results in fewer incidents of damage. These consist of a series of dark bars, separated by spaces, as shown in this example. Bar coding is also employed in many industrial applications, for item identification.

There are several types of coding in use. An RF system uses portable terminals that have a built in bar code scanner, a small screen and a keyboard. These are either carried by staff or mounted on vehicles or robots. They are connected via a radio link to the main computer system, including the accounting system and any production systems. A fully-fledged warehouse management system has many advantages. Although it will be expensive to install it can offer considerable savings.

It is much easier and quicker to locate any item held in the warehouse. Stock levels are updated instantly and perfectly accurately. Orders for new stocks will be placed automatically when needed. Write an explanation in your own words in the boxes on the left. Why do the purchasing and accounts departments need a copy?

One simple example is the two-bin system. A usage value is calculated for each item, which is the purchase price times the number issued or sold; the highest usage value items then receive the greatest amount of attention. For issuing of stocks, the corresponding documents are the customer order or materials requisition, and the returns to supplier note. We look at some uses of technology that are commonly used to assist the purchasing function: Electronic Date Interchange EDI , e-procurement and business exchanges.

Our brief review of this subject is intended to help you apply the principles of good security. Although these four topics may seem to be unrelated, our discussions of them should help us to tie together some of the themes covered earlier in this workbook. Deliveries Suppliers Delivery records Purchase orders Issues Stock Issue records Users Forecast of requirements Analysis of requirements Purchase orders are sent to suppliers as a result of an analysis of requirements.

The existing level may be determined by visually inspecting the stock, but is more often calculated from the records of deliveries and issues. The process may continue on other days, when you discover that another shop offers lower prices and is quicker to serve you. Organizational purchasing involves the following activities. It is therefore important that the user or designer provides the purchasing officer with a specification of the goods, including perhaps dimensions, finish, colour, type and so on.

The purchasing function has the task of obtaining goods and services on the most favourable terms. Competitive tenders may be invited from contractors for larger value goods. It is a fact of life that suppliers will sometimes give false information in order to obtain a contract. Experienced purchasing personnel will be wary of promises of delivery dates by unknown or unreliable suppliers.

Its main task is to provide a service for the rest of the organization, not only in obtaining the required goods, but in giving appropriate advice and information. It is obviously in the interests of both parties to find ways around any problems that may arise, and the purchasing officer plays a crucial role in these negotiations. Activity 26 3 mins From the above, what would you say were the benefits to the organization of a well-managed purchasing function?

Try to list at least three benefits. It is currently estimated that around , companies all over the world consisting primarily of very large public companies and their numerous trading partners conduct business using EDI. The list of industries in which EDI is actively used includes shipping, retail, grocery, clothing and textiles, financial, health care and many others. These transaction sets replace paper documents such as purchase orders, invoices, and so on.

Standards define the structure, format, and content of EDI documents, including the data fields that may be included in a document, and the sequence and format of fields. What do you think this means and why is it a good thing? EDI has advantages for the organization ordering goods and for the organisation supplying them. The incoming EDI order automatically updates the stock system and the accounting ledgers.

But it was far too expensive. Trading partners of large companies have faced a tough choice until recently: they could either pay the going price of EDI or lose their large company customer. It is available wherever the Internet is available. There are, nevertheless, some issues still to be addressed. In particular many companies have substantial investments in their bought-and-paid-for EDI systems and in integrating them with back-end applications.

They do not want to retire their systems prematurely, nor do they wish to end up supporting two systems that essentially do the same thing. One-off organizational purchases may be made online in exactly the same way as an individual would make them, using an organizational credit card.

If online purchases are made regularly it is more likely that the organization will have an account with the supplier. An authorised and registered user will log in using a password and the organization will periodically be billed by the supplier. Depending on the status of the buying organization there may be discounts for volume purchasing or other special offers.

This saves searching for the items required and also avoids the need to key in name, address and delivery details. B2B offers similar advantages to EDI in terms of speed and elimination of unnecessary work. It also offers the purchasing organization much wider choice than it might have had otherwise. In theory, resources can be sourced from suppliers anywhere in the world, perhaps at much lower prices than could be obtained if the organization only considered local suppliers.

Activity 28 3 mins Can you see any potential problems for an organisation that allows its purchasing department to use e-procurement? The main issue is control: if anyone can order goods from anywhere there is a major risk that unauthorised purchases will be made. There is also an increased likelihood that purchases will be made from suppliers who cannot deliver the required quality or cannot deliver at all!

For this reason, companies such as Ariba have developed special e-procurement software with built-in tools to control who can place orders at various spending levels, who orders should be placed with and so on. All the participants in the formation of the exchange will ask their existing suppliers to join in, thus creating the beginnings of a supplier pool.

If each participant adds their own existing suppliers then all participants will immediately be able to enjoy the benefits of increased choice and competition. A notable example is Covisint, which brings together all the major motor manufacturers — Ford, General Motors, Nissan, Renault and so on. One approach is to do without stocks altogether. They arrange for parts and materials to be delivered at exactly the time when they are needed, to be fed directly into the assembly lines. These are called just-in-time JIT systems. The whole operation has to be highly organized to keep these large-scale enterprises fully stocked and running smoothly at all times.

Perhaps the points you identified are among the following. When the suppliers themselves need time to manufacture or assemble their products, advance planning is essential. The supplier and the user also need to communicate frequently in order to adjust and confirm the precise timing and volume of deliveries. This is not possible without the aid of sophisticated technology, as the following real-life case history shows. There are possible variations for these components, depending on colour, engine size, extras and whether the model is left-hand or righthand drive.

The component supplier has a factory just two miles away, and it makes deliveries up to 60 times a day. When the message is received by computer link, machines and operators at the supplier select, trim and fit plastic extras, before stacking them in sequence and loading them on trucks in small batches. On arrival, the driver takes the stock straight to the assembly line. The dangers inherent in the system are also recognized. Try to suggest two reasons why this is so. Just-in-time is very inconvenient for suppliers, who are used to a world in which most of their customers perhaps including your organization are content to go along with the traditional way of doing things.

In practice, vendors need to be located very close, geographically, to the organization they are supplying to. This involves moving some of the supply problems to the suppliers, and eliminating stock from the central storeroom. This brings benefits of reduced costs, but obviously needs careful management and reliable suppliers.

Here are two examples of organizations that might benefit from applying MRP. A hotel, which provides not only accommodation but food, a bar service, dry cleaning and so on, in the packages it provides its guests. In both these cases, the final product to the customer is dependent on the provision of lower-level goods or services. If the number of customers is known or can be estimated, then the organization knows how many of each component must be manufactured, prepared or obtained.

Its outputs are a detailed schedule of all the items that will be required, in order to make up the final product. The other inputs are the bill of requirements or bill of materials , listing all the elements that go to make a product or service; a schedule of capacity, showing the capacity the organization has to make things; and a list of current stock. The essential MRP structure is shown in the next figure. Master schedule: forecast or actual demand for products or services Bill of requirements: list of all parts, materials, and services required for each product Opening stock levels Schedule of capacity: what the organization is capable of producing MRP program Activity schedule: what has to be done Purchase schedule: what has to be bought Forecast stock levels Forecast of possible shortages Forecast of spare or deficient capacity The centre box in this diagram is labelled the MRP program because the calculations are done by a software program on a computer.

As with all computer programs, the accuracy of what you get out depends entirely on the accuracy of what you put in. The program is run repeatedly, as new input data arrives. Provided all the input data is correct, MRP is a very efficient method of scheduling and planning materials management. Prior to its use, materials and work scheduling was based on historical statistics, which was much less reliable. However, the introduction of low-cost networked PCs in the early s opened up the possibility of linking up the activities of many more parts of the organization, and since that time we have seen steady advances in computerized methods of resource planning.

Introduced in the early s, it was a method for planning all manufacturing resources. In addition MRPII provided detailed financial plans, such as budgets and links to the financial accounting system. MRPII software, together with networked PCs, linked together various, previously isolated functions, allowing manufacturing managers to obtain a complete picture of the activity and to set about optimising the way the activity was performed.

In non-manufacturing industries similar approaches were adopted to help manage core areas. As the technology of PC networking developed, the possibilities of supporting a larger version of MRPII, covering the entire enterprise, became more obvious. Enterprise Resource Planning ERP offered the opportunity to share common data, and therefore the resources contained within the data, across a wide range of common activities, promising to repeat on an enterprise-wide basis the improvements gained in individual areas of activity.

Typical components of an ERP system are as follows. This leads to production scheduling, dispatching, and job costing. Logistics in this case consists of inventory and warehouse management, and delivery. The purchasing function is also usually grouped under logistics. Imagine that your organisation is planning to adopt ERP. What possible problems might arise? People are often the biggest barrier to the success of a new system.

Staff may take the view that what they were doing before worked perfectly well and either not use the new system, or insist that it is adapted to reflect their old way of doing things, in which case few of the benefits of integration will be realised. Office politics may have a part to play in this. Individuals also have much more responsibility when systems are closely integrated. The consequences of a mistake in one department are no longer restricted to that department: the implications could be much more widespread. Another major problem is that existing systems in individual departments may not be compatible with each other.

You may have thought of other ideas specific to your own organisation. Numerous independent firms may be involved in a supply chain, for example manufacturers, components suppliers, delivery agents or shippers, wholesalers and retailers. Although ERP systems provide a great deal of planning capabilities, the various material, capacity, and demand constraints are all considered separately, in relative isolation to each other.

SCM software helps to plan and optimize the supply chain as a continuous and seamless activity. SCM products are able to consider demand, capacity and material constraints simultaneously, and to perform real-time adjustments. Changes can be communicated instantaneously to all participants in the supply chain using Internet technology.

It is a change of attitude. In the past the supply chain was typically defined by antagonistic relationships. Supplier contracts featured heavy penalty clauses and were drawn up in a spirit of general mistrust of all external providers. The knowledge and skills of the supplier could not be exploited effectively: information was deliberately withheld in case the supplier used it to gain power during price negotiations.

Hence, no single supplier ever knew enough about the ultimate customer to suggest ways of improving the cost-effectiveness of the trading relationship, for instance buying additional manufacturing capacity or investing in quality improvement activities. By working together, organisations can make a much better job of satisfying the requirements of their end market, and thus both can increase their market share. By opening up design departments and supply problems to selected suppliers a synergy results, generating new ideas, solutions, and new innovative products.

To enhance the nature of collaboration the organization may reward suppliers with long term sole sourcing agreements in return for a greater level of support to the business and a commitment to on-going improvements of materials, deliveries and relationships. What do you think might be typical financial impact for an organization of SCM in terms of revenue and costs?

Here are some ideas that you may have included in your answer. Reduced costs of purchasing. Less waste because of better understanding of quality standards, and fewer errors. Increased revenue due to higher quality product. Increased revenue due to new product ideas and products that more closely match customer needs. Now we move onto security. Similar fears haunt the managers of all organizations. Activity 33 3 Minutes Think of two examples of threats that can arise to the security of each of the following.

You may have included some of the following possible threats. Assault by robbers, other staff, or the general public; injury caused by defective buildings or equipment; damage to wellbeing from hazardous substances, fumes, fire or flood. The possibilities are infinite and businesses are increasingly vulnerable for some or all of the following reasons. Information stored and retrievable electronically is highly portable and also prone to attack by computer hackers — think how much data can be stored on one floppy disk.

A major fire, the theft of a payroll, or the death of key personnel in a transport accident will have serious consequences. But it is statistically more probable that an organization will suffer the theft of information; or unauthorized use, malicious corruption or destruction of that information. Data held electronically is potentially accessible to anyone, anywhere in the world.

For example, some recipes have been handed down through the generations and their knowledge restricted to the fewest possible employees But, someone has to have the recipe for a product to be made — and if it is made by computer controlled equipment, the chances are that somewhere it will appear in an electronic memory which will not endure torture unto death to protect it! That could lead to starvation for people already vulnerable through hunger.

Whose responsibility would that be — the rodents or the people managing the grain store? The sales manager will have confidential information about trading terms, possibly company production methods and recipes, plus personal contacts and standing with major customers. This could lead to a major theft, or series of thefts if the employee chooses to share the information with criminals. If the criminals are armed, serious injury or death could result as well as loss of property. It is also used in the health and safety arena, where you may already have encountered it.

Below is a five-step approach. Five step approach to assessing and minimising risks to resources 1 Identify the resources at risk. Safety is concerned with hazard, while security deals with the intrinsic vulnerability of resources. Hazard In safety management, hazard is the intrinsic potential of anything to cause harm, such as the capacity of asbestos fibres to cause fatal or serious illness.

Intrinsic vulnerability is necessary. If your business is manufacturing industrial diamonds, or CDs, you cannot eliminate them from it. If you did replace the vulnerable resource, the replacement is likely to be as vulnerable as the item it replaces, but you can assess the risks to it and follow through the five-step process to eliminate or minimise the risks. Is there a risk to our staff from customers who have had too much to drink? Is there a greater risk of it being damaged or stolen? It could be that a previously unconsidered potential risk has arisen, or changes to procedures are being considered.

Use the grid provided as Extension 6 to make an assessment of the security risks in the following scenario. As this is an open air event in a large space, there is less potential conflict with safety issues than in, for example, an upstairs dance hall. A cash and carry warehouse is just extending a branch and has asked you as the responsible manager to conduct a security risk assessment before the work starts. Some overhead work will be involved and, at some stage, the contractors will need to break through the existing external wall, close to some high storage racking.

The main computer terminal will have to be moved to a new office. It has been agreed that contractors staff can use company fork lift trucks, provided that they are licensed drivers and obtain formal permission from you on every occasion. Of the 50 company staff on site, around 40 are paid in cash on Thursday afternoons. In the limited time available, make your assessment and indicate the strategy you would use to minimise each risk you identify You will find a model solution in the reflect and review session on page The Activity will have given you some experience of the process of assessing risks and of deciding what the priorities should be for tackling the consequences identified.

Some terrible losses 81 Session C of life have occurred in stores, sports arenas, nightclubs and dance halls, where security devices prevented the victims escaping. Often, problems are caused by security bars and locked or blocked emergency exits which prevent people escaping when a fire has started, or when a panic has caused people to stampede towards the exits. When people are shopping, working or sleeping upstairs, as in a department store, hospital or hotel, they are especially vulnerable.

Minimizing the risks to personnel and visitors There can be no greater risk to the security of personnel and visitors than finding themselves on the third floor, with the fire exits and windows securely barred in front of them as the spreading smoke and flames begin to overtake them. All the contents of the barrow proved to be worthless and bore out his claim that he was taking rubble to an off-site skip. It transpired that he had stolen ten wheelbarrows. This frequently told story does illustrate how simple strategies often defeat security systems.

However, it should not prevent you looking for simple, common sense ways to protect property against theft. Look at the following case study, based on real events Example A heavy goods vehicle driver, wearing an overall displaying a company logo, walked up to a fork lift driver in the despatch warehouse of a large company. At the bay, he indicated the largest of the assembled palletised loads — some ten tons of material, which they helped him to load.

He thanked them politely for their help, secured his load and drove off, never to be seen again.


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He spoke politely and confidently to the staff and appeared to be in no hurry. The load he took was worth several thousand pounds. Very often, the simplest strategies are the most effective for a thief. Looking confident, appearing to know the way around and even asking for help can be much simpler, safer and more profitable than using dynamite, tunnels or guns.


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