Risk Assessment and Quantification in Manufacturing Enterprise

Abstract

In this research first time in Latvia a multidimensional risk assessment is carried out in a manufacturing enterprise in the pharmaceutical industry according to the only international risk management standard ISO 31000:2018. The key multisided risks were identified and prioritized in the manufacturing pharmaceutical enterprise by applying the common metrics method: obtaining evaluations of risk occurrence and impact severity, made by the two highest levels of enterprise management, i.e. Board and senior line managers. A Top 10 of key risks was created from identified 64 different risks and the convergence and divergence in the risk rankings, evaluated by the enterprise’s Board and senior line management were obtained and analyzed. The main conclusion is that manufacturing enterprises in the pharmaceutical industry have specifics regarding exposure to multisided risks, where the main key risk is a regulatory risk and not different financial risks. Different rankings of enterprise operational risks, investment assessment risks, technological innovations risks made by the enterprise Board and senior line managers are signalling that exactly in these directions of the enterprise’s business activities it is necessary to review the strategic and operational planning with the aim to mitigate the potential risk impacts.