117 OPERATIONAL RISK MANAGEMENT (ORM) FUNDAMENTALS

117.1 Discuss the concept of Operational Risk Management (ORM).

1. Operational Risk Management is a systematic, decision making process used to

identify and manage hazards that endanger naval resources. ORM is a tool

used to make informed decisions by providing the best baseline of knowledge

and experience available. Its purpose is to increase operational readiness by

anticipating hazards and reducing the potential for success to gain the

competitive advantage in combat. ORM is not just related to naval aviation;

it applies across the war-fighting spectrum.

.2 Explain the following terms as they apply to ORM:

a. Identify hazards: Begin with an outline or chart of the major steps in the

operation or operational analysis. Next, conduct a preliminary hazard analysis

by listing all of the hazards associated with each step in the operational analysis

along with possible causes for those hazards.

b. Assess hazards: For each hazard identified, determine the associated degree of

risk in terms of probability and severity. Although not required, the use of a

matrix may be helpful in assessing hazards.

c. Make risk decisions: Develop risk control options. Start with the most serious

risk first and select controls that will reduce the risk to a minimum consistent

with mission accomplishment. With selected controls in place, decide if the

benefit of the operation outweighs the risk. If risk outweighs benefit or if

assistance is required to implement controls, communicate with higher

authority in the chain of command.

d. Implement Controls: The following measures can be used to eliminate hazards

or reduce the degree of risk. These include: Engineering controls, admin-

inistrative controls, and personnel protective equipment.

e. Supervise: Conduct the follow up evaluations of the controls to ensure they

remain in place and have the desired effect. Monitor for changes which may

require further ORM. Take corrective action when necessary.