s a result of the ongoing credit crisis, senior managers in financial services firms are reassessing their risk management processes. This is leading to a greater emphasis on enterprise risk management (ERM) or firmwide risk management, according to “The Bigger Picture: Enterprise Risk Management in Financial Services Organisations,” an Economist Intelligence Unit survey and report sponsored by SAS Institute Inc.
The report is based on an Economist Intelligence Unit survey in July 2008 of 316 senior executives from around the world. Among the respondents, 59 percent say that the credit crisis has forced them to scrutinize their risk-management practices. A key challenge for many financial services companies is that the move to an enterprisewide risk‑management approach is lengthy and often involves a shift in corporate culture.
Executives also indicated that a lack of relevant, timely, and consistent data is preventing a wider acceptance of ERM.
“This survey confirms that financial services organizations will increasingly be looking to adopt best practice in risk management, with firmwide risk and stress testing being placed center stage,” says Allan Russell, head of global risk practice at SAS.
Other findings of the report include:
• An expectation of growing regulatory pressure will increase the implementation of ERM. In the wake of recent recommendations from regulators, industry groups, and rating agencies, 27 percent of executives say that they have full confidence in their own stress- testing practices and are likely to step up the pressure on firms to adopt best practice in risk- management systems.
• Lack of relevant data is hampering financial services firms’ approaches to risk management. Although a sophisticated infrastructure is necessary to handle risk data such as credit scoring, stress-testing, and economic capital, human judgment in risk management is also important.
• Creating a culture for risk management is a challenging proposition for most firms. One of the keys to successful ERM is embedding risk management within the company culture, but for surveyed executives this was the most widely encountered challenge, cited by almost half of the respondents. Organizational structures play an important role in developing this culture, as do the strength of reporting lines and other communication channels.
The report is available at www.eiu.com/sponsor/ERM . For further information, visit www.eiuresources.com/mediadir/default.asp?PR=2008091801 .
“The Culture of Quality: Serving Customers, Organizations, and Communities” is the theme for the American Society for Quality’s (ASQ) upcoming world conference. The conference will take place May 18-20, 2009, at the Minneapolis Convention Center.
The content is designed to create, promote, and grow the culture of quality on a global scale through five focus areas: quality basics; customer service; driving quality through the organization; improved performance; and 21st century needs, competencies, and issues.
Offering the latest quality knowledge and tools through networking opportunities with quality experts, the conference seeks to generate quality ideas through a broad range of sessions. For unique, interactive presentations, the popular “After 5” sessions are designed to demonstrate how quality can be incorporated into everyday life--with sessions on yoga, skin care, sushi, kitchen improvements, power tool safety, and much more. Conference attendees can participate in the sessions, see keynote speakers, and join networking events as well as more targeted sessions that may cater to their expertise.
The 2009 conference offers attendees the opportunity to take part in three other mini-conferences that will be held concurrently, all for one registration fee:
• Quality Institute for Healthcare (QIHC)--12 sessions and eight workshops available
• The Quality Institute for Software--nine sessions available
• The Quality in Sustainability Conference--12 sessions, eight workshops, and one keynote available
For further information, visit http://wcqi.asq.org .
Our apologies to the “Do the Math” junkies who missed us last month. Trade shows, trips to Taiwan, and vacations interrupted our well-tuned process of bringing you the best math errors.
In September, we sent you to an advertisement spotted by one of our readers. The ad offered an amazing 60-percent-off sale. Unfortunately, the only amazing thing about the sale was the math. Here is the offending section:
“Friday, August 15th SAVE 60% When You Buy Three Items...
Pick out three of your favorite things and SAVE 30% on the first item, SAVE 20% on the second item, and SAVE 10% on the third item.”
As almost all of you noted, you can’t add up those individual percentages.
Look at it this way. If each item you purchased cost $100:
Item 1: less 30% = $70.00
Item 2: less 20% = $80.00
Item 3: less 10% = $90.00
This leaves you a total expenditure of $240, or a 20-percent savings overall. The percentage saved will depend on the cost of the individual items, but will never equal 60 percent.
This month’s randomly selected winner is Don Knaepple.
As reader Mike Ferraris points out: “Funny math--it’s not just for politicians anymore.”
Next month’s puzzle
Speaking of politics, this month’s math error was spotted by Dan Montgomery on a CBS News blog: www.cbsnews.com/blogs/2008/09/08/politics/horserace/entry4425329.shtml . Tell us what the error is, and drill down into the blog (hint, hint) and tell us how/why the error occurred.
Send your answers to this month’s puzzle, or submit an error that you spotted in the media, by clicking the Contact link at the top right of this page. You could win a prize.
The International Organization for Standardization (ISO) and the United Nations Industrial Development Organization (UNIDO) have published Fast Forward--National Standards Bodies in Developing Countries.
Explaining the background to the book, UNIDO director-general, Kandeh K.Yumkella, and ISO secretary-general, Alan Bryden, point out in its preface, “Realities and priorities in developing countries are different from those that pertain to the developed world; a typical standards body structure and mode of operation that work well and meet the needs of stakeholders in a developed country are unlikely to be the perfect answer in the developing world.”
The book explains the role of standardization in industrial development, trade facilitation, and improving access to global markets. It describes how standardization is interlinked with the disciplines of metrology and conformity assessment. It also describes how the three form essential building blocks for developing a quality infrastructure that enables sustainable development, can lead to full participation in international trade, and satisfies the technical requirements of the multilateral trading system.
For further information, visit www.iso.org/iso/pressrelease.htm?refid=Ref1155 .
When deliveries begin in 2009, AeroLogic will be using Boeing’s Maintenance Performance Toolbox and Airplane Health Management (AHM), as a foundation for the carrier’s 777 Freighter maintenance documentation platform.
Maintenance Performance Toolbox, including the library and authoring modules, will help AeroLogic, based in Leipzig/Halle, Germany, to streamline an array of maintenance activities, including managing technical publications, training, and customizing online maintenance manuals.
“Boeing has exactly the right tools to help us build a lean, competitive cargo carrier,” says Christian Schmucker, AeroLogic maintenance director. “It is important to bring our customers a service that utilizes the very latest maintenance technology, meeting our commitment to reducing our operating costs while improving our productivity and performance.”
The goal is to give the airline a real-time fault-management tool to identify maintenance needs and communicate with ground teams to enable proactive, planned, and timely maintenance operations, and address potential issues. The combination of Toolbox and AHM enables enhanced productivity in airline maintenance and engineering operations. Only an internet connection, a password, and a computer--a laptop, desktop, or pen tablet--are necessary to access the system as a secured, hosted service.
AeroLogic GmbH is jointly owned by DHL Express and Lufthansa Cargo AG.
For further information, visit www.boeing.com/news/releases/2008/q3/080925a_nr.html.
In an effort to explore how diversity, culture, language, and health-literacy issues can be better incorporated into current Joint Commission standards, the Commonwealth Fund, based in New York, issued a new grant to The Joint Commission to revise and develop accreditation standards for culturally competent, patient-centered care in hospitals across the United States.
This standards development initiative builds upon The Joint Commission’s ongoing study, “Hospitals, Language, and Culture: A Snapshot of the Nation,” that examines how hospitals in the United States respond to the diverse cultural and language needs of their patients. The study found that practices used to promote effective communication and cultural competence--critical elements of patient-centered and equitable care--vary widely from hospital to hospital.
“Hospitals face many challenges in caring for a rapidly changing patient population,” says Paul M. Schyve, M.D., senior vice president of The Joint Commission, located in Oakbrook Terrace, Illinois. “Sensitivity and responsiveness to cultural and language needs impact the quality of care, patient safety, and patient and family satisfaction. This Commonwealth Fund- supported initiative will provide a firm foundation for standards that foster culturally competent patient-centered care.”
The standards development process will, as is customary, include a review by interested parties in health care and the public. The Joint Commission will collaborate with the Los Angeles-based National Health Law Program (NHeLP) to develop an implementation guide to prepare Joint Commission surveyors and accredited hospitals for the release of these new standards, targeted to take effect in 2011.
As part of the project, The Joint Commission is seeking nominations for an expert advisory panel that will review available evidence-based practices and identify principles that can be used as the basis for new and revised standards.
For further information, visit www.jointcommission.org/newsroom/newsreleases/nr_08_25_08.htm .
A new edition of ISO 9001, the world’s most widely used quality management systems standard, was submitted in May 2008. Publication of the revised version should happen in November 2008.
The standard was last revised in 2000. This revision includes language that clarifies requirements in outsourcing, document control, and customer relations, among other topics. Many of the changes are designed to bring about better compatibility between ISO 9001 and the ISO 14001 environmental management systems standard.
A comparison of the 2000 and 2008 editions of ISO 9001 reveals that there are little, if any, radical differences.
ISO’s rules for the development of standards require their periodic review to decide if they need revising, maintaining, or withdrawing. ISO 9001:2008 represents fine-tuning, rather than a thorough overhaul. It introduces clarifications to the requirements existing in ISO 9001:2000, based on user experience during the last eight years, and changes that are intended to improve further compatibility with the ISO 14001:2004 standard for environmental management systems.
ISO 9004, a support document, will be published as a new edition in 2009.
For further information, visit www.iso.org .
A technology that provides high-quality images of the crystallization process marks the next step toward a “right first time” approach to drug manufacture, according to engineers at the University of Leeds, United Kingdom.
Crystallization of drug compounds from solution is a fundamental part of the lengthy pharmaceutical processing chain. The size and shape of drug compound crystals has a significant effect on product purity and quality. It also affects other parts of the process, where crystals are sifted, milled, and blended with other chemicals before being made into tablets or suspensions.
“Essentially we’re working toward developing high-quality Six Sigma manufacturing processes for the pharmaceutical sector, very much mirroring the approaches already adopted by high-tech sectors such as microelectronics,” says professor Kevin Roberts of the University of Leeds-School of Process, Environmental, and Materials Engineering. “I believe we can help the manufacturing process become faster and more efficient, which will cut waste and save money--and shorten the time it takes drugs to get to market.”
Until now there has been little research into how crystal formation can be monitored and controlled. Optimizing crystal formation at the beginning of the manufacturing process could significantly affect the efficiency of the production chain.
For further information, visit www.leeds.ac.uk/media/press_releases/current/crystallisation.htm .
Following a June 9, 2008, plutonium spill at the National Institute of Standards and Technology (NIST) Boulder Laboratories campus in Colorado, the organization is implementing new actions to improve safety. The actions came about as a result of internal and external investigations and reports, including a safety audit conducted with the assistance of the U.S. Department of Energy (DOE).
“These latest actions represent important steps for increasing all aspects of safety at NIST-Boulder laboratories,” says Richard Kayser, interim director of the NIST-Boulder Laboratories. “Much still needs to be done, but we are grateful for the hard work of NIST staff and associates as well as the input we have been receiving from experts at agencies such as the Department of Energy.”
A few of the recent actions taken by NIST are:
• NIST contracted with Energy Solutions of Salt Lake City to decontaminate the laboratory where the plutonium spill occurred. The great majority of the plutonium present in the laboratory already has been recovered and transferred to Los Alamos National Laboratory in New Mexico.
• As a result of the safety audits, four laboratories and a machine shop were shut down due to potential safety concerns for personnel working in those laboratories.
• All hazardous materials disposal issues raised by the DOE-assisted audit have been rectified. Specifically, all hazardous waste is being properly labeled and stored, and additional training has been provided to waste handlers. In waste accumulation areas, improved signage, required weekly inspections, and logs of materials are being maintained.
• NIST-Boulder has required all supervisors to meet with their staff, associates, and general contractors to identify job-related hazards, specific training, and personal-protective-equipment requirements.
A report on the DOE-assisted audit of NIST’s Boulder Laboratories and a letter to the City of Boulder describing recent NIST safety improvement actions have been provided to the new NIST Blue Ribbon Commission on Management and Safety established by the U.S. Department of Commerce. These documents are available at www.nist.gov/public_affairs/releases/boulder-incident.html .
For further information, visit www.nist.gov/public_affairs/releases/doe091608.html.