πŸ› οΈ Some Commonly Used Risk Assessment Methods Explained

Assessing risk in business, processes, and physical assets requires different approaches. In practice, many organizations tend to mix them up β€” but it’s important to apply each method where it fits best.

πŸ“Œ In short:

  • For business risks, use Business Impact Analysis (BIA)
  • For process-level risks, apply HAZOP (Hazard and Operability Study)
  • For equipment and asset risks, apply FMEA (Failure Mode and Effects Analysis)

πŸŽ“ Learn to use each method properly instead of blending them blindly.
πŸ“„ Download comparison resources:

  • BIA, FMEA, HAZOP Comparison
  • Difference between HAZOP & FMEA
  • How to conduct risk assessment using HAZOP

πŸ’‘ Then vs. Now

In the past, risk assessors spent hours flipping through books, handwriting reports.
Today? With AI tools like ChatGPT, you can have your own β€œprivate tutor” – translating, explaining, and refining information from global sources in your native language.

But don’t take AI’s answers at face value. Here’s how to use it effectively:

  • βœ… Always check the source of the information.
  • βœ… Ask for the reference link.
  • βœ… Review and revise the terminology and clarity.

Used properly, AI becomes a smart assistant, not a shortcut to inaccuracy.


🧾 Industry Classification Codes for Risk Audits

When conducting risk or compliance audits, especially in international contexts, organizations rely on industry classification codes like NACE, S, E, or F codes.

πŸ” NACE Code (Nomenclature of Economic Activities)
This is the European Union’s standard classification system for economic sectors.

Here are two practical examples using NACE codes:


πŸ₯” Potato Farming

βœ… NACE Code: A 01.13
Classification:

  • A – Agriculture, forestry, and fishing
  • 01 – Crop and animal production
  • 01.1 – Growing of crops
  • 01.13 – Growing of root and tuber crops (e.g., potatoes, sugar beet)

Ask AI: β€œList the key risks related to occupational safety, emergency, business continuity, information security, and food safety for NACE 01.13”

πŸ” Example Output:

CategoryKey Risks
βœ… OHS (Occupational Safety & Health)– Heavy machinery accidents (tractors, harvesters)
– Exposure to chemicals (pesticides, fertilizers)
– Sunstroke or hypothermia
– Ground hazards (holes, frost, slips)
– Overexertion injuries (e.g. back injuries)
πŸ”₯ Emergency– Wildfires
– Severe weather (floods, storms)
– Chemical spills
– Zoonotic disease outbreaks
🏒 Business Continuity– High seasonality risk (planting/harvest)
– Crop failure due to weather/pests
– Labor shortages, equipment failure
– Logistic disruptions (fuel, roads)
πŸ” Information Security– Data breaches on GPS/IoT devices
– Labor tracking system violations
🍽 Food Safety– Residual chemicals (pesticides)
– Poor storage (mold, spoilage)
– Inadequate sanitation
– Lack of traceability

🧡 Spinning Mill (Textile)

βœ… NACE Code: C 13.10
Classification:

  • C – Manufacturing
  • 13 – Textile manufacturing
  • 13.1 – Preparation and spinning of textile fibres
  • 13.10 – Spinning of textile fibres

Sample Risks per Category:

CategoryKey Risks
βœ… OHS– Entanglement in moving parts
– Dust inhalation (Byssinosis)
– Noise-induced hearing loss
– Poor air quality
– Hair/clothing entrapment in rotating machinery
πŸ”₯ Emergency– Fire risk (dust, fibers, oil)
– Electrical shorts
– Chemical storage leaks
🏒 Business Continuity– Raw material delays (e.g. via border transport)
– Utility interruptions (electricity, steam)
– Machinery breakdown
– Flooding, smoke, water system failures
πŸ” Information Security– Customer design/size/spec leaks
– Attacks on automated production systems
– ERP and digital order vulnerabilities
🍽 Food Safety– Not directly applicable unless producing food-grade textiles (must then comply with ISO 22000, HACCP, etc.)

🧠 Final Takeaways:

To conduct proper risk assessments in any industry, you really just need two things:

  1. βœ”οΈ A clear grasp of the three core risk assessment methods (BIA, HAZOP, FMEA)
  2. βœ”οΈ The ability to apply the correct sector code (e.g., NACE) to identify relevant risks

From there, if you leverage AI tools effectively, you can:

  • Generate deeper insights
  • Run probabilistic analyses
  • Perform quantitative modeling using statistics

Just remember: Human judgment always matters. Review. Verify. Decide.


🎁 Bonus Tip: Turn It into a PPT with AI

The AI platform Gamma instantly generated a presentation of this text in under 1 minute:

Yes, it can generate in Mongolian too!

βœ… Saves time
βœ… Increases productivity
βœ… Keeps documentation consistent


πŸ‘ Best of luck in mastering your risk assessment workflows!
#RiskAssessment #HAZOP #FMEA #BIA #NACE #BusinessContinuity #Safety #ProcessRisk #AIForWork #Gamma #OccupationalSafety #ISO45001 #ProductivityTools #CleanData #SmartAudit

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