Risk Assessment of Manufacturing Small and Medium-sized Enterprise
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Risk Assessment of Manufacturing Small and Medium-sized Enterprise
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Risk Assessment of Manufacturing Small and Medium-sized Enterprise
Introduction
The manufacture, development, distribution, and maintenance of electric cars (EVs),
electric vehicle charging infrastructure, and related goods and services are all handled by small
and medium-sized businesses (SMEs) in the e-Mobility sector. SMEs in this industry are crucial
for fostering innovation, boosting competitiveness, and boosting accessibility to environmentally
friendly transportation options (Gherghina et al., 2020). The e-Mobility market is home to
various companies, including EV producers, battery producers, infrastructure suppliers for
charging, software creators, and mobility service providers. Small and medium-sized businesses
in this industry are frequently more adaptable and agile than prominent companies, enabling
them to innovate fast and adjust to shifting market conditions. The SME is engaged in the e-
Mobility sector, which comprises the manufacture, sale, and upkeep of electric vehicles and the
provision of charging infrastructure and related services (Roberts, 2022). Industry projections
predict that the worldwide e-mobility market will expand between 2021 and 2028 at a
compounded annual growth rate (CAGR) of 27%. The main factors influencing this increase are
the desire for sustainable transportation options and the rising demand for electric cars (EVs)
(Fortune Business Insights, 2021).
Creating cutting-edge battery technologies, such as lithium-ion batteries, solid-state
batteries, and flow batteries is one area of concentration for SMEs in the e-Mobility industry.
SMEs drive innovation in this space by creating novel materials, manufacturing techniques, and
battery management systems. Battery technology is a crucial component of EVs. Businesses are
essential to the construction of the infrastructure for EV charging. This involves the creation of
wireless charging options, innovative charging systems, and fast-charging technologies that help
optimize energy usage and save expenses (Zeng et al., 2022). Creating mobility services that
integrate EVs with other modes of transportation, including public transportation, bike sharing,
and ride-hailing, is another area of concentration for SMEs in the e-Mobility industry. These
services are intended to offer users convenient and environmentally friendly mobility options,
decreasing the need for private vehicle ownership (Gould et al., 2015).
This risk assessment report aims to pinpoint and analyze potential threats to Small and
Medium Sized Businesses (SMEs) operating in the e-mobility industry. A summary of the SME's
operations and the rationale behind the risk assessment are given in the report. The research
emphasizes the value of risk management for SMEs and offers suggestions for dealing with the
risks found.
Risk Identification
Disruptions in the supply chain:
The e-Mobility business depends mainly on supply
networks, and any disturbance within may affect SMEs' capacity to deliver goods to
clients. Natural catastrophes, geopolitical crises, or other external reasons can cause
supply chain interruptions. This risk may impact businesses that depend on intricate
global supply chains. Supply chain interruptions can cause delays, higher costs, and
reputational harm if not adequately managed (Malik et al., 2014). These kinds of risks fall
under operational risks
Cybersecurity threats:
Cybersecurity risks represent a severe danger for firms working
in the digital age. Hacking, malware, fraud, and other cyber-attacks are some of these
dangers. Cybersecurity threats can lead to data breaches, the theft of intellectual property,
and monetary losses if they are not adequately controlled (Witts, 2023). Operational risk
is where this risk belongs to.
Theft of intellectual property:
For companies that depend on original concepts,
procedures, or designs, intellectual property theft poses a severe risk. Employees, rival
businesses, or outside suppliers could be the source of this danger. Intellectual property
theft can cost a business money, a competitive edge, and reputational harm (Llp, 2020).
Uncertainty risk is the category in which this risk belongs.
Legal Liabilities:
Legal liabilities can develop due to breaking the law, contract
violations, or other legal conflicts. Legal liabilities can cause financial losses, harm the
company's reputation, and legal penalties if they are not adequately managed. The SMEs
in this sector are also impacted by changes to government legislation and policies relating
to EVs and the infrastructure for charging them (Hu et al., 2020). Uncertainty risk is the
category in which this risk belongs.
Economic downturn:
Companies of all sizes and industries can be affected by economic
downturns. These recessions may lead to lower consumer spending, more competitors,
and lower profits. Unprepared businesses risk suffering financial losses and even going
out of business (Gherghina et al., 2020). The opportunity risk category includes this risk.
Natural disasters:
Earthquakes, floods, and hurricanes can cause business disruptions
and property damage. Companies located in disaster-prone locations should have a plan
in place to lessen the risk of loss and inconvenience (Alesch et al., 2001). This danger
belongs to the group of hazards risks.
Risk Assessment
Using a risk matrix, we awarded scores based on the possibility that each risk would occur and
its possible impact on the SME in order to evaluate its impact and likelihood. The outcomes are
displayed in the subsequent table.
Risk
Probability of
Occurrence
Potential Impact
Risk Score
Economic downturn
High
bankruptcy and
reduced profitability
7
Legal Liabilities and
government
regulations
Very high
legal action, and
reputational damage
10
Theft of intellectual
property
Very high
loss of revenue,
market share and
profitability
10
Threats to
cybersecurity
Very high
reputational damage
and legal liability
10
Disruptions in the
supply chain
Very high
loss of revenue and
market share
10
Mitigation Plan
Risk mitigation is a method for dealing with the inherent and unavoidable risks that
businesses face. Risk mitigation aims to decrease the impact of the consequences of hazards that
do arise (Wojno, 2022).
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Economic downturn:
To ensure that the firm may continue to make money even if one
industry undergoes a downturn, diversify the company's offerings to appeal to multiple markets.
Also, Make a cash reserve fund so the company may continue to run through challenging
economic times (OECD, n.d.). Cost-cutting strategies like lowering non-essential spending,
renegotiating contracts with suppliers, and staff reductions can help with the contingency plan
for this risk. Create a strategy to quickly adopt the company's cash reserve fund, including a set
consumption level and explicit replenishment methods (OECD, n.d.).
Management plan:
keeping an eye on economic indicators and being aware of future economic downturns
Creating a strategy to cut costs in the case of a recession
Having backup strategies in case of decreased sales or financial flow
Review financial performance frequently to spot potential dangers and make required
adjustments to your strategies (OECD, n.d.).
Legal liabilities and government regulations:
To assist the company with navigating
any potential legal liabilities or regulatory issues, hire a legal professional or team and assist
employees in avoiding behaviors that can result in legal liabilities or regulatory concerns,
establish a clear code of conduct and set of policies (Gilman, 2005). A plan of action for this risk
includes Having a crisis management strategy that can be implemented immediately if the
company suffers any legal or regulatory issues. Create open lines of communication with all
parties involved, including staff members, shareholders, and regulatory agencies, to ensure
everyone is aware of the situation and any corrective measures being taken (Gilman, 2005).
Management plan:
Keep up with regulatory changes, and adjust policies and procedures as necessary.
To guarantee that regulations are being followed, conduct routine internal audits.
Provide a procedure for resolving legal disputes or violations of regulations.
Have adequate insurance coverage to guard against legal liabilities (Gilman, 2005).
Intellectual property theft:
Use effective cybersecurity procedures to safeguard the
company's intellectual property from online attacks and, inform employees of the value of
protecting the company's intellectual property, conduct frequent training and awareness
initiatives (Slater, 2021). A contingency plan for this risk includes having a plan of action that
may be used immediately if intellectual property is stolen, and investigating the theft with the
assistance of law enforcement and other professionals, and then filing a lawsuit if required
(Slater, 2021).
Management plan:
Security measures should be periodically reviewed and updated to ensure efficacy.
Regularly educate staff members on protecting intellectual property.
Create and implement an action plan for suspected intellectual property theft or
unauthorized usage.
Connect with legal representatives and law police to help in the event of intellectual
property theft or illegal usage (Slater, 2021).
Cybersecurity risks:
Conduct frequent cybersecurity audits to find and fix
vulnerabilities before cybercriminals use them. Employers should regularly educate staff
members about the value of cybersecurity and how to recognize potential online risks. Data
backups should be kept in a completely distinct area on a different server, USB drive, or,
preferably, on the cloud. Because connected storage can be automatically infected by
ransomware and other viruses, isolating your backup from your primary server will help keep it
secure. Include data backups in your regular business operations, and restrict access to the
backup data (Alahmari & Duncan, 2020), by creating a response strategy that can be used
immediately in a cybersecurity incident. A contingency plan for this risk involves working with
cybersecurity professionals to investigate the breach and take action to mitigate any damage
caused by the incident, including alerting affected parties and putting new security measures in
place (Flynn, 2023).
Management plan
:
Ensure efficacy and regularly assess and update cybersecurity measures.
Regularly educate staff about secure cybersecurity procedures.
Creating and putting into action a plan of action for potential cyber-attacks.
Helping in the event of a cybersecurity breach, develop contacts with law enforcement
organizations and cybersecurity professionals (Flynn, 2023).
Problems with the supply chain:
Risk reduction tactics include lessening dependency
on a single provider or location, developing ties with several vendors, and building a real-time
monitoring system to spot and handle supply chain disruptions as soon as they occur (Marotta,
2023) by creating a backup strategy that can be deployed right away if the supply chain is
disrupted, and creating effective channels of communication with suppliers and clients to keep
them updated on any problems and any measures being taken to address them (Marotta, 2023).
Management plan:
1.
Keep an eye out for supply chain interruptions and keep up with any changes.
2.
Create a plan to lessen interruption, including finding substitute suppliers and keeping
adequate stock levels.
3.
Create channels of communication with suppliers to stay in the loop about potential
disruptions.
4.
Review and update the supply chain plan frequently to ensure it is effective and, if
necessary, make changes to account for new risks (Marotta, 2023).
Conclusion
In conclusion, SMEs play a critical role in the e-mobility sector, stimulating innovation and
offering essential services, including producing, marketing, and maintaining electric vehicles and
charging infrastructure. However, SMEs in this sector face a number of hazards, such as supply
chain disruptions, cybersecurity risks, intellectual property theft, legal liability, economic
downturns, and natural disasters. Effective risk management techniques that consider the unique
difficulties SMEs must adopt in the e-mobility sector face managing these risks. Failing to
control these risks could result in losses of money and possibly bankruptcy. Thus, SMEs in the e-
mobility sector must make risk management a top priority and an integral part of their daily
operations.
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