Your neighbor’s (third party) operational hazards can generate risks requiring a strategic shift.
Jul 30th, 2015
Your neighbor’s (third party) operational hazards can generate risks requiring a strategic shift.
We live in a complex interconnected world which generates interdependencies some times very difficult to detect/understand. Interdependencies are of different kinds: physical, geographical, logical, cyber. Your neighbor’s (third party) operational hazards can generate risks requiring a strategic shift.

Hazmat Trains Accidents
Here are some examples of interdependencies
- The US Pentagon mistakenly sent live anthrax to at least nine labs in the US and to a US military base in South Korea using Fedex. This is a classic example of logical interdependency. That’s the classification, although the fact in itself seems quite illogical for the recipient labs.
- An accidental spill from a “third party” vessel in a harbor may result in a severe restriction of docking, loading/ unloading operations. These can impact all the present vessels. Such an incident occurred at small scale in Vancouver this year. This is an example of geographical interdependency for the owners of the other vessels or the wharves.
- The recent accident at a refinery in California has stressed the gasoline supply, an example of a physical interdependency like, as another example, the collapse of an interstate in Arizona (I10) which will cause difficulties in the traffic for quite a long time with increased costs and travel times for all kinds of third parties.
- Finally, as an example of a cyber interdependency we can quote a number of anomalies in flash trading in the stock exchange that have generated indirect financial consequences for third parties.
Final notes
Your risk register can stop at your “property perimeter”, but doing so corresponds to an ostrich stance making you very vulnerable to risks that may affect your strategic goals.
Your neighbor’s (third party) operational hazards can generate risks impinging on your operations. You do not need to “do something wrong” in order to get a hit: it is enough to “be there”. Your image and reputation may even suffer a blow from those hits.
Some of the generated risks may be intolerable, or even unmanageable, thus requiring a strategic shift.
Only a rational and well balanced risk assessment can help you decide and avoid the pitfalls.
We wish you all a pleasant month of August.
Tagged with: cyber interdependency, geographical interdependency, Intolerable, logical interdependency, operational hazards, physical interdependency, strategic goals
Category: Consequences, Hazard, Optimum Risk Estimates, Risk analysis, Risk management
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