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Every business operates in the presence of uncertainty. This uncertainty creates the opportunity for risk.

As beneficial as that might be it does not capture the full nature of uncertainty. associated with the word risk, "Risk Management" is getting in the way of effectively contending with uncertainty Change Operationally, compliance at its core is the practice of meeting obligations in the presence of uncertainty means meeting all your obligations (conformance, performance, and outcome-based) in the presence of uncertainty To reflect the shift to improve the certainty of meeting obligations we have elected to call these certainty

All the waste that LEAN seeks to eliminate is caused by the same thing: uncertainty, and this uncertainty Here are a few examples of how this happens: We create defects because of uncertainty associated with than necessary because of logistics uncertainty. We move more than necessary because of uncertainty associated with work procedures and standards. If you want to eliminate waste, eliminate uncertainty first.

For purposeful and goal-oriented organizations, sources of uncertainty can often be found with respect Uncertainty of the goals and objectives Companies use roadmaps to take them from where they are now to Uncertainty of any of the elements of the roadmap will impact mission success which include: Uncertainty are now Uncertainty with their prediction of the future Not addressing these uncertainties may result Processes may be defined but tend not to be effective (ordered uncertainty).

In cases of greater uncertainty these models will be adjusted over time as more information is gathered Risk Risk is defined (ISO 31000, COSO) as the effects of uncertainty on objectives which involves having However, everything happens in the presence of uncertainty so it is important to properly identify uncertainty There are two primary forms of uncertainty: Epistemic uncertainty; lack of knowledge or know how; this Reducible risk is treated by buying down uncertainty to improve the probability of meeting each objective

However, when uncertainty (the root cause of risk) is connected with natural variation (aleatory uncertainty Also, when uncertainty is due to a lack of knowledge (epistemic uncertainty) prediction is limited based We need to estimate uncertainty (both aleatory and epistemic), its impacts, and the effectiveness of

Hazards are sources of uncertainty, and as we know, uncertainty creates the opportunities for risk. You can try, and many will, to deal with the combinatorial explosion of the effects of AI uncertainty Yet, some will take the advice of the wise risk manager and contend with the uncertainties first. Heed the advice of the wise risk manager: “If you want to handle AI risk, contend with the uncertainties

However, the unifying thread across all these endeavours is the pervasive presence of uncertainty. between risk, uncertainty, and LEAN. Uncertainty is the breeding ground for risk, and risk, in turn, is the catalyst for waste. The challenge, therefore, lies in effectively contending with uncertainty to minimize waste. Navigating from Uncertainty to Certainty Our journey through the nexus of LEAN Logistics, value chain

Staying between the lines is focused on keeping risk out and certainty in. This is a dynamic and continuous endeavour to keep the dragons of uncertainty at bay and far enough away This is accomplished by contending with uncertainty using margins and buying down risk to levels needed Improvements are triggered by the presence of uncertainty between us and our objectives.

The primary purpose of risk management is to handle the possible effects of uncertainty against specified Risk is always associated with uncertainty as defined by ISO 31000 where risk is, “the effects of uncertainty We can therefore classify risk treatments according to the nature of this uncertainty as follows: Risk due to epistemic uncertainty; lack of knowledge or know how; this risk is reducible. Risk due to aleatory uncertainty; caused by inherent randomness or natural/common variation; this risk

Contending with operational uncertainty help organizations operate between the lines which protects the Scorecard Protecting the creation of value fundamentally is about contending with aleatory and epistemic uncertainty Aleatory uncertainty is handled by applying margins to cover losses that cannot be avoided or reduced Whereas, epistemic uncertainty is handled by means of compliance controls and measures to buy-down risk More uncertainty and risk is expected in the incubation and startup activities.

Every plan, business, or endeavour happens in the presence of uncertainty. is responsible for creating value in the eyes of the stakeholders and it does so in the presence of uncertainty Margins are necessary to mitigate the effects of aleatory (i.e. irreducible) uncertainty. Compliance programs also serve the value chain by mitigating the effects of epistemic (i.e. reducible) uncertainty To succeed in the presence of uncertainty a balanced scorecard should include objectives and measures