Flow chart is a micro level technique. Better detailed activities can be known through the help of flow chart. Organizational chart is unable to give a clear picture of the risks lying in the organization and it also cannot identify the impact of the risk on the organization. The flow chart will remove these drawbacks which are found in organizational chart. The flow chart also shows that where the most important and crucial dependencies are in the process of production.
Flowchart sequentially and graphically depicts the activities of a particular organization. Any loss or any risk which will cause disruption in the operations and will therefore be the bottlenecks can be clearly identified through this technique. Flow chart shows the clear picture of the internal activities of a particular organization, particular activity of the organization and also the organization’s complete chain of economic activities.
Subsidiary flow charts are also prepared, these flow charts shows the activities of each department, each supplier and also the activities of customers. Network analysis can also be done with the help of flow charts. Networks analysis shows the values moving along with different paths of flow chart. The limitations which are involved in analyzing the risk through flow charts are that they are process oriented and they do not indicate the vulnerability of each step.
Now let us take the example of paper making industry. In which the raw material is collected which includes straw and used paper. These are then stored in store room. After that processing is done on the raw material and pulp is produced. From pulp, tissue paper, corrugated paper and fax paper will be made. From corrugated paper, corrugated sheets are prepared. Corrugated sheets are then converted into paper reels, which can be used internally for packing a product or can be used for selling it.
This flow chart is drawn below and will explain that how risks can be identified from a flow chart. Used paper is normally stored under the sheds and straw in not stored under sheds, straw can itself ignite when temperature is near 40 C, therefore the risk manager will try to reduce the risk of self ignition by installing a network of hydrants around straw, which sheds water twice a day. Risk manager will try to locate the area of risk concentration and risk dependencies. Pulp making is a non-hazardous process as water is used as a raw material in it. This is how the risk manager will locate the risk in the production process by the help of a flow chart.