establishing a risk analysis adam caldwell v0, may 19, 2015
TRANSCRIPT
Establishing a Risk Analysis
Adam CaldwellV0, May 19, 2015
Biography• Adam Caldwell is ASQ Six Sigma Black Belt that is working for
Michelin, NA as a Project Manager focused on new technologies and tire lines for the NA market.
• He holds a BA in Elementary Education from Clemson University and a BS in Business Administration from Limestone College.
• He has over 15 years of manufacturing experience with roles that range from warehouse management to lean manufacturing in the vitamin industry, and industrial engineering to project management within the tire industry.
• Most importantly, he is married to Lara Caldwell and they raise two girls – Emma and Dana – on their small farm in Gray Court, SC.
Structure of Review• What is a Risk Analysis?• Phase 1: Identification
– Before the Meeting– Set the Stage– Risk Mitigation
• Phase 2: Quantification– Severity & Occurrence
• Phase 3: Treatment– Options for Treatment
• Closing Thoughts
Vocabulary
• Risk– According to Project Management Institute (PMI)
• uncertain event or condition that, if it occurs, has a positive or negative effect on the projects objectives.
• Risk Analysis– It is a methodical approach to Anticipate and Control the risk
associated with the proposed change.• Includes:
– Identification – what risk(s) are created– Quantification – how impactful is the risk(s)– Treatment – action taken to mitigate risk(s)
What happens in a risk analysis?
Three Phases of Risk Analysis Sessions
Phase 1Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Who to invite to a risk analysis?Before the Meeting
Representatives “in” the process
Representatives “around” the
process
End User
Upstream
Downstream
Do the work
Maintain the process
Created the process
Points to Consider• Will anyone be calling in?
– Set up & share with invite• Have you meet with the team to review and update
the Risk Register with the risks already identified?– This must be complete prior to session
• Review the agenda and determine if you need to split it into multiple phases due to size of topic– If needed, first review should be to generate risks and
quantify; then bring back for treatment options
Before the Meeting
Meeting Agenda• Welcome– Purpose and Ground Rules– Review of Process Changes
• Known Risks– Industrial Risks, Customer Risks
• New Risks– Shop by Shop review based on proposed model– Interaction of new risks
• Quantify Risks• Known Investments
– Funding, Prototypes already in development, existing recommendations
• Treatment of Risks• Close meeting
– Review of location of information, next meeting (if necessary), actions
Before the Meeting
Three Phases of Risk Analysis Sessions
Phase 1Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Set the Stage
Welcome• Agenda
– Share the structure of the session so everyone knows what is coming
• Purpose – Purpose of why the session has been called – Ex – ID risks for Process A, Treat Risks,
etc– We are not here to pass judgment on if the project should proceed– Post or write on a white board/flip chart a quick definition of risk types you are
seeking
• Ground Rules– This is a posted list of expectations during the risk generation – its all about behavior
• Review of proposed change(s) – Have a visual of the proposed change(s) as either a hand out or large print posted
on the wall– Be prepared to review what is “new”
• It is possible that something is only “new” at one of the intended sites
Set the Stage
Ground Rules1. Focus of this review is on the specified project, risks of other
projects will be redirected back to scope2. Treat others with respect – focus on the risk, not the person3. Place cell phones on vibrate – take calls outside; you will be
asked to step out if you do not.4. Share your thoughts on risks5. Some risks may be presented that should not be on the
register – save debate, filter will eliminate6. Be engaged & have fun
Set the StageExample
R2 / R3 Risk Analysis Product, Material, Process, Method
Quality Planning is the anticipation and control of the R2 and R3 risks.
• R2 Risks – Not achieving the desired Product Performance because of the impact of the Manufacturing Performance.
• R3 Risks – Impact of the Product Design on Industrial Performance.
QualityUniformity ArchitectureUniformity Correction
Process Capability
Material Volume
Width, Thickness, Placement
Cycle TimeDebit New MaterialsCure Time
Products
Set the StageExample
New Process Proposal• Include a visual of the design - CAD drawing, Process
Maps, Photos, physical mock ups, etc– Having a visual enhances the risk identification AND simplifies
communication
• Create a bullet list of what is “new”– Point out
• Quality of any material• Geom. Of any material• New components added• Changes to specifications• New process that it will be built upon
Set the Stage
Three Phases of Risk Analysis Sessions
Phase 1Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Set the Stage
Risk Identification
Moving the Mind• The structure of the risk review should help
people move through different “rooms”
Risk Identification
Preparation Tire Building Curing After Cure
Site
“New” for Tire
Moving the Mind• The structure of the risk review should help
people move through different “rooms”
Risk Identification
Preparation Tire Building Curing After Cure
Site
“New” for Tire
Rubber
Steel
MAC/MAF
Group
MB2
Wet
Dry
Dual
Aspect
Unif.
Rect.
Textile
21
If you don’t like the rooms plan, think of the Fish Bone….
Risk
The 8 Ms (used in manufacturing)
Machine (technology) Method (process) Material (Includes Raw Material, Consumables and Information.) Man Power (physical work)/Mind Power (brain work): Kaizens, Suggestions Measurement (Inspection) Milieu/Mother Nature (Environment) Management/Money Power Maintenance
Risk Identification
Structure of Risk Identification
• Risk Leader can be the scribe for the session – but they can delegate this to another person if it they need to– Risk Register is not displayed while you are
collecting information– Scribe needs to be able to quickly flip to the
register to review
Risk Identification
Getting To the Risks• Three main methods to getting the ideas from the participants:
– Let them call them out as they have them, when the ideas slow, put them in a new “room”
• Drawback – one person can control the discussion causing you to have to intervene more often
– Set up a rotation – we are going to start on the left side of the room and get one risk per person, if you do not have one, say “pass”; when the ideas slow, put them in a new “room”
• Drawback – people get “tired” of waiting or do not want to just give one on their turn
– Use post its to capture the points and group linked risks together before putting into the register; when the ideas slow, put them in a new “room”
• Drawback – takes a bit more time to put the ideas on the post it then group
Risk Identification
Exercise: Select the types of risk that should be on R2/R3 Risks Register
• Plant does not experience with 20” tires
• Loading incorrect material on the Extruder
• The new material has poor performance on plant process
• Tooling will be delivered late
• Potential for an increase of changeover time due to the temperature shifts between material new material and other materials
Risk Identification
Risk Register
• Be as specific as possible when documenting the description of the Risk.
• Capture the Cause if it is known.
Risk Identification
Tips to stay on track
• Define up front the types of risks you are looking to identify– Chunk it up if it really is all risks
• Set your ground rules up to help – Let the rest of the room have input – if most agree
– keep it• If all else fails – record it and move on
– Quantification will help move it out of the way
Risk Identification
Three Phases of Risk Analysis Sessions
Phase 1Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Set the Stage
Risk Identification
Risk Quantification
Quantify Risk
• For each Risk identified, you will need to provide two values:– Severity– Occurrence
• Why not detection?– Preference and need – use it if you feel it is needed
Risk Quantification
SeverityRisk Quantification
1 3 7 9
Non-conformity does not lead to an effect perceptible in the performance of the product.
It is probable that the customer will not be in a position to discover it.
Non-conformity can constitute a slight difficulty for the customer.
He/she can note a slight fall in the performance of the product
Discontentment of customer.
The customer will note a significant deterioration in the product performance.
Non-conformity with Regulations / Safety is not affected
Potential safety problem with or without warning sign before occurring
The impact on industrial indicators is not significant.
Minor Disruption
Some indicators of industrial performance are impacted.
Moderate Disruption
Some indicators of industrial performance are heavily impacted.
Major Disruption
Very high impact on a large subset of industrial performance indicators.
Failure to Meet Internal/External Safety and/or Regulatory Requirements.
De
sc
rip
tio
n
Risks 2
Risk 3
Severity Rating
Example
OccurrenceRisk Quantification
DescriptionProbability
of Ocurrence
Very High: Certain ≥ 1 in 10 9
High 1 in 50 7
Moderate: occasional occurrence under similar conditions
1 in 2,000 3
Low: relatively unlikely 1 in 100,000 1
Oc
cu
rre
nc
e R
ati
ng
Example
Three Phases of Risk Analysis Sessions
Phase 1Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Set the Stage
Risk Identification
Risk Quantification
Risk Treatment
Which ones to treat?
• Once all the scores are tabulated, let the chart guide you to the ones that need treatment.– Set your own based on your business needs
9 27 63 81
7 21 49 63
3 9 21 27
1 3 7 9
Risk Factor
Non-Acceptable Risk Zone
Risk Zone requiring further review by Quality Planning Team
Acceptable Risk Zone
Example
Risk Treatment
Methods to Mitigate• For all risks in the Red, a method to Validate
and/or Mitigate the risk must be developed.
Risk Treatment
9 27 63 81
7 21 49 63
3 9 21 27
1 3 7 9
Risk Factor
Non-Acceptable Risk Zone
Risk Zone requiring further review by Quality Planning Team
Acceptable Risk Zone
Methods to Mitigate• For all risk in the Orange, additional study is
needed to determine if the Risk is acceptable
Risk Treatment
9 27 63 81
7 21 49 63
3 9 21 27
1 3 7 9
Risk Factor
Non-Acceptable Risk Zone
Risk Zone requiring further review by Quality Planning Team
Acceptable Risk Zone
Methods to Mitigate• For all risk in the Green, Risk is acceptable
Risk Treatment
9 27 63 81
7 21 49 63
3 9 21 27
1 3 7 9
Risk Factor
Non-Acceptable Risk Zone
Risk Zone requiring further review by Quality Planning Team
Acceptable Risk Zone
Methods to Mitigate• In all cases, this team is to come up with
methods to reduce Severity or Occurrence BUT it is up to the steering committee to approve the direction
Risk Treatment
Categories of Treatments
• Improvements or updates to the design• Changes to the material• Create a new process – Prototype projects• Implement a known – Investments • Review/challenge of requirements in specs
(internal and external)• Process changes leveraging work method
Risk Treatment
Validation of Treatment Plan• How do you verify your treatment is acceptable?
– Use your functional experts & company’s established practices
– Examples of established practices• Steering Committees set up with defined purposes –
technical direction, manufacturing spending• Standing Project Review Teams with set scope and
processes aligned with the overall flow of the process
Risk Treatment
Three Phases of Risk Analysis SessionsPhase 1
Risk Identification
Phase 2Risk Quantification
Phase 3Risk Treatment
Before the Meeting
Set the Stage
Risk Identification
Risk Quantification
Risk Treatment
Closing the Meeting
Steps to Close the Meeting• Review any open actions that are not captured in the risk
register. Assign an owner for those actions with due date.• High level review of the session
– We have completed the 1st review of the risks for project “x”. – If you did not make it all the way to Mitigation, set the stage
for what is next to come.• Set expectations for next steps
– Remind everyone of location of the register (include link in follow up email to those with actions)
– Identify when next meeting will be for a review on the Quantification or Treatment of the Risks
• Thank everyone for their participation and dismiss
Closing the Meeting
• Before the Meeting– Who to invite?– What to consider for the review?– Setting the agenda
• Set the Stage– Structure of the review– Set the stage for the review– Setting up the room for the review– Ground Rules for the participants
and the risks
• Risk Identification– Method to layout for drawing out
the risks– Keep people on the task – use the
Ground Rules
Closing Thoughts on Risk Analysis• Risk Quantification
– Have a pre-defined method for ranking Detection, Occurrence, and Severity element for the risk
• Risk Treatment– “Simple” treatments can be discussed and
recorded– Some treatments may not be readily
available – be prepared to establish additional sessions to treat
• Closing– Assigning actions– setting up the next steps if needed
Appendix
The following are forms and templates that you are welcome to use as they are or as a guide to make your own.
ParticipantsRole Name Manager
Before the Meeting
Risk Register
Template of file:
Risk Identification
Blank Risk Analysis