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Risk Management

Brief introduction to risk management

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16 views25 pages

Risk Management

Brief introduction to risk management

Uploaded by

chaos5869
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Brief Introduction

to Risk
Management
DEFINITION: WHAT IS RISK?
Risk is defined as the likelihood of the hazard causing harm.
Risk is defined as the chance of something happening that will have an
negative impact.
Risk is the combination of the probability of occurrence (P) and the
severity (S) of the potential non-conformity.
RISK MANAGEMENT?
Systematic application of management policies,
procedures, and practices to the tasks of
analyzing, evaluating, controlling, and monitoring
risk.
RISK MANAGEMENT PROCESS
RISK IDENTIFICATION
Systematic process to understand the nature of and to reduce the level of risk.

What might go wrong?

What is the likelihood (probability) it will go wrong?/ how often?

What are the consequences (severity)? / how bad it is?


RISK ANALYSIS
Systematic use of available information to identify hazards
and to estimate the risk .

Available information can be obtained from internal and


external audit, customer feedback, technical records,
technical process (Pre-analytic, Analytic, Post-analytic) and
brainstorming.
TECHNICAL PROCESS
TYPE OF ANALYSIS
QUALITATIVE
Uses word to describe the magnitude of consequences and likelihood
(critical, major, minor)

QUANTITATIVE
Uses numerical values
Likelihood Scale
Severity Harm scale
How to estimate?
In the absence of any data on the probability of occurrence of harm, it is not possible to estimate the
risk, and it may be necessary to evaluate the risk on the basis of the nature and severity of the harm
alone. If it can be concluded that the hazard is of little practical consequence, the risk can be judged
to be acceptable and no risk control measures are necessary.
For significant hazards, however, which
could inflict harm of high severity such as those noted above, no level of exposure can be identified that
would correspond to a risk so low that it can be ignored. In such cases, the risk estimate should be made
on the basis of a reasonable worst-case estimate of probability. In some instances, it is convenient to set
this default value of the probability to one and to base risk control measures on preventing the hazard
entirely, reducing the probability of harm to an acceptable level or in reducing the severity of the harm.
RM TOOL : FAILURE MODE EFFECTS
ANALYSIS (FMEA)
Looking on failure on process level and impact of final product
EXAMPLE:
Example
RISK ASSESSMENT: EVALUATION
The purpose of risk evaluation is to make decisions, based on outcome of risk

Example acceptance criteria could be:

Intolerable/critical: must re-design product/ processes or not proceed

High risk: must control the risk

Moderate risk: may control the risk

Low risk: action is optional

Tolerable risk: no action warranted


RPN Risk Action plan
10-25 High A HIGH risk requires immediate action to control the hazard as
detailed in the hierarchy of control. Actions taken must be
documented on the risk assessment form including date for
completion.

5-9 Medium A MEDIUM risk requires a planned approach to controlling the


hazard and applies temporary measure if required. Actions taken
must be documented on the risk assessment form including date
for completion.

1-4 Low A risk identified as LOW may be considered as acceptable and


further reduction may not be necessary. However, if the risk can
be resolved quickly and efficiently, control measures should be
implemented and recorded.
RISK CONTROL
Risk reduction
Risk substitution
Risk acceptance
Risk elimination
HOW TO CONTROL RISK?
Decreasing the frequency of an event happening
Decreasing the consequences
Duplicating assets
Changing the source
Implementing standard procedures
Engineering controls
Training and preparedness
THANK YOU

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