When something goes wrong, the worst part of the problem is that it wasn’t anticipated, and due to this no one knows what to do about it yet.
By adding risk management into your processes, especially at the planning stage, you can either take steps to ensure that anticipated problems don’t occur, or have steps in place to deal with them when they do.
The saying goes that an ounce of prevention is worth a pound of cure, and equally, an hour identifying potential risks can be worth several days scurrying around trying to deal with an unexpected problem.
The savings in time and cost can be great.
Who is Responsible?
Quality Assurance manager or the General Manager or the designee shall:
-> be responsible for identification, analysis, evaluation of hazards in the QMS processes.
-> be responsible for initiating corrective actions, when the risk analysis shows that the processes in the QMS are not suitable, adequate or effective.
-> be responsible for presenting the updates and summary data from the Risk Management process at the Management Review.
What is Risk Management in QMS?
The Quality System Risk management is a systematic process for identification, assessment, control, communication and review of risks to the quality system processes.
It is just acknowledging that risk happens, and taking measures to ensure you’re completely prepared for it.
Risk Management Process
-> Risk Identification
-> Risk Analysis
-> Risk Control
-> Risk Evaluation
-> Risk Reduction
-> Risk Acceptance
-> Risk Communication
-> Risk Review
To identify the hazards, create a list the potential areas of concerns or foreseeable hazards in the QMS sub process areas, based upon historical data, theoretical analysis, informed opinions, and the concerns of stakeholders. Risk identification addresses the “What might go wrong?” question, including identifying the possible consequences. This provides the basis for further steps in the quality system risk management process
Risk analysis is the estimation of the risk associated with the identified hazards. It is the qualitative or quantitative process of linking the likelihood of occurrence and severity of harms.
This is essential for understanding the impact of risk on business goals and objectives, as well as how likely it is the risks could happen, and when.
Assessing risks is also important for making sure that the risks that are being recorded are actually credible. This is the time when scrutiny can be applied, and methods of qualitative and predictive analysis can be used to better understand which risks should be taken most seriously.
The goal of risk analysis is to help top management understand where to focus their most immediate attention
Risk control includes decision making to reduce and/or accept risks. The purpose of risk control is to reduce the risk to an acceptable level. The amount of effort used for risk control should be proportional to the significance of the risk. Decision makers might use different processes, including benefit-cost analysis, for understanding the optimal level of risk control.
The Risk control measures usually focus on the following areas.
->Is the risk above an acceptable level? What can be done to reduce or eliminate risks?
->What is the appropriate balance among benefits, risks and resources?
->Are new risks introduced as a result of the identified risks being controlled?
Risk evaluation compares the identified and analyzed risk against given risk criteria. The Risk evaluations consider the strength of evidence for the following fundamental questions.
->What might go wrong?
->What is the likelihood (probability) it will go wrong?
->What are the consequences (severity)?
->Risk reduction focuses on processes for mitigation or avoidance of quality risk when it exceeds a specified (acceptable) level .
->Risk reduction might include actions taken to mitigate the severity and/or probability of harm.
->Processes that improve the detect-ability of hazards might also be used as part of a risk control strategy.
->The implementation of risk reduction measures can introduce new risks into the system or increase the significance of other existing risks.
->Hence, it might be appropriate to revisit the risk assessment to identify and evaluate any possible change in risk after implementing a risk reduction process.
->Risk acceptance is a decision to accept risk.
->Risk acceptance can be a formal decision to accept the residual risk or it can be a passive decision in which residual risks are not specified.
->For some types of harms, even the best quality risk management practices might not entirely eliminate risk. In these circumstances, it might be agreed that an appropriate quality risk management strategy has been applied and that quality risk is reduced to a specified (acceptable) level, this will be referred to as tolerable risk.
Risk communication is the sharing of information about risk and risk management between the decision makers and others. Parties can communicate at any stage of the risk management process.
Risk management should be an ongoing part of the quality management process. The updates and status of action items from the Risk Management process shall be presented in the Management Review meetings.
Benefits of Risk Management
So what makes risk management so appealing? Why are so many people interested in using risk management in their business?
Risk management can increase productivity
No matter what industry you’re in, or what kind of product or service you’re selling, you can always quantify your productivity to some degree. Productivity is always tied to your process. What risk management allows you to do is look at your process and figure out ways to improve the way you get work done.
Not only will his help you optimize for higher productivity, it also means your work environment will be safer because you’ve lowered the amount of risk involved.
Risk management improves your bottom line
Risk management strategies aren’t just about finding a new insurance policy. A properly implemented risk management system should actually save you money because logically you’ll be facing fewer losses and improved efficiency. That translates to reduced operational costs and ultimately, more profit.
All individuals at all levels of the organization stand to benefit from the forward-thinking, opportunistic outlook that risk management systems provide.
Successfully implementing a risk management system offers benefits like:
->Helping everyone in the organization understand and prepare for risk
->Helping to develop clear goals and objectives in line with a higher level business strategy
->Fostering more informed decision-making
->Cultivation of a company culture of continuous improvement
->Improving trust between the organization and its stakeholders
->Encouraging innovation and positive change within the organization
->Improve success rate within the organization
Following is an example of a Risk Management Template.
Risk Management Template: