ng bb 49 risk assessment
DESCRIPTION
TRANSCRIPT
National GuardBlack Belt Training
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Module 49
Risk Assessment
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CPI Roadmap – Improve
Note: Activities and tools vary by project. Lists provided here are not necessarily all-inclusive.
TOOLS
•Brainstorming
•Replenishment Pull/Kanban
•Stocking Strategy
•Process Flow Improvement
•Process Balancing
•Standard Work
•Quick Change Over
•Design of Experiments (DOE)
•Solution Selection Matrix
• ‘To-Be’ Process Mapping
•Poka-Yoke
•6S Visual Mgt
•RIE
ACTIVITIES• Develop Potential Solutions
• Develop Evaluation Criteria
• Select Best Solutions
• Develop Future State Process Map(s)
• Develop Pilot Plan
• Pilot Solution
• Develop Full Scale Action/
Implementation Plan
• Complete Improve Gate
1.Validate the
Problem
4. Determine Root
Cause
3. Set Improvement
Targets
5. Develop Counter-
Measures
6. See Counter-MeasuresThrough
2. IdentifyPerformance
Gaps
7. Confirm Results
& Process
8. StandardizeSuccessfulProcesses
Define Measure Analyze ControlImprove
8-STEP PROCESS
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3Risk Assessment
Learning Objectives
Understand the concept of Risk Assessment and how it impacts your project
Understand some of the tools available to identify and reduce risk before solutions are implemented
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4Risk Assessment
Risk Defined
Risk – The chance of loss or the perils to loss; also the degree of probability of loss
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5Risk Assessment
Risk Management
Risk Management is a comprehensive means to proactively
Identify
Assess
Mitigate
the risks of your proposed project changes throughout the project
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6Risk Assessment
Tools to Assess Risk
Risk Standards Matrix
Risk Identification Matrix
Controls Assessment Matrix
FMEA
FMEA
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7Risk Assessment
Risk Standards Matrix
What is a Risk Standards Matrix?
Simple but effective tool for identifying potential problems
Prompts a BB to consider the ways in which the implementation could impact:
Users
Cost
Safety
IT
Environment
Other Areas
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8Risk Assessment
Risk Standards Matrix (Cont.)
How to Construct a Risk Standards Matrix
Create a standardized list of potential risk areas to be used on all projects. Think in terms of big risk and likely probability. Consider risks arising from external sources like:
Supply Source
Technology changes
Economic condition
Political conditions
Regulation
National
Also Consider“The 6 M’s”
Man
Material
Machine
Method
Measurement
Mother Nature
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9Risk Assessment
Risk Standards Matrix ExampleExample
Create Standard Risk Categories
Create Scale of Either 1-5 or 1-10 to Assess
Create Standard for Totals Based on Risk ToleranceEx over 50 High, Over 40 Med, Over 30 Low
Category Risk Score
Human Resources 3
M & A Activity 6
Capacity Planning 4
Global Sourcing 3
Tactical Purchasing 7
Scheduling 4
Materials Management 2
Environment 4
Accounting 3
Hazardous Materials 3
Community Responsibility 2
Depot Management 3
Finance 1
Quality 1
Total 46
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10Risk Assessment
Risk Identification Matrix
What is a Risk Identification Matrix?
Brainstormed list of potential project risks
Prioritization of “pain” this would cause
Prioritize the likelihood of occurrence
Concentrate efforts on High Likelihood and High Pain Items
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11Risk Assessment
Risk Identification Matrix - Template
Brainstorm risks
Rate the risk in terms of potential damage or cost to the organization
Rate the risk in terms of the likelihood that it will occur
Focus on risks that have a large impact and are most likely to occur
Project
Date: Prepared by: Reviewed by: Next Update:
Risks Impact Probability ofOccurrence
Priority
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12Risk Assessment
Controls Assessment Matrix
Helps identify the activities designed to protect you and your unit from high priority risks identified.
To construct a controls assessment matrix:
List the highest priority risk from the Risk Assessment Matrix.
List the Controls that would help mitigate or eliminate the risk.
Does this control exist?
Discuss the appropriateness and sufficiency of each control.
Identify the actions that need to take place to address any control deficiencies.
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13Risk Assessment
Controls Assessment Matrix Example
Sufficiency of Control: (x = excessive, a = adequate, i = inadequate)
Controls Existing Is it sufficient? If not, why? Next Steps
Y/N
Y
N
N
What? Who? When?Training conducted
System Configured to
prevent submission of
transactions without
required data
User master verification
(a) Training
(b) Procedures not
specific
(c) No process for
user master
Date: Prepared by: Reviewed by: Next Update:
Risk: Information is lost in transaction
Project Objective: Accurate receipt of contracts via EDI
Controls are not always cheap or easy!
Be sure that there is a balance between risks to controls, and that other objectives such as efficiency and speed are not lost.
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14Risk Assessment
Failure Mode and Effects Analysis (FMEA)
A preliminary FMEA was introduced earlier to help identify potential causes of failures in the process
As the project advances, the FMEA can be developed more fully to address and re-evaluate potential solutions
FMEA is a way to organize possible product or process failures and the risks associated with these failures - from this information action can be planned to reduce or eliminate that risk
Complete the FMEA in the Improve phase
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15Risk Assessment
Types of Failure Mode and Effects Analysis
Design FMEA
Product or Service Design FMEA
Uncover problems that may result in:
Safety hazards
Malfunctions
Shortened product life or decreased service satisfaction
Ask how can the product or service fail
Process FMEA
Uncover process problems that may result in:
Safety hazards
Defects in product or service production process
Reduced process efficiency
Ask how people, materials, equipment, methods, and environment cause process problems
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16Risk Assessment
Failure Mode and Effects Analysis Worksheet
Identify failure modes
and their effectsIdentify causes of the
failure modes
and controls
PrioritizeDetermine and assess
actions
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17Risk Assessment
How to Complete an FMEA
1. Review the product, service or process
2. Brainstorm and group possible failure modes
3. List one or more potential effects for each failure mode
• Answer the question: If the failure occurs, what are the consequences?
4. Assign severity rating for each effect
5. Assign an occurrence rating for each failure cause
6. Assign a detection rating for each failure mode
7. Calculate risk priority number (RPN) for each effect
8. Use the RPNs to select high priority failure modes
9. Plan to reduce or eliminate the risk associated with high priority failure modes
10. Carry out the plans
11. Recompute RPN
How-to
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18Risk Assessment
Calculating Risk Priority
Risk Priority =
Severity
x
Occurrence
x
Detection
Severity ScaleBad Rating Criteria: A Failure Could
10 Injure a customer or employee9 Be illegal8 Render product or service unfit for use7 Cause extreme customer dissatisfaction6 Result in partial malfunction5 Cause a loss of performance which is likely to result in a complaint4 Cause minor performance loss3 Cause a minor nuisance but can be overcome with no performance loss2 Be unnoticed and have only minor effect on performance1 Be unnoticed and not affect the performance
GoodOccurrence ScaleBad Rating Time Period Probability
10 More than once per day >30%9 Once every 3-4 days 30%8 Once every week 5%7 Once per month 1%6 Once every 3 months .03%5 Once every 6 months 1 per 10,0004 Once per year 6 per 100,0003 Once every 1-3 years 6 per million2 Once every 3-6 years 3 per 10 million1 Once every 6-9 years 2 per billion
GoodDetection ScaleBad Rating Definition
10 Defect causes by failure is not detectable9 Occasional units are checked for defects8 Units are systematically sampled and inspected7 All units are manually inspected6 Manual inspection with mistake-proofing modifications5 Process is monitored (SPC) and manually inspected4 SPC is used with an immediate reaction to out of control conditions3 SPC is above 100% inspection surrounding out of control conditions2 All units are automatically inspected1 Defect is obvious and can be kept from affecting the customer
Good
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19Risk Assessment
Appeal Process ExampleExample
Identify failure modes
and their effectsIdentify causes of the
failure modes
and controls
Prioritize Determine and assess
actions
Appeal Process
Application Incomplete Delay 5 Sales Rep Rushed 8 Clerk Checks 1 40
315
50
Application Incorrect Bad Decision 7 Sales Rep Mistake 5 Review by Mgr 9
Committee Members Absent Bad Decision 5 Illness/Bus Trips 10 Clerk Checks 1
Identify error types JG 3/12/01
Appeals Process Team
BB: E. Jones 1 6
3/01/01
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Failure Mode Effects Analysis (FMEA)
Process Step /
Input
Potential Failure
Mode (X)
Potential Failure
Effects (Y)
Potential Root
Causes Current Controls
Actions
RecommendedResp. Actions Taken
What is the
process step
and Input
under
investigation?
In what ways does
the Key Input go
wrong?
What is the impact
on the Key Output
Variables (Customer
Requirements)?
What causes the Key
Input to go wrong?
What are the existing
controls and procedures
(inspection and test) that
prevent either the cause
or the Failure Mode?
What are the
actions for reducing
the occurrence of
the cause, or
improving
detection?
What are the
completed actions
taken with the
recalculated
RPN?
Updating
Tollgates
Ineffective
templatesIneffective reviews 5
Discrepancies: POI vs
Templates4 None 5 100
Adjust templates to
match POIPMO 5 2 2 20
Users and leaders
don't buy-in to LSS
Slide purposes not
clear4 None 4 80
Adjust slide titles
and notesPMO 1 2 10
Redundant and NVA
slides3 None 4 60
Eliminate NVA
slidesPMO 1 2 10
Incomplete SOP or
"Help" within PS3 None 5 75
Develop "read me"
slidesPMO 1 2 10
Updating
Tollgates
Too many steps to
build/updateInefficient updating 3 NVA steps 5 None 4 60
Link templates to
PS PhasePMO 3 3 2 18
Users get frustrated
and delay projects
Too many choices
between templates4 None 4 48
Eliminate NVA;
group in foldersPMO 2 2 12
Inconsistent file
names and locations3 None 4 36
Simple names;
group in foldersPMO 1 2 6
LSS Tool
Access
Not all LSS tools &
refs in PS
User cannot find
tools & references4
Not all tools available
in PS5 None 4 80
Revise list of tools
and joggersPMO 4 2 2 16
Project completion is
delayed
Poor explanation in
some references3 None 3 36
Develop direct
access pdf filePMO 2 2 16
LSS Tool
Access
Too many steps to
retrieve tools
Inefficient retrieval of
LSS tools/refs2
Multiple means for
accessing tools3 None 5 30
"Read me" file; one
folderPMO 2 2 2 8
NVA steps 3 None 5 30Eliminate NVA
stepsPMO 2 2 8
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Required Deliverable
- Example -
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21Risk Assessment
Takeaways
Many tools exist to help identify project risks
Risk Standards Matrix
Controls Matrix
FMEA
Identify risks early – evaluate their likelihood and impact
Create a comprehensive plan to reduce risk exposure
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What other comments or questions
do you have?