Practical Applications
of Risk Management


                          ASQ – Orange Empire


                        by: Ja...
Attendee Notes:
From this presentation, what do I want to have answered/clarified?
_______________________________________...
© JD Consulting, 2009   3
Welcome!

 •    Phones
 •    Interactive – please share
 •    Relaxed approach
 •    Write questions and “Aha!”
      mome...
Background of the audience

 • Familiarity with Risk Management
 • Industry: Medical, Aerospace, IT,
   Service and other
...
My plan

 •    Risk is part of every day life
 •    Introduce simple concepts
 •    Apply them to Supplier/Material risk
 ...
Risk Analysis – complicated?

 • Common sense
 • We do it every day
       – Look both ways before crossing …
       – Get...
© JD Consulting, 2009   8
What do you think of the impact?


 •    Personal life?
 •    Impact on family life - security
 •    Business now and futu...
That’s why managing risk makes
         sense at many levels!




© JD Consulting, 2009                10
ISO 14971-2007

 • Medical devices – Application of risk
   management to medical devices
 • Significant to EU
 • Accepted...
Definitions

 • Harm – Physical injury or damage to
   health, property or environment
 • Hazard – Potential source of har...
Definitions (contd.)

 • Risk – Combination of probability of
   occurrence of harm and severity of
   that harm
 • Risk e...
Definitions (contd.)

 • Risk evaluation – process of
   comparing risk against given risk
   criteria to determine the ac...
Hazard




© JD Consulting, 2009   15
Shark

 • Harm – Getting bitten or eaten

 • Hazard – Shark




© JD Consulting, 2009               16
Calculations

 • P1 is the probability of hazardous
   situation occurring
 • P2 is the probability of “it” leading to
   ...
Calculations for Shark-bite

 • P1 is when I might be in open ocean – 20
   dives x 0.75 hr/dive / (365 days x 24 hr/day)
...
From ISO 14971

 • Schematic representation of the
   process

 • Flow chart




© JD Consulting, 2009                19
© JD Consulting, 2009   20
© JD Consulting, 2009   21
Teamwork




© JD Consulting, 2009   22
© JD Consulting, 2009   23
Human Nature
 •    Denial
 •    “It” won’t happen to me
 •    No one is “that stupid” to do…
 •    Blind spots
 •    They ...
Invite an Outside Expert

               for better results!


© JD Consulting, 2009                  25
© JD Consulting, 2009   26
© JD Consulting, 2009   27
Risk Assessment Summary
             O-5        ALARP    NAC     NAC        NAC     NAC


                        ALARP
  ...
Risk Assessment

 •    Vendor/Supplier/Material risk
 •    Design risk
 •    Manufacturing process risk
 •    User risk (i...
Risk analysis techniques
 • FMEA is bottoms-up
       – Excellent for production/process risk
       – Some use for design...
FMEA

                                      Potential
                                       Causes                Before
...
What is FTA?
 • A top-down approach which assumes
   the safety hazard and then analyzes
   the possible causes.
 • Starts...
Supplier Risk

 • Common to most companies
 • Common to every day life such as
       – Auto recalls
       – Electrical s...
© JD Consulting, 2009   34
Supplier Risk Reduction –
sterile packaging service

 • Potential problem of losing sterility due
   to poor package seals...
Supplier Risk Reduction
Example - Component

 • Example: Injection molded connector
   with parts cracking – failure in re...
Supplier Risk Reduction –
sterile packaging service

 • Potential problem of losing sterility due
   to poor package seals...
Supplier Risk Reduction –
sterile packaging service

 • Potential problem of running an
   incorrect load configuration
  ...
Supplier Risk Reduction –
finished product – tubing set

 • Again, the risk analysis placed it in the
   “red” zone
 • Wor...
Supplier Risk

 • Look for business risk, process risk,
   quality system risk, production
   planning risk, resources ris...
Supplier Risk (contd.)

 • Treat it as if it a part of your quality
   and management system
       – Because it affects y...
Supplier Risk (contd.)

 • Know the risk the supplier
   product/service affects to your product
 • This means a risk asse...
Supplier Risk (contd.)

 • Main areas of concern
       –   Business and operational capability
       –   Technological c...
Supplier Risk (contd.)

 • Operational capability such as:
       – Ability and willingness to respond to
         perform...
Supplier Risk (contd.)

 • Controls such as:
       –   Change control
       –   Control of their suppliers (incl. audits...
© JD Consulting, 2009   46
Learnings from the experience

 • Please look at your notes on the
   summary sheet provided
 • Share ideas to take-home
 ...
My plan – we covered

 •    Risk is part of every day life
 •    Introduce simple concepts
 •    Apply them to Supplier/Ma...
Gratitude

 • ASQ Orange Empire Section 0701
 • Dave Nagy
 • Audience for your participation




© JD Consulting, 2009    ...
Other information

 • To contact Jack Dhuwalia
       – Email: jdhuwalia@jdconsultingsite.com
       – Phone:949-854-4534
...
© JD Consulting, 2009   51
Practical Applications
of Risk Management


                          ASQ – Orange Empire


                        by: Ja...
Upcoming SlideShare
Loading in …5
×

ASQ Clinic On Risk 09

1,220 views

Published on

Practical Applications for Risk Management

Published in: Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,220
On SlideShare
0
From Embeds
0
Number of Embeds
20
Actions
Shares
0
Downloads
52
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

ASQ Clinic On Risk 09

  1. 1. Practical Applications of Risk Management ASQ – Orange Empire by: Jack Dhuwalia, President, J D Consulting November 10, 2009 © JD Consulting, 2009
  2. 2. Attendee Notes: From this presentation, what do I want to have answered/clarified? ________________________________________________ _________________________________________________________________ _______________________________ Ideas that I can apply: _________________________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ __________________________________________ © JD Consulting, 2009 2
  3. 3. © JD Consulting, 2009 3
  4. 4. Welcome! • Phones • Interactive – please share • Relaxed approach • Write questions and “Aha!” moments/ideas on the summary sheet provided © JD Consulting, 2009 4
  5. 5. Background of the audience • Familiarity with Risk Management • Industry: Medical, Aerospace, IT, Service and other • Questions you’d like to have answered – lets hear them © JD Consulting, 2009 5
  6. 6. My plan • Risk is part of every day life • Introduce simple concepts • Apply them to Supplier/Material risk • Ideas on risk reduction/management • Have a fun, learning experience for all • Handout have more stuff than we’ll cover © JD Consulting, 2009 6
  7. 7. Risk Analysis – complicated? • Common sense • We do it every day – Look both ways before crossing … – Getting the brakes fixed before … • Purpose: Manage risk to an acceptable level – “zero” risk? • Write “Aha!” moments/ideas © JD Consulting, 2009 7
  8. 8. © JD Consulting, 2009 8
  9. 9. What do you think of the impact? • Personal life? • Impact on family life - security • Business now and future • Does it shake up consumer confidence? • Competitive advantage? – Market place – Regulatory • Quality of life © JD Consulting, 2009 9
  10. 10. That’s why managing risk makes sense at many levels! © JD Consulting, 2009 10
  11. 11. ISO 14971-2007 • Medical devices – Application of risk management to medical devices • Significant to EU • Accepted by FDA - expectations • Application to drugs/biologics - recent ICH Q9 includes risk management • Transfers to other industries as well as service groups © JD Consulting, 2009 11
  12. 12. Definitions • Harm – Physical injury or damage to health, property or environment • Hazard – Potential source of harm • Hazardous situation – Circumstances in which people, property or the environment are exposed to one or more hazards (see Mr. Jaws!) © JD Consulting, 2009 12
  13. 13. Definitions (contd.) • Risk – Combination of probability of occurrence of harm and severity of that harm • Risk estimation – Process used to assign values of the probability of occurrence of harm and severity of that harm © JD Consulting, 2009 13
  14. 14. Definitions (contd.) • Risk evaluation – process of comparing risk against given risk criteria to determine the acceptability of the risk © JD Consulting, 2009 14
  15. 15. Hazard © JD Consulting, 2009 15
  16. 16. Shark • Harm – Getting bitten or eaten • Hazard – Shark © JD Consulting, 2009 16
  17. 17. Calculations • P1 is the probability of hazardous situation occurring • P2 is the probability of “it” leading to harm • P1 x P2 is the probability of occurrence of harm © JD Consulting, 2009 17
  18. 18. Calculations for Shark-bite • P1 is when I might be in open ocean – 20 dives x 0.75 hr/dive / (365 days x 24 hr/day) = 0.0017 • P2 is “it” leading to harm – • From Mr. Jaws – near zero since I only dive in warm waters • From other sharks – estimate 5/20 = 0.25 • P1 x P2 = 0.0017 x 0.25 = 0.0004, or 4/10,000 dives – Probability of occurrence of harm © JD Consulting, 2009 18
  19. 19. From ISO 14971 • Schematic representation of the process • Flow chart © JD Consulting, 2009 19
  20. 20. © JD Consulting, 2009 20
  21. 21. © JD Consulting, 2009 21
  22. 22. Teamwork © JD Consulting, 2009 22
  23. 23. © JD Consulting, 2009 23
  24. 24. Human Nature • Denial • “It” won’t happen to me • No one is “that stupid” to do… • Blind spots • They can’t “see” the problem • Likely to miss potential risks The same mind that creates a given problem simply cannot fix the problem. © JD Consulting, 2009 24
  25. 25. Invite an Outside Expert for better results! © JD Consulting, 2009 25
  26. 26. © JD Consulting, 2009 26
  27. 27. © JD Consulting, 2009 27
  28. 28. Risk Assessment Summary O-5 ALARP NAC NAC NAC NAC ALARP O-4 ALARP NAC NAC NAC ALARP ALARP O-3 NAC NAC ALARP ALARP Occ O-2 NAC ALARP O-1 S-1 S-2 S-3 S-4 S-5 Severity © JD Consulting, 2009
  29. 29. Risk Assessment • Vendor/Supplier/Material risk • Design risk • Manufacturing process risk • User risk (idiot-proofing) • Risk assessments are mostly subjective since hard data is seldom available in many situations © JD Consulting, 2009 29
  30. 30. Risk analysis techniques • FMEA is bottoms-up – Excellent for production/process risk – Some use for design risk – Creates “blind-spots” • FTA is top-down – Excellent for user risk – Helps complete the picture – eliminates “blind spots” © JD Consulting, 2009 30
  31. 31. FMEA Potential Causes Before After Mitigation of Mitigation Failure O O Proce POTENTIA D Potential CURRENT c D c ss L EFFECTS S S e # Failure PROCESS c e c step/F OF e e t UNCTIO Mode CONTROLS u t u FAILURE v R v e R N r e r e P Mitigations e c P r c r ri N ri t N e ti e t t i n o n y y o c n c n e e © JD Consulting, 2009 31
  32. 32. What is FTA? • A top-down approach which assumes the safety hazard and then analyzes the possible causes. • Starts with a postulated undesired consequence and looks for possible causes or fault modes at the lower system or component level. • Used for COMPLEX SYSTEMS. © JD Consulting, 2009 32
  33. 33. Supplier Risk • Common to most companies • Common to every day life such as – Auto recalls – Electrical safety - toaster © JD Consulting, 2009 33
  34. 34. © JD Consulting, 2009 34
  35. 35. Supplier Risk Reduction – sterile packaging service • Potential problem of losing sterility due to poor package seals – Verified material specs – Discovered that manufacturing process didn’t have an alarm or a shut down if malfunction resulting in poor seal segment – Worked with the supplier to create a more robust out-going inspection and audit – Reduced the probability of occurrence into “ALARP” or “green” zone © JD Consulting, 2009 35
  36. 36. Supplier Risk Reduction Example - Component • Example: Injection molded connector with parts cracking – failure in red – High probability of occurrence – To bring it to below “red” zone – Work with supplier to implement process validation – Adding in-process testing to stress the part to failure, then operating much below – Same test at incoming inspection until resolution © JD Consulting, 2009 36
  37. 37. Supplier Risk Reduction – sterile packaging service • Potential problem of losing sterility due to poor package seals – Verified material specs – Discovered that materials in past lots didn’t have sufficient adhesive – Worked with the supplier to create a more robust in-coming inspection and audit – Reduced the probability of occurrence into “ALARP” or “green” zone © JD Consulting, 2009 37
  38. 38. Supplier Risk Reduction – sterile packaging service • Potential problem of running an incorrect load configuration – Supplier must follow the exact load configuration for Gamma Irradiation – Incorrect load places the risk factors in “red” zone – Working with production and quality and systems in place to assure compliance – Reduced the probability of occurrence into “ALARP” or “green” zone © JD Consulting, 2009 38
  39. 39. Supplier Risk Reduction – finished product – tubing set • Again, the risk analysis placed it in the “red” zone • Working with supplier to discover that residual solvent stays inside the tubing • Solvent bubbles into blood being circulated causing potential embolism in patient • Supplier changed the solvent which completely evaporates ahead of time © JD Consulting, 2009 39
  40. 40. Supplier Risk • Look for business risk, process risk, quality system risk, production planning risk, resources risk, ability to solve problems - quickly and effectively … © JD Consulting, 2009 40
  41. 41. Supplier Risk (contd.) • Treat it as if it a part of your quality and management system – Because it affects you and your risk – Per ISO 9001, ISO 13485, FDA – QSR, the manufacturer is fully responsible for the finished product, regardless whether the supplier provides a component or the entire product or provides a service regardless of Supplier’s ISO certification © JD Consulting, 2009 41
  42. 42. Supplier Risk (contd.) • Know the risk the supplier product/service affects to your product • This means a risk assessment has been made and is “driving” the supplier assessment © JD Consulting, 2009 42
  43. 43. Supplier Risk (contd.) • Main areas of concern – Business and operational capability – Technological capability – Ethics, values (what is important to them?) – Can they supply the necessary • Quality • Safety • Performance • Reliability © JD Consulting, 2009 43
  44. 44. Supplier Risk (contd.) • Operational capability such as: – Ability and willingness to respond to performance indicators such as: • Lead times • On-time delivery • Response time • Past performance, experience and human resources (quality and quantity) all play into it © JD Consulting, 2009 44
  45. 45. Supplier Risk (contd.) • Controls such as: – Change control – Control of their suppliers (incl. audits) – Quality System (ISO, etc.) – Process capability – Process validations – Complaint handling and responsiveness – Corrective and preventive actions © JD Consulting, 2009 45
  46. 46. © JD Consulting, 2009 46
  47. 47. Learnings from the experience • Please look at your notes on the summary sheet provided • Share ideas to take-home • Share ideas that make sense to me © JD Consulting, 2009 47
  48. 48. My plan – we covered • Risk is part of every day life • Introduce simple concepts • Apply them to Supplier/Material risk • Ideas on risk reduction/management • Have a fun, learning experience for all © JD Consulting, 2009 48
  49. 49. Gratitude • ASQ Orange Empire Section 0701 • Dave Nagy • Audience for your participation © JD Consulting, 2009 49
  50. 50. Other information • To contact Jack Dhuwalia – Email: jdhuwalia@jdconsultingsite.com – Phone:949-854-4534 – www.jdconsultingsite.com • FDA – www.fda.gov/cdrh devices • GHTF – www.ghtf.org/documents © JD Consulting, 2009 50
  51. 51. © JD Consulting, 2009 51
  52. 52. Practical Applications of Risk Management ASQ – Orange Empire by: Jack Dhuwalia, President, J D Consulting November 10, 2009 © JD Consulting, 2009

×