NG BB 49 Risk Assessment


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NG BB 49 Risk Assessment

  1. 1. UNCLASSIFIED / FOUO National Guard Black Belt Training Module 49 Risk Assessment UNCLASSIFIED / FOUO
  2. 2. UNCLASSIFIED / FOUOCPI Roadmap – Improve 8-STEP PROCESS 6. See 1.Validate 2. Identify 3. Set 4. Determine 5. Develop 7. Confirm 8. Standardize Counter- the Performance Improvement Root Counter- Results Successful Measures Problem Gaps Targets Cause Measures & Process Processes Through Define Measure Analyze Improve Control TOOLS ACTIVITIES •Brainstorming • Develop Potential Solutions •Replenishment Pull/Kanban • Develop Evaluation Criteria •Stocking Strategy • Select Best Solutions •Process Flow Improvement • Develop Future State Process Map(s) •Process Balancing • Develop Pilot Plan •Standard Work • Pilot Solution •Quick Change Over • Develop Full Scale Action/ •Design of Experiments (DOE) Implementation Plan •Solution Selection Matrix • Complete Improve Gate •‘To-Be’ Process Mapping •Poka-Yoke •6S Visual Mgt •RIE Note: Activities and tools vary by project. Lists provided here are not necessarily all-inclusive. UNCLASSIFIED / FOUO
  3. 3. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 3
  4. 4. UNCLASSIFIED / FOUO Risk Defined  Risk – The chance of loss or the perils to loss; also the degree of probability of loss Risk Assessment UNCLASSIFIED / FOUO 4
  5. 5. UNCLASSIFIED / FOUO Risk Management  Risk Management is a comprehensive means to proactively  Identify  Assess  Mitigate the risks of your proposed project changes throughout the project Risk Assessment UNCLASSIFIED / FOUO 5
  6. 6. UNCLASSIFIED / FOUO Tools to Assess Risk  Risk Standards Matrix  Risk Identification Matrix  Controls Assessment Matrix  FMEA  FMEA Risk Assessment UNCLASSIFIED / FOUO 6
  7. 7. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 7
  8. 8. UNCLASSIFIED / FOUO 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 Also Consider “The 6 M’s”  Technology changes Man  Economic condition Material  Political conditions Machine  Regulation Method  National Measurement Mother Nature Risk Assessment UNCLASSIFIED / FOUO 8
  9. 9. UNCLASSIFIED / FOUO Example Risk Standards Matrix Example Category Risk Score Create Standard Risk Human Resources 3 Categories M & A Activity 6 Capacity Planning 4 Global Sourcing 3 Tactical Purchasing 7 Create Scale of Either 1-5 Scheduling 4 or 1-10 to Assess Materials Management 2 Environment 4 Accounting 3 Hazardous Materials 3 Create Standard for Totals Community Responsibility 2 Based on Risk Tolerance Depot Management 3 Ex over 50 High, Over 40 Finance 1 Med, Over 30 Low Quality 1 Total 46 Risk Assessment UNCLASSIFIED / FOUO 9
  10. 10. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 10
  11. 11. UNCLASSIFIED / FOUO Risk Identification Matrix - Template Project  Brainstorm risks Priority Risks Impact Probability of Occurrence  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 Date: Prepared by: Reviewed by: Next Update: Risk Assessment UNCLASSIFIED / FOUO 11
  12. 12. UNCLASSIFIED / FOUO 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. Risk Assessment UNCLASSIFIED / FOUO 12
  13. 13. UNCLASSIFIED / FOUO Controls Assessment Matrix Example Project Objective: Accurate receipt of contracts via EDI Risk: Information is lost in transaction Sufficiency of Control: (x = excessive, a = adequate, i = inadequate) Controls are not Controls Existing Is it sufficient? If not, why? Next Steps always cheap or Y/N What? Who? When? easy! (a) Training Y Training conducted Be sure that System Configured to there is a (b) Procedures not N prevent submission of balance between specific transactions without risks to controls, required data and that other (c) No process for objectives such user master N User master verification as efficiency and speed are not lost. Date: Prepared by: Reviewed by: Next Update: Risk Assessment UNCLASSIFIED / FOUO 13
  14. 14. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 14
  15. 15. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 15
  16. 16. UNCLASSIFIED / FOUO Failure Mode and Effects Analysis Worksheet Identify failure modes Determine and assess Identify causes of the Prioritize and their effects actions failure modes and controls Risk Assessment UNCLASSIFIED / FOUO 16
  17. 17. UNCLASSIFIED / FOUO How to Complete an FMEA How-to 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 Risk Assessment UNCLASSIFIED / FOUO 17
  18. 18. UNCLASSIFIED / FOUO Calculating Risk Priority Risk Priority = Severity Scale Bad Rating Criteria: A Failure Could 10 Injure a customer or employee 9 Be illegal 8 Render product or service unfit for use 7 Cause extreme customer dissatisfaction 6 Result in partial malfunction Severity 5 4 Cause a loss of performance which is likely to result in a complaint Cause minor performance loss 3 Cause a minor nuisance but can be overcome with no performance loss 2 Be unnoticed and have only minor effect on performance x Good 1 Be unnoticed and not affect the performance Occurrence Scale Occurrence Bad Rating 10 Time Period More than once per day Probability >30% 9 Once every 3-4 days 30% x 8 7 Once every week Once per month 5% 1% 6 Once every 3 months .03% 5 Once every 6 months 1 per 10,000 Detection 4 3 Once per year Once every 1-3 years 6 per 100,000 6 per million 2 Once every 3-6 years 3 per 10 million 1 Once every 6-9 years 2 per billion Good Detection Scale Bad Rating Definition 10 Defect causes by failure is not detectable 9 Occasional units are checked for defects 8 Units are systematically sampled and inspected 7 All units are manually inspected 6 Manual inspection with mistake-proofing modifications 5 Process is monitored (SPC) and manually inspected 4 SPC is used with an immediate reaction to out of control conditions 3 SPC is above 100% inspection surrounding out of control conditions 2 All units are automatically inspected 1 Defect is obvious and can be kept from affecting the customer Good Risk Assessment UNCLASSIFIED / FOUO 18
  19. 19. UNCLASSIFIED / FOUO Example Appeal Process Example Appeal Process BB: E. Jones 1 6 Appeals Process Team 3/01/01 Application Incomplete Delay 5 Sales Rep Rushed 8 Clerk Checks 1 40 Application Incorrect Bad Decision 7 Sales Rep Mistake 5 Review by Mgr 9 315 Identify error types JG 3/12/01 Committee Members Absent Bad Decision 5 Illness/Bus Trips 10 Clerk Checks 1 50 Identify failure modes Identify causes of the Prioritize Determine and assess and their effects failure modes actions and controls Risk Assessment UNCLASSIFIED / FOUO 19
  20. 20. UNCLASSIFIED / FOUOFailure Mode Effects Analysis (FMEA) O O Process Step / Potential Failure Potential Failure Potential Root D Actions D S C Current Controls Resp. Actions Taken S C Input Mode (X) Effects (Y) Causes E Recommended E E C E C T T What is the In what ways does What is the impact V What causes the Key U What are the existing What are the What are the V U E E R process step the Key Input go on the Key Output E Input to go wrong? R controls and procedures actions for reducing completed actions E R C RPN C P and Input wrong? Variables (Customer R R (inspection and test) that the occurrence of taken with the R R T T N under Requirements)? I E prevent either the cause the cause, or recalculated I E I I investigation? T N or the Failure Mode? improving RPN? T N O O Y C detection? Y C N N E E Updating Ineffective Discrepancies: POI vs Adjust templates to Ineffective reviews 5 4 None 5 100 PMO 5 2 2 20 Tollgates templates Templates match POI Users and leaders Slide purposes not Adjust slide titles 4 None 4 80 PMO 1 2 10 dont buy-in to LSS clear and notes Redundant and NVA Eliminate NVA 3 None 4 60 PMO 1 2 10 slides slides Incomplete SOP or Develop "read me" 3 None 5 75 PMO 1 2 10 "Help" within PS slides Updating Too many steps to Link templates to Inefficient updating 3 NVA steps 5 None 4 60 PMO 3 3 2 18 Tollgates build/update PS Phase Users get frustrated Too many choices Eliminate NVA; 4 None 4 48 PMO 2 2 12 and delay projects between templates group in folders Inconsistent file Simple names; 3 None 4 36 PMO 1 2 6 names and locations group in folders LSS Tool Not all LSS tools & User cannot find Not all tools available Revise list of tools 4 5 None 4 80 PMO 4 2 2 16 Access refs in PS tools & references in PS and joggers Project completion is Poor explanation in Develop direct 3 None 3 36 PMO 2 2 16 delayed some references access pdf file LSS Tool Too many steps to Inefficient retrieval of Multiple means for "Read me" file; one 2 3 None 5 30 PMO 2 2 2 8 Access retrieve tools LSS tools/refs accessing tools folder Eliminate NVA NVA steps 3 None 5 30 PMO 2 2 8 steps - Example - Required Deliverable UNCLASSIFIED / FOUO
  21. 21. UNCLASSIFIED / FOUO 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 Risk Assessment UNCLASSIFIED / FOUO 21
  22. 22. UNCLASSIFIED / FOUO What other comments or questions do you have? UNCLASSIFIED / FOUO