Risk Management Planning

Risk Management Planning

Risk Management

The focus of risk management is to identify the hazards associated with functional units and their accessories, estimate and evaluate the risks, control these risks and monitor the effectiveness of the control. The foundation of effective risk management is a clear commitment from corporate management. There are three key commitments that must be made in order to build the necessary infrastructure for a cost-effective risk management program:

• Organize and maintain the knowledge and information on the design, development and manufacturing of the product and ensure this data is up-to-date and accurate. This process is essential as the quality of the risk management program depends directly on this information.
• Provide knowledgeable and competent personnel throughout the organization to manage the risk management process and to participate in risk assessment and other work activities.
• Create a system that not only documents and maintains risk management files, but also records management’s response to these studies and enforces an audit system to ensure that all approved risk reduction actions are implemented in a timely manner.

The risk management process in general includes the following elements:

• Risk Management Plan;
• Risk Assessment-covering both Risk Analysis and Risk Evaluation;
• Risk Control;
• Post-Production Information.

Risk Management Plan

Management must clearly define the objectives and scope of the project, which are dependent on a number of factors:

• The part of the product/process/system on which the project focuses;
• The phase of the product’s life cycle in which the project takes place;
• The amount of information available.

Decisions concerning risk acceptability may be based on operational, technical, financial, legal, social, humanitarian or other criteria. The decisions can be justified by doing the following:

• Using product-specific standards. If standards are properly implemented and the product is tested, an acceptable level of risk should result.
• Comparing with levels of risk evident from other similar products/systems on the market, which should consider similarities and differences in:
• Functionality/intended use;
• Hazards;
• Risk;
• Safety features;
• Historical data;
• Following appropriate guidance documents.

Risk Assessment (Risk Analysis & Risk Evaluation)

Risk analysis addresses three specific questions:

• What can go wrong?
• How likely is it?
• What are the impacts?

In order to answer the above questions, it is essential to understand the intended use or purpose of the product, including any foreseeable misuse, and to identify the product characteristics that could impact on safety. The next step is to identify hazards associated with the product and determine the related causes and consequences, and ultimately estimate the risk. Some potential hazards (if applicable) that should be evaluated include these factors:

• Toxicity, flammability and reactivity of raw materials and wastes;
• Sensitivity to environmental factors such as temperature and humidity;
• Mechanical or electronic hazards;
• Human factors associated with the operator-equipment interface.

The risk analysis is not restricted to only the design of the product but should also be done for the manufacturing process (e.g. assembly process, packaging) and the process of delivering the product to its intended location. For products that involve materials that are sensitive to the environment (e.g., heat, humidity, cold or light), storage and transportation methods need to be reviewed. If problems are identified, appropriate changes should be made in packaging or warnings on storage or packaging containers.

Risk Analysis Methodologies

This paper gives an overview of Hazard and Operability Analysis (HAZOP) and Fault Tree Analysis (FTA), which are risk analysis techniques commonly used in the industry as alternatives to Failure Mode and Effects Analysis (FMEA).

Hazard and Operability Analysis (HAZOP)

HAZOP is a highly structured bottom-up methodology. It uses the combination of design parameter and guide word to help identify deviation from design intent. The following are examples of guide words and design parameters:

Guide Words

• More or High or Higher or Greater (words that imply an excess), when compared to the design intent;
• No, None, Less or Low or Lower or Reduced (words that imply insufficiency), when compared to the design intent;
• Part of or Not all of or partially (words that imply incompleteness), when compared to the design intent.

Design Parameters

Applicable parameters typically include:

• Pressure;
• Temperature;
• Flow;
• Composition;
• Level;
• Reaction Rate;
• Viscosity;
• pH.

Applicable operations typically include:

• Filling;
• Transferring;
• Purging;
• Emptying;
• Draining;
• Venting;
• Maintenance;
• Start-up;
• Shut-down.

Fault Tree Analysis (FTA)

Fault Tree Analysis is a top-down methodology. The analysis starts with the undesired consequence or top event and identifies the various combinations of faulty and normal possible events occurring in the system. This procedure deduces the root cause(s) of the top event. The events and logical relationships between events are represented graphically in a tree structure using both logic and event symbols. FTA can be used to identify multiple failure conditions where two or more events must occur for the top-level event to occur. If estimates of failure rates are available for individual events, the probability of the top event can be predicted.

Figure 1: A Fault Tree Diagram [1]

Failure Mode and Effect Analysis (FMEA)

The need for continuous improvement of product quality, reliability and safety arises from product recalls, above all a company’s desire to improve its market position and customer satisfaction. These issues require product manufacturers to perform risk analyses that identify and minimize part/system failures throughout the product’s life cycle. The FMEA methodology is one of the risk analysis techniques recommended by international standards. It is a systematic process to identify potential failures to fulfill the intended function, to identify possible failure causes so the causes can be eliminated, and to locate the failure impacts so the impacts can be reduced. The process of FMEA has three main focuses:

• The recognition and evaluation of potential failures and their effects;
• The identification and prioritization of actions that could eliminate the potential failures, reduce their chances of occurring or reduce their risks;
• The documentation of these identification, evaluation and corrective activities so that product quality improves over time.

FMEA is primarily adapted for material and equipment failures, but in a broad sense, human error, performance and software errors can also be included. By applying the FMEA methodology during the various phases of a product’s life cycle, the methodology provides a systematic and disciplined strategy for examining all the ways in which a product can fail. The results of FMEA in turn affect the product design, process development, sourcing and suppliers’ quality, downstream (referring to downstream of a process or user of the product) application, and field service.

The following are some of the benefits of conducting a FMEA study:

• Ensures that the potential failures and their effects on the system have been identified and evaluated, consequently helping to identify errors and define corrective actions;
• Provides a means for reviewing product and process design;
• Helps to identify critical characteristics of the products and processes;
• Improves productivity, quality, safety and cost efficiency;
• Helps to determine the need for selecting alternative materials, parts, devices, components and tasks;
• Assists in documenting the reasons for changes;
• Provides a means of communication between different departments;
• Helps increase customer satisfaction;
• Improves a company’s image and competitiveness.

Limitations of FMEA

Using Failure Mode and Effects Analysis can potentially be disadvantageous for the following reasons:

• Analysis of complex systems that have multiple functions consisting of a number of components can be tedious and difficult;
• Compound failure effects cannot be analyzed;
• Incorporating all possible factors influencing the product/process, such as human errors and environmental impacts, can make the analysis lengthy and require a thorough knowledge of the characteristics and performance of the different components of the system;
• Successful completion requires expertise, experience and good team skills;
• Dealing with data redundancies can be difficult;
• Can be costly and time consuming.

FMEA Steps

During an FMEA study, the product/process/service/system being reviewed is broken down into smaller items/subsystems. For each item, the following steps are performed:

• Define the item being analyzed.
• Define the functions of the item being analyzed.
• Identify all potential failure modes for the item.
• Determine the causes of each potential failure mode.
• Identify the effects of each potential failure mode without consideration of current control.
• Identify and list the current controls for each potential failure mode.
• Determine the most appropriate corrective/preventive actions and recommendations based on the analysis of risk.

FMEA Procedures

Similar to a HAZOP, the FMEA is a bottom-up approach starting with components and using a single-point failure approach to progressively work up to the top level. During the FMEA study, risk is estimated by rating the severity of failure effects, the likelihood of causes, and the likelihood of detecting the cause of a failure or the failure mode.

FMEA Terminology

Item function specifies the function of the part or item under review.

Potential Failure Mode

A potential failure mode is the manner in which a failure can occur i.e. the ways in which the reviewed item can fail to perform its intended design function, or perform the function but fail to meet the objective. The potential failure mode may also be the cause of another potential failure mode in a higher-level subsystem or system, or be the effect of one in a lower-level component. Typical potential failure modes include the following:

• Fail to open/close;
• Brittle;
• Cracked;
• Warped;
• Under filled;
• Undersized/Oversized.

Current Controls

Current controls are the safeguarding measures in place at the time of review that is intended to do the following:

• Eliminate causes of failure;
• Identify or detect failure;
• Reduce impacts/consequences of failure.
• Eliminate causes of failure;
• Identify or detect failure;
• Reduce impacts/consequences of failure.

This list includes common examples of current controls:

• Statistical Process Control (SPC) analysis;
• Product capability studies;
• Function tests;
• Gauge repeatability and reproducibility (R&R) studies;
• Durability tests;
• Design reviews and design guidelines;
• Operator training.

Severity (S)

Severity is the seriousness of the effects of the failure. Severity is an assessment of the failure effects on the end user, local area and in-between (next higher) areas. The severity rating applies only to the effects. The severity can be reduced only through a change in the design. If such a design change is attainable, the failure can possibly be eliminated.

Occurrence (O)

Occurrence is the frequency of the failure-that is, how often the failure can be expected to take place.

Detection (D)

Detection is the ability to identify the failure before it reaches the end user/customer.

Risk Priority Number (RPN)

An RPN is a measurement of relative risk. It is calculated by multiplying together the severity, occurrence and detection ratings. The RPN is determined before implementing recommended corrective actions, and it is used to prioritize the actions. The value, by itself, does not have any other significance.

Recommended Corrective Action

The recommended corrective action is intended to reduce the RPN by reducing the severity, occurrence or detection ranking, or all three together.

Corrective Actions Taken

It is a brief description of the actual actions taken, after identifying recommended corrective actions.

Resulting Severity

After a corrective action has been chosen/identified, “estimate” and record the resulting severity rating.

Resulting Occurrence

After a corrective action has been chosen/identified, “estimate” and record the resulting occurrence rating.

Resulting Detection

After a corrective action has been chosen/identified, “estimate” and record the resulting detection rating.

Resulting RPN

The resulting RPN is determined based on the resulting severity, occurrence and detection.

After going through all the items for each failure, assign a rating (from 1 to 10, low to high) for severity, occurrence and detection. Determine the RPN and use it to prioritize the recommendations. The severity rating should be based on the worst effect of the potential failure mode. When the severity is very high (8 to 10), special attention must be given to ensure that the risk is addressed through existing design controls or corrective/preventive actions, regardless of the RPN. If there are no recommended actions for a specific potential failure mode, failure cause or existing control, enter “None”. If this is a follow-up of an existing FMEA, note any action taken to eliminate or reduce the risk of failure modes. Determine the resulting RPN as the risk of the potential failure modes are reduced or eliminated. Once corrective action has been taken, the resulting RPN is determined by reevaluating the severity, occurrence and detection ratings. Improvement and corrective action must continue until the resulting RPN is at an acceptable level for all potential failure modes.

Preliminary Consideration of FMEA

It is important that the scope of the FMEA study is clearly defined. This allows the FMEA team to suggest and implement improvements freely within the defined boundaries. The following is a list of questions that help to define the boundaries of the study:

• What aspects of the FMEA is the team responsible for? e.g. FMEA analysis, recommendations for improvement, implementation of improvements.
• What is the budget for the FMEA?
• Does the project have a deadline?
• What is the scope of the FMEA?

When it comes to planning the meeting, the following is a suggested list of considerations:

People

People involved in all meetings may differ in values, attitudes, experiences, gender, age and education. All these differences must be accounted for in the planning of the meeting.

Purpose

As mentioned before, the scope of the study—the purpose, objective and the goal—must be understood by all, both management and participants.

Atmosphere or climate

The atmosphere contributes to the effectiveness of the meeting. It is imperative that whoever plans the meeting takes into consideration the climate and atmosphere.

Place and space

All meetings are held in a place and a space. Therefore, planners must consider the following:

• Access to the space, available parking;
• Size of the space;
• Acoustics, lighting, temperature control;
• Cost;
• Equipment requirements.

Costs

The FMEA budget should take into consideration the required preparation time, as it can be lengthy. The required preparation work is discussed further in the next section. As the system, design, process or service personnel assigned to do the FMEA may be in different places, one should consider the travel expenses of participants.

Time dimensions

When estimating the time required for conducting the FMEA, one should consider the conditions, objectives and complexity of the project. The time constraints should be fully evaluated. If the meeting is going to be prolonged, the agenda items and objects should be adjusted accordingly.

Prework and “after the official meeting work”

The quality of the FMEA study depends on good preparation work, which is discussed further in the next section.

Plans, program and agenda

All meetings have an agenda, for without an agenda, there cannot be a meeting. A detailed planned program or agenda, which can be shared (no surprises) by all participants, is a valuable addition to a meeting. When planning the agenda, make sure all the objectives of the meeting are covered.

Follow-up

After the meetings have ended, there is a need for some follow-up in these areas:

• Implementing action items;
• Communicating information to all appropriate personnel;
• Publishing the documented study and writing the report.

Preparation before FMEA Sessions

Before conducting a FMEA, preparation work should be done to ensure that the FMEA study is carried out smoothly. The following are the recommended procedures for doing so:

Define scope

After considering the questions outlined in the previous section, the study scope should be defined and documented. This would help prevent the FMEA team from focusing on the wrong aspect of the product, process or service during the FMEA. It would also assist the process of data collection (next step).

Collect data

On the basis of the scope defined in step 1, assemble as much information as possible. The following are some examples:

• Product prototype;
• Design specification;
• Design drawings;
• Process flow diagram;
• Operating manual;
• Maintenance log.

Break down the system

During the process of breaking down the product/process/service into smaller items, consider the following:

• If items are too small, you can lose your sense of analysis and incur excessive repetition;
• If items are too large, they can become confusing and hard to handle. The best way to size an item is based on item function.

Prepare list of potential failure modes

The list of potential failure modes prepared at this stage acts as a starting point for the FMEA section. It is not intended to replace the effort of identifying the potential failure modes during the FMEA section. The list can be established based on this information:

• Failure history of products with similar design;
• Product recalls;
• Failure records of the product/process/system;
• Review of the product/process/system.

Assemble FMEA team

A FMEA study requires efforts of experts from different areas. It cannot be done on an individual basis. Hence, the team should be cross-functional and multi-disciplined. It is important to ensure that the appropriate individuals are going to participate.

Choose the right tool for transcribing FMEA

Choosing the right tool for transcribing the FMEA ensures efficiency of conducting the analysis. There are three different methods (non-computer and computer based):

• Manual transcription;
• Spreadsheet-type software;
• Risk analysis software (Windows based).

Conducting FMEA Sessions

The FMEA team is led by the team leader or the facilitator. The team leader/facilitator provides assistance and guidance to the team to ensure that the FMEA session is conducted effectively on a timely basis. A typical FMEA session would follow the steps outlined below:

Facilitator or team leader explains

The facilitator or one of the team members explains the purpose and scope of the FMEA and sets the rules for the study.

Review the system being studied

The system is reviewed to ensure everyone on the FMEA team has the same understanding of the system.

Perform the analysis

The FMEA process described earlier is applied to the product/process/system. When FMEA is performed on commodity items, it would be efficient to perform group FMEAs on similar or identical items and then address the out-of-the-ordinary conditions as separate items.

Review FMEA

At the end of the FMEA, the team should ensure that the function, purpose and objective have been met. Some helpful hints include the following questions:

• Is the problem identification specific?
• Was a root cause, effect or symptom identified?
• Is the corrective action measurable?
• Is the corrective action proactive?
• Is the use of terminology current and consistent?

Reference :

1. http://en.wikipedia.org/wiki/Fault_tree_analysis
2.