Risk Assessment Risk Assessment In Production In Production OrganizationOrganization

Munif AhmadMunif Ahmad

Purpose of today’s meeting:

1- To revisit Risk Assessment Process

2- Identify Tools used

3- To explain the structured approach to Risk Assessment.

Risk : The possibility of meeting danger or suffering harm or loss.

Risk Management:

The identification, analysis and mitigation of risks that could impact the achievement of objectives over time.

Two important definitions :

Components of Risk Assessment Process :

Risk Management is a series of coordinated activities to direct and control an organization with regard to risk. In general an effective risk management process has the following primary components:

1. Risk Identification

2. Risk Assessment

3. Risk Accountability

4. Risk Mitigation Plan Development

5. Risk Mitigation Implementation

6. Continuous review and monitoring

7. Independent Audit

Sources of Risk Identification

1. Risk Log & Risk Register.

2. Personal observations.

3. Audit Reports.

4. Check out other Sites / Functions.

5. Group Web Site.

6. News.

External Risk: What are they ?

1- Some things can go wrong which are outside the control of GMS.

2- If the likely hood cannot be reduced than action should be taken to reduce the consequences.

3- These risks need to be included in the risk register and addressed in the Business Continuity Plan (BCP).

Internal Risk: What are they ?

Things can go wrong which impact :

1. Security of supply

2. Product Quality / Patient’s Safety

3. Costs

4. People (Both Employees, Neighbors, and Partners)

5. Reputation

Brain Storming (Already done by us)

GEMBA

Fish Bone

Risk Identification Tools :

Possible impacts • Inadequate skills or manpower impacting short and longer term security of supply/ quality.

•Disaffected people impacting quality and safety

•Misuse of human potential ( 8th waste) impacting costs

•and reputation

8.3 Under valued, Disengaged People

8.1 Wrong people / roles

Ineffective Training

Future skillsMis-identified

Excessiveheadcount

Lack of integrity /Unethical behaviour

Safety

Accidents:- at work , travelling

Loss via Retirement, Redundancy, or to other

employers

Critical knowledgeNot defined,captured

8.2 Not developing people effectively.Not reaching full potential

IneffectivePDP process

Key talent not developed

Lack of disabled facilities

Lack of diversity

Grievances

Poor IR

Unclear, poor communication

Language barriers

Poor resource planning Excessive

overtimeIneffectiveSuccessionplanning

Skill shortage

Poor external Talent pipeline

High turnover

Reliance on temporariesLong term

vacancies OrganisationalStructure impedes delivery

Unclear role specs / responsibilities

Discrimination

Bullying

Poor synchronisation across functions

Unclear targets

Strikes

Uncompetitive Pay/reward

HR Policies

Poor workingenvironment

Alcohol / drug abuseLow rewardrecognition

Misaligned objectives

Decisions takeToo long

8.4 Health and Safety

Stress / Poor work life balance

High Absence

Sensitisation

Absence process

Protectiveclothing

Poor Ergonomics and Job design

Equipment not used/ Poor

Poor safety Audit process

Poor 5S/ housekeeping

High Sound levels

Poor LightingAir quality

Infectious disease

HIV FluLegionnaires

SabotageTheft

Don’t work to standard

No back up on key skills

E.g. Fish Bone >>>>>> People Issues & Causes

Assess & Priorities Risks

Risk Index Value

Risk Index Value = Severity of Consequence

x

Likely Hood of Occurrence

Three Classification of Risk Levels as per Index Value :

Low RiskLow Risk < 5< 5

Medium RiskMedium Risk 5 to < 105 to < 10

High Risk High Risk 10 to 2510 to 25

Assess & Priorities Risks

Risk Matrix

ConsequencesConsequencesLikelihoodLikelihood InsignificanInsignifican

tt

11

MinorMinor

22ModerateModerate

33MajorMajor

44CatastrophicCatastrophic

55

Almost Almost Certainly 5 Certainly 5

(Nearly every (Nearly every time)time)

55 1010 1515 2020 2525

Likely 4 (1 in Likely 4 (1 in 1 Yr)1 Yr) 44 88 1212 1616 2020

Possible 3 (1 Possible 3 (1 in 5 Yrs)in 5 Yrs) 33 66 99 1212 1515

Unlikely 2 (2 Unlikely 2 (2 in 10 Yrs)in 10 Yrs) 22 44 66 88 1010

Rare 1 (1 in Rare 1 (1 in 10 Yrs)10 Yrs) 11 22 33 44 55

High Risk if Risk Index Value > 9

Definitions Insignificant : First aid, no customer or regulatory impact, immediately reversible environmental

damage, lose/rework part batch, < 2% COG

Minor :Medical treatment, no impact to patient, regulatory notification, limited annoyance

to locals, lose batch, stock out 1 sku. > 2% COG

Moderate :Lost time, recall 1 product/market, environmental damage <1 year, lose

production> 1shift, Stock out >1 sku, interrupt supply > 1 day, > 5% COG

Major :Permanent damage, recalls, warning letter, environmental damage > 1 y, lose

production, interrupt supply > 1 week, major stock out, > 15% COG

Catastrophic :Death, global recall, long term environmental damage, lose production > 1 month,

35% COG

Thank You