COURSE OUTLINE

01 Introduction to Risk
Management
BUSINESS RISK
MANAGEMENT 02 Five Simple Steps

03 Conclusion

1
3. CONCLUSION
A Risk Register
B Risk Based Thinking
C Failure Mode and Effects Analysis
(FMEA)

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 2

3. A – RISK REGISTER
Effect of uncertainties on objectives (ISO 31000:2018)
❖ A deviation from the expected could be positive or negative.
❖ Risk is often expressed in terms of a combination of the consequences of an
event (impact) and the associated likelihood (probability).
❖ The word “risk” is often used when there is a possibility of negative
consequences.
➢ Risk can be better defined as the “threat” and “opportunity” of negative
and positive consequences.

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 3

3. B – RISK BASED THINKING
❖ “Risk Based Thinking” is a new term in ISO 9001:2015
❖ “Preventive Actions” requirement in the previous version of the standard has
been replaced with “Risk Based Thinking” in 2015 version of the standard.
❖ There is no requirement to formally implement risk management.
❖ Some of the ISO 9001:2015 requirements related to risk-based thinking:
➢ leaders to promote risk-based thinking.
➢ Identify risks during the planning stage
➢ Actions taken proportionate to the impact on the conformity
➢ Analyze the effectiveness of actions taken to address risks
➢ Update risks identified during planning

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 4

3. C – FMEA
❖ Failure Mode and Effects Analysis
❖ It is proactive tool (Before the problem happens / not the after-effect analysis)
❖ It is a living document

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 5

3. C – FMEA
Process / Failure Mode Failure Severity Cause(s) of Occurrence Current Controls Detection R Recommende
Requirement Effect (1-10) failure mode (1-10) (KPIVs) (1-10) P d actions
N
Perfume (1-10) • Unclear (1-10) • Review and 4 96
Making • Inconsistent specification 3 approve
quality 8 specification
• Receiving • Wrong by design
ingredients
• Substandard 6 • Third party 4 192
material certification
supplied by • In house test
supplier lab
• Mixing

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 6

 3. C – FMEA
Risk Priority Number (RPN) = Severity (1-10) x Occurrence (1-10) x Detection (1-10)

Severity Occurrence Detection

❖ Severity 1 – No effect/
client might not even
notice it
❖ Severity 10 – Serious
safety hazard without
warning
❖ Occurrence 1 – Rare
event, no data of such
type of failure in past
❖ Occurrence 10 –
Failure almost
inevitable
❖ Detection 1 – Current
system almost certainly
detect the problem
(automation)
❖ Detection 10 – Current
system can not detect
the problem

1. Intro. to Risk Management 2. Five Step Process 3. Conclusion 7