Foundations of Quality Risk Management

385 Pages·2020·9.515 MB·English

by  Jayet Moon

Foundations of
QUALIT Y
RISK
MANAGEMENT
A Practical Approach to EFFECTIVE RISK-BASED THINKING
Jayet MOON
Foundations of
Quality Risk
Management
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Foundations of
Quality Risk
Management
A Practical Approach to
Effective Risk- Based Thinking
Jayet Moon
Quality Press
Milwaukee, Wisconsin
American Society for Quality, Quality Press, Milwaukee 53203
All rights reserved. Published 2020
© 2020 by Jayet Moon
No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopy-
ing, recording, or other wise, without the prior written permission of the publisher.
The views, opinions, and materials presented in this book are the author’s alone and do not in any way
represent the views, opinions, or materials of the author’s current or past employers or affiliations.
Library of Congress Cataloging- in- Publication Data
Names: Moon, Jayet, author.
Title: Foundations of quality risk management : a practical approach to effective risk-b ased
thinking / Jayet Moon.
Description: First Edition. | Milwaukee : Quality Press, 2020. | Includes bibliographical references and
index. | Summary: “A comprehensive reference and thorough introduction to risk management and
risk- based thinking from a quality perspective and using quality tools”—P rovided by publisher.
Identifiers: LCCN 2020029337 (print) | LCCN 2020029338 (ebook) | ISBN 9781951058326 (paperback) |
ISBN 9781951058340 (adobe pdf ) | ISBN 9781951058333 (epub)
Subjects: LCSH: Risk management. | Quality control.
Classification: LCC HD61 .M5866 2020 (print) | LCC HD61 (ebook) | DDC 658.15/5—d c23
LC rec ord available at https:// lccn . loc . gov / 2020029337
LC ebook rec ord available at https:// lccn . loc . gov / 2020029338
Publisher: Seiche Sanders
Managing Editor: Sharon Wood house
ASQ advances individual, orga nizational, and community excellence worldwide through learning,
quality improvement, and knowledge exchange.
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Printed on acid- free paper
Printed in the United States of Amer i ca
25 24 23 22 21 20 6 5 4 3 2 1
This book is dedicated to A. R. Moon
If you don’t run the risk of change, you don’t have the benefit of advancement.
— Andrew Cuomo, governor of New York
If you only take small risks, you are only entitled to a small life.
— Robin Sharma, author of The Monk
Who Sold His Ferrari book series
If you don’t invest in risk management, it doesn’t matter what
business you’re in, it’s a risky business.
— Gary Cohn, former director of the
United States National Economic Council
Table of Contents
List of Tables and Figures........................................................xi
Foreword ....................................................................xix
Preface......................................................................xxi
Acknowl edgments........................................................... xxix
1 Introduction to Risk Management ............................................1
2 Quality and Risk Management ...............................................5
Risk Management and the Pro cess Approach................................6
3 So, What Is Risk?..........................................................10
4 Risk- Based Thinking ......................................................13
5 Risk- Based Decision Making................................................16
6 ISO 9001 and Risk Management.............................................20
Risk, Opportunity, and ISO 9001 .........................................23
7 Basic Risk Identification and Analy sis........................................24
8 Events and Consequences ..................................................31
9 Basic Risk Modification ....................................................36
10 The Stakeholder...........................................................40
11 Upside of Risk: Opportunity ................................................44
12 Detailed Risk Identification.................................................47
Where Do the Risks Come From? ........................................52
How Do We Identify the Risks? ..........................................55
13 Chance and Possibilities....................................................57
14 Orga nizational Context and Risk Management: The Working Details.............64
15 Stakeholder Risk Attitude and Appetite.......................................68
16 Orga nizational Context and Risk Management 2: The Top View .................71
The Orga nizational Business Model.......................................72
Orga nizational Culture..................................................72
The Value Chain .......................................................73
17 Comprehensive Risk Management Maturity (CoRMM) Model...................75
18 Risk Management Planning and Risk Management Plan ........................79
Integration of the Risk Management Plan and the Quality
Management Plan......................................................82
vii
viii • Contents
19 Risk Pro cess Facilitation....................................................83
Risk Management Teams................................................88
20 The Risk Repository (Risk Register or Hazard Log) ............................90
21 Detailed Risk Identification Tools............................................92
Risk Breakdown Structure...............................................92
Structured What- If Technique (SWIFT)...................................94
Assumptions and Constraints Analy sis....................................96
SWOT Analy sis........................................................98
22 Checkpoint: Risk Assessment— a Macro View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
23 Hazard, Hazardous Situation, and Benefit and Harm ..........................103
24 Detailed Consequence Analy sis ............................................109
Fault Tree Analy sis (FTA) ..............................................110
Decision Tree Analy sis.................................................111
Event Tree Analy sis (ETA)..............................................112
Bow Tie Analy sis......................................................114
Cause and Consequence Analy sis (CCA) .................................117
Scenario Analy sis .....................................................118
Root Cause Analy sis (RCA) ............................................119
Preliminary Hazard Analy sis (PHA) .....................................122
25 Risk Analy sis ............................................................125
26 The Risk Matrix and Its Constituents........................................128
27 Risk Evaluation ..........................................................140
28 Risk Treatment/Modification Se lection......................................149
Positive Risk Realization by Design ......................................152
29 Risk Response Planning...................................................157
The Concept of Secondary Risk .........................................158
The Concept of Residual Risk...........................................158
The Concept of Inherent Risk...........................................159
Contingency Planning .................................................160
30 Monitoring and Reviewing Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
31 Monitoring and Reviewing Risk 2 ..........................................167
What Are Trigger Conditions and Why Should They Be Monitored? .........168
Risk Awareness .......................................................170
Risk Audits...........................................................170
32 Graphical Tools for Monitoring and Reviewing Risk...........................172
Pareto Charts.........................................................172
Scatter Plots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
Contents • ix
Bar Graphs and Histograms ............................................175
Line and Time Series Charts............................................177
Run Charts...........................................................178
Control Charts........................................................178
Pie Charts............................................................180
Dotplots .............................................................181
Individual Value Plots .................................................182
Radar Charts .........................................................182
Area Charts ..........................................................183
J Charts..............................................................183
33 Visual Risk Exposure Tracker ..............................................187
34 A DMAIC Approach for Structured Risk- Based Trending......................190
Applicability of Control Charts for Trending ..............................190
What Is Risk- Based Trending? ..........................................191
The Five- Step DMAIC Pro cess..........................................191
Which Control Charts Should We Use? ..................................194
Attribute Chart Assumptions ...........................................196
Real- World Application................................................197
35 Risk- Based Auditing......................................................202
Audit Outcomes ......................................................203
Auditing Risks: Threats and Opportunities ...............................204
36 Risk- Benefit Analy sis .....................................................206
Generalized Method for Risk- Benefit Assessment for Drugs,
Medical Devices, and Combination Products..............................213
37 Cognitive Science of Risk- Based Decision Making ............................222
38 Risk- Based Design Thinking: Risk Mitigation by Design.......................227
39 Supplier or Vendor Risk Oversight..........................................232
Graphical Supplier Risk Repre sen ta tion ..................................236
Preparing for Unanticipated Supplier Risks ...............................237
40 Risk in Industry 4.0.......................................................239
41 Advanced Risk Tools: Failure Modes and Effects Analy sis (FMEA) ..............242
Workflow for UFMEA .................................................257
Workflow for PFMEA .................................................257
Relationship between DFMEA and UFMEA ..............................257
42 Advanced Risk Tools: Hazard Analy sis ......................................261
Identify the Hazard....................................................261
Identify the Sequence of Events .........................................262