ASQ - Electronics and Communications Division

Using Risk Assessment to Mitigate New Business Demands

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In the current global business, companies need to be more competitive than ever to survive and keep up with their growing pace. To be eligible to enter in this global market, companies need to comply with legal and regulatory requirements and international norms. In addition to this, the products reliability is mandatory. Such types of requirements are regulated by contracts between companies that impose several penalties for non-accomplishment with those requirements. With this scenario, risk assessment is getting significant importance in order to bring to companies’ executives a more accurate analysis to the exposure level that their companies are facing. Probability to meet technical and legal requirements versus contracts negative consequences need a careful attention since could represent the life of the company. Whether by legal requirements or technical specifications the Risk assessment and management will be initiated by a clear definition of main parameters to be attended. These parameters should incorporate different scenarios for the production process associated. The conceptual framework of the methodology uses the FTA to analyze the undesired system state decomposed into a logical combination of basic events. FTA is able to provide different ways to lead to the top event failure. This ways to the top event failure are called cut sets and these cut sets can have their probability calculated in order to identify the most critical basic events, or in other terms, product parameters when associated to any production process. Currently, a good range of software is available for FTA probability calculations and cut sets identification. The cut sets cumulative probabilities distribution versus contingency budget outline chance of success and the cost associated for that probability. This is called a Cost Risk Simulation and will be the guideline as a decision make tool for risk exposure level to be dealt. At this moment, companies’ executives have a better way for balancing the importance of potential contracts and penalties associated for requirements not accomplished. Further than risk acceptance level decision, the risk response planning is essential for determining actions to enhance opportunities and reduce threats. At that point, the selected basic events – product parameters – are associated with the process flow diagram in a cross functional analysis. This cross functional analysis will evaluate in a qualitative procedure the impact of each process phase at the product parameters. This analysis is based on QFD principles that will provide an identification of the most critical process phase where resources – improvements, controls systems, standardization and training – should be allocated to ensure a proper process parameter control. Based on this methodology application the risk level for new business demands is well quantified and the elements at the production process – critical for technical or legal requirements – specified for risk response planning.

Keywords: RAMS 2010 Proceedings - Life Cycle Cost - Fault Tree Analysis

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