IATF 16949 Risk Assessment will help you address potential risks and identify opportunities. IATF standard requires businesses to understand the potential of identified risks deeply and to mitigate or minimize them.
What is IATF 16949 Risk Assessment and Risk Analysis?
This is the process of identifying the risks and evaluating the potential of the impact that could occur due to those risks. This is also designing the strategies to mitigate such risks by analyzing them.
After risk analysis has been done, one needs to manage the risks as soon as possible by performing the following steps in sequence:
- Identification of potential risks that are existing in the system
- Analyzing those potential risk that is being identified
- Rank the analyzed risks
- Treat the ranked risks and devise a plan to mitigate and eliminate them
- Monitor and review the risk management plan
- Periodically review your risk management plan with a cross-functional team
Criteria of Risk Evaluation
There are two criteria for evaluating the potential risks that exist in any organization, which is:
- Based on Severity: How serious is the potential risks
- Based on Probability: Probability of the occurring risks
Risk-Based Approach in IATF 16949
IATF 16949 risk assessment includes several clauses related to risk. After the identification of risks, determine the likelihood of failure, along with the implementation of industry best practices to establish a safer workplace. To implement a risk-free environment, the support of top management is needed. Here are the ways how senior management can support team to set up a risk-free workplace.
- Execute reviews of contingency plans
- Motivate process owners
- Escalate process safety wherever possible
- Ensure the accomplishment of performance of customer targets and all quality objectives
- Implement the responsibility for corporate initiatives
IATF 16949 Clause 6.1: Actions to address risks and opportunities
Clause 6.1 addresses the risks and opportunities when the QMS (Quality Management System) has been planned. Find the details below about clause 6 of IATF 16949, sbout risk management.
Clause 6.1.2.1: Risk Analysis
Use any information obtained from a product recall, risk analysis, observations, or nonconformity from previous audit reports, consumer complaints, and the outcomes of risk analysis reports. Risk analysis should be teamwork and must work to identify risks and devise a risk mitigation plan. The risk assessment team should periodically review the risk mitigation implementation plan and evaluate the effectiveness.
Clause 6.1.2.2: Prevention Action
The goal of devising preventive action is to lessen the negative impact of risk and to allow appropriate severity of potential identified risks. Preventive actions are aligned with QMS planning or re-engineered QMS.
Clause 6.1.2.3: Contingency Plans
IATF 16949 Risk Assessment provides a systematic approach for risk. IATF 16949 Risk Assessment helps you define and prepare contingency plans with a process for notification to the customer or any other interested parties. Identifying and evaluating risks related to manufacturing processes or any particular risk identified from an external source (external fire or in case of natural disasters) should be addressed and mitigated correctly. Contingency plan requirement has been made to align with the QMS plan.
Other Clauses for Risk Management
- Clause 7.1: Resources
- Clause 7.2: Competence
- Clause 7.3: Awareness
- Clause 8.3: Design and Development
- Clause 8.4: Control of External Providers
IATF 16949 Risk Assessment Tools
Tools that are used for risk management are:
- FMEA (Failure Mode Effects Analysis)
- FTA (Fault Tree Analysis)
The spectrum of Businesses that IATF 16949 Covers
The requirements of IATF spreads to the following type of businesses:
- Automobile manufacturers
- Automotive part designers and manufacturers
- The quality management industry of automobile industries
- The distribution centers of Automobile parts
- The design centers of Automobile parts
Change Management in IATF 16949
While implementing risk mitigation plan, there is change probability and it is essential to manage such changes in IATF 16949 Risk Assessment accordingly.
- Change may occur in existing operations to assess manufacturing feasibility.
- Initial product design approval after evaluating design changes
- Control plan for transition may exist, and it may affect the final product, manufacturing processes, lab procedures, a mode of measurement, logistics, and supply chain, the volume of production changes or analysis of risks.
- Periodic frequency of internal audits
- Based on consumer feedback
Consequences of Poor Risk Management
IATF 16949 Risk Assessment and Risk Management, Risk Management, and Risk Management.
What if businesses ignore to manage risk?
How adverse is the impact of poor risk management on a business?
Delayed Projects
Unexpected risks or in other words “Unaddressed risks” can result in missed project deadlines because then you need to understand how to minimize such risks and lose your track from main project activities.
Projects Being Overspent
Managing risks sometimes cost money and can lead to an overspent budget on project completion. Better to identify such issues before project initiation and mitigate them before they have any negative impact.
Confident Clients
Clients prefer to not invest in the high-risk environment. Businesses should be wise enough to devise a Plan B in case of an emergency in the form of a contingency plan. It is of vital importance to report on potential risks and convey a mitigation plan to clients to shore up to their confidence levels.
Reputation
With such a high risk environment, project completion status can be shaky. Clients prefer to avoid risk.
Project Failure
Imagine the worst case scenario: Complete project failure can occur due to the involvement of high potential risks.
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