A common goal of the largest industries worldwide is to give their consumers premium goods and services. Imagine if a major car manufacturer created vehicles without running any quality checks or tests. Would you feel competent operating one of their cars? Possibly not.
Globally accepted as a standard for QMS is International Organization for Standardization. The present version for quality control systems is ISO 9001:2015. A key component of ISO 9001 is risk management.
Risk management helps organizations identify, analyze, and address potential risks that could impact the quality of their products or services. In this article, we will discuss the role of risk management in ISO QMS.
How Risk Management is integrated into ISO Quality Management Systems?
ISO 9001 offers a methodical approach for controlling quality inside a company. It meets consumer needs and keeps processes constantly improving using a Plan-Do-Check-Act (PDCA) cycle. Risk management is integrated into this cycle to ensure that potential risks are identified, evaluated and addressed.
The concept of risk in ISO standards
ISO defines risk as the effect of uncertainty on objectives. In the context of quality management systems, risk can be anything that can potentially affect the quality of products or services. It could be a process failure, supply chain disruption, or even a change in customer needs.
In ISO standards, risk management is mostly dependent on the consideration of internal as well as external hazards. Internal risks are those that develop inside the company; external risks are those outside of its purview. Considering both kinds of threats helps companies minimize their effects on quality and better ready for possible problems.
The role of risk management in ISO 9001
A fundamental principle of ISO 9001 is the need for a proactive approach to risk management. The standard calls for companies to create a routinely watched, updated and improved upon risk management system. This ensures that potential risks are identified and addressed before they impact the quality of products or services.
Risk control in ISO 9001 also helps to guarantee adherence to legal and regulatory norms. Identifying possible hazards helps companies to take required actions to satisfy criteria and prevent possible legal consequences.
The PDCA cycle and risk management
The PDCA cycle is the core of ISO 9001 and is also the basis for risk management in the standard. The steps of the PDCA cycle – Plan, Do, Check, Act – align with risk management activities.
Plan- Organizations in this stage find possible hazards and create strategies for control. This covers defining risk management goals, procedures, and resource allocation.
Do: Once the plan is in place, organizations implement it by executing risk management strategies.
Check: Organizations track and assess the success of their risk-reducing strategies in the check phase.
Act: In this final phase, organizations take corrective action to address any gaps or issues identified during the check phase.
The aim is continuously improving the risk management process and overall quality management system.
Key Steps for Effective Risk Management in ISO Quality Management Systems
These fundamental actions will help companies to effectively apply risk management in ISO QMS.
Identify potential risks
The first step in effective risk management is to identify potential risks. One should take into account both internal and external hazards and review all pertinent procedures and activities. The data acquired during this process can be applied to build a risk register, so acting as a central hub for all possible hazards.
The knowledge, experience, and opinions of the staff members might be quite helpful in spotting possible threats. They might have insights others would ignore since they are directly engaged in the operations and activities. The risk register should be routinely changed to record any newly developing hazards.
Assess the severity and likelihood of risks
After possible risks have been found, companies should evaluate their degree and probability using a risk matrix to help them to prioritize and concentrate on high-risk areas.
You may also decide to use a qualitative or quantitative approach for risk assessment. A qualitative approach involves assigning subjective values to risks, while a quantitative approach involves using data and statistical analysis.
Organizations assessing risks should also take into account the possible results of neglecting them. This can include financial losses, damage to reputation, or non-compliance with regulations.
Develop risk management strategies
Based on the degree of risk and the assessment of likelihood, companies can create risk management plans for every found risk. These techniques can include contingency plans to lessen the impact of a risk should it arise or preventative actions to lower the probability of a risk developing.
Every strategy should be assigned to risk owners, who also should have a schedule for application and evaluation. Furthermore in line with the general goals and policies of the company should be the strategies.
Implement risk management strategies
Organizations should implement the risk management strategies they have developed in the previous step. The risk owners are responsible for overseeing the implementation and ensuring that all necessary resources are allocated.
How you implement your risk management strategies will depend on the nature of the risks and your organization’s processes. It may involve training employees, making procedure changes, or purchasing insurance. The effectiveness of the strategies should be regularly monitored and reviewed.
Monitor and review risk management processes
Risk management is an ongoing process, and organizations should continuously monitor and review their risk management activities. This includes reviewing the risk register, assessing the effectiveness of risk management strategies, and making any necessary updates or improvements.
Regular reviews help companies to spot new risks that might develop and include them into their risk-reducing strategy. Maintaining a proactive and efficient risk managing system depends on this constant improvement strategy.
7 Benefits of Incorporating Risk Management in ISO Quality Management Systems
Organizations that incorporate risk management into their ISO QMS can experience various benefits. Here are some of the key advantages.
Better management of resources
The identification and management of risks can help organizations better allocate their resources, such as time, budget, and personnel. By assessing potential risks, organizations can prioritize and focus on areas that require the most attention, leading to more efficient use of resources.
Greater compliance with regulations and standards
ISO QMS demands that companies follow several rules and guidelines. Including risk management into their QMS helps companies find possible non-compliance hazards and act before they materialize. This can help to preserve a good name and help to avoid expensive fines.
Increased customer satisfaction
Customers expect high-quality products and services that meet their needs and expectations. By implementing risk management, organizations can identify potential risks that may impact customer satisfaction, address them in a timely manner, and continuously improve their processes to deliver better results.
Stronger risk awareness and culture
Risk management promotes a proactive approach towards identifying and addressing risks. This creates a culture where employees are more aware of potential risks and understand their roles in managing them. With increased risk awareness, organizations can make better decisions and respond to potential risks more effectively.
Improved decision-making
Risk management provides organizations with valuable insights into their processes, activities, and potential risks. The risk assessment process can help organizations make data-driven decisions based on objective information. More informed decision-making can lead to better outcomes and help organizations achieve their goals.
Enhanced performance and efficiency
Organizations can improve their processes, reduce errors, and increase efficiency by identifying and mitigating potential risks. By implementing risk management, organizations can streamline their processes, improve productivity, and achieve better results.
Continual improvement of processes
Risk management is an ongoing process that requires regular monitoring and review. By incorporating it into their ISO QMS, organizations can continuously evaluate their processes, identify areas for improvement, and make necessary changes to drive continual improvement.
How Can You Implement Risk Management in Your ISO Quality Management System?
The planning and implementation of risk management in an ISO QMS should involve the whole organization and follow a systematic approach.
Sync Resource is a risk management and ISO consulting firm that can guide you through the process of incorporating risk management into your ISO QMS. We follow a step-by-step approach that includes identifying, assessing, and managing risks in an integrated manner.
Our team can help you develop risk management strategies, and impliment them in alignment with your overall objectives and policies. We can also assist you in regularly monitoring and reviewing the risk management processes for continuous improvement.
Contact us to learn how we can help you achieve your risk management and QMS goals.