Manufacturing Risk.

Information | Understanding | Best Practice.

Manufacturing risk management is focused on the risks to an organization associated with failure of some aspect of the manufacturing operation. On a regular basis, we see reports in the media of product recalls and customer advisory notices due to defects or potential defects associated with the use of products across all industries. When a business needs to instigate a recall, the financial, reputational, safety impacts can all be very significant. For example, a recall of a medical device can result from reports of patient harm. The knock-on effects of production downtime, inventory destruction, redesign costs, re-approval costs which include regulatory and clinical updates, litigation costs, etc.. can all be very significant and in some instances can result in the demise of the company itself. Therefore, there needs to be a clearly defined and very focused commitment by management to developing an understanding, assessment and control program of the risks posed to a business in the performance of on-going operations, across all aspects of the business which can result in the creation of risk.

Who is best qualified to perform a Manufacturing Risk Assessment?

The immediate answer is that employees with appropriate competence are best suited to developing and maintaining the risk management program. Certainly employees must be involved. Equally, technical experts from outside the business should actively input. The use of historical data, field feedback, customer experiences all need to contribute into the risk process. What is essential is that individuals with a mandate to “challenge” conventional thinking are central to the risk process. A failure of many design teams when they perform a risk assessment is that those involved in the design perform the risk assessment. Their very involvement in the design process, creates a barrier to aggressively challenging the potential failure of a product or process. However, when failures arise which are associated with the design of a product or process, the cause of the failure can often seem obvious, yet has been overlooked.


Assessment of Manufacturing Risk.

The assessment of risk can be performed in a single step or in a multi-step process. The most effective approach is widely seen as being a two step approach. Under this approach, the risks and potential hazards associated with operational failure are identified. These risks are rated against a predetermined rating scale. A simple scale may be “low”, “medium” and “high” risks. The policy of the business will be pre-defined in terms if attitude to risk and it may determine that “low” level risks will be deemed to be “acceptable as is”. However “medium” and “”high” level risks will be further reviewed with a determination that all “high” level risks must be reduced to “medium” level, at a minimum and all “medium” level risks will need to be investigated with a focus on seeing if they can be further reduced to a “low” level.


Manufacturing Risk Rating (measurement).

The actual method employed in the rating of risk is somewhat less critical than the need to consistently and accurately apply a rating to all potential hazards. There are a number of risk rating mechanisms, the decision on which method to apply is primarily the decision of the business, their experience and use of prior rating scales. Many rating methods only include a probability estimate and a severity estimate. Probability referring to the possibility of the hazard arising. Severity referring to the potential impact on the applicable stakeholder. Stakeholders may be the business itself, customers, employees, investors, regulators, etc.. However, often overlooked yet critically important is the need to consider the detectability of a hazard. For example, consider a failure associated with the constituent properties of a pharmaceutical drug, versus the failure within an item of process equipment. The detectability of the latter may be immediate, the detectability of the former drug may be years after patient use. Clearly, the more immediate the detectability, the lower the overall risk there exists for the business.


Manufacturing Risk Review Team.

Every organization should establish a dedicated team to review the operation and effectiveness of the risk management process. In larger organizations, there will be a risk department, with dedicated risk managers and risk assessors. In the smaller business, the risk team may consist of a cross section of technically competent staff and outside experts, who meet on a pre-determined frequency to review the risk management process. As outlined above, a key element to successfully implementing risk management is the ability of those charged with identifying, assessing, managing and reporting risk, is their ability to “aggressively” challenge conventional thinking, assumptions and scenarios associated with the potential for hazards to arise. The risk team will need to see the risk process as a continuous feedback loop, with input into the loop coming from a range of sources and driving review and re-evaluation of risk ratings.
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Risk Management.