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Risk & Opportunity Analysis (ISO 9001:2015)
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RISK ASSESMENT
• Systematic Investigation & Analysis of potential risk• To assign severities of probabilities & consequences• Rate the risk to prioritize action proportionate to potential
impact
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RISK & Opportunity Analysis• Business processes in Quality Management System
Sales & Marketing Purchasing / External Providers Production Warehousing & Logistics Quality Control Document Control Human Resources
• Manufacturing Processes As in Control Plan / Process Flow Chart
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• External & Internal issues• Interested Parties Requirement
RISK & Opportunity Analysis
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Step 1: Choose Risk & Analysis Tool• Various analysis tools are available
FMEA SWOT HIRARC Others
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Business Risk & opportunity Analysis
Process & Function of the process
Identifying current Risk & Control
New Actions to handle the risk that has high score
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Step 2: Define Ranking Method
• Develop Severity and probability rating scores• Develop Risk Matrix & define rating to take action
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Severity TableSeverity Situation Rating
Disastrous Risk or Opportunity that if not addressed, may cause the Organization to cease bankrupt 5
Major
Risk or Opportunity that if not addressed, may :- Seriously affecting the organization's reputation & credibility May cause lost of future customers A loss of about ½ year revenue Causing the production to shut down for 10 days or more
4
Serious
Risk or Opportunity that if not addressed, may :- Affecting the organization image / function / requirement May completely loss the customer A loss of about ¼ year revenue Causing the production to shut down for 5 ~ 9 days
3
Moderate
Risk or Opportunity that if not addressed, may :- Slightly impacting the organization image / function / requirement Required explanation to the affected interested parties May cause revenue loss of RM10K ~ 50K Causing the production to stop for 1 ~ 3 days
2
MinorRisk or Opportunity that if not addressed, may :- Causing discomfort to the interested parties Causing the production stop less than 24 hrs.
1
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Probability TableProbability Situation Rating
Very Likely• Risk that has occurred based on previous record in the organization • Opportunity that has been adopted and proven with beneficial result 5
Possible
• Risk that has not occurred in the Organization but based on previous record in similar industry or competitor
• Opportunity that has not been adopted by the Organization but has been adopted by similar industry or competitor with proven good result
4
Likely• Risk that may occur if situation is not properly managed due to carelessness,
ignorance or inexperience • Opportunity that may be implemented but with intangible beneficial result
3
Remote • Risk that has not been known to occur after many years • Opportunity that might not be viable due to requirement of high capability and
investment for implementation2
Unlikely Almost not possible to happen or implement 1
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Risk MatrixSeverity
Probability of Occurrence 1 2 3 4 5
5 5 10 15 20 25
4 4 8 12 16 20
3 3 6 9 12 15
2 2 4 6 8 10
1 1 2 3 4 5
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Trigger LevelRISK LEVEL GUIDELINES FOR ACTION
HIGH[15~ 25 Points]
• Immediate intervention from the top management is needed to ensure that a concrete controls is in place to avoid occurrence
• Control established must be able to reduce the Risk to at least Medium Level
MEDIUM [5~12 Points]
• For 10 points and above, must be given with additional control to reduce the risk level
• For below 10 points additional control may be taken if there are any opportunity to do so
• Medium Risks shall be reviewed periodically to ensure that they are not turned into High Risk
LOW [1~4 Points]
• Not compulsory to have additional control but it may be done voluntary
• Shall be reviewed regularly to ensure that they are not turned into High Risk
• Reduce the risk to as low as possible & practical
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Step 3: Define The interested Parties, Their need & expectation
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Complying to International Standards
Implement & Maintain ISO Certifications
Quality & Reliability of Product On time delivery of the parts Effective communication & Good
CAR handling practices Fulfill legal & safety requirement Reasonable product cost &
dependable services
Complying to legal requirement Maintaining business licenses
No pollution or Public nuisance
Profitable business
Salary on Time Taken care of the welfare
Business continuation Good payment terms
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Step 4 : Identify process
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Step 5 : Carry out Risk & Opportunity Analysis
Carry out for identified processesInclude interested parties expectationInclude past experience
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