A “Risk Based Thinking”

Model for ISO 9001:2015

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 Agenda
• Why implement Risk Based Thinking?
– What does ISO 9001:2015 require?
• What is Risk Based Thinking?
• What is Risk?
• What is a simple Risk Tool?
• How does it integrate into the Process
Approach?
• How do you make Risk Based Thinking a
Continual Process Improvement activity?
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ISO 9001:2015 Risk & Opportunities
4.4 Quality management system and its processes
The organization shall establish, implement, maintain and
continually improve a quality management system,
including the processes needed and their interactions, in
accordance with the requirements of this International
Standard.

The organization shall determine the processes needed

for the quality management system and their application
throughout the organization and shall determine:
f) the risks and opportunities in accordance with the
requirements of 6.1, and plan and implement the
appropriate actions to address them;
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ISO 9001:2015 Risk & Opportunities

6 Planning for the quality management system

6.1 Actions to address risks and opportunities
6.1.1 When planning for the quality management system,
the organization shall consider the issues referred to
in 4.1 and the requirements referred to in 4.2 and
determine the risks and opportunities that need to be
addressed to:
a) give assurance that the quality management
system can achieve its intended result(s);
b) prevent, or reduce, undesired effects;
c) achieve continual improvement.

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ISO 9001:2015 Risk & Opportunities
6.1.2 The organization shall plan:
a) actions to address these risks and opportunities;
b) how to:
1) integrate and implement the actions into its
quality management system processes (see
4.4);
2) evaluate the effectiveness of these actions.

Actions taken to address risks and opportunities shall be

proportionate to the potential impact on the conformity of
products and services.

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The Main Objectives of International
Standards
• To provide confidence in the organization’s
ability to consistently provide customers with
conforming goods and services
• To enhance customer satisfaction

The concept of “risk” in the context of the

international standards relates to the
uncertainty in achieving these objectives
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What is Risk Based Thinking?

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 What is “Risk-Based Thinking”?

• Risk-based thinking is something we all do automatically and

often sub-consciously
• The concept of risk has always been implicit in ISO 9001 – the
2015 revision makes it more explicit and builds it into the whole
management system
• Risk-based thinking is already part of the process approach
• Risk-based thinking makes preventive action part of the routine

• Risk is often thought of only in the negative sense. Risk-based

thinking can also help to identify opportunities. This can be
considered to be the positive side of risk

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 Why Should I adopt “Risk-Based
Thinking”?
• To improve customer confidence and
satisfaction
• To assure consistency of quality of goods and
services
• To establish a proactive culture of prevention
and improvement
• Successful companies intuitively take a risk-
based approach
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 What Should I Do?

Identify what the risks and opportunities are in

your organization – it depends on context
–ISO 9001:2015 will not automatically require
you to carry out a full, formal risk
assessment, or to maintain a “risk register”
–ISO 31000 (“Risk management — Principles
and guidelines”) will be a useful reference
(but not mandated)

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 What Should I Do? (continued)

• Analyse and prioritize the risks and opportunities in

your organization
– what is acceptable?
– what is unacceptable?

• Plan actions to address the risks

– how can I avoid or eliminate the risk?
– how can I mitigate the risk?

• Implement the plan – take action

• Check the effectiveness of the actions – does it work?
• Learn from experience – continual improvement

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 Key Points to Remember

Risk Based Thinking = Preventative

Action
Risk Based Thinking is everybody’s
business!
– Risk Based Thinking is not just the
responsibility of management
– Risk Based Thinking must become
an integral part of the organizational
culture
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 What is Risk?

Risk is the possibility of events or

activities impeding the achievement of an
organization’s strategic and operational
objectives.

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 Risk – A Simple Definition

The volatility of potential outcomes.

or

How surprised do you really want to be??

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 Food for Thought
• Why is Risk like Swiss Cheese?

Author needs to acknowledge that this idea was shown at the NQA Meeting,
Boston Session, August 2014
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 Risk Definitions

Risk can be defined by two (2)

parameters
– Severity
• This is the Seriousness of the harm

– Probability
• This is the Probability that the harm will occur

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Risk Assessment - Quantitative

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Risk Acceptable Regions
Generally
Un-Acceptable

As Low As
“Reasonably”
Practical

Generally
Acceptable
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Risk Assessment - Qualitative

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Risk Registers

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 The Importance of a Risk Register

• The risk register or risk log becomes

essential as it records identified risks, their
severity, and the actions steps to be taken.
• It can be a simple document, spreadsheet,
or a database system, but the most effective
format is a table.
• A table presents a great deal of information
in just a few pages.

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 Components of a Risk Register

There is no standard list of components that should be included in the risk

register. Some of the most widely used components are:
• Dates: As the register is a living document, it is important to record the
date that risks are identified or modified. Optional dates to include are
the target and completion dates.
• Description of the Risk: A phrase that describes the risk.
• Risk Type (business, project, stage): Classification of the risk:
Business risks relate to delivery of achieved benefit;, project risks relate
to the management of the project such as timeframes and resources,
and stage risks are risks associated with a specific stage of the plan.
• Likelihood of Occurrence: Provides an assessment on how likely it is
that this risk will occur. Examples are: L-Low >30%)(, M-Medium (31-
70%), H-High (>70%).
• Severity of Effect: Provides an assessment of the impact that the
occurrence of this risk would have on the project.

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 Components of a Risk Register

There is no standard list of components that should be included in the risk

register. Some of the most widely used components are:

• Countermeasures: Actions to be taken to prevent, reduce, or transfer

the risk. This may include production of contingency plans.
• Owner: The individual responsible for ensuring that risks are
appropriately engaged with countermeasures undertaken.
• Status: Indicates whether this is a current risk or if risk can no longer
arise and impact the project. Example classifications are: C-current or
E-ended.
• Other columns such as quantitative value can also be added if
appropriate.

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 Risk Registers - Example

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Risk Registers - Example

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Integrating Risk Based Thinking with
the Process Approach

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Purpose of the Process Approach
The purpose of the process approach is to enhance an
organization’s effectiveness and efficiency in achieving
its defined objectives. This means enhancing customer
satisfaction by meeting customer requirements.

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Is This a Process Model in Your
Organization?

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or does your Process Approach look
like this?

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or does your Process Approach look
like this?

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 Materials Measures Manpower
(With What?) (Trend Charts) (Training)
(Metrics) (Skills)

Process
(Major Elements & Boundaries)
Suppliers Inputs Start Outputs Customers
(By Whom) End (for Whom?)
Process Owners:

Risks
(What Can
Go Wrong?)

Methods Machine Environment

(How?) (With What?) (Area Conditions?)

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Proposed Risk Model

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Proposed Risk Model - Populated

New Risk Value

Post Action Plans

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 Food for Thought
• Why is Risk like Swiss Cheese?

Author needs to acknowledge that this idea was shown at the NQA Meeting,
Boston Session, August 2014
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Addressing Risk

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Integrating Risk Based Thinking with
the Process Approach and PDCA

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 Plan-Do-Check-Act
The Plan-Do-Check-Act (PDCA) methodology can be
a useful tool to define, implement and control
corrective actions and improvements. Extensive
literature exists about the PDCA cycle in numerous
languages.

Act Plan
•How to improve •What to do?
next time? •How to do it?

Check Do
• Did things happen •Do what was
according to plan? planned

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 Process + Risk + PDCA Model
Act-
Incorporate Plan the process
improvements (Extent of planning
Interaction with other process

Interaction with other process

as necessary depends on RISK)

INPUTS Do – Carry out the OUTPUTS

process

Check – monitor/measure
process performance

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 Management Review Input
Top management shall review the organization's quality management system, at
planned intervals, to ensure its continuing suitability, adequacy, and effectiveness.
The management review shall be planned and carried out taking into
consideration:
a) the status of actions from previous management reviews;
b) changes in external and internal issues that are relevant to the quality
management system including its strategic direction;
c) information on the quality performance, including trends and indicators for:
1) nonconformities and corrective actions;
2) monitoring and measurement results;
3) audit results;
4) customer satisfaction;
5) issues concerning external providers and other relevant interested parties;
6) adequacy of resources required for maintaining an effective quality
management system;
7) process performance and conformity of products and services;
d) the effectiveness of actions taken to address risks and opportunities (see clause
6.1);
e) new potential opportunities for continual improvement.
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 Conclusions

• Risk Based Thinking is an element in the Process

Approach
• Risk Based Thinking is an input to Management
Review
• Risk Based Thinking is an element in the continual
improvement process that is focused on prevention.
• Risk Based Thinking has be be demonstrated during
audits; a risk register is documented information that
validates an organization has done Risk Based
Thinking.

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Questions???

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 References
• ISO 9000 Introduction and Support Package:
Guidance on the Concept and Use of the Process
Approach for management systems, ISO/TC 176/SC
2/N 544R3
• ISO 9001:2008
• ISO 9001:2015
• “Implementing the Process Approach”, Core
Business Solutions, Inc., March 31, 2008.
• The Process Approach: Adding Business Value and
Minimizing Risks; David Muil, Intertek.
• “The PDCA Continuous Improvement Cycle; Module
6.4”, Jeremy Weinstein and Steve Vasovski , 2004
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