No, ubiquitous RBT isn’t a new rap group. It’s a more of a reality show. While risk permeates every aspect of life, risk-based thinking (RBT) is applied anywhere good sense is needed to deal with risk. Each risk recognized offers an opportunity to apply RBT.
To recognize how risk is considered within a management system, consider the following excerpt from some manufacturing company’s Production procedure:
- Using the MRP system and barcodes appearing on Travelers, Production personnel wand into assigned operations.
- Needed materials are transported to the appropri ate workstations.
- Production personnel acquire any needed tooling according to CNC program call-outs.
- Before proceeding, Production personnel ensure the material is correct by verifying that the job number appearing on the Traveler corresponds to the job number recorded on the material itself.
This excerpt provides evidence of risk-based thinking (RBT) on several levels. Here are some thoughts about how:
The fact that a Production procedure exists suggests RBT has been applied. Establishing this procedure increases the likelihood that Production activities will be performed as planned while at the same time decreasing the likelihood that these activities will be performed incorrectly (or not as planned).
“What’s the risk of doing production poorly or improperly?”
“We’ll go out of business.”
“What can we do to address this risk?”
“First, tell personnel how to do it properly according to our best idea today. Once operations are being done according to plan, we can check for opportunities for performance improvement. If addressing any such opportunities is likely to lead to performance optimization, we’ll adjust the plan to improve performance accordingly. I heard it from some guy named Deming.”
RBT Embedded in the Plan
1st BULLET
An MRP system is in use. Apparently the volume and complexity of processing warrants use of an MRP system in this company. Maybe at some point in the company’s history, management decided that an MRP system represented an opportunity improve operations. The anticipated beneficial consequences of using an MRP system at some point outweighed the anticipated consequences of continuing on with old technologies.
Consider the risk of using old technology while competitors embrace new, more effective, efficient technologies. If this risk goes unrecognized or ignored, it will eventually lead to going out of business (and perhaps sooner than later).
As we can gather from the excerpt, using an MRP system is now a reality for this company, helping plan and control resources as part of managing operations. Investing in an MRP system was the result of RBT. At one time, it was an action pursuant to the plan-do-check-act cycle. It was an action taken to improve the ability to meet requirements, a necessity for survival in a competitive, ever-changing world.
Anyway, also from the 1st bullet, we find that Travelers are in use. When manufacturing operations can be performed in a variety of sequences using a variety of available machinery or equipment, a Traveler or Router is commonly used to specify which activities are to be performed (often called “operations”), the sequence in which they are to be performed, and what equipment is to be used to complete each required operation.
The use of Travelers itself is more evidence of RBT. Here, a variety of viable processing options present opportunities for error, so Travelers specify which processing options are to be applied. The list of operations appearing on a Traveler is intended to assure proper processing; it’s used to result in conforming product. At the same time, it helps prevent improper processing. In listing the required operations and their sequence, management is increasing the likelihood that conforming product will result, while reducing the risk of improper processing resulting in nonconforming product.
Improper processing, after all, might result in shipping nonconforming or late product to the customer. So Travelers mitigate the risk to quality caused by applying ineffective or inefficient operations due to uncertainties about the plan for processing.
2nd BULLET
Notice that needed materials “are transported” to the workstations. This sentence from the procedure is somewhat vague. It doesn’t specify who transports materials to the workstations. Apparently, this particular activity doesn’t represent risk enough to warrant more control or specific language.
Perhaps training provides adequate detail. Maybe management considered stating that “Production personnel transport materials to the area,” but in many cases, its actually Receiving personnel who transport the materials and that’s okay here. To management, it doesn’t matter who moves the material to the workstations. So management has chosen to define this aspect of processing vaguely.
In other circumstances, the chain of custody of the product is of utmost importance and the procedure might reference to a “Material Transfer” work instruction.
Apparently here, though, it doesn’t matter. So the procedure isn’t specific. If this permissible latitude for transporting material poses an unacceptable risk (or causes problems), management would presumably apply more control to this activity (perhaps beginning with being more clear about who is responsible for it). At this point, however, this risk isn’t an issue and management has decided it’s acceptable.
3rd BULLET
CNC call-outs provide operators with a tool list. Perhaps at one time, tool lists accompanied tape drive technology to a machine. Maybe even before that, a machinist standing in front of a manual mill or lathe received nothing but a blueprint, a hunk of metal, and a handful of tools. As new technologies become available, management takes advantage of these opportunities in order to remain viable suppliers to their customers. Proactive improvement actions are driven by RBT.
Anyway, providing a tool list itself results from RBT. It reduces the risk of using the wrong tools by eliminating the uncertainty associated with tool selection. By stating that CNC call-outs provide a tool list, the risk of using the wrong tool lists has also been mitigated (e.g., using those residing in tool-boxes or in lockers or wherever else tool lists might have once hidden).
4th BULLET
Production personnel acquire their own tooling. Here the procedure is clear about who is responsible for tooling acquisition. Yet it doesn’t specify precisely how tooling is acquired. Maybe some kit their tools, while others pull their tools from the appropriate bins as they need them. Apparently it doesn’t matter to management. Given training and competence of personnel, apparently management doesn’t feel a need to provide this level of detail here. The risk to quality is apparently not adequate to provide more detail in this procedure. (This could change someday, of course.)
Not only do Travelers specify required operations, here they also specify the material to use. Clearly this reduces the risk of processing the wrong material. Management’s planned arrangements involve identifying material with unique job numbers, which correspond to their respective Travelers, greatly reducing (if not eliminating) the uncertainty about which material to process.
A WORK INSTRUCTION
Work instructions are raised in situations where not providing detailed instruction would pose a risk to quality. If training is adequate, great. If not, and a documented work instruction or work aid is needed, this conclusion is the result of RBT. If absence of a documented instruction would have a detrimental effect on quality, RBT urges management to develop appropriate instructions. (Incidentally, the Travelers discussed earlier can be considered work instructions; some companies couldn’t operate without them.)
Anyway, if a work instruction says, “Insert nut A onto bolt B and torque to 20 foot pounds,” not only does this instruction make it more likely that nut A will be threaded onto bolt B and torqued to 20 foot pounds, but it at the same time reduces the likelihood that bolt D will be threaded onto bolt B and torqued to 5 foot pounds. RBT is built into such instructions.
Show me any process control and I’ll show you evidence of RBT. Likewise, show me a good procedure and I’ll show you lots of evidence of RBT. While risk is ubiquitous within any management system, so is effective RBT.
Bio:
T. D. (“Dan”) Nelson has been closely involved with ISO 9000 since 1994 as a technical writer, quality manager, management representative, consultant, author, and CB auditor. Holding an MA in Business Administration from the University of Iowa, Dan also has 12 years of experience as an IRCA-certified QMS Lead or Principal Auditor, conducting registration audits and surveillance audits, and training Lead Auditor candidates in accredited courses. Using a process approach, Dan has taken several scores of clients of various shapes and sizes through registration to ISO 9001:1994/2000/2008 and related sector schemes (e.g. QS 9000, AS9100, ISO 13485, and ISO 17025). Dan’s numerous articles about the process approach have also been published by Quality Digest, Inside Quality, ASQ’s Quality Management Division, the Society for Manufacturing Engineers (SME), and the South African Quality Institute (SAQI); Dan has been featured as a guest blogger by RABQSA, and has been featured on Quality Digest Live. Dan is available for management consulting, training, and coaching, as well as auditor training and coaching. Contact: dan@tdnelson.com 720 412 7994