FICCI CE

Risk management
FICCI CE

Risk management

Risk can be defined as the probability of an undesirable event

occurring and the impact/consequence of that event.
Risk management is a process of managing risk using risk abatement
plans.
FICCI CE

Objectives of risk management plan

• To identify and quantify risk elements viz. Technical, cost, marketing

risk.
• To reduce risk by means of risk abatement plans integrated into
processes
• To Monitor progress of abatement plan
• To Highlight and manage risk as early as possible.
FICCI CE

Key steps of a risk management process

• Identify risk elements and risk types

• Assign risk ratings i.e. probability and consequence of risk
• Prioritize risk as high medium and low
• Identify risk abatement plans for high and medium risks
• Incorporate the risk abatement plans into work plans.
FICCI CE

Ways to identify risk

1. FMEA (This has been already discussed in the chapter on

“Measurement”
2. Past experience
3. Brainstorming
Whatever be the method it is important to analyze risk in terms of
complex design issues, cutting edge technology issues, untested
techniques, new manufacturing processes and high cost uncertainties.
FICCI CE

Methods of risk abatement

• Involve customers/suppliers/manufacturing/field early in the process

• Model or simulate the process
• Use robust design
• Test
• Conduct periodic project reviews
• Complete analysis earlier
• Assure proper resourcing