Original Date: 08/20/2001
Revision Date: 12/14/2006
Information : Risk Management Process
Lockheed Martin Naval Electronics & Surveillance Systems-Surface Systems developed a Risk Management Process to measure the probability of adverse affects or risks. The process defines a strategy for dependable input and output requirements so that processes can be consistently applied.
In the past, risk tracking was an undisciplined, subjective process performed by various individuals. The company often underrated the consequences of risk reduction for its customers. In response, Lockheed Martin Naval Electronics & Surveillance Systems-Surface Systems (NE&SS-SS) developed a Risk Management Process to measure the probability of adverse affects or risks.
Lockheed Martin NE&SS-SS believes that risk identification is everyone’s job, so risk evaluation is now performed through Integrated Product Teams (IPTs). The Risk Management Process involves Risk Identification; Risk Assessment and Analysis; Risk Mitigation; and Risk Tracking and Control. Risk Identification involves uncovering new issues, tracking existing ones, performing quarterly evaluations across the work breakdown structure, and classifying issues into risk categories. Risk Assessment and Analysis involves identifying critical risk issues, qualifying potential program impacts, evaluating interdependencies, assigning probability and consequence of occurrence values, performing hardware/software proofing, and testing. Risk Mitigation involves developing plans for handling and tracking risk issues, evaluating cost/effectiveness, and documenting the plan. Risk Tracking and Control involves updating the databases on current knowledge of risk, developing a risk assessment report and management plan, disseminating the reports to the Team and customer, and holding a Risk Review Board meeting.
Understanding the structured and systematic procedures are essential to the early detection of risk in an engineering environment. Standardizing the Risk Management Process enables an IPT to determine the high-risk elements in need of risk mitigation, and make effective decisions based on risk evaluation and tracking. This cost-effective approach has the potential to unify efforts in risk management across IPTs and company disciplines.
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