The development and production of any new product entails elements of risk.
Risk has two components: (1) the probability or likelihood of an undesirable
event occurring and (2) the effect or impact the occurrence of that event will
have on the product. The goal of a risk management program is to anticipate
risks and how they can be mitigated before they become problems.
Risk management entails actions to control risk. It includes risk planning,
assessing risk areas, developing risk-handling options, monitoring risks to
determine how they have changed, and documenting actions. The key to managing
risk is to ensure that risk identification and assessment processes are in place
and being followed from the onset of the product development. Such tools can
assist in identification of potential risks early in the design process so that
they can be assessed, tracked, and mitigated before they create significant
problems. From the producibility perspective, risk reduction must focus on
design and the transition to production, those areas that have the greatest
impact on the successful manufacturing of the product.
The importance of risk management to producibility is
highlighted in Case Studies 7, 8, and 9 in Appendix D .
Many product development efforts have failed because managers allowed the
schedule to drive them into production with immature designs. They failed to
identify risk early enough to preclude performance shortcomings or cost or
Staff:The IPT is the instrument for risk management. All
members of the team should view the management of risk as their own personal
responsibility. Depending on product scope, some organizations utilize a risk
facilitator (either full or part-time) to work directly with IPTs to identify,
track, and provide visibility to areas of risk so that managers and team leaders
are continuously aware of the status of the risks and can make informed
decisions on how to most effectively manage them.
Tools and Techniques:Risk Management Tools are available for assisting in
assessing, analyzing and managing risk. Appendix F.1.18 includes a
description of three tools that can address such issues as schedule, cost, and
Training:The members of the IPT should be trained in risk
assessment techniques and procedures including the need to follow a disciplined,
Risk management activities begin at the outset of any product development
effort and continue through all phases. Although the scope and method of
implementation will vary with, among other things, product complexity, common
threads of any risk reduction effort are:
- Risk identification: What process improvements are needed to ensure that
producibility will be achieved? Do design analysis processes include a
producibility assessment? Do trade study activities include producibility as a
- Risk assessment: What consequences will result if identified areas of risk
are not dealt with or are only partially addressed? Will the impact affect
performance, cost, and/or schedule, and to what degree?
- Risk tracking: Is an unmitigated risk growing? By when must the risk be
- Risk mitigation/reduction: What can be done to eliminate the source of the
risk or reduce it to an acceptable level? Are funds available to develop and
conduct the necessary risk mitigation efforts?
The following is an example of a risk management implementation
- Issue statement and assessment of the risk or problem.
- Identify the probability of success or the consequence of failure.
- Consider the alternatives and the cost of each.
- Recommend risk reduction / abatement method(s).
- Implement an impact statement (cost / schedule / technical).
- Identify the responsible organization and personnel.
- Establish criteria for closure of this risk activity.
- Highlight the decision points (flowcharts).
- Recommend backup developments and tests, including cost
It should be noted that since the implementation of such a strategy is both
manpower and cost intensive, only the highest risk items should be assessed in
this manner. Risk assessments should be tailored to fit the product and to
satisfy customer requirements.