ASQ Clinic On Risk 09

Practical Applications
of Risk Management

ASQ – Orange Empire

by: Jack Dhuwalia,
President,
J D Consulting
November 10, 2009
© JD Consulting, 2009

Attendee Notes:
From this presentation, what do I want to have answered/clarified?
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Ideas that I can apply:
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© JD Consulting, 2009 2

Welcome!

• Phones
• Interactive – please share
• Relaxed approach
• Write questions and “Aha!”
moments/ideas on the summary sheet
provided


Background of the audience

• Familiarity with Risk Management
• Industry: Medical, Aerospace, IT,
Service and other
• Questions you’d like to have answered
– lets hear them


My plan

• Risk is part of every day life
• Introduce simple concepts
• Apply them to Supplier/Material risk
• Ideas on risk reduction/management
• Have a fun, learning experience for all
• Handout have more stuff than we’ll
cover


Risk Analysis – complicated?

• Common sense
• We do it every day
– Look both ways before crossing …
– Getting the brakes fixed before …
• Purpose: Manage risk to an acceptable
level – “zero” risk?
• Write “Aha!” moments/ideas


What do you think of the impact?

• Personal life?
• Impact on family life - security
• Business now and future
• Does it shake up consumer confidence?
• Competitive advantage?
– Market place
– Regulatory
• Quality of life


That’s why managing risk makes
sense at many levels!


ISO 14971-2007

• Medical devices – Application of risk
management to medical devices
• Significant to EU
• Accepted by FDA - expectations
• Application to drugs/biologics - recent
ICH Q9 includes risk management
• Transfers to other industries as well as
service groups


Definitions

• Harm – Physical injury or damage to
health, property or environment
• Hazard – Potential source of harm
• Hazardous situation – Circumstances
in which people, property or the
environment are exposed to one or
more hazards (see Mr. Jaws!)


Definitions (contd.)

• Risk – Combination of probability of
occurrence of harm and severity of
that harm
• Risk estimation – Process used to
assign values of the probability of
occurrence of harm and severity of
that harm


Definitions (contd.)

• Risk evaluation – process of
comparing risk against given risk
criteria to determine the acceptability
of the risk


Hazard


Shark

• Harm – Getting bitten or eaten

• Hazard – Shark


Calculations

• P1 is the probability of hazardous
situation occurring
• P2 is the probability of “it” leading to
harm
• P1 x P2 is the probability of
occurrence of harm


Calculations for Shark-bite

• P1 is when I might be in open ocean – 20
dives x 0.75 hr/dive / (365 days x 24 hr/day)
= 0.0017
• P2 is “it” leading to harm –
• From Mr. Jaws – near zero since I only dive
in warm waters
• From other sharks – estimate 5/20 = 0.25
• P1 x P2 = 0.0017 x 0.25 = 0.0004, or
4/10,000 dives – Probability of occurrence of
harm


From ISO 14971

• Schematic representation of the
process

• Flow chart


Teamwork


Human Nature
• Denial
• “It” won’t happen to me
• No one is “that stupid” to do…
• Blind spots
• They can’t “see” the problem
• Likely to miss potential risks

The same mind that creates a given
problem simply cannot fix the problem.


Invite an Outside Expert

for better results!


Risk Assessment Summary
O-5 ALARP NAC NAC NAC NAC

ALARP
O-4 ALARP NAC NAC NAC

ALARP
ALARP
O-3 NAC NAC

ALARP
ALARP
Occ O-2 NAC

ALARP
O-1

S-1 S-2 S-3 S-4 S-5

Severity

© JD Consulting, 2009

Risk Assessment

• Vendor/Supplier/Material risk
• Design risk
• Manufacturing process risk
• User risk (idiot-proofing)
• Risk assessments are mostly
subjective since hard data is seldom
available in many situations


Risk analysis techniques
• FMEA is bottoms-up
– Excellent for production/process risk
– Some use for design risk
– Creates “blind-spots”
• FTA is top-down
– Excellent for user risk
– Helps complete the picture – eliminates
“blind spots”


FMEA

Potential
Causes Before
After Mitigation
of Mitigation
Failure

O O
Proce POTENTIA D
Potential CURRENT c D c
ss L EFFECTS S S e
# Failure PROCESS c e c
step/F OF e e t
UNCTIO Mode CONTROLS u t u
FAILURE v R v e R
N r e r
e P Mitigations e c P
r c r
ri N ri t N
e ti e
t t i
n o n
y y o
c n c
n
e e


What is FTA?
• A top-down approach which assumes
the safety hazard and then analyzes
the possible causes.
• Starts with a postulated undesired
consequence and looks for possible
causes or fault modes at the lower
system or component level.
• Used for COMPLEX SYSTEMS.


Supplier Risk

• Common to most companies
• Common to every day life such as
– Auto recalls
– Electrical safety - toaster


Supplier Risk Reduction –
sterile packaging service

• Potential problem of losing sterility due
to poor package seals
– Verified material specs
– Discovered that manufacturing process
didn’t have an alarm or a shut down if
malfunction resulting in poor seal segment
– Worked with the supplier to create a more
robust out-going inspection and audit
– Reduced the probability of occurrence into
“ALARP” or “green” zone

Supplier Risk Reduction
Example - Component

• Example: Injection molded connector
with parts cracking – failure in red
– High probability of occurrence
– To bring it to below “red” zone
– Work with supplier to implement process
validation
– Adding in-process testing to stress the part
to failure, then operating much below
– Same test at incoming inspection until
resolution


• Potential problem of losing sterility due
to poor package seals
– Verified material specs
– Discovered that materials in past lots
didn’t have sufficient adhesive
– Worked with the supplier to create a more
robust in-coming inspection and audit



• Potential problem of running an
incorrect load configuration
– Supplier must follow the exact load
configuration for Gamma Irradiation
– Incorrect load places the risk factors in
“red” zone
– Working with production and quality and
systems in place to assure compliance

finished product – tubing set

• Again, the risk analysis placed it in the
“red” zone
• Working with supplier to discover that
residual solvent stays inside the tubing
• Solvent bubbles into blood being
circulated causing potential embolism
in patient
• Supplier changed the solvent which
completely evaporates ahead of time

Supplier Risk

• Look for business risk, process risk,
quality system risk, production
planning risk, resources risk, ability to
solve problems - quickly and
effectively …


Supplier Risk (contd.)

• Treat it as if it a part of your quality
and management system
– Because it affects you and your risk
– Per ISO 9001, ISO 13485, FDA – QSR, the
manufacturer is fully responsible for
the finished product, regardless whether
the supplier provides a component or the
entire product or provides a service
regardless of Supplier’s ISO certification



• Know the risk the supplier
product/service affects to your product
• This means a risk assessment has
been made and is “driving” the
supplier assessment



• Main areas of concern
– Business and operational capability
– Technological capability
– Ethics, values (what is important to them?)
– Can they supply the necessary
• Quality
• Safety
• Performance
• Reliability



• Operational capability such as:
– Ability and willingness to respond to
performance indicators such as:
• Lead times
• On-time delivery
• Response time

• Past performance, experience and
human resources (quality and
quantity) all play into it



• Controls such as:
– Change control
– Control of their suppliers (incl. audits)
– Quality System (ISO, etc.)
– Process capability
– Process validations
– Complaint handling and responsiveness
– Corrective and preventive actions


Learnings from the experience

• Please look at your notes on the
summary sheet provided
• Share ideas to take-home
• Share ideas that make sense to me


My plan – we covered

• Risk is part of every day life
• Introduce simple concepts
• Apply them to Supplier/Material risk
• Ideas on risk reduction/management
• Have a fun, learning experience for all


Gratitude

• ASQ Orange Empire Section 0701
• Dave Nagy
• Audience for your participation


Other information

• To contact Jack Dhuwalia
– Email: jdhuwalia@jdconsultingsite.com
– Phone:949-854-4534
– www.jdconsultingsite.com
• FDA
– www.fda.gov/cdrh devices
• GHTF
– www.ghtf.org/documents


ASQ Clinic On Risk 09

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