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Advanced Product Quality Planning Risk Management

Advanced Product Quality Planning Risk Management

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Advanced Product Quality Planning Risk Management

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    1. 1 Advanced Product Quality Planning Risk Management Milwaukee ASQ Section May 17, 2010

    2. 2 Outline Introduction Risk Management Defined Manage Risk Through Advance Planning Reacting to High Risk Situations Standards Addressing Risk Management

    3. 3 ASQ Long Term Relationship Joined ASQ - 1972 Active in Battle Creek - Kalamazoo Section as Secretary, Treasurer, Chairman ASQ: CQE -1976 CQA -1994 HACCP Auditor -2005 ASQ 35 Year Service Award - 2008 RABQSA ISO 9001 Lead Auditor -1994 RABQSA Aerospace Auditor 2009 President Rand E. Winters Group, Inc. 1989 ASQ National Instructor - 1994 to present

    4. 4 Risk Management As an auditor I see first hand how firms address or dont address issues of risk, and I thought it might be appropriate to discuss risk in light of the recent high profile recalls. It is my opinion that organizations owe it to themselves to become more aware of risk and the management of that risk to minimize the impact on the organization and society, and keep regulators at bay.

    5. 5 Expertise Success at Risk Management I solicited opinions on managing risk from two firms who have demonstrated success without public recall or withdrawal. One firm is a fire suppression company in business since the early 1900s. Other firm is a high end electronic home appliance manufacturer producing 600 to 1000 units per day and in business since1946. Their comments are in red.

    6. 6 Defining Risk Effect of Uncertainty on Objective

    7. 7 Risk Its Everywhere Getting out of bed every day carries a risk. Operating your household can be risky: leaky roof, sewer backup, termites, fire. Business executives are confronted with risks all day longinsufficient cash flow, non-conforming product from suppliers, OTJ injuries, etc.

    8. 8 Impact - Supply Chain Risk Icelands volcano resulted in no flying so no parts from Pacific rim; European plants shutdown. Fire in major first tier supplier no parts so production shutdown.

    9. 9 Product Safety - Product Failure Vehicle braking system -potential injury. Electronic home appliance fails to start loss of sales.

    10. 10 Risk Management Defined A planning process to define the level of risk in a product and to take appropriate actions to potentially reduce the risk and maintain risk within acceptable levels.

    11. 11 Risk Management Two Parts Preventing risk through planning. 2. Reacting to situations managing and minimizing impact of problem or issue without help of a regulatory body.

    12. 12 An Attempt to Control Failure Lets look at a suggested attempt to control failure as shown in a national TV news program.

    13. 13 Stopping Runaway Prius Both feet applied to brake and push as hard as you can, Push gear lever to the left and hold until car goes from D to N (2 to 5 seconds), Push down and hold start/stop button for at least 3 seconds, Call 911 Items 1 3 came from MSNBCs Morning Joe March 12, 2010; Item 4 was actual case presented on Morning Joe March 11, 2010

    14. 14 Other Recalls Ford Explorer tire blow-outs cost Ford billions of dollars. Hamburger recalls millions of pounds. Vioxx drug withdrawn from market cost $1B/yr in sales; deaths linked to drug. Major fire sprinkler system manufacturer- 5 year + campaign - Wall Street Journal quarterly report on regulatory actions

    15. 15 Results of Failure to Control Risk A recall program A withdrawal from market program A product campaign Common denominator for all three programs is loss of dollars to the organization and the community and loads of bad media attention!!

    16. 16 Long Term Results of Risk Failure Damage to reputation, which may result in Loss of $$ Reduced market share Reduced future sales Potential for ongoing lawsuits, for years Could result in overall black eye for product, depending on industry (Central did not enhance peoples perception of fire sprinklers when they had their CPSC recall). Company resources are wasted on damage control rather than programs that move company forward.

    17. 17 Client Stories Trucking supplier found crack in one hitch and spent a year traversing the world to find and replace other defective hitches. A formal recall would have cost millions of dollars. Medical lab discovered missing page in an instruction booklet which would have resulted in FDA violation. Sister firm added the missing instructions as product was sold. Easier to deal with problems in your own facility than that of your customers so says my home appliance manufacturer.

    18. 18 Is Your Product Immune? Toys recalled because of lead paint. Drywall from China recalled because of smell and copper corrosion. Major car companies requesting suppliers to participate in recall costs (potentially tier 3 and 4 suppliers are involved). Household appliances & home window shades recalled. Federal Agencies taking away rights to participate in US markets (FDA medical devices). May not be something you did, but something a supplier did If products are purchased in the US, you have recourse, May be more difficult to get satisfaction if product is purchased overseas (depending on country).

    19. 19 Planning for Risk

    20. 20 Examples FMEA Failure Modes & Effects Analysis FMECA - Failure Modes, Effects & Criticality Analysis FTA - Fault Tree Analysis ISO 14971- apply risk management to medical devices

    21. 21 Four Phases of Risk Risk Management Approach (ISO 14971 Flow Diagram)

    22. 22 IS0 14971 Establishing Risk Acceptability

    23. 23 Risk Management Review Preventive Measures Protective Measures Informative Measures CCP Monitoring CCP Audit Mfg. Actions Field Actions Mgmt. Reports Suitability & Effectiveness

    24. 24 FMEA Tool Severity X Occurrence X Detection = RPN (RISK PRIORITY NUMBER)

    25. 25 FMEA Chart

    26. 26 The Four Phases of Risk Management FMEA Approach

    27. 27 Total Product Life Cycle 2727

    28. 28 Additional Tools Error proofing Irreversible corrective action Computer simulations

    29. 29 Error Proofing Problem Solution 1. Car goes full throttle at 90mph 2. Driver fully engages brakes to no avail 3. Driver dials 911 4. Police car pulls in front of Prius & brakes to slow/stop car (3/8/10)

    30. 30 Error Proofing Problem Solution 1. Car goes to full throttle at 90mph 2. Driver fully engages brakes to no avail 3. Driver dials 911 4. Police car pulls in front of Prius & brakes to slow/stop car.(3/8/10) Brake override system (smart brake) Electronic software check when brakes fully applied is car at full throttle? If yes, computer disengages throttle. Technology available for 10 years, Nissan, Chrysler, BMW and Mercedes using this system.

    31. 31 Corrective Action Irreversible? Is corrective action focusing on system? - meaning system is changed, - has a procedure changed, - has root cause analysis been conducted. Equipment or software error proofed? Actions described been implemented? Training is generally not a system change. Incident specific actions are not irreversible.

    32. 32 My Observations FMEA or FTA not maintained as living document. Risk information customer complaints, returned goods, internal problems not funneled through organized team or designated individual resulting in slow response to problems and effective corrective action.

    33. 33 Managing and Minimizing

    34. 34 Key Steps to Create Risk Management Program Create team of mid and executive management personnel that meet on a regular basis to review and approve actions. Create risk management data base to include: market studies, pilot builds, pre-production issues, customer issues or rejections, internal quality issues, preventive & corrective action review, trend issues in processes, regulatory training (if appropriate), others. Create action plan & team for any external actions required to manage risks. (SQF 2000 = crisis management team). Ensure all communications current and accurate records maintained on all decisions. Have one department (preferably one person) handle all quality complaint returns for the visibility necessary to quickly identify a situation needing immediate attention (for things that come up between the regular meetings).

    35. 35 Minimize Effects of Problem Potential to take a bad situation and turn it into a positive reinforces why customers buy from you, if you step up and take responsibility. In the invent of a recall, communication is extremely important: Make sure customer contacts (CSRs and sales personnel) know what is going on, Provide answers to questions you think customers will ask, Provide detailed instructions to customer on what they need to do and what the company will do to resolve the issue, Try to make it as painless as possible for the customer.

    36. 36 Issues To Address One person should not hold all the information, this is a middle to senior management team. Document or do what you think is right, dont let the plans/records of your activity show something different. Provide risk management training up front. Dont wait for the big issue to occur - do not ignore the issues and hope it will go away.

    37. 37 Issues To Address Different types of response for different types of problem. As we are dealing in life safety, if we were to find a problem with a sprinkler that would cause it not to operate in a fire situation, we would recall it from the field. If we were to find a problem that may cause a sprinkler to leak in a limited number of cases, we may decide to pull stock from warehouses, but not recall from customer. If something has limited issues in the field, we may allow product to be returned as the issue comes up and work on a redesign or change in manufacturing. Life safety/personal injury need to be addressed immediately product liability is handled based on $$$ exposure.

    38. 38 My Observations Too many firms wait until after the event. Record of product testing and production checks not complete, not maintained as specified.

    39. 39 Standards Addressing Risk Action ISO 9001:2008 ISO 13485:2003 AS 9100 SQF (Safe Quality Food) ISO 22000

    40. 40 ISO 9001 General QSM Standard Clause 8.3 Control of Nonconforming Material By taking action appropriate to the effects or potential effects of nonconformity when nonconforming product is detected after delivery or use has started.

    41. 41 ISO 13485:2003 Medical Devices 7.1 Planning for Product Realization The organization shall establish documented requirements for risk management throughout the realization process. Records arising from risk management shall be maintained. Note: ISO 14971 is a good guidance document.

    42. 42 AS 9100 Aerospace 7.2.2d) risks have been evaluated (e.g., new technology, short delivery time scale) 8.3 In addition to any contract or regulatory authority reporting requirements the organizations systems shall provide for timely reporting of delivered nonconforming product that may effect reliability or safety..

    43. 43 European - ISO 22000 Food Safety Management System Two Phased Program HACCP & Withdraw. 7.6 Establishing HACCP plan. HACCP (Hazard Analysis and Critical Control Point). Define control points, monitor control points and take action when outside limits.

    44. 44 European - ISO 22000 Food Safety Management System 7.10.4 Withdrawals. To enable and facilitate the complete and timely withdrawal of lots of end product which have been identified as unsafe. Top management appoint personnel having the authority Documented procedure notificationhandling of product and sequence of actions.

    45. 45 U.S. - SQFI Food Safety SQF Code 2000, levels II and III (GFSI recognized) Two Phases prevention and reaction. 4.4.4 Food Safety plan HACCP. 4.4.6 Business Continuity Plan (BCP) 4.1.6.1 BCP food safety threats cope with a business crisis.

    46. 46 SQF Business Continuity Plan 4.1.6.2 the BCP shall include: Management responsible for action, Nomination & training of a crisis management team, Controls to ensure quality is not effected, Measures to isolate effected product, Measure to verify acceptability of other product prior to release, Crisis alert Contact list, Source of legal and expert advice, Responsibility for internal communication as well as external and media.

    47. 47 SQF Business Continuity Plan 4.6.3 Product Withdrawal and Recall Senior Management responsible Identify those responsible for initiating and managing, Describe the management procedures, Outline communication plan. 4.6.3.2 Determine the cause 4.6.3.3 Test/verify the process at least annually 4.6.3.4 Maintain records

    48. 48 Takes Commitment You can preach commitment to customer quality all day, but when the company is so strongly committed to quality that they call a truck back 14 hours from their dock because they suspect defective productthat is COMMITMENT!!

    49. 49 Risk Management Plan Do you have a plan?

    50. 50 Finally Lesson Learned Which Japanese car manufacturer is introducing a brake over-ride system in all 2011 models?

    51. 51 Thank You Questions? Tonights presentation available on your website. Further questions - e/mail me at: rand_winters@yahoo.com