Supplement FMEA with a Risk Priority Matrix for Better Results
by Dushyant Thatte and Sandeep Bhatt
Within the world of risk management – a common aspect of improvement projects – there is a distinction between response and mitigation. A response is taken in reaction to risk, while mitigation is undertaken proactively. Thus, responses are implemented once risk materializes, and mitigation actions must be planned and implemented before a risk presents itself. The focus of this article is on mitigation actions and exploring both the limitations of a traditional risk analysis model and a method for overcoming these limitations.
Urgency and Importance
As with any aspect of business, risk mitigation planning, execution, and monitoring and control are constrained by cost, time, scope and quality. Typically, not all possible mitigation actions can be implemented; they must be prioritized so that the activities that will provide the biggest help to a project are implemented. Prioritization of any action is typically guided by two factors – urgency and importance.
The urgency of risk mitigation activities can be derived based on the time dependency of risk. Few risks are time dependent (i.e., they occur at a specific time in the project), while others may occur at any time throughout the project. That timing will inform the urgency of a particular mitigation action. For example, a mitigation action for a risk that may occur a year from now will be prioritized at a “low urgency” level compared to the mitigation action for another risk that may occur in the next month.
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