Why Key Concepts of Risk and Quality Management Go Together in a QMS
Risk management and quality management go hand in hand. In fact, businesses addressing their risks in every possible way are most competent at achieving quality excellence. Risk-based thinking is also made a fundamental part of the Quality Management System (QMS) i.e., ISO 9001, to demonstrate its significance. Risk-based thinking enables a business to determine which factors can cause their processes or quality management procedures to deviate from the expected results. As a result, they can put effective preventive actions in place to ward off the risks. It is therefore important for you to incorporate the key concepts of risk and quality management together in your QMS. But, before that, you need to understand why to integrate risk management in your quality management.
Why Risk Management is Essential in a Quality Management System?
Risk-based thinking has been always implicit in businesses. It is just that the concept is more widened and was explicitly included in business processes after the international quality management standard ISO 9001 included it as one of the basic principles. Needless to say, it positively impacts the organizations by making them more capable of managing risks, maintaining continuity of their operations, and consistency in their quality of output.
If you need more concrete reasons to understand the significance of risk management in a QMS, here they are:
• Incorporating risk-based thinking in your business ensures that risks are considered throughout your processes, from beginning to end.
• Adopting the risk-based approach in your quality management strategy makes you proactive in managing risks rather than reactive. It helps you implement practices for assessing risks preventing or mitigating them rather than recovering from them.
• A risk-based approach enables you to handle risks in a positive way even though they have a negative consequence. It helps you to identify opportunities in your business, i.e., which processes need to be improved or changed to reduce risks as much as possible. In short, risk management promotes a culture of continuous improvement in your business and drives you towards excellence.
Risk Management Concepts and Processes
To incorporate risk management in your QMS, you should first understand its inherent concepts and processes. These are in fact the components that make up a holistic risk management approach for organizations.
Risk identification: The first step or concept of risk management is always identifying what the risks to your organization and QMS processes are. You need to anticipate your processes and their outcomes to prepare a list of potential hazards/risks. The best ways to foresee risks in your processes are looking at the analysis of previous records, collecting informed opinions, and considering the concerns of the stakeholders.
Analysis of risks: Following the identification of possible risks, you need to analyze them to learn their impacts on the business. Analysis of risk involves understanding the likelihood of its occurrence, impacts on business objectives or quality goals, and when it could happen or what would cause it to happen. Risk analysis is the basis of risk management as it helps to determine the measures needed to prevent or lessen them.
Risk control: It is the decision-making part of risk management. Based on the analysis report, you need to decide whether to eliminate, reduce, or accept the risk. Risk control is mainly about reducing the risk or its consequences to an acceptable level when the risk cannot be eliminated or prevented. For appropriate risk control, you should have a better grip on the cost-benefit analysis. You need to find the appropriate opportunities or benefits that your business gets in return of implementing measures for risk reduction.
Risk evaluation: Every uncertainty in the business is identified as a strong risk after it fulfils certain criteria. Evaluation of risk is the process of comparing an identified potential risk against the criteria. The evaluation is based on availability of the information for a few elementary questions like what will happen as it emerges, what are chances it will happen, what are the consequences, and what is the severity of the risk.
Risk reduction: Reduction of risk involves deciding practices for alleviating or preventing the risk if it is found to be non-acceptable to the business. The practices should be meant to reduce the severity and damaging consequences of the risk as much as possible. Risk reduction also means enhancing the ability of your risk identification approaches to faster detect the hazards or risks.
Risk acceptance: A risk is accepted and alternative measures are undertaken to bypass or minimize it when either there is no effective controls found or the risk is found to be less severe. Also, a risk need to be accepted when it is a residual risk i.e., a risk that is still prevalent after all the preventive actions or control are implemented. Most businesses accept risks by getting proper insurance or transferring the risks to a third party (i.e. outsourcing of the risk-related processes).
Risk communication: The last but very crucial concept of risk management is communication. The risks and any information related to them should be communicated by the decision-makers to the employees of the organization at all levels. They should be informed as well as instructed on how to react or respond to an acceptable risk. However, most importantly, the decision-makers should make the employees a part of their risk management process and encourage them to provide opinions or views for addressing any risks.
Benefits of Incorporating Risk Management in Your Quality Management
The results of successful inclusion of risk management in the quality management are observed in increased compliance, quality assurance, and better decision making. These provide a number of advantages to your business such as:
• Proactive governance and enforcement of a culture of continual improvement
• Increased efficiency of the work procedures and enhancement of work environment
• Consistency in the quality of products or services and improvement in customer satisfaction
• Improvement in the scope of sales in the market
• Improvement in organizational resilience and quality performance
• Development of better relationships with stakeholders and increase in their confidence
• Increased ability of your organization to respond to any change/market scenario and grow amidst all business circumstances
By considering risk management along with your quality management approach, you are cushioning your organization against all possible odds and helping it to maintain consistency in its outputs. Integrating the key concepts of risk and quality management together in your QMS helps you have a risk-driven approach in all the business processes.
When you consider the risks in all your processes and are able to effectively address them, it helps you to fulfill your quality commitments. So customers always get the product or service they expected. In short, it drives your business towards quality excellence.
However, how should you prepare your organization for risk management? Well, it involves a number of steps like risk assessment, analysis and prioritizing of risks, planning of actions, and implementing the actions. Also, you need to audit the effectiveness of your preventive actions. To get some assistance for your risk-driven approach, you can contact Compliancehelp Consulting LLC. We are a team of quality assurance experts with decade long experience in Quality Management Systems. We can provide you with the right help to integrate the risk management in your QMS. Feel free to contact us today!
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