Advanced Product Quality Planning Risk Management

1
Advanced Product Quality Planning Risk
Management

• Milwaukee ASQ Section
• May 17, 2010

2
Outline

• Introduction
• Risk Management Defined
• Manage Risk Through Advance Planning
• Reacting to High Risk Situations
• Standards Addressing Risk Management

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
Risk Management

• As an auditor I see first hand how firms address
  or dont address issues of risk, andI 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.

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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
Defining Risk

• Effect of Uncertainty on Objective

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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
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
Product Safety - Product Failure

• Vehicle braking system -potential injury.
• Electronic home appliance fails to start loss
  of sales.

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Risk Management Defined

• A planning process to define thelevel of risk in
  a product and to take appropriate actions to
  potentially reduce the risk and maintain risk
  within acceptable levels.

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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
An Attempt to Control Failure

• Lets look at a suggested attempt to control
  failure as shown in a national TV news program.

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

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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

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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!!

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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.

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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.

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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).

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Planning for Risk
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

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Four Phases of RiskRisk Management Approach
(ISO 14971 Flow Diagram)

• Risk Analysis Risk
  Evaluation
• INTENDED USE Identification
• HAZARD identification
• RISK estimation RISK
  ASSESSMENT
• 
  

• RISK acceptability decisions

• Risk Control
• OPTION analysis
• Implementation of measures
• RESIDUAL RISK evaluation
• Overall RISK acceptance

• Post Production
• Information
• Post-production experience
• Review of RISK MANAGEMENT
• experience- customer use
• Take appropriate actions

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IS0 14971 Establishing Risk Acceptability
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Risk Management Review

• Preventive Measures
• Protective Measures
• Informative Measures
• CCP Monitoring
• CCP Audit
• Mfg. Actions
• Field Actions
• Mgmt. Reports
• Suitability Effectiveness

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FMEA Tool

• Severity X
• Occurrence X
• Detection
• 
  RPN
• (RISK PRIORITY NUMBER)

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FMEA Chart
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The Four Phases of RiskManagement FMEA Approach

• Risk Analysis Risk
  Evaluation
• Design FMEA
• Process FMEA
• RISK
  ASSESSMENT
• 
  

• RISK acceptability decisions
• RPN and Recommended Actions

• Risk Control
• OPTION analysis (Top Management)
• Implementation of measures
• RESIDUAL RISK evaluation
• Overall RISK acceptance

• Post Production
• Information
• Post-production experience
• Review of FMEAs
• Define and implement any necessary
  actions

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Total Product Life Cycle
Concept

Prototype
Next Generations
Internal testing/use
Commercial Use
Marketing
First Production run and testing
Manufacturing
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Additional Tools

• Error proofing
• Irreversible corrective action
• Computer simulations

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Error ProofingProblem 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)

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Error ProofingProblem 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.

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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.

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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.

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Managing and Minimizing
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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).

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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.

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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.

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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
My Observations

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

39
Standards Addressing Risk Action

• ISO 90012008
• ISO 134852003
• AS 9100
• SQF (Safe Quality Food)
• ISO 22000

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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.

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ISO 134852003 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.

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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
European - ISO 22000 Food Safety
Management System
REW

• 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.

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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.

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U.S. - SQFI Food SafetySQF 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.

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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.

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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

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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!!

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Risk Management Plan

• Do you have a plan?

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Finally Lesson Learned

• Which Japanese car manufacturer is introducing a
  brake over-ride system in all 2011 models?

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Thank You

• Questions?
• Tonights presentation available on your
  website.
• Further questions - e/mail me at
• rand_winters_at_yahoo.com