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Advanced Product Quality Planning Risk Management


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Title: Advanced Product Quality Planning Risk Management

Advanced Product Quality Planning Risk
  • Milwaukee ASQ Section
  • May 17, 2010

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

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

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.

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.

Defining Risk
  • Effect of Uncertainty on Objective

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.

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.

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

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.

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.

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

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

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

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!!

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.

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.

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
  • 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
  • May be more difficult to get satisfaction if
    product is purchased overseas (depending on

Planning for Risk
  • FMEA Failure Modes Effects Analysis
  • FMECA - Failure Modes, Effects
  • Criticality Analysis
  • FTA - Fault Tree Analysis
  • ISO 14971- apply risk management to medical

Four Phases of RiskRisk Management Approach
(ISO 14971 Flow Diagram)
  • Risk Analysis Risk
  • INTENDED USE Identification
  • HAZARD identification
  • RISK estimation RISK

  • RISK acceptability decisions
  • Risk Control
  • OPTION analysis
  • Implementation of measures
  • RESIDUAL RISK evaluation
  • Overall RISK acceptance
  • Post Production
  • Information
  • Post-production experience
  • experience- customer use
  • Take appropriate actions

IS0 14971 Establishing Risk Acceptability
Risk Management Review
  • Preventive Measures
  • Protective Measures
  • Informative Measures
  • CCP Monitoring
  • CCP Audit
  • Mfg. Actions
  • Field Actions
  • Mgmt. Reports
  • Suitability Effectiveness

  • Severity X
  • Occurrence X
  • Detection

  • RPN

FMEA Chart
The Four Phases of RiskManagement FMEA Approach
  • Risk Analysis Risk
  • Design FMEA
  • Process FMEA
  • RISK

  • 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

Total Product Life Cycle

Next Generations
Internal testing/use
Commercial Use
First Production run and testing
Additional Tools
  • Error proofing
  • Irreversible corrective action
  • Computer simulations

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)

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.

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.

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.

Managing and Minimizing
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).

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

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.

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
  • Life safety/personal injury need to be addressed
    immediately product liability is handled based
    on exposure.

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

Standards Addressing Risk Action
  • ISO 90012008
  • ISO 134852003
  • AS 9100
  • SQF (Safe Quality Food)
  • ISO 22000

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.

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.

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..

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

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
  • Documented procedure notificationhandling of
    product and sequence of actions.

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)
  • BCP food safety threats cope with a
    business crisis.

SQF Business Continuity Plan
  • the BCP shall include
  • Management responsible for action,
  • Nomination training of a crisis management
  • 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.

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

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!!

Risk Management Plan
  • Do you have a plan?

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

Thank You
  • Questions?
  • Tonights presentation available on your
  • Further questions - e/mail me at
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