Risk Management

Use Monte Carlo Simulation to Manage Schedule Risk

The three critical aspects of a running a successful project include project costs, project scope and project schedule. Since projects contain many sources of variation, all three aspects are prone to not meeting targets. Project managers need to use appropriate tools to manage the variability (or risk) in the project. Critical Path Method Traditionally, project…


Supplement FMEA with a Risk Priority Matrix for Better Results

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….


Six Sigma and Enterprise Risk Management

Much has been written about the increasing uncertainty enterprises face due to globalization, restructuring, changing markets and increased competition. An increased call for transparency is causing organizations to focus on the benefits of enterprise risk management (ERM). Leading companies are using the methods and tools of Six Sigma to improve existing processes so they can…

Use Forecasting Basics to Predict Future Conditions

Basic terminologies of time series and forecasting can be difficult to understand. There are four basic learning points: The definition of forecasting Forecasting as a business and communicative process (not a statistical tool) General definitions used in forecasting (regardless of statistical tool) The statistical/mathematical techniques Becoming Aware of the Broad View of Forecasting: Overview –…

Assess Opportunities and Risks to Maximize Projects

Black Belts sometimes become so focused on the processes being improved that they lose sight of what is around them. For example, the same improvements resulting in production increases at Station A may create bottlenecks at Station R. Or an improvement in one area may have application in another. The astute Black Belt must be…

Six Sigma Tools and the Eight Keys to Risk Management

Enterprise risk management (ERM), a framework for managing risk across an organization, improves an organization’s ability to accept the right amount of risk to capture strategic opportunities. ERM is made up of eight components, each of which can be supported by the tools and methods of Six Sigma. 1. Internal Environment The business vision, coupled…

Using Fault Tree Analysis to Improve Software Testing

Testing a software product to remove hidden defects is an integral part of the software development life cycle (SDLC). Yet it is well accepted that running a software product through every possible scenario to check for defects is not just difficult, but usually impossible. The enormous cost and huge effort required is simply too much….

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