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Quantifying a Reduction in Risk

Six Sigma – iSixSigma Forums Old Forums General Quantifying a Reduction in Risk

This topic contains 4 replies, has 5 voices, and was last updated by  John Jay Fopalan 14 years, 2 months ago.

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  • #40170

    Scott
    Member

    The major outcome of a current project will be to reduce the company’s exposure to uninsured risk posed by contractors. Any suggestions on how to quantify the reduction in risk? 

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    #124028

    Paul Gibbons
    Participant

    All risk can be assessed using likelihood and severity. You need to ask:
    What is the likelihood of the company being exposed to uninsured risk?
    then, multiply it by
    The severity if the exposure was to occur?
    You then look at either reducing the likelihood and/or severity to reduce the overall risk.
    Not sure if this is what you meant but it may help.
    You could try and get two independent risk assessments made and test them for significance to see if they are accurate. If they are significantly different then the risk assessments are not accurate. This is just an idea that I have not tested yet.
    Good luck
    Paul

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    #124464

    Harald Vegstein
    Participant

    Hi,
    As a risk management proffessional, I would address your risk assessment by doing a initial brain storming / HAZARD Identification – i.e. map out all your major unisured risks and their ass. consequences together with their estimated frequency (e.g. 1/100 yr, 1/1000 yr 1/10000 yr). Then, together with your team, you categorize as acceptable, ALARP Region (as low as reasonalbly practicable) or unacceptable (i.e. create a Risk Matrix).
    Subsequently, you could refine your analysis by looking into frequency of occurence and consequences in more detail, reduce your risk by mitigating the risk by reducing probabilities of occurence (e.g. by doing practical safety implemetation), implement consequence reducing measures (e.g. if not insured for lasting power failure (data loss) consider emergecy generator) or alt. buy  insurance.
    From the aggregated picuture you get, you will easily addrees your risk reduction by showing effect of different measures.
    Best regards,
    Harald

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    #124467

    franz
    Participant

    Hello all,
    You may find useful to use the FMEA template to put together all the severity/frequency/detectability analysis, the RPN computation and the corrective actions you should put in place to address the major risks. On top of that, this tool is very easy to use with teams, operators and all the “non-experts” people, which is key in this kind of issues.
    Hope this helps.
    Franz
     

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    #124472

    John Jay Fopalan
    Participant

    Hi….
    Try using FMEA and asses the risk using its RPN.
    By doing so, you can prioritize gray areas to focus and analyzed.
    Focus on items with higher RPNs..
     
     

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