6.1 Actions To Address Risks And Opportunities

Although risks and opportunities have to be determined and addressed, there is no requirement for a formal, documented risk management process in ISO 9001. You should, however, ensure that your organization has a methodology in place that enables you to effectively identify risks and opportunities with respect to the planning of the QMS.

ISO 9001:2015 ISO 9001:2008 Summary of Changes
6.0 Planning For The Quality Management System 5.4.2 Quality Management System Planning

Title only

6.1 Actions To Address Risks And Opportunities

5.4.2

Quality Management System Planning This is a new requirement that requires a process to be implemented to determine and evaluate applicable risks. The organization will be expected to have an understanding of this requirement and be prepared to explain how they are managed within their quality system.
8.5.3 Preventive Action
6.2 Quality Objectives And Planning To Achieve Them 5.4.1 Quality Objectives This requirement is amended to ensure that quality objectives are relevant to the conformity of products and enhancing customer satisfaction.

Quality objectives should be analyzed to assign resources, identify responsible parties, establish a timeline, and determine evaluation practices.
6.3 Planning Of Changes 5.4.2 Quality Management System Planning This is a new requirement. Organizations should retain documented information relating to planning and implementing changes that impact upon the QMS.

 

Reference to risk-based thinking is present in the following clauses of the standards:

  • Determine and address risks (Clause 4.4.1)
  • Promote risk-based thinking (Clause 5.1.1)
  • Ensure risks determined and addressed (Clause 5.1.2)
  • Determine risks that need to be addressed to achieve intended results (Clause 6.1.1)
  • Plan actions to address risks; integrate into processes; evaluate effectiveness of actions (Clause 6.1.2)
  • Control those risks identified (Clause 8.1)
  • Evaluate effectiveness of actions on risks (Clause 9.1.3)
  • Review effectiveness of actions on risks (Clause 9.3.2)
  • Improve the EHQMS responding to risk (Clause 10.3)

The risks and opportunities should be relevant to the context of your organization (Clause 4.1), as well as any interested parties (Clause 4.2). You should ensure that your organization has applied this risk identification methodology consistently and effectively.

processes to identify risks and opportunities

What process should been developed to identify risks and opportunities?

In the absence of documented processes/procedures, you may need to use observations and interviews (and a review of the process output, which may contain documented evidence) to assess the processes that determine whether or not undocumented processes are being carried out as planned.

External and internal issues, and relevant needs and expectations of relevant interested parties may be sources of risks. Objective evidence may be in the form of a dedicated risk matrix, risks added to other forms such as an aspect register, corrective/preventive action log and forms, etc.

Each of the processes of a QMS do not represent the same level of risk in terms of your organization’s ability to meet its objectives. Due to this reason, the consequences of failures or non-conformities in relation to processes, systems, products and/or services will not be the same for all organizations.

When deciding how to plan and control the QMS, including its component processes and activities, your organization needs to consider both the type and level of risk associated with them. Ensure that your organization is taking a planned approach to addressing risks and realizing opportunities, and that any actions taken have been recorded. Options to address risks and opportunities can include:

  • Avoiding risk
  • Taking risk in order to pursue an opportunity
  • Eliminating the risk source
  • Changing the likelihood or consequences
  • Sharing the risk
  • Retaining risk by informed decision
  • SWOT analysis by the organization as part of its business strategy to identify the external risk and opportunities and action plan to address them
  • Formal business risk assessment performed by the organization talking into consideration its context, associated risk and opportunities and mitigation plan
  • Use of process approach by organization to identify sources of input, activities, output, receiver of output, performance indicators to control and monitor processes, the risks and opportunities associated with them and action plan to address them

Why is Risk Management Important

Why is Risk Management Important?

The concept of risk in the context of ISO 9001:2015 relates to the uncertainty in achieving the objectives of the QMS. Risk will influence every aspect of your organization’s operations and by understanding the risks you face, managing them appropriately will enhance your ability to make better decisions and to achieve your objectives.

Your organization should begin to view the management of risks to its people, assets and all aspects of its operations as an important responsibility. Implement and maintain a risk management process to protect and support your organization’s responsibilities. An effective risk management approach is not only good business practice but provides organizational resilience, confidence and benefits, including:

  • Provides a rigorous decision-making and planning process
  • Provides the flexibility to respond to unexpected threats
  • Takes advantage of opportunities and provides competitive advantage
  • Equips managers with tools to anticipate changes and threats, and to allocate appropriate resources
  • Provides assurance to Top management and stakeholders that critical risks are being managed
  • Enables better business resilience and compliance management

Risk Management Methodology

Risk will influence every aspect of your organization’s operations. Understanding the risks and managing them appropriately will enhance your organization’s ability to make better decisions, safeguard assets, and enhance your ability to provide products and services and to achieve your mission and goals.

By considering risk throughout your organization the likelihood of achieving stated objectives is improved, output is more consistent and customers can be confident that they will receive the expected product or service. Risk-based thinking therefore helps to:

  • Improve customer confidence and satisfaction
  • Assure consistency of quality of goods and services
  • Establishes a proactive culture of prevention and improvement
  • Intuitively take a risk-based approach

We suggest that you use the familiar Plan-Do-Check-Act (PDCA) methodology to manage your organization’s transition to risk-based thinking; using this approach:

PDCA Risk

Risk Management Information

Documented information resulting from risk management activities such as risk management processes, plans and reports, etc. should be maintained or referenced in either a risk management file or other appropriate sources:

  • Design history file
  • Technical file/documentation
  • Device master record
  • Device history record
  • Process validation files

Your organization should consider the benefits of integrating the risk management processes, documents and records directly into your quality management system. The advantage of this could be a single document control system, ease of use and review, accessibility, retention, etc.

Document controls, including document change controls, for risk management system documentation should be the same as the controls for quality management system documentation. This documentation can be in any form or type of medium.

Communication of Risks

Within your quality management system, consideration needs to be given to internal and external communication of risk. Internal communication is necessary for all appropriate personnel to be aware of the remaining risks even after implementing risk control measures.

Outsourced Processes

Your organization might outsource the provision of some processes or the manufacture of components, subassemblies or entire units. In order to maintain control over the processes, your organization should incorporate appropriate risk management activities for these processes and products by planning and by ensuring risk control measures are appropriately applied. Before the approval and implementation of a change to any outsourced process or product, your organization should:

  1. Review the change;
  2. Assess if new risks have been discovered; and,
  3. Determine if current and/or new individual residual risks and/or the overall risk is acceptable according to the predetermined existing acceptability criteria.

If risk control measures are applied to outsourced process or products, the risk control measures and their importance should be documented within the purchasing data or information and clearly communicated to the supplier.

Design & Development

Risk management activities should begin as early as possible in the design and development phase, when it is easier to prevent problems rather than correcting them later.

For each identified hazard, the risk in both normal and fault conditions is estimated. In risk evaluation, you should decide whether risk reduction is needed. The results from this risk evaluation such as the need for risk control measures then become part of the design input.

Risk Registers

While not mandated by ISO 9001:2015 or ISO 14001:2015, risk registers can help identify and record the risks and opportunities facing different areas of the business and identifying risk is a critical step in managing it.

Risk registers will allow your organization to assess the risk in context with the overall context of your organization and will help to record the controls and treatments of those risks. Risk registers can be developed in tiers:

  • Strategic level
  • Operational level
  • Process level

The risk registers or risk logs become essential as it records the identified risks, their severity, and the actions steps to be taken. It can be a simple document, spreadsheet, or a database system, but the most effective format is a table.

A table presents a great deal of information in just a few pages. As the register is a living document, it is important to record the date that risks are identified or modified.

  • Description of the risk
  • Risk Type (business, project, stage)
  • Likelihood of occurrence which provides an assessment on how likely it is that this risk will occur
  • Severity of effect which provides an assessment of the impact that the occurrence of this risk would have on the project
  • Countermeasures and actions taken to prevent, reduce, or transfer the risk. This may include production of contingency plans
  • Risk owner who is responsible for ensuring that risks are appropriately engaged with countermeasures undertaken
  • Current status of whether this is a current risk or if risk can no longer arise and impact
  • Other columns such as quantitative value can also be added
  • Optional dates to include are the target and completion dates

Auditing Risk Management

The primary objective of auditing the risk management process is to provide an assurance framework that underpins the risk management process.

This should include reviews of processes and controls over high risks as determined through the risk planning process. The internal audit function provides independent appraisal of the adequacy and effectiveness of internal controls. Recommendations should be provided, where applicable, for improvements to controls, efficiency and effectiveness of processes.

Risk-based Thinking

Clauses that Promote Risk-based Thinking

Risk-based thinking is probably already part of your organization’s process approach as it forms a key part of preventive action routines. Risk is often thought of only in the negative sense but risk-based thinking can also help to identify opportunities and advantages, this is the positive aspect of risk management.

There are six clauses in ISO 9001:2015 that require your organization to consider risk:

  1. Clause 4.4.1 requires your organization to determine the risks which can affect its ability to meet the system objectives. Risk-based thinking means considering risk quantitatively as well as qualitatively, depending on the business context.
  2. Clauses 5.1.1 and 5.1.2 require Top management to demonstrate leadership and commit to ensuring that risks and opportunities that can affect the conformity of a product or service are determined and addressed.
  3. Clauses 6.1.1 and 6.1.2 each require your organization take action to identify risks and opportunities, and plan how to address the identified risks and opportunities.
  4. Clause 8 requires your organization to plan, implement and control its processes to address the actions identified in Clause 6.
  5. Clause 9 requires your organization to monitor, measure, analyze and evaluate the risks and opportunities.
  6. Clause 10 requires your organization to improve by responding to changes in risk.

The adoption of risk-based thinking will, over time, improve customer confidence and satisfaction by assuring the consistency of the quality of goods and services brought on by establishing a culture of prevention and improvement.

Risk Evaluation Process

Risk evaluation should become embedded into your organization’s day-to-day operations and should be undertaken at all levels throughout your organization.

The overall aim of risk evaluation is to ensure that organizational capabilities and resources are employed in an efficient and effective manner to manage opportunities and threats.

Risk evaluation can be represented as a seven step, cyclical process:

PDCA Risk

Step 1: Planning

Your organization should develop and document a plan that briefly describes how and when risk, in the form of strengths, weaknesses, opportunities and threats, will be assessed, and who will be involved. This should reflect the scope (including its complexity, interfaces, etc.), policies and objectives.

Step 2: Identification

In this step, your organization should systematically identify those risks associated with the scope of the process that could significantly affect the achievement of objectives and product conformity.

Risk identification should be carried out with the full involvement of the relevant parties to ensure the relevant perspectives and expertise should be represented (e.g. appropriately qualified representatives from various functions, contractors, stakeholders, suppliers and specialists as appropriate.

Risk identification involves the relationship between your organization and the broader, external environment or community.

A range of issues should be considered in examining the strategic content, including:

  • Opportunities and threats associated with the local, regional, state and global economic, social, political, cultural, environmental, regulatory and competitive environments
  • Key thrusts of stakeholder strategies
  • Strengths and weaknesses of in attaining objectives

Operational risk identification involves gaining an understanding of the organisation’s capabilities, goals, objectives, strengths and weaknesses by considering:

  • Organisational structure and culture
  • Geographical/demographical
  • The identity and nature of interaction with key internal or external stakeholders
  • The existence of any operational constraints
  • Objectives and key performance indicators
  • Business resilience vulnerabilities
  • Relevant issues relating to recent change management risk, performance or audit reviews
  • Relevant stakeholder community concerns or requirements
  • Regulatory and contractual requirements and constraints
  • Quality management systems

Step 3: Assessment

Having identified all hazards and associated risks which could impact on occupational health and safety, the process of rating the risks for significance can be carried out.

This crucial process, together with a thorough knowledge of legal and other similar requirements, provide the foundations of the management system.

This assessment process is vital in determining the need for controls aimed at either reducing risk to levels deemed to be tolerable or meeting the requirements of legislation.

The significance level (or risk rating) should then be used to prioritise actions.

Remember that the importance of this process cannot be overestimated. If you get this process wrong, the whole system will be suspect.

The assessment of the severity of a risk should drive management attention and supports the planning for risk mitigation. Quantitative risk assessments (QRA) can be undertaken to provide an improved understanding of the risk profile and derive a more detailed understanding of certain cost and time risks. The output of QRA can also support decision making and monitoring of risk management activities.

Step 4: Response

For each risk, the risk owner must establish an appropriate level of mitigation. Control measures in addition to those already existing may be needed to achieve this level of mitigation.

When a response action is completed, the risk should be reassessed (i.e. repeat Step 3) to reflect any newly introduced existing control measure.

Step 5: Review

Regular review and challenge is essential to ensure that risks are being appropriately managed, and that the risk data remains accurate and reliable, reflecting any changes in circumstances or management activities.

Step 6: Reporting

Regular reports are necessary to inform and provide assurance to Top management and other key stakeholders, that risks are being appropriately managed. Reporting must be based on current process data, which must be updated and reviewed in good time for the reporting cycle (see Step 5 above).

On occasion, it may be appropriate to escalate a risk to ensure it is assessed and/or managed by the person or party best placed to do so (able and with appropriate authority). For example, where a more substantial or coordinated response is required than the current owner can authorise or implement, or where the risk severity or its effects on the wider project justify higher level assessment and/or management.

Step 7: Monitoring

Continuous systematic and formal monitoring of implementation of the risk process and outputs will take place against appropriate performance indicators to ensure process compliance and effectiveness. Monitoring may take a variety of forms and range from self-assessment and internal audit to detailed reviews by independent external experts.

 

ISO 9001 Clauses - PLAN

 

Updated: 15th October 2019
Author: Richard Keen

Richard Keen

Richard Keen

Richard is our Compliance Director, responsible for content & product development.
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