IATF 16949 Risk Assessment will help you address potential risks and identify opportunities. IATF standard requires businesses to understand the potential of identified risks deeply and to mitigate or minimize them.

What is IATF 16949 Risk Assessment and Risk Analysis?

It is the process of identifying the risks and evaluating the potential of the impact that could occur due to those risks and designing the strategies to mitigate such risks by analyzing them.

After risk analysis has been done, one needs to manage the risks as soon as possible by performing following steps sequence wise:

  1. Identification of potential risks that are existing in the system
  2. Analyzing those potential risk that is being identified
  3. Rank the analyzed risks
  4. Treat the ranked risks and devise a plan to mitigate and eliminate them
  5. Monitor and review the risk management plan
  6. Periodically review your risk management plan with a cross-functional team

Criteria of Risk Evaluation

There are two criteria for evaluating the potential risks that exist in any organization, which is:

  1. Based on Severity: How serious is the potential risks
  2. Based on Probability: Probability of the occurring risks

Risk-Based Approach in IATF 16949

IATF 16949 Risk Assessment includes several clauses related to Risk. After the identification of risks, one must have to determine the likelihood of failure, along with the implementation of industry best practices to establish a safer workplace to work by mitigating all the identified risks. To implement a risk-free environment, the support of top management is a crying need of the modern era. Here are the ways how senior management can support team to set up a risk-free workplace.

  1. To execute reviews of contingency plans
  2. To motivate process owners
  3. To escalate process safety wherever possible
  4. To ensure the accomplishment of performance of customer targets and all quality objectives
  5. To implement the responsibility for corporate initiatives

IATF 16949 Clause 6.1: Actions to address risks and opportunities

Clause 6.1 addresses the risks and opportunities when the QMS (Quality Management System) has been planned. Find the details below about clause 6 of IATF 16949, that states about risk management.

Clause 6.1.2.1: Risk Analysis

Any learning from a product recall, risk analysis, observations, or non-conformities from previous audit reports, consumer complaints, and the outcomes of risk analysis reports. Risk analysis should be teamwork and must work to identify risks and should devise a risk mitigation plan. Risk assessor team should periodically review the risk mitigation implementation plan and must evaluate the effectiveness of risk mitigation plan.

Clause 6.1.2.2: Prevention Action

The process of devising preventive action plan is to lessen the negative impact of risk and to allow appropriate severity of potential identified risks, learning from lessons of product recalls, consumer complaints or customer feedback or any safety incident happened in the past. Preventive actions are aligned with QMS planning or re-engineered QMS.

Clause 6.1.2.3: Contingency Plans

IATF 16949 Risk Assessment provides a systematic approach for risk.  IATF 16949 Risk Assessment helps you define and prepares contingency plans with a process for notification to the customer or any other interested parties. Identifying and evaluating risks related to manufacturing processes or any particular risk identified from an external source (external fire or in case of natural disasters) should be addressed and mitigated correctly. Contingency plan requirement has been made to align with the QMS plan.

Other Clauses for Risk Management

  1. Clause 7.1: Resources
  2. Clause 7.2: Competence
  3. Clause 7.3: Awareness
  4. Clause 8.3: Design and Development
  5. Clause 8.4: Control of External Providers

IATF 16949 Risk Assessment Tools

Tools that are used for risk management are:

The spectrum of Businesses that IATF 16949 Covers

The requirements of IATF spreads to the following type of businesses:

  1. Automobile manufacturers
  2. Automotive part designers and manufacturers
  3. The quality management industry of automobile industries
  4. The distribution centers of Automobile parts
  5. The design centers of Automobile parts

Change Management in IATF 16949

While implementing risk mitigation plan, there is a probability that many changes will come in your way, and it is essential to manage such changes in IATF 16949 Risk Assessment accordingly.

  1. Change may occur in existing operations to assess manufacturing feasibility.
  2. Initial product design approval after evaluating design changes
  3. Control plan for transition may exist, and it may affect the final product, manufacturing processes, lab procedures, a mode of measurement, logistics, and supply chain, the volume of production changes or analysis of risks.
  4. Periodic frequency of internal audits
  5. Based on consumer feedback

Consequences of Poor Risk Management

IATF 16949 Risk Assessment and Risk Management, Risk Management, and Risk Management! Why so much hype?

What if businesses ignore to manage risk?

How adverse is the impact of poor risk management on a business?

Let’s burst some fallacies regarding risk management.

Delayed Projects

Unexpected risks or in other words “Unassessed risks” can result in missed project deadlines because then you need to understand how to minimize such risks and lose your track from main project activities.

Projects Being Overspent

Managing risks sometimes cost money too and leads to an overspent budget on project completion. Isn’t it better to identify such dangers before project initiation and mitigating them before they make any negative impact on your project successful completion? Of course, it is!

Not so Happy Clients

Trust us. Clients would never prefer to invest in the high-risk environment at all. Businesses should be wise enough to devise a Plan B in case of an emergency in the form of a contingency plan. It is of vital importance to report on potential risks and convey a mitigation plan to clients to mark up to their satisfaction levels.

Reputation on Stake

With such a highly risky environment, project completion status would always remain shaky. Clients would never prefer to invest in businesses that have a risky situation.

Project Failure

Imagine the worst case scenario! Complete project failure can occur due to the involvement of high potential risks. It may lead to complete project failure, which means you won’t be able to deliver anything on the project.