Risk &

Opportunity
Analysis
(ISO 9001:2015)
By: Ghiru
RISK ASSESMENT

• Systematic Investigation & Analysis of potential risk

• To assign severities of probabilities & consequences
• Rate the risk to prioritize action proportionate to potential
impact

By: Ghiru
RISK & Opportunity
Analysis
• Business processes in Quality Management System
 Sales & Marketing
 Purchasing / External Providers
 Production
 Warehousing & Logistics
 Quality Control
 Document Control
 Human Resources

• Manufacturing Processes
 As in Control Plan / Process Flow Chart

By: Ghiru
RISK & Opportunity
Analysis

• External & Internal issues

• Interested Parties Requirement

By: Ghiru
Step 1: Choose Risk & Analysis
Tool
• Various analysis tools are available
 FMEA
 SWOT
 HIRARC
 Others

By: Ghiru
Business Risk & opportunity Analysis

New Actions to handle

Identifying current
the risk that has high
Risk & Control
score

Process &
Function of
By: Ghiru
the process
Step 2: Define Ranking Method

• Develop Severity and probability rating scores

• Develop Risk Matrix & define rating to take action

By: Ghiru
Severity Table
Severity Situation Rating
Risk or Opportunity that if not addressed, may cause the Organization to cease
Disastrous
bankrupt 5
Risk or Opportunity that if not addressed, may :-
 Seriously affecting the organization's reputation & credibility
Major  May cause lost of future customers
 A loss of about ½ year revenue
4
 Causing the production to shut down for 10 days or more

Risk or Opportunity that if not addressed, may :-

 Affecting the organization image / function / requirement
Serious  May completely loss the customer
 A loss of about ¼ year revenue
3
 Causing the production to shut down for 5 ~ 9 days

Risk or Opportunity that if not addressed, may :-

 Slightly impacting the organization image / function / requirement
Moderate  Required explanation to the affected interested parties
 May cause revenue loss of RM10K ~ 50K
2
 Causing the production to stop for 1 ~ 3 days

Risk or Opportunity that if not addressed, may :-

Minor
By: Ghiru  Causing discomfort to the interested parties
 Causing the production stop less than 24 hrs.
1
Probability Table
Probability Situation Rating
• Risk that has occurred based on previous record in the organization
Very Likely • Opportunity that has been adopted and proven with beneficial result 5
• Risk that has not occurred in the Organization but based on previous record in similar
industry or competitor
Possible
• Opportunity that has not been adopted by the Organization but has been adopted by
4
similar industry or competitor with proven good result
• Risk that may occur if situation is not properly managed due to carelessness,
Likely ignorance or inexperience 3
• Opportunity that may be implemented but with intangible beneficial result

• Risk that has not been known to occur after many years
Remote • Opportunity that might not be viable due to requirement of high capability and 2
investment for implementation

Unlikely Almost not possible to happen or implement 1

By: Ghiru
Risk Matrix
Severity
Probability of
1 2 3 4 5
Occurrence
5 5 10 15 20 25
4 4 8 12 16 20
3 3 6 9 12 15
2 2 4 6 8 10
1 1 2 3 4 5

By: Ghiru
Trigger Level
RISK LEVEL GUIDELINES FOR ACTION
• Immediate intervention from the top management is needed to
HIGH ensure that a concrete controls is in place to avoid occurrence
[15~ 25 Points] • Control established must be able to reduce the Risk to at least
Medium Level
• For 10 points and above, must be given with additional control to
reduce the risk level
MEDIUM • For below 10 points additional control may be taken if there are any
[5~12 Points] opportunity to do so
• Medium Risks shall be reviewed periodically to ensure that they are
not turned into High Risk
• Not compulsory to have additional control but it may be done
voluntary
LOW • Shall be reviewed regularly to ensure that they are not turned into
[1~4 Points] High Risk
• Reduce the risk to as low as possible & practical

By: Ghiru
Step 3: Define The interested
Parties, Their need & expectation

By: Ghiru
  Complying to International
Standards
 Implement & Maintain ISO
Certifications
 Business continuation
 Good payment terms

 Quality & Reliability of Product

 On time delivery of the parts
 Effective communication & Good
CAR handling practices
 Fulfill legal & safety requirement
 Reasonable product cost &
dependable services

 Salary on Time
 Taken care of the welfare

 Complying to legal requirement

 Profitable business
 Maintaining business licenses

 No pollution or Public
nuisance
By: Ghiru
Step 4 : Identify process

By: Ghiru
Step 5 : Carry out Risk &
Opportunity Analysis

 Carry out for identified processes

 Include interested parties expectation
 Include past experience

By: Ghiru
By: Ghiru