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Quality

Risk Management
LINK TO QUALITY RISK
Opportunities to impact
Design risk using quality risk
management
Process

Materials Manufacturing/
Service
Facilities
Delivery

Customer

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Research
Planning
Phase
Trial
Phases End of
life cycle
Launch
Implementation

Quality

Efficacy
Quality
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What does it mean?
What is it worth?
Where does it lead?

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 Understand and influence the factors (hazards)
which impact regulators and industry business
 Create awareness and a culture
 Supports an effective pro-active behaviour
 Open factual dialogue
 Make decisions traceable and consistent

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 Provide assurance
 Risks are adequately managed
 Compliance to external and internal requirements
 Recognise risks at a desired level
 Zero risk not possible

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Empowerment & Flexibility
• An appropriate integrated approach
helps to meet requirements more efficiently

Proactive Quality Improve


communication
disclosure Risk through sharing best
build trust and
understanding Management practice and science
based knowledge

Master complexity
Convert data into knowledge
e.g. by using methodology and tools
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Different meaning of risk
Individual
 Risk is a cognitive and emotional response to expected
loss
 Risk is usually based on the expected value of the
conditional probability of the event occurring multiplied
by the consequences of the event given that it has
occurred
 Combination of the probability of occurrence of harm and
the severity of that harm

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Different meaning of risk
 Organizations might use many different meanings of risk
 Depending on the type of risk management program

 In general, "probability" and "severity" must be considered


 In a given program definitions will fine-tune the concepts
so that a risk management program can be created
and applied
 Make the detail in the definition fit the objective
of the program

 Accept the different "realities" among the stakeholders


 Harmonized guidance needs to focus concepts
into useful terms for the purpose (e.g. protection of Customer)

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Severity and Probability are simple concepts?
 Which consequence is more severe?
 300 lives lost in single, fiery plane crash.
 300 lives lost on roads over a weekend.
 300 lives potentially lost from cancer within the next 20 years

 Which probability is probable?


What does a “30% chance of rain tomorrow” mean?
 30% of the days like tomorrow will have at least a trace of rain.
 30% of the area will have rain tomorrow.
 30% of the time tomorrow, it will rain.

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Concerns regarding QRM
Hiding risks
 Writing half the truth (e.g. in an investigation report)
 A means of removing industry’s obligation to comply with
regulatory requirements
 Both Companies & Inspectors have to think and not
simply follow black and white rules

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What happens to regulatory expectations
when things go wrong? What if
disaster happens?
Consequences

Prior use of QRM may


lower the consequences
Nowadays
QRM

Using QRM

Quality management as function of time

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 The weakest link in the chain will no
longer be a problem

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Integrate QRM during product life cycle
Gain experience
Analyse root cause: (Risk of) Failure ?
Continuous Manufacture
improvement Quality Risk for market
Management
(QRM)
Improve it Do, what you say

Update Approval
documentation
Say, what you do

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Hazard – Definition
 A hazard is defined as a condition or an object with the potential to
cause injuries to personnel, damage to equipment or structures, loss
of material, or reduction of ability to perform a prescribed function
(ICAO DOC (9859)

 Wet Surface
 Open Manhole
 Outdated Documentation
 Unskilled Workforce

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FIRST FUNDAMENTAL —
UNDERSTANDING HAZARDS
 Hazards Are Latent in Nature
 Difficult to Identify
 Confusing to Define
 Outdated Documentation is a one hazard, Resulting in Wrong
Implementation is a consequence. (avoid the tendency to
describe the consequence as hazard)

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Hazard Types
 Natural Hazard
 Hurricanes
 Icing Conditions

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Hazard Types
 Technical Hazard
 Movement of Flight Controls on Ground
 Tyre Bust on Ground

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Hazard Types
 Economic Hazard
 Volatile Fuel Prices
 Terrorism

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Natural Hazard
 Natural hazards are a consequence of the habitat or
environment within which operations related to the
provision of services take place. Examples of natural
hazards include:
 severe weather or climatic events (e.g. hurricanes, winter
storms, droughts, tornadoes, thunderstorms, lighting and wind
shear);
 Adverse weather conditions (e.g. icing, freezing precipitation,
heavy rain, snow, winds and restrictions on visibility);

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Natural Hazard
 Natural hazards are a consequence of the habitat or
environment within which operations related to the
provision of services take place. Examples of natural
hazards include:
 geophysical events (e.g. earthquakes, volcanoes, tsunamis,
floods and landslides);
 geographical conditions (e.g. adverse terrain or large bodies of
water);

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Natural Hazard
 Natural hazards are a consequence of the habitat or
environment within which operations related to the
provision of services take place. Examples of natural
hazards include:
 environmental events (e.g. wildfires, wildlife activity, and insect
or pest infestation); and/or
 public health events (e.g. epidemics of influenza or other
diseases).

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Technical hazards
 Technical hazards are a result of energy sources
(electricity, fuel, hydraulic pressure, pneumatic pressure
and so on) or Quality-critical functions (potential for
hardware failures, software glitches, warnings and so on)
necessary for operations related to the delivery of
services.

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Technical Hazard
 Examples of technical hazards include deficiencies
regarding:
 aircraft and aircraft components, systems, subsystems and
related equipment;
 an organization’s facilities, tools and related equipment; and/or
 facilities, systems, subsystems and related equipment that are
external to the organization.

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Economic hazards
 Economic hazards are the consequence of the socio-
political environment within which operations related to
the provision of services take place. Examples of
economic hazards include:
 growth;
 recession; and
 cost of material or equipment.

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SECOND FUNDAMENTAL
HAZARD IDENTIFICATION

 Examples of the scope of factors and processes that


should be looked into when engaging in hazard
identification include:
 design factors, including equipment and task design;
 procedures and operating practices, including their
documentation and checklists, and their validation under actual
operating conditions;

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SECOND FUNDAMENTAL
HAZARD IDENTIFICATION
 Examples of the scope of factors and processes that should be
looked into when engaging in hazard identification include:
 communications, including means, terminology and language;
 personnel factors, such as company policies for recruitment,
training, remuneration and allocation of resources;
 organizational factors, such as the compatibility of production
and Quality goals, the allocation of resources, operating
pressures and the corporate Quality culture;

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Second Fundamental
Hazard Identification
 work environment factors, such as ambient noise and
vibration, temperature, lighting and the availability of
protective equipment and clothing;
 regulatory oversight factors, including the applicability
and enforceability of regulations; the certification of
equipment, personnel and procedures; and the
adequacy of oversight;

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Second Fundamental
Hazard Identification
 defenses, including such factors as the provision of
adequate detection and warning systems, the error
tolerance of equipment and the resilience of equipment
to errors and failures; and
 human performance, restricted to medical conditions and
physical limitations.

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Internal Sources of Hazard Identification
 Flight data analysis; - FDR & CVR
 Company voluntary reporting system; Confidential
Reporting
 Quality surveys; - Annual Surveys
 Quality audits; - Periodic Quality Audit

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Internal Sources of Hazard Identification
 Normal operations monitoring schemes; - LOSA, QA
 Trend analysis; - MIS
 Feedback from training; and – Simulator Statistics
 Investigation and follow-up of incidents – Incident
Investigation

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External sources of hazard identification
 Examples of external sources of hazard identification
available to an organization include:
 Accident reports; - Other Airlines Accident Investigation Reports
 State mandatory occurrence reporting system; - MORs
 State voluntary reporting system; - Routine Info Exchange with
Regulators
 State oversight audits; – Annual Quality Audits By CAA
 Information exchange systems. – STEADS & GSIC

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Triggers of Hazard Identification
 These three conditions should trigger more in-depth and
far-reaching hazard identification activities and include
 Any time the organization experiences an unexplained increase
in Quality-related events or regulatory infractions; - Increase Bird
Strike or Un-stabilized Approaches

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Triggers of Hazard Identification
 These three conditions should trigger more in-depth and
far-reaching hazard identification activities and include
 Any time major operational changes are foreseen, including
changes to key personnel or other major equipment or systems;
- Fleet Upgrade
 Before and during periods of significant organizational – Merger
& Acquisition

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THIRD FUNDAMENTAL — HAZARD ANALYSIS

 Hazard identification is a wasted exercise unless Quality


information is extracted from the data collected.

 The first step in developing Quality information is hazard


analysis.

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Hazard Identification and Analysis
 Hazard analysis is, in essence, a three-step process:

 a) First step. Identify the generic hazard (also known as


top level hazard, or TLH).

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Hazard Identification and Analysis
 Generic hazard, in the context , is used as a term that
intends to provide focus and perspective on a Quality
issue, while also helping to simplify the tracking and
classification of many individual hazards flowing from the
generic hazard.

 Airport Construction

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Hazard Identification and Analysis
 Second step. Break down the generic hazard into
specific hazards or components of the generic hazard.
Each specific hazard will likely have a different and
unique set of causal factors, thus making each specific
hazard different and unique in nature.
 construction equipment
 closed taxiways, etc.

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Hazard Identification and Analysis
 Third step. Link specific hazards to potentially specific
consequences, i.e. specific events or outcome
 aircraft colliding with construction equipment (construction
equipment)
 aircraft taking off into the wrong taxiway (closed taxiways), etc

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Fourth Fundamental — Documentation Of Hazards

 Hazards typically perpetuate in a system and deliver


their damaging potential mainly because of the absence
or ineffectiveness of hazard identification. Lack of hazard
identification is often the result of:
 not thinking about operational conditions with the potential to
unleash the damaging potential of hazards;
 not knowing about operational conditions with the potential to
unleash the damaging potential of hazards

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Documentation Of Hazards
 unwillingness to consider or investigate operational
conditions with the potential to unleash the damaging
potential of hazards; and
 unwillingness to spend money to investigate operational
conditions with the potential to unleash the damaging
potential of hazards.

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Documentation Of Hazards

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Hazard – Documentation
 Appropriate documentation management regarding
hazard identification is important as a formal procedure
to translate raw operational Quality information into
hazard-related knowledge
 Continuous compilation and formal management of this
hazard-related knowledge becomes the “Quality library”
of an organization

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Hazard – Standardization
 Definitions of terms used;
 Understanding of terms used;
 Validation of Quality information collected;
 Reporting (i.e. what the organization expects);
 Measurement of Quality information collected; and
 Management of Quality information collected.

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Quality Information Analysis
 Analysis is the process of organizing facts using specific
methods, tools or techniques. Among other purposes, it
may be used to:
 Assist in deciding what additional facts are needed;
 Ascertain factors underlying Quality deficiencies; and
 Assist in reaching valid conclusions.

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Quality Information Analysis - Challenges
 Consideration needs to be given to all relevant
information; however, not all Quality information is
reliable
 Absence of Historic Data does not rule-out Presence of Hazards
 Time constraints do not always permit the collection and
evaluation of sufficient information to ensure objectivity.
Intuitive conclusions may sometimes be reached which
are not consistent with the objectivity required for
credible Quality analysis.

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Quality Information Analysis - Challenges
 Humans are subject to some level of bias in judgment.
Past experience will often influence judgment, as well as
creativity, in establishing hypotheses. One of the most
frequent forms of judgment error is known as
“confirmation bias”. is the tendency to seek and retain
information that confirms what one already believes to
be true. (we used to do this in XXX Airlines)

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Hazard Identification – Analytical Methods and Tools

 Statistical Analysis
 Number of Accident per Million
 Trend Analysis
 Increase in Emergency Chute Deployment
 Normative Comparisons
 Gap Analysis

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Hazard Identification – Analytical Methods and Tools

 Simulations and Testing


 Training Exercises
 Expert Panel
 Trade Organisation
 Cost Benefit Analysis -

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Quality Risk Management – Cost/Benefit
 Direct Cost
 Indirect Cost
 Loss of Business
 Loss of Use of Equipment
 Loss of Human Productivity
 Investigation and Clean-up
 Insurance Deductable
 Legal Action and Damage Claims
 Penalties and Citation

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Subjective Nature of Cost Benefit Analysis
 Managerial. Is the Quality risk consistent with the
organization’s Quality policy and objectives?
 Legal. Is the Quality risk in conformance with current
regulatory standards and enforcement capabilities?
 Cultural. How will the organization’s personnel and other
stakeholders view the Quality risk?

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First Fundamental — Quality Risk Management

 Market. Will the organization’s competitiveness and well-


being vis-à-vis other organizations be compromised by
the Quality risk?
 Political. Will there be a political price to pay for not
addressing the Quality risk?
 Public. How influential will the media or special interest
groups be in affecting public opinion regarding the
Quality risk?

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Second Fundamental — Quality Risk Probability

 Quality risk probability is defined as the likelihood that an


unsafe event or condition might occur.
 The Probability of Rain, Snow
 The Probability of Engine Failure
 The Probability of Accident

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The Framework for Identifying Probability
 Is there a history of similar occurrences to the one under
consideration, or is this an isolated occurrence?
 What other equipment or components of the same type
might have similar defects?
 How many personnel are following, or are subject to, the
procedures in question?

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The Framework for Identifying Probability
 What percentage of the time is the suspect equipment or
the questionable procedure in use?
 To what extent are there organizational, management or
regulatory implications that might reflect larger threats to
public Quality?

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Predictability and Quality Library
 In assessing the likelihood of the probability that an
unsafe event or condition might occur, reference to
historical data contained in the “Quality library” of the
organization is paramount in order to make informed
decisions.
 It follows that an organization which does not have a
“Quality library” can only make probability assessments
based, at best, on industry trends and, at worst, on
opinion

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Probability

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Third Fundamental — Quality Risk Severity
 Quality risk severity is defined as the possible
consequences of an unsafe event or condition, taking as
reference the worst foreseeable situation
 The Cost of An Accident
 The Cost of Ground Incident
 The Cost of Mishandled Baggage

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Risk Severity Questions
 How many lives may be lost (employees, passengers,
bystanders and the general public)?
 What is the likely extent of property or financial damage
(direct property loss to the operator, damage
 to aviation infrastructure, third-party collateral damage,
financial and economic impact for the State)?

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Risk Severity Questions
 What is the likelihood of environmental impact (spillage
of fuel or other hazardous product, and physical
disruption of the natural habitat)?
 What are the likely political implications and/or media
interest?

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Fourth Fundamental — Quality Risk Tolerability

 The Quality risk of the consequences of the hazard is


unacceptable. The organization must:
 Allocate resources to reduce the exposure to the consequences
of the hazards;
 Allocate resources to reduce the magnitude or the damaging
potential of the consequences of the hazards; or
 Cancel the operation if mitigation is not possible.

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Severity

Source ICAO

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Risk Tolerability
 Multiplying the Probability Risk Rating by the Impact Risk Rating
provides the overall Risk Tolerability for that stage of the analysis.

 Tolerability = PRR x SRR


 PRR – Probability Risk Rating
 SRR – Severity Risk Rating

Risk Factor Values range from 1 To 25

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Risk Tolerability Assessment

Unacceptable Action Required No Action Required Source ICAO

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Fifth Fundamental
Quality Risk Control/Mitigation
 Avoidance

 Reduction

 Segregation of Exposure

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Avoidance
 Avoidance. The operation or activity is cancelled
because Quality risks exceed the benefits of continuing
the operation or activity. Examples of avoidance
strategies include:
1. operations into an aerodrome surrounded by complex
geography and without the necessary aids are
cancelled;
2. operations in RVSM airspace by non-RVSM equipped
aircraft are cancelled.

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Reduction
 Reduction. The frequency of the operation or activity is
reduced, or action is taken to reduce the magnitude of
the consequences of the accepted risks. Examples of
reduction strategies include:
 Operations into an aerodrome surrounded by complex
geography and without the necessary aids are limited to
daytime, visual conditions;
 Operations by non-RVSM equipped aircraft are conducted above
or below RVSM airspace.

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Segregation
 Segregation of exposure. Action is taken to isolate the
effects of the consequences of the hazard or build in
redundancy to protect against them. Examples of
strategies based on segregation of exposure include:
 Operations into an aerodrome surrounded by complex
geography and without the necessary aids are limited to aircraft
with specific performance navigation capabilities;
 Non-RVSM equipped aircraft are not allowed to operate into
RVSM airspace.

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Risk Mitigation
 Effectiveness  Enforceability
 Cost/Benefits  Durability
 Practicability  Residual Quality Risk
 Challenge  New Risks/Problems
 Acceptability of Each
Stakeholder

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Effectiveness
 Effectiveness. Will it reduce or eliminate the Quality risks
of the consequences of the unsafe event or condition?
To what extent do alternatives mitigate such Quality
risks? Effectiveness can be viewed as being somewhere
along a continuum,
 Engineering Mitigation
 Control Mitigation
 Personnel Mitigation

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Engineering mitigations
 Engineering mitigations. This mitigation eliminates the
Quality risk of the consequences of the unsafe event or
condition, for example, by providing interlocks to prevent
thrust reverser activation in flight

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Control mitigations
 This mitigation accepts the Quality risk of the
consequences of the unsafe event or condition but
adjusts the system to mitigate such Quality risk by
reducing it to a manageable level, for example, by
imposing more restrictive operating conditions.
 Both engineering and control mitigations are considered
“hard” mitigations, since they do not rely on flawless
human performance.

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Personnel mitigations.
 This mitigation accepts that engineering and/or control
mitigations are neither efficient nor effective, so
personnel must be taught how to cope with the Quality
risk of the consequences of the hazard
 for example, by adding warnings, revised checklists, SOPs
and/or extra training. Personnel mitigations are considered “soft
actions”, since they rely on flawless human performance.

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Mitigation
 Cost/benefit. Do the perceived benefits of the mitigation
outweigh the costs? Will the potential gains be
proportional to the impact of the change required? -
 Reinforced Cockpit Door (it cost USD 76000 Per Door)
 Practicality. Is the mitigation practical and appropriate in
terms of available technology, financial feasibility,
administrative feasibility, governing legislation and
regulations, political will, etc.?
 Multiple Redundant Systems

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Mitigation
 Challenge. Can the mitigation withstand critical scrutiny
from all stakeholders (employees, managers,
stockholders/State administrations, etc.)?
 Strip Search
 Acceptability to each stakeholder. How much buy-in (or
resistance) from stakeholders can be expected?
(Discussions with stakeholders during the Quality risk
assessment phase may indicate their preferred risk
mitigation option.)
 Full Body Scanners

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Mitigation
 Enforceability. If new rules (SOPs, regulations, etc.) are
implemented, are they enforceable?
 Hand Baggage Allowance for Code Share Flights
 Durability. Will the mitigation withstand the test of time?
Will it be of temporary benefit or will it have long-term
utility?
 Screening Bags before Check-in

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Mitigation
 Residual Quality risks. After the mitigation has been
implemented, what will be the residual Quality risks
relative to the original hazard? What is the ability to
mitigate any residual Quality risks?
 Airbags in the Car
 New problems. What new problems or new (perhaps
worse) Quality risks will be introduced by the proposed
mitigation?
 Reinforced Cockpit Door in case dual incapacitation

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Mitigation Challenges

 it is important to determine why new defenses are


necessary or why existing ones must be reinforced
a) Do defenses to protect against the Quality risks of the
consequences of the hazards exist?
b) Do defenses function as intended?
c) Are the defenses practical for use under actual working
conditions?
d) Are staff involved aware of the Quality risks of the
consequences of the hazards, and the defenses in place?
e) Are additional Quality risk mitigation/control measures required?

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Quality Risk Mitigation Process

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Quality Risk Mitigation Process
 the effectiveness and efficiency of the mitigation/control
strategies must be confirmed. The fourth step in the
Quality risk mitigation/control process is accepting the
mitigation of the Quality risk
 Does the mitigation address the Quality risks?
 Is the mitigation effective?
 Is the mitigation appropriate?
 Is additional or different mitigation warranted?
 Do the mitigation strategies generate additional risks?.

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Quality Risk - Challenges
 There is no such thing as absolute Quality — in aviation
it is not possible to eliminate all Quality risks.
 Quality risks must be managed to a level “as low as
reasonably practicable” (ALARP).
 Quality risk mitigation must be balanced against:
 Time;
 Cost; and
 The difficulty of taking measures to reduce or eliminate the
Quality risk (i.e. managed).

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Quality Risk Challenges
 Effective Quality risk management seeks to maximize
the benefits of accepting a Quality risk (most frequently,
a reduction in either time and/or cost in the delivery of
the service) while minimizing the Quality risk itself.
 The rationale for Quality risk decisions must be
communicated to the stakeholders affected by them, to
gain their acceptance.

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Quality Risk Management Process

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Unacceptable Risks
 Can the Quality risk(s) be eliminated? If the answer is
yes, then action as appropriate is taken and feedback to
the Quality library established. If the answer is no, the
next question is:
 Can the Quality risk(s) be mitigated? If the answer is no,
the operation must be cancelled. If the answer is yes,
mitigation action as appropriate is taken and the next
question is:

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Unacceptable Risks
 Can the residual Quality risk be accepted? If the answer
is yes, then action is taken (if necessary) and feedback
to the Quality library established. If the answer is no, the
operation must be cancelled.

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QRM may help to define acceptable quality levels

Use
“science-based” and
“risk-based” behavior

 Not every single detail can nor should be covered by


 Specifications (product quality)
 Documents (quality systems)
 Set priorities and allocate resources
according to the potential for protection of Customer

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Opportunity for the Industry & Regulators
 Using the same guideline apply QRM to
 Industry (development, manufacture and distribution)
 Competent authorities (reviewer and inspectorate)
 Facilitates common approaches to quality risk management in our
every day jobs
 Supports science-based decision making
 Focus resources based on risks to customer
 Avoids restrictive and unnecessary requirements
 Facilitates communication and transparency

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 Over all: Positive Contribution to customer protection
 Further develops Quality Risk Management awareness, that is already
part of industry and regulatory culture

 Ongoing change in behaviour


 Identifying risks can be positive
 A long list of identified risks that are assessed and controlled provides
high quality capability
 Awareness of quality risks
 “Risk-based approach”
 A potential of risks remains - No “Zero” risk!

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Way Forward for Industry and Regulators
 Improve communication and transparency
 Adapt existing
structures, organizations and systems
 Raise awareness of rationales for decision making
 Develop training on methods and tools, as appropriate
 Do not create new QRM organizations
 Do not create new requirements
 Adapt existing requirements using quality risk
management behaviors

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Opportunities & Benefits
 Encourages transparency
 Create baseline for more science-based decisions
 Facilitates communication
 Matrix team approach
 An aid to convince the stakeholders with trust

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Opportunities & Benefits
 Encourages a preventive approach
 Proactive control of risks and uncertainty
 Benefit of knowledge transfer by team approach
 Changes behavior
 Better understanding of risk-based decisions
 Acceptance of residual risks

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Change in behaviour

Sharing information

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Change in behaviour

From tick-box
approach for compliance

towards

systematic
risk-based thinking

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 Definitions of “Compliance”:
 Conformity in fulfilling official requirements
 The act or process of complying to a
desire, demand, or proposal or to coercion
 A disposition to yield to others

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 The ability of an object to yield elastically
when a force is applied: flexibility
Definition of “Flexibility”:
 characterised by a ready capability
to adapt to new, different, or changing requirements
 Source: www.webster.com, 01. Nov.04

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Doing things,
Change in behaviour

that do not matter


for the customer
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Integration of QRM
into existing systems
and
regulatory processes
will take time, trust and
communication
IATA Training & Development Institute 97

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