Every business would be facing unforeseen events during its lifecycle, and might have negative

impacts in terms or financial losses or human losses. To counter the potential harm or risk
associated with such event, a business should engage well planned risk management system.

Risk management is a continuous process of identifying, assessing and controlling process,

financial, legal, strategic risk in the organizations and minimize its financial impact. The Risks, or
threats can be sourced form financial instability or uncertainty, accidents or legal obligations.

To reduce the risk rates and its negative impacts, right resources are engaged to monitor and
control risks and maximize the positive event.

Following are the important steps in Risk management system

1. Risk Identification:
a. Identification of existing or potential risk. This activity requires brainstorming
and assumptions associated with worst case scenario.
2. Risk Analysis:
a. Potential harm associate with identified risk is based on the scores of four
parameters, Likelihood, impact, velocity, and materialization.
3. Risk evaluation/ prioritization:
a. Every identifies risk would have more or less harm associated with it, Thus Risk
prioritization will provide information about, the criticality and importance of
fixing a particular risk or threat.
4. Risk treatment/mitigation:
a. Risk mitigation is set of controls or counter action that would be taken to
minimize the negative impact corresponding to identified risk. Usually there are
four risk mitigation options
i. Risk acceptance
ii. Risk avoidance
iii. Risk Transfer
iv. Risk Reduction
5. Risk monitoring and review:
a. Change in the product, standards, business strategies can’t be avoided, thus Risk
monitoring step, will be closely monitoring all sectors of business and would try
to predict risk.

ISO 31000 is the international standard that provides principle and guideline for effective risk
management.

As part of job role of Quality Engineer, they are responsible to ensure all the members in the
product development or process development team should follow the guideline and strategy
designed by the management, to minimized the risk associated with development process or
documentation.
There are numerous predictive methods/ tools are used in the organization to identify risk
associated with product and process, PFMEA, SFMEA, DFMEA. With these initiatives’ engineers
are able to identify potential failures, related risks and mitigate them in timely manner, which
aids in meeting customer expectations.

Reference:

What is risk management? | IBM. (n.d.). https://www.ibm.com/topics/risk-management

Just a moment. . . (n.d.). https://reciprocity.com/resources/what-does-risk-management-involve/