Risk assessment is a great tool to understand hazard size. It helps us understand where to implement preventive actions. It can be safety, quality, finances, project management and other areas, where assessment can help us understand any risks.

this article covers:

Risk and hazard definition
Rules for risk assessment
Risk assessment criteria
Risk assessment example
Risk matrix explanation
Risk assessment excel template
Risk matrix excel template

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Risk and hazard definition

Hazard or risk does not mean danger that some incident happens.

It is a combination of incident probability and severity of incident consequences. Hazard, thus, is not a workspace, machine or process itself. But likelihood, that something wrong occurs in some period.

Example. When we drive a car, danger is not a car itself. But possibility, that we fail to notice other cars while entering the main road.

Here are 3 steps to proceed with risk assessment:

Risk source identification
Risk seriousness evaluation – risk matrix
And counter-measurements introduction. if not to full risk elimination, so at least to risk reduction.

this a excel charter to download preview

Here is a link to download project charter template for your usage, with the brief description of each section.

Download Charter now

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Rules for risk assessment

Make sure, you follow these advices during risk source identification:

The best way to start is to identify one process, or concrete situation to be assessed. Do not solve whole facility at once. To identify process to be assessed, use process mapping..
Plan this activity in advance. People must count with it in their schedule.
Work as a team. Invite at least one person from assessed process. As well as colleagues from different departments
Visit and observe assessed process. Walk to see is key to reveal hazards.
Do not hesitate to ask questions, while observing.
Note each hazard on paper, or directly to computer under each other, and create table.

Top 11 six sigma certifications providers review – read here

Risk assessment criteria

There are two criteria in risk seriousness evaluation. Incident probability. And consequences severity. Each criteria have 5 categories.

probability categories are:

Randomly to happen
Unlikely to happen
Probably to happen
Very probably to happen
Permanently to happen

And consequences severity categories are:

Very low
Low
Medium
High
Very high

Match each identified risks with probability and severity number.

Lean vs Six Sigma -why are used together?

Risk assessment example

There are more options how to identify risk seriousness. You can multiply probability and severity numbers. Higher calculated number, higher risk seriousness. Advantage of this approach is, that you can have countermeasures listed next to each risk.

The easies risk assessment – 5 step method (read here)

Risk matrix explanation

For better risk seriousness visualization, use risk matrix. There are 2 axis on the matrix. One representing probability and second severity. There are 3 sections, matrix is divided in:

Low-risk seriousness. The green one
Middle. Orange one
And high-risk seriousness. Marked red

Both methods used together in combination is the best approach

Enter matched risks numbers to each axis and find meeting point. Seriousness level is now obvious and visual.

You can use percentage numbers for more precise seriousness definition, if required.

I suggest using combination of both methods to visualize and address risk with countermeasures.

Find the right balance between countermeasure, and its price.

Review hazard rates After taking measures against reviewed processes. Numbers should go down under tolerable limit. If not, review what else you can implement to improve it.

It is all about of doing smart decisions based on data and understanding problem root cause. Imagine easier life you can live. Imagine happier customer that has received his order incredibly fast and in expected promised condition.

How to run DMAIC in the office- example read here

Download risk assessment excel matrix

You will get excel matrix with automated calculations. Just follow guideline notes in the the top of the table. Probability and consequences cathegories + countermeasurement efficiency is part of downloaded file. So hurry up, use it, eliminate risks in your processes.