Sustaining excellence and continuous process improvements are two imperative constituents of manufacturing that guarantee competitive and successful technology. Sustaining excellence principles widely discussed in the literature. For instance, the main 12 principles of manufacturing excellence to achieve sustaining excellence described by Larry Fast . Sustaining excellence strategy creates a special culture of the manufacturing providing world-class performance.
Manufacturing improvements are resulted from process changes and generally contradict to the sustaining. Using TRIZ contradiction categories we could define that ideal manufacturing should be changeable and sustainable at the same time.
Process changes are always intended to increase a company’s profit and typically can be designated by two vectors: yield improvement or/and cost reduction. Yield – Cost diagram is shown in Fig. 1. Yield and cost can be successfully used as a coordinate representing process changes. The ideal process is located in the top left corner and corresponds to the highest possible yield and lowest possible cost. The real process is always located somewhere in the middle part of the chart corresponding to a certain yield that is achieved by a certain cost. Any change of the process can be considered as an outside impact aiming to improve either yield (vertical move) or cost (horizontal move).
A successful outcome of the change could be shown on the diagram (Fig. 1) as any movement of the process into the top-left quarter to get close to the Ideal Process.
An unsuccessful outcome is typically unexpected and moves the process into the bottom part of the diagram. Yield is the most important parameter of the process since it reflects the health and robustness of the technology. Therefore any yield degradation occurred due to a change implementation is classified as a failure. It is important to mention that a yield degradation cannot be compensated by even cost reduction achieved due to change implementation. Yield degradation means failure.
When a failure has already happened Problem Solving (PS) approach can be successfully applied to analyze the failure based on problem definition, root cause analysis, a model of the failure creation, and finding a solution.
Risk Assessment and Risk Management (RARM) is complementary to PS tool and refers to predicting and preventing the possible failure before it could happen. RARM approach is also based on modeling and a detailed understanding of the change before the change implementation and allows us to elaborate and apply additional activity to prevent or at least mitigate possible failure.
TYPICAL EXAMPLE OF THE TYPICAL MISTAKE IN RISK ASSESSMENT
Let’s try to analyze a very trivial real example taken from our day-to-day life. Young pair with a small baby arrived at the snow hill to play with snow and toboggan his baby. The parents have found a place with friendly slop well apart from sky trace. Everything was very safe and pleasant. Father releases the sled with the baby and the mother catches the sled with the baby. The distance between the parents is about 10-12 meters; the speed of the sled is low. Father releases the sled, the mother catches the sled and the baby is laughing. Once it happened that the mother’s leg has suddenly dipped into the snow. She tried to release the leg, she tried to catch the sled with the baby but with no success. The sled with small baby continues to move, the speed became higher and higher than it was before. The parents started to run after the sled but everybody knows that it is not easy to be running on the snow.
So, in the end, the sled has fallen aside and finally stopped because the baby tried to stand up and leave the sled, but everyone was shocked, just deeply shocked.
What was the problem? The problem was related to a completely incorrect risk assessment. The parents analyzed the chosen location on the snow hill and decided that the risk is low. This is the wrong assessment. Each time we assess risk as low or medium we are remaining at real high risk.
Low-risk assessment means that everything is fine, that there is nothing to do and think about. Each time we assign “Low risk” we remain at “High risk”. Low-risk assessment places us into a high-risk situation.
HOW TO ASSESS A RISK
The risk is usually presented in the form of numbers and is calculated using special parameters and grades. There is a number of methods of the risk calculations published in the literature. Our risk assessment approach is based on the non-quantitate method.
There are two main parameters characterizing a failure: a probability of failure and severity of the failure. The chart that is shown in Fig. 2 is a very suitable risk analysis. The probability of failure (POF) is plotted on the Y-axis, while the severity of failure (SOF) is on the X-axis. The left bottom corner corresponds to Ideal Final Result (IFR) – “0” POF and “0” SOF.
Redline represents a risk-tolerant line that could separate the low (acceptable) risk areas from high (unacceptable) risk levels.
Nevertheless each time we decide that risk is low or medium we are actually at high risk. This is what had happened with the young couple when they decided that the risk is low and no additional actions required.
The position mentioned by redpointing corresponds to the highest risk: 100% POF and 100% SOF. This could look like a paradox but the high-risk assessment leads to actual low risk. In general terms, the risk is the level of uncertainty. Cassandra’s story can be taken as an excellent historical example of reducing actual risk by increasing risk at assessment. Cassandra made a very clear and useful statement “Troy will be destroyed” – she said. What did she do? She actually stated that there is no risk in the war, everything is clear: “Troy will be destroyed” anyway people should think about how to survive and not on how to keep Troy. Highest risk – 100% POF and 100% SOF provide no uncertainty, therefore, reduce risk down to “0”. For instance, there is no risk to jump from a root of 20 floors building or there is no risk to be sleeping on the railways because everything is clear and result known as fatal: POF = 100% and SOF=100%. Such risk assessment is very useful since allows to analyze situation trying to avoid actions leading to fatal results.
How to assess risk? Very simple it is necessary to start from the highest risk point – mentioned as “Starting point” on the chart shown in Fig. 2.
How to assess risk? It is very simple – to invite Cassandra and assess risk as highest resulting in “fatal” failure.
A risk of any changes could be always assessed as HIGH RISK.
RARM is an excellent method for process changes possible impacts analysis. Especially cost reduction changes may be very dangerous if implemented without necessary risk assessment and management. RARM methodology contains 4 steps that should be consequently completed.
Step 1. Describe a change and an expected gain
To complete the first step four questions should be answered:
Problem statement – What is the problem?
Current solution – How this problem is currently solved?
The new solution – How the expected change could solve the problem?
Expected Gain – What is the expected gain from the change?
Step 2. Convert paradigm to Cassandra and create a model of a fatal failure due to the process change
Failure model creation is the key step for MBRM.
Proceed with Step 2 as follows:
Believe that the process change is “Trojan Horse” that will result in “fatal” failure;
Create a model of complete disaster due to the change. To perform functional analysis of the system (list of affected components and describe the functions) is one of the very effective ways for model creation.
Cause-Effect-Chain analysis, Resource Analysis, Functional modeling, and some other TRIZ tools are recommended for the failure mode creation.
Refrain from the process change implementation until a failure model is created.
Step 3. Create mitigation/Failure prevention
Based on the elaborated model the failure prevention or at least mitigation. There are two ways to proceed:
Severity of Failure (SOF) reduction – tactic way;
A probability of Failure (POF) reduction – strategy way
Combine SOF + POF way is also viable, but the analysis should be separated for SOF and POF;
Failure prevention principles are illustrated in Fig. 3
It is important to mention again that any failure prevention or mitigation activity should be done separately for SOF reduction first and for POF second. Such an approach will keep the situation at a general High-Risk alert. Any mixing of SOF and POF will move the situation at the medium or low-risk area that will result in danger. The directions for failure prevention and mitigation are shown in Fig. 4.
Step 4. Making a decision on the change implementation
The decision is made based on a comparison of the failure prevention cost vs. the gain previously expected from the process change.
Proceed with three actions as follows:
Define the cost of failure prevention (mitigation)
Compare failure prevention cost and cost gain that was initially expected from the process change implementation
Make a decision
It is recommended to use the matrix as shown in Table I.
No gain –
Change with no failure
Change with failure
An example of RARM methodology in the case of cost reduction change is summarized in the chart Risk vs. Cost. (Fig. 5).
“Initial Position” point represents an existing process before the change. Ideal change supposes cost reduction without risk elevation. Such a process condition is shown by the second yellow point “Expected Position”. The difference between these two yellow points corresponds to initially expected gain from the cost reduction project implementation.
MBRM methodology requires continuing the process change analysis taking into account possible failure that could result from the change. The continuation should be done as follows: Invite Cassandra and create a model of fatal failure. This action will elevate the risk of the process up to “Predicted Position”. Any mitigation or failure prevention has a cost that should be taken in to account as well. The mitigation/failure prevention will reduce risk but will affect cost bringing the process to the “Mitigated Point”. The difference between “Expected Cost Reduction” and “Mitigation Cost” results in real “Cost Reduction” that may be received from the change.
RARM is a strong and effective tool for predicting possible failure that could occur after a process change implementation. The main principles that should be kept in mind to avoid catastrophic failures due to a process change implementation could be formulated as follows:
Psychological inertia always moves us into positive results of the proposed change;
Wishing to implement the change and get the gain often typically affects risk assessment;
Change the paradigm, change your mindset to the worst scenario;
Formulate inverse problem: How the change can destroy the system;
Larry E. Fast, “The 12 Principles of Manufacturing Excellence: A Leader’s Guide to Achieving and Sustaining Excellence”, Boca Raton USA, CRC Press, 2011, 266 pp.