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Training Transformations

What's Risk Management Got to Do With lean?

Mike Richman's picture
Submitted by: Mike Richman

Over at our sister company, Quality Digest Daily, we recently ran an article from lean trainer Mike Micklewright titled, ”Lean, Quality, and Risk-Based Thinking in ISO 9001:2015.”

Now, Mike is a buddy, and one thing I like about him is that he’s got a way of seeing everything in lean terms. I don’t mean that in the, “We got a hammer so every problem looks like a nail” kind of way, although for sure many people have tended to err on that side when trying to implement transformational improvement methodologies like lean.

But Mike’s approach is more subtle than that. He expects processes to be efficient, work to flow, problems to be identified and fixed, and people to be respected.

Lean happens to be an effective way to accomplish all of those things, and not just in the business world. He’s taught me to look at everything I do in a lean fashion—it’s amazing how batch processing pops up around regular household chores, for example. But that’s a topic for a different blog posting.

Here I want to focus on risk, because in his latest article (and the videos that inspired it), Mike makes the point that lean has a huge influence on understanding and mitigating risk, and that this is operating at multiple levels of the organization at the same time. From the perspective of top management, risk must be addressed as a strategic imperative. The general flow of value within a company (and then out of the company, to customers) must be planned, analyzed, and constantly fine-tuned, always with an eye not only toward potential benefits, but potential problems, too. This is where leaders need to consider their strengths, weaknesses, opportunities, and threats—better known as a SWOT analysis.

Lean takes this process one step further with hoshin kanri, a Japanese term that’s best translated as “strategic policy deployment.” At its heart, hoshin kanri is an exercise in anticipating risk to make the organization flexible enough to deal with almost anything that market forces or force majeure can throw at it.

Operationally, as a central part of ongoing kaizen activities, an understanding of risk is central to poka yoke, or mistake-proofing. From there it’s a short step to the failure mode and effects analysis (FMEA), which is often the core document in defining risks and—more important—establishing new processes to help mitigate them. Oh, and as a side benefit, an understanding of the FMEA process has been mentioned by certification body auditors as one important way for registered companies to demonstrate compliance with the risk-based thinking language in the 2015 version of ISO 9001.

The explicit references to risk are new in ISO 9001:2015, and therefore many quality professionals are trying to figure out how to address this concept as they transition to the new version of the standard. Those who are working in a lean, continuous improvement environment can help because so much of what they do revolves around the practical application of risk-mitigation strategies. In fact, this leads (again) to something that should be made clear if it isn’t already: “Lean” and “quality” are really one in the same thing, with the same ultimate goal of making the company better and retaining those improvements. It’s all part of the business management system that should cascade through all levels of the organization, covering principles, culture, and tools.

But that, too, is a topic for a different blog posting.