What is Risk-Based Thinking
"Risk-Based Thinking" is an established approach for risk management at all levels of the organization, following a process-based logic that considers risk as a possible effect on the failure to achieve objectives.
With Risk-Based Thinking, management tools have been enriched with the concept of Key Risk Indicator (KRI), which serves as a counterpart to the Key Performance Indicator (KPI), already well-known before the introduction of the new approach.
The logic of KRIs is entirely predictive: when a parameter exceeds a predefined threshold, the indicator triggers actions to mitigate risk and potential damage. In this sense, the difference with KPIs is clear. KRIs are risk indicators and therefore measure preliminary conditions related to a specific event, while KPIs are performance indicators and as such measure conditions following the event itself.
The Link Between Risk-Based Thinking and Quality 4.0
The connection between Risk-Based Thinking and the discipline of Quality 4.0 is therefore immediate.
The use of increasingly integrating IT technologies capable of connecting information systems and production tools leads to more accurate and widespread measurements of phenomena.
In this sense, generating performance indicators at all levels of the production areas becomes easier and more satisfying, influencing the identification and calculation of risk indicators. In other words, with systems governing the logic of Quality 4.0, the relationships between phenomena, risks, and potential problems become more evident, as these relationships are easily modelable and measurable in their most evident manifestations.
Risk-Based Thinking as a Control System in a Quality 4.0 Environment
Consequently, Risk-Based Thinking is enabled as a true control system by Quality 4.0 techniques. Risk indicators serve to define alarm thresholds, above or below which the system alerts and generates corrective actions that prevent compromising performance. These performances are precisely indicated by dedicated indicators, in a virtuous cycle that also allows determining if the KRIs have been correctly identified.
Thus, Quality 4.0 becomes a predictive and prescriptive system at all levels of the production value chain. Through risk measures, the entire production cycle is kept under strict control, both in terms of output (the production itself) and input (the quality and efficiency of machines, the quality of materials, etc.).
The condition for this to happen is certainly that the company is equipped with efficient, modern, and interconnected information systems. The integration of various information systems, such as ERP, MES, Supply Chain Management, CRM software, and others, allows for the realization of a true Digital Quality Management System, overseeing the automation of production processes and document management for internal organizational and/or external documentary purposes.
The integration of these information systems is still a distant reality in many of today's production environments. However, progress will be made with a step-by-step approach. One of these steps is represented by Blulink solutions...
For information, write to marketing@blulink.com
