Step 1: Collect and Review Primary Information
February 12, 2025
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Contract farming has been hailed by many experts as the perfect economic arrangement between farmers and companies. Corporations like Monsanto, McDonalds, Starbucks and KFC have become champions in the use of contract farming. Companies claim that it is a beautiful arrangement that cuts out non value adding middlemen and therefore increases the prosperity of the […]
Introduction In any environment if a person is assigned to do the same task, then after a period of time, there is an improvement in his performance. If data points are collected over a period of time, the curve constructed on the graph will show a decrease in effort per unit for repetitive operations. This […]
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Prior to the introduction of Six Sigma philosophy, there was a debate as to whether Six Sigma is a goal worth pursuing. Many experts in the area of quality believed that wastage was a way of life. Trying to eliminate wastage would cause more wastage. They believed that it was possible to eliminate waste but […]
The Project Risk Assessment Matrix is one of the required documents to complete the Define phase of the DMAIC methodology.
The procedure has been designed in such a way to ensure that people implementing the project have given a thought to what can possibly go wrong and begin thinking of mitigation plans.
Here is a step by step review of how to prepare the Project Risk Assessment Matrix:
The first step in the process begins with the listing down of all the risks that the participants can think of. This is usually done in a brainstorming session.
Participants are typically given a list which contains common categories of risks. The participants are then advised to think of whatever risk they can foresee in the project category by category. This is done over and over again to ensure that the list is exhaustive.
Once the list of the possible risks that a project may face is available, the next step is to rate the risks.
The risks are rated on two parameters viz. probability of occurring and impact of occurring.
In both cases the score is given out of 5, with 5 being certainty that the risk will occur or have a very high impact if they do occur. The scores are then multiplied and then arranged in a descending order.
All risks are not equally important from the six sigma project point of view. Hence they need to be classified and efforts need to be focussed only on the ones that are priority. There is usually a standard matrix that classifies the risks into the following 4 categories based on the parameters:
There are three basic strategies which help mitigate risks successfully. They are:
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