It’s common for companies to think of quality management and risk management synonymously. In fact, in most industries, you cannot discuss quality management without also considering the impact of risk. Unfortunately, risk management is often isolated as a separate quality management project.
Although risk and quality management are distinct concepts, they require meaningful and intentional collaboration to capitalize on process improvements and product quality. In order to do that, it’s important to use an enterprise quality management software (EQMS) solution that integrates risk management efforts to determine quality improvements and risk identification.
Risk Management vs Quality Management
Quality management focuses on adherence to ISO standards, manufacturing requirements, and government regulations – both in domestic and international markets. These standards drive the fundamental framework of how a holistic quality management system should be implemented and maintained and ensures that a company’s objectives are consistent.
Risk management focuses on the uncertainty, probability, and consequence of various threats to both a company’s bottom line and its ability to deliver goods and services on time. Risk management enables companies to prepare for unexpected events – internally and externally –before they happen.
While quality management and risk management are different, they complement each other and must work together. Both disciplines rely on cause-and-effect analysis techniques to determine which corrective and preventative actions drive more efficient business practices. Risk management is an integral part of a complete quality management control system. It should be used as a mechanism to identify the risks and associated mitigations in the early stages of quality management activities.
As an example of how risk management and quality management complement one another, consider the challenges of managing a large, multi-tiered supplier base. Meeting both domestic and international compliance directives bears a complex set of processes for your organization to follow, which is why having a thorough quality management system is so critical. Comprehensive risk management and quality management systems allow companies to more easily anticipate and meet the demands of those processes, procedures, and responsibilities, and to simultaneously safeguard their assets.
Benefits of Merging Risk Management with Quality Management
Given the increasingly competitive nature of the manufacturing industry today, you know that risk management impacts every level of your quality management system. Thus, creating harmonization between quality management and risk management may not only give your company a competitive advantage over the long term but may also protect its assets and brand. After all, failure to recognize and address risks costs money, increases re-work and waste, and reduces customer satisfaction. Why not offer holistic customer satisfaction by delivering a high-quality product where risk has already been assessed? Preventing or eliminating risk is akin to customer satisfaction.
Including risk management strategies in a quality management system also allows you to thoroughly and systematically vet suppliers, which makes managing the quality of a globally-dispersed network of suppliers easier. Consider the trend of increasing the role of suppliers in daily quality management processes: as the quality of a supplier’s products or parts decreases over time, the risk of delivering sub-par finished products increases. Taken a step further, without a systematic, integrated way to monitor quality and risk management collaboratively, the validity of a supplier’s capabilities to deliver high-quality products comes into question.
As such, acknowledging risk is not only implicit to the responsibilities of a successful quality management professional, but it serves as an opportunity to learn, innovate, and improve products that satisfy your customer.
When Quality Management and Risk Management Work Well Together
The previous application of quality management and risk management activities took a reactive approach, whereas risk detection was performed after the fact. It’s far more beneficial to consider risks upfront by having a well-constructed plan to address risks in the form of planning, managing, and driving actions that help control risk.
The integration of risk management into quality management is already evident in several industries today. One example is the use of failure modes and effects analysis used by automotive manufacturers today. Another example is the use of Six Sigma techniques for reducing product defects to lower risk.
Given the rapid pace of change in today’s manufacturing industry, quality is the key to staying competitive and profitable in the global economy. Your competitiveness can be strengthened by responding to strategic opportunities to be successful, including recognizing the shift in the risk management and identification landscape.
In order for quality management to be effective, risk management data must be added to the equation. Furthermore, you must aim to challenge the culture within your company and work with your company’s risk management professionals to find creative ways to embed risk management into quality management processes – and vice versa. By taking a comprehensive approach to quality and risk by deploying a combined solution, your company can achieve harmonization that improves quality early in the value chain, which in turn, instills confidence in your customers.
Contact IQS today to learn more about how we can integrate risk management into your quality management system or request a demo.