How to Prepare the Project Risk Assessment Matrix ?
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:
Step 1: List down the Risks
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.
Step 2: Rate for Probability and Impact
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.
Step 3: Classify the Risks
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:
Step 4: Decide on Mitigation Planning
There are three basic strategies which help mitigate risks successfully. They are:
- What is Secondary Metric(s) ?
- Measuring the Financial Benefits
- What is Project Risk ?
- What is a Project Schedule ?
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