Shivashish Chaturvedi

There is an element of ambiguity when we say "RPN threshold". Because there is not any specific value and it varies industry to industry. For example, process risk in a disposable cup manufacturing company will never be same as in the parachute manufacturing company. In general practice RPN threshold value of 100 or 150 or some other value is used in organizations. And here comes the first likelihood of this practice being counter productive if organizations choose inappropriate RPN threshold. This leads to non addressing of significant risks or addressing of non significant risks. Secondly, setting an RPN threshold completely restricts addressing of identified risks, For example, if RPN threshold is 100, organisation will take action against risks having RPN value of 100 or above but what about risk of RPN value 96? Since the threshold is set, this risk will not be addressed. But to note that risk having RPN 96 may be as significant as those having 100 or above. Thirdly, having a set threshold may lead to biased approach and there are chances of manipulation during calculating RPN value in order to keep it below the RPN threshold and to escape action plans. To address above mentioned issues associated with RPN threshold, now 80:20 principle aka Pareto principle is considered as a better approach for Risk mitigation. Pareto principle states that for many outcomes roughly 80% of the consequences come from 20% of the causes. In this approach instead of setting RPN threshold, RPN values are sorted in descending order prioritizing risks where actions needs to be taken. Now, Action should be taken first against RPNs contributing upto 80%(In descending order) of the RPN summation. For example,Sort RPNs 100, 98, 125, 150, 50, 75 to 150,125, 100, 98, 75, 50. Calculate RPN summation and cumulative percentage of RPNs. take action on 80% of cumulative % of RPN first. Allot new RPN value after action plan. In a process of continual improvement, where ever necessary, this process can be repeated for further Risk mitigation. In this way, all those significant risks can be addressed which might get missed in RPN threshold approach and also it eliminates chances of manipulation and biasness.