5 Risk Management Tips for Automotive Manufacturers

1. 5 Risk Management Tips for Automotive Manufacturers Automotive manufacturers are exposed to many risks that can harm their bottom line and even cause them to go out of business, if the risks are severe enough. Knowing how to manage these risks proactively can help you stay in business and keep your shareholders happy, but it’s not easy because of the nature of automotive manufacturing processes. Risk management tips include keeping up with industry trends, keeping a close eye on regulatory agencies, and making sure your insurance coverage stays up-to-date as you grow your company. What is Risk Management? Risk management is all about planning. Developing a good plan, knowing how to evaluate risks, and ultimately reducing those risks you have no control over are all part of risk management. For example, automotive risk management involves identifying ways to mitigate risk when building cars or trucks. Whether you're an auto manufacturer that builds new cars from scratch or a technician who fixes engines on vehicles already on the road, it's important to understand how you can mitigate any potential problems with your automobile build specifications (build

2. specs). By creating a vehicle build specification, or VBS, in advance, you can avoid surprises in terms of cost and timeline later down the line. Safety standards and regulations The regulatory environment surrounding vehicle build specifications is complicated and ever-changing. It’s not enough to just set these standards—manufacturers must also follow them. Meeting compliance standards also helps manufacturers reduce risk because it helps prevent mistakes or other potential problems during vehicle builds. Following a few key tips can help keep manufacturers on track and safeguard against costly issues. First, develop a process to assess each change in car build specifications requirements to ensure they don’t create operational risks that threaten quality or safety. Next, develop an approach for ensuring that these changes are implemented correctly across all departments involved in vehicle builds, from those designing vehicles to manufacturing employees who assemble them. Risk Management & Compliance with ISO 26262 ISO 26262 has been incorporated in many new vehicle standards, including IEEE 1628 and ISO 13406. These standards require that management of risk to a system be formally addressed during requirements definition and throughout development. To manage risk appropriately, you will need: a) management support b) independence from development teams c) dedicated resources d) structured processes e) good staff training.

3. In addition, you'll need to select (or create/adapt) your own set of strategies suited to your particular organization and your specific implementation challenges. It's not an easy task but without properly addressing risk at all stages of car build specification it can lead to costly mistakes being discovered late in a project or after product launch! Automotive Safety Integrity Levels FMEA is a popular approach to risk management. FMEA uses root cause analysis to determine which parts and subsystems could fail, then determines how those failures might affect all stakeholders in your organization, including customers and suppliers. To complete an FMEA, list possible failure modes or ways something can go wrong, then estimate consequences of each failure mode with regards to risk severity and frequency. For example, if you manufacture cars, you might list possible failures such as broken brakes (severity 1: death) or overheating engines (severity 2: serious damage). A failure rate of once every 20 years is probably low enough to be acceptable if there are no other severe risks; one failure every five years would be considered unacceptable by most companies with competent QA programs. Failure Mode and Effects Analysis An FMEA identifies possible failures in a product or process and evaluates their effect on a company’s objectives. This can help manufacturers better gauge their risk tolerance, as well as identify areas of improvement. The larger your firm is, and thus more complex your products and operations are, increases your chance of being sued if something goes wrong; therefore, it pays to perform an FMEA before releasing a new car model to market or rolling out a new line of SUVs. An FMEA will also help you identify ways to minimize risks by troubleshooting designs from both a technical standpoint and an engineering one. It’s important to note that performing an FMEA doesn’t necessarily mean that you have to implement every recommendation made—but it does mean that you should give them due consideration.

4. Conclusion Part of keeping your customers safe is knowing which risks to be aware of and having a plan in place should those risks become a reality. By using these tips, you can build safer cars and minimize automotive risk management costs. You’ll be able to reduce accidents, keep liability costs down, reduce medical expenses and claim amounts paid, limit compensation and wage payments to injured parties. In turn, you’ll have greater peace of mind while protecting your bottom line. Remember: Every business needs risk management services—automotive manufacturing is no exception!