AAOM Handbook

Operating Model definition of risk (comprising the three elements of a Serviceable Item, risk type and risk source), the probability distribution for each risk will typically be simple. It will either be a single one of the three distribution types, or it may be a combination of a period of constant risk followed by a wear out period. In specifying the distribution type remember that we are dealing with statistical estimates and we should not overcomplicate things. For example, if less than 10% of the cumulative probability for a risk follows a random pattern and 90%+ follows a wear out pattern, treating it as a straight wear out failure will probably result in an effective Service strategy selection. o The boundary and inflexion points in the distribution curve, i.e. where does application of the curve start in the life or operation, where does it change shape (e.g. from decreasing probability to constant/increasing, or from constant probability to increasing), and where does it terminate (failure is close to certain). o The shape and value(s) of the probability curve for each failure pattern region. There are potentially many mathematically functions available to describe the possible shapes (e.g. binomial, exponential, linear, logarithmic, step, weibull, etc.). Again, since we are dealing with statistical estimates we should not overcomplicate things. If a simple function such as linear provides a 90%+ fit, then using it will probably result in an effective Service strategy selection. • Whether the commencement of the unwanted event can be reliably detected, and if so how. • The unwanted event Warning Interval, either the minimum interval between possible detection of the developing unwanted event and the ultimate occurrence of the unwanted event, or preferably, the probability distribution of the warning time. • A calculated Criticality Rating - indicating the current risk level in relation to the Criticality Rating. Note that for unwanted events that have an early failure or wear out pattern the Criticality Rating varies with time (decreasing and increasing respectively). The records should also specify how the Criticality Rating is calculated.

A database shall be used to record the risk characteristics.

Time

The risk characteristics shall be specified during establishment of a process.

Review and validation of risk characteristics shall be based on either a change of performance targets driven by changing business expectations or the benefit ranking of improvement opportunities identified through analysis of performance. Resources Definition of risk characteristics is the accountability of the role identified in the configured flowchart. For ORM Layer 2 Issue Based Risk Management