NC State of Business

There is always a level of risk associated with managing projects. Often discussed as individual topics, risk management and project management are now being integrated into general discussions of systems management. More specifically, the new version of AS9100 – Quality Management Systems - Requirements for Aviation, Space and Defense Organizations actually includes specific references to the need for risk and project management processes.

Risk Management

AS9100 (Rev. C) has now added requirements for companies to assess and manage the risks involved with providing their product or service. So what is risk? Risk is that element of doubt you feel when you tackle something new and aren’t quite sure of the final outcome. Risk is defined in the AS9100 standard as “an undesirable situation or circumstance that has both a likelihood of occurring and a potentially negative consequence”. Risk Management consists of defining those potentially “undesirable situations”, assessing their probability of occurring; understanding what the impact may be should the event happen and determining what to do if the risk level is too high. A simple matrix can help you understand the level of risk associated with the products and service your company provides.

Once the risk level has been defined, then you develop action plans to reduce or eliminate the risk. If the risk level is low, you may be able to accept it without taking any action. Understanding and managing risk as it relates to Special Requirements, Critical Items, and Key Characteristics is the intent of the new requirements in the AS9100 Standard.

Project Management

Why add a Project Management requirement into the standard? If you are working on an aviation, space or defense project, you could be working on something that is quite large and complex, involving multiple suppliers or partners and takes place over a long time period. To be successful, these programs should be effectively defined, planned and executed in a controlled manner in order to meet the customers’ needs and expectations. Defining, Planning, Executing, Controlling – are key activities of project management. The new requirements in the standard promote additional focus on up front planning and encourage adequate controls throughout the whole “product realization” process to meet schedules and stay within resource constraints.

The revised audit standard for AS9100 Rev. C has not been released yet, so no companies can be certified to the new C version until the auditing documents are released, which is estimated to be mid-year 2010. What do you do in the meantime? If you are planning to get registered before the middle of next year, you can set up your program to meet the requirements for both B & C versions and get certified to the B version changing to the C version at an audit cycle. If you are already certified to AS 9100 Rev. B. you will need to add these and the other new requirements into your program during the next 30 months or before your next audit cycle if it occurs after mid-year 2010.

Undoubtedly, the challenges for manufacturing are great. Global competition places enormous pressure for companies to survive. The job loss is painful! However, when is the last time you saw these facts in the national headlines:

• U.S. manufacturing produces more goods than any other country and is 21% of the world’s total.

• Manufacturers account for two-thirds of all private research and development in the United States.

• Twenty-two manufacturing occupations have expectations of “average” to “much faster than average” growth nationally.

And I suspect you have not seen these North Carolina manufacturing facts in the headlines:

• The seventh largest manufacturing state in the nation.

• Manufacturing is the largest contributor to the gross state product at 18.6%.

• Manufacturers provide 98% of all state exports, or $21 billion.

• Average annual manufacturing earnings per job is $59,964 - 46 % higher than the statewide average.

Indeed, productivity enhancing technologies are eliminating routine work positions while simultaneously increasing the required skills for the remaining positions. Consequently, companies become more competitive and we have the results above. Note that certain occupations are anticipated to be high growth jobs. We regularly hear about job loss in manufacturing but rarely do we hear the message that good job opportunities will continue to be in manufacturing.

So, the next time you hear manufacturing is going away, share some of the facts above. And turn the conversation into how we can help manufacturing become even more competitive and successful.

Let’s not forget that manufacturing matters. It matters a great deal to all of us!!