Enhancing Risk Management: Leveraging the Likelihood/Severity Matrix for Effective Risk Assessment and Mitigation in the Electrical and Electronic Sector

Abstract

This paper presents the basic concept of risk and reviews commonly applied tools and techniques for risk assessment. Generally, risk assessment is a completely experiential decision-making process based on experience and knowledge of risk assistants. This paper emphasises one quantitative/qualitative technique, namely the likelihood/severity matrix approach, which aims to direct the organisation’s attention towards risks that have the highest potential to have a negative effect. This paper’s main contribution lies in introducing a proposed model that utilises the likelihood/severity matrix approach to categorise risks into ‘regions’ and subsequently rank them. This process supports risk managers in making informed decisions to reduce risks effectively. A likelihood/severity matrix was examined through a case study belonging to the electrical and electronic sector to find the critical risks that hinder the assembly line of personal computers. Results showed that the ‘Breaking parts during assembly’, ‘Shocking the components from static electricity discharge’ and ‘Using wrong compatible parts’ risks had the maximum risk score, with values of 10–15 as the most critical risks. These results can influence decision makers in developing actions to mitigate these highlighted risks.