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What Is a Preventive Action?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 19 September 2016
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A preventive action is any measure that is taken as a means of addressing a flaw or weakness in a process before it has the effect of significantly damaging the results of that process. This strategy can be utilized in a number of settings and typically involves the efforts of management to ensure that an operation is functioning with the highest degree of efficiency possible. As a proactive tool, preventive action will seek to identify potential problems before they arise, implement changes that minimize or eliminate the issue, and allow the production to continue without any ill effects.

The origin of a preventive action may come from any number of sources. A management team may use data collected on the production process and identify some factor that should be addressed in order to avoid a developing problem. At times, employees who are directly engaged in the production process may notice something that has the potential to adversely affect the operation and work with a manager to prevent that adverse affect. Even customers can sometimes make suggestions that in turn lead the management team to look closer at some aspect of a product or the way that product is manufactured, and develop some course of action that incorporates those customer suggestions.

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Preventive action can occur in any type of business setting. The essentials of the process involve identification of some factor that has the potential to slow production or decrease quality in some manner. Once the root cause for the potential issue is identified, it is possible to begin brainstorming possible solutions that will eliminate the problem. Each of those solutions are then ran through a simulation process to determine if one or more would create additional issues if implemented. Once the best possible solution is identified, it is implemented and the operation can continue at the same or possibly even a higher level production and efficiency.

Businesses of all sizes may use preventive action to enhance their operations. In an office, taking this type of corrective action can help increase productivity in terms of processing daily administrative tasks. Manufacturing plants can take preventive action to minimize the potential for equipment breakdowns or contamination of raw materials used in the production of goods. Even a home business can make use of the general concept of preventive action by using the process to identify issues that could derail productivity and adversely affect the flow of income, and developing processes that ensure income levels remain within acceptable ranges.

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serenesurface
Post 3

@candyquilt-- Well preventive action isn't necessary all the time. Financial assessments are usually done periodically, sometimes twice a year and sometimes quarterly. So it's not like businesses are constantly trying to predict the very distant future. That would be a waste of time. Usually, businesses are trying to discover what issues may crop up in the next quarter or next financial year.

I'm not an expert on this topic though and I suspect that different businesses may go about this slightly differently. The size of the business, the type of business and the risks involved are important factors too.

candyquilt
Post 2

Preventive action sounds like a lot of work. Do businesses spend all of their time calculating what could go wrong? It seems a bit excessive to me. It's good to be prepared for the worst case scenario and even prevent a problem before it occurs. But spending too much time on this may take away valuable time to plan an expansion of production or product improvement, wouldn't it?

turquoise
Post 1

A lot of what financial analysts do is about preventive action. These experts study the numbers and financial performance of a company to predict the near future. Their goal specifically is to identify potential problems and take action before they occur. So it's all about prevention and avoiding costs and losses before it's too late.

The strange part about this whole process however is that financial factors are very difficult to predict. There can be sudden developments that completely change everything. So no financial prediction is every 100% right. But experts who do their job well and have good foresight can get very close with their predictions and save their bosses a lot of money and trouble. That's why there is and will always be such great demand for good financial analysts. Even small business hire analysts several times a year to measure risks and to ask for advice.

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