INTEGRATING RISKS CONTROL WITHIN THE ENGINEERING PROCESS

1. By Engr. Olufemi OGUNFOLU Risk & Insurance Managers Society of Nigeria (RIMSON) INTEGRATING RISKS CONTROL WITHIN THE ENGINEERING PROCESS

2. Risk Control Definition • Risk Management Process • Response Planning Strategies • Risk Management and the Engineering Process • Hierarchy of Risk Controls OUTLINE

3. Hazard: has the potential to cause harm. • Risk: likelihood of a potential hazard being released and causing damage or injury. • Control: recommended or prescribed way of carrying out work that, if followed, should reduce the risk. RISK CONTROL

4. The method of evaluating potential losses and taking action to reduce or eliminate such threats It utilizes findings from risk assessments (identifying potential risk factors in a firm's operations) and implementing changes to reduce risk in these areas …………RISK CONTROL

5. The project risk management process helps stakeholders make informed decisions regarding alternative approaches to achieving their objectives and the relative risk involved in each. • Minimize adverse impacts to project scope, cost, and schedule (and quality, as a result). • Maximize opportunities to improve the project’s objectives with lower cost, shorter schedules, enhanced scope and higher quality. • Minimize management by crisis. RISK MANAGEMENT PROCESS

6. The project risk management process helps stakeholders make informed decisions regarding alternative approaches to achieving their objectives and the relative risk involved in each. • Minimize adverse impacts to project scope, cost, and schedule (and quality, as a result). • Maximize opportunities to improve the project’s objectives with lower cost, shorter schedules, enhanced scope and higher quality. • Minimize management by crisis. RISK MANAGEMENT PROCESS

8. Matrix sample showing the processes and the responsibilities of the stakeholders RISK KEY RESPONSIBILITIES

9. Subjective analysis of risk identified: • Probability of risk occurring (low, medium, high or 1 – 10) • Impact (consequence) using low, medium or high. The process helps in risk urgency assessment, and risks with urgency moved into Risk Response Plan * What is your risk tolerance threshold? QUALITATIVE RISK ANALYSIS

10. Provides guidance for priorities based on: • Impact • Likelihood • Control Effectiveness “vulnerabilities and threats are endless, but the funds to address them are not” RISK/CONTROL MATRIX

11. RISK RESPONSE PLANNING STRATEGIES

12. ……..RISK RESPONSE PLANNING STRATEGIES NEGATIVES: • Avoid: avoiding high risk by removing work package. • Mitigate: strategy that can reduce occurrence or reduce amount at stake. • Transfer: transferring high risk that are high but not avoidable. • Accept: taking risk that are low in occurrence and cost.

13. ……..RISK RESPONSE PLANNING STRATEGIES POSITIVES: • Exploit: take advantage of the opportunity e.g. adding talented resources to reduce time • Share: partnership in utilizing maximum advantage e.g. outsourcing • Enhance: getting it done by doing the right things (identify enhancers or drivers, and perform in a way to increase probability and/or impact) • Accept: in case of occurrence , do nothing

14. RISK MANAGEMENT & THE ENGINEERING PROCESS

15. Conceptualization/Initiation: • Uncertainty/ Unknown is at its greatest • Technology choices to resolve • Feasibility studies • Who is involved in the process? Balance between stakeholders involved and information flow • Credible estimates for Cost, Schedule, Resources, Risks, etc RISK MANAGEMENT & THE ENGINEERING PROCESS:Risks & their Characteristics

16. Design/ Specification: • Define required Performance, Cost and Timescale (PCT), though may not accurate at this stage. • Good understanding of Operations & Maintenance (lowest cost solution, reliable technology, advanced control system) • Safe and acceptable standards of products, process, by-products. • Robustness of emerging product. Still virtual (need to prototype/simulate? ) • Mix of designs/suppliers, Global POWs and formal progress review

17. Construction/ Fabrication: • Contract time estimates • Formulation of contracts • Material control • Quality control e.g. leak test, welding procedure, etc • Conformity to design • Funding constraints • Price variation/ FOREX

18. Commissioning/Hand-over: • Quality control (inspection, testing procedures, acceptance criteria, etc) • Post-project support • Documentation/ recording ‘as-built’ condition

19. Operations/ Asset Management: • Trivializing & Disregarding Risks • Incompetent/ Under-qualified personnel • Inadequate training • Over-reliance on Technology/ Automation • Poor planning & Slow response to change • Largest, most controllable, most mismanaged risks

20. Decommissioning: • Data management • Major resource commitment

21. Elimination: Redesign or eliminate hazards totally • Functionality must not be compromised • Permanent solution, which should be attempted in the first instance • No other management controls required • Substitution: Replace the material or process with a less hazardous one • May represent a lower risk HIERARCHY OF RISK CONTROLS Participation & Supervision needed Effectiveness & Sustainability

22. Engineering Controls: Use physical means/ additional equipment to control risks. • Administrative Controls: Reduce or eliminate time of exposure by adherence to procedures and instructions • Documentation should emphasize steps/controls to be taken/used • Personal Protective Equipment (PPE): Supplementary method of control using protective clothing or equipment • Used only as a ‘last resort’, short term contingency or additional protective measure

23. THANK YOU