Risk Management Flashcards
What is risk management in an engineering context?
The concern with coping with future uncertainties, by planning for unintended outcomes through avoidance, management or mitigation.
What are different types of engineering risk?
- Safety and Environment
- Financial and Commercial Risk
- Project Risk
- Technical Risk - failure in design
What is project risk?
Risk of an uncertain event or condition that if occurs may have a positive or negative effect on the project’s objectives. E.g.
- late delivery
- poor quality
- desired outcomes not achieved
What is technical risk?
Risk that the design is not sufficient and results in failure. Technical risk management should include:
- quality management system (QMS)
- design stds for natural hazards
- quantitative assessment of both occurrence and severity
What is financial and commercial risk?
contract management (limit of liability, 3rd party reliance, consequential losses)
IPENZ code of ethics says engineers have a duty of care to protect life and safeguard people:
- priority to safety and wellbeing of community
- minimise the risk of loss of life, injury or suffering
- draw attention to level of significance of risk associated
- assess and minimise potential dangers
- ..? If matter gives rise to adverse consequences bring to the notice of the appropriate person
risk =
probability x consquence
Sources of risk for engineers in design contracts:
- inadequate scope or brief
- unrealistic timeframe
- liability from design inadequacies
- unforceen circumastances require major change
- loss of intellectual property
- missing data
- faulty assumptions
- calculation errors
- inadequate or improperly used software
Sources of risk in resource consenting
- assumption that consent would be non notified
- request for further info leads to delays
- consultation outcomes unexpected
- consent refused
- conditions of consent are too onerous
- need to appeal decision to environment court
Sources of risk in construction
- prices higher than estimated
- poor design documents lead to additional cost
- too few firms bid for work (uncertainty quality/cost)
- building consents requirements lead to changes, cost, delays
- delays from weather, labour stikes, h&s incidents
Risk mangement for design:
- risk identification
- risk impact assessment
- risk prioritisation analysis
- risk mitigation
What are risk mitigation options?
- Avoid: adjust requirements to reduce
- Reduce: control actions to minimise impact or likelihood
- Transfer: responsibility to another
- Watch/ monitor: for changes that impact risk
- Assume / Accept: without effort to control it
What is risk retention?
- accepting the loss, or benefit of gain from a risk when it occurs
Why is risk transfer often used in place of risk sharing?
Belief that you can transfer risk to 3rd party through insurance or outsourcing
Risk workshops are used to:
- identify potential issues ahead of time, before they pose cost and or schedule negative impacts.
- create or review risk register to identify and quantify risk elements
