RISK MANAGEMENT JC Flashcards
What is a risk?
Risk is an uncertain future event which would have an effect on the achievement of one or more project objectives.
What is risk management?
- A process for identifying, assessing and responding to risks associated with the delivery of an objective such as a construction project.
- Risk management establishes a set of procedures by which risks are managed.
- It comprises an intuitive approach where project teams look to manage risk in a more proactive manner.
What are the key stages of Risk Management?
1) Identify
2) Assess/Analyse
3 )Respond
4) Monitor and control
Talk me through how you manage risk on your projects.
Risk management workshops where I fill in risk registers and these are monitored and updated at monthly intervals in order to mitigate the risks.
Did you have a risk register on your project? How was it formulated?
This was a document formed following a risk workshop with the project team. Each risks nature was explained qualitatively and quantitatively. This included the probability, impact, mitigation and risk owner of each risl.
How would you go about pricing a risk register?
Firstly I would identify the risks. I would then
What types of risks would you find under employers risks?
NAME?
What type of risks would you find under employer’s change?
- Specific changes in requirements (i.e. in scope of works or project brief during design, pre-construction and construction stages).
- Changes in quality (i.e. specification of materials and workmanship).
- Changes in time.
- employer driven changes/variations introduced during the construction stage.
- Effect on construction duration (i.e. impact on date for completion).
- Cumulative effect of numerous changes.
What type of risks would you find under construction risks?
- Contaminated ground.
- Adjacent structures (i.e. requiring special precautions). Invasive plant growth.
- Tree preservation orders.
- Ecological issues (e.g. presence of endangered species).
- Environmental impact.
What type of risks would you find under design development?
- Inadequate or unclear project brief.
- Unclear design team responsibilities.
- Unrealistic design programme.
- Appropriateness of design (constructionability).
- Ineffective design co-ordination.
What is a risk Mangement strategy?
STARR
S - Share usually through construction contract, exceptional adverse weather, EOT, not loss and expense
T - Transfer - through insurance
A - Avoid - action to ensure risk does not occur. Remove or alternative design/ method
R - Reduce - if a risk does occur the impact will be reduced as much as possible
R - Retain - nothing and keep the risk under control
How do you carry out risk analysis and risk management?
Produce a risk register
- All members of the design team come together and brainstorm as many elements of project risk as possible
- These risks are continually monitored throughout the project progress
- Identified risks can be used to flag, prepare for and reduce the possibilities of their occurrence
What is a risk register?
A tool used in risk management to identify potential risks in a project
The register includes all information about each identified risk, such as nature of the risk, level of the risk, who owns it and what are the mitigation measures in place to respond to it
What approaches can you use to identify risks?
1) Research - similar projects / neighbouring sites
2) Structured interviews / questionnaires - with the project team
3) Checklists / Prompt lists
4) Brainstorming in a workshop environment
5) Risk Register
6) Database of historic risk
What is the aim of risk analysis?
It is concerned with trying to achieve a better understanding of the nature of the identified risks.
Risks have two dimensions that need to be analysed:
- Probability - likelihood of the risk occurring
- Impact - if the risk did occur, what effect could it have on the project objectives?
This allows you to determine which of the identified risks require detailed consideration (high probability with high impact) verses which only need a cursory glance.
What are the benefits of risk management?
1) Increased confidence in achieving project objectives
2) Reduced cost / time overruns
3) Enable decision making based on known variables
4) Risk Management Workshop facilitates team development and encourages communication
What is the use of probabilistic risk analysis?
It is a method of further evaluating a deterministic model using sets of random variables.
An example of probabilistic analysis includes the Monte Carlo Simulation
What is Monte Carlo Simulation?
A quantitative (probabilistic) risk analysis method. It is used to model the probability of different outcomes in a process that cannot be easily predicted due to the intervention of random variables.
It is a technique used to understand the impact of risk and uncertainty in prediction and forecasting models.
It helps to visualise most or all of the potential outcomes to have a better idea regarding the risk of a decision.
It can be best understood by thinking about a person rolling dice. A novice playing craps for the first time will not have a clue what the odds are to roll a six in any combination (e.g. 2+4, 5+1, 3+3). Throwing the dice many times, ideally several million times, would provide a representative distribution of results which will tell us how likely a roll of six will be. Ideally we should run these tests efficiently and quickly, which is what Monte Carlo simulation does.