Risk Engineering Society RISK 2016 Conference
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Transcript of Risk Engineering Society RISK 2016 Conference
Contents
Presentations - Thursday 19 May
Carl_Pettersson Presentation
David Cox Presentation
David Hulett Presentation
David Skegg Presentation
Goran Gelic Presentation
Ian Thomas Presentation
Jeff Jones Presentation
Laurie Bowman Presentation
Leigh Appleyard Presentation
Pedram Danesh Presentation
Robert Relf Presentation
Santosh Bhat Presentation
Stephen Weber Presentation
Truck rescue (mp4 video)
Presentations - Friday 20 May
Amr Fathy Presentation
Edmund Ang Presentation
Geoff Hurst Presentation
Greg Wruck Presentation
Marcus Punch Presentation
Matt Goode Presentation
Patrick Walker Presentation
Pedram Danesh-Mand Presentation
Peter Trueman Presentation
Richard Lightfoot Presentation
Santhosh Therakam Presentation
Steve Bickley Presentation
RES RISK 2016 CONFERENCE CONTINGENCY ASSESSMENT FOR
FINAL BUSINESS CASES (CASE STUDY)
M AY 2 0 1 6
OUR GLOBAL SUPPORT – AMEC FOSTER WHEELER
• 40,000 exceptionally talented people
worldwide
• 150+ year history operating in over
50 countries
• Markets – Oil & Gas, Clean Energy,
Environment & Infrastructure, Mining
• Offerings – Consultancy,
engineering, project management,
operations and construction
services, project delivery, specialist
power equipment
PEDRAM DANESH-MAND
• Flashback to my past
• Highlighting of my present
• Looking forward to my future –
WHY DO WE NEED TO TALK?
OPPORTUNITIES TO ENHANCE CAPITAL PRODUCTIVITY
• Flag of emerging risks – appropriate governance, reporting
framework, and reliable indicators
• Have adequate cost and time contingency – accurate assessment,
proper allocation, proactive management
• Having scenario analysis – enhanced delivery scenario planning
TO MITIGATE THE RISK OF 62% AVERAGE BUDGET OVERRUN ON MAJOR PROJECTS, …
Ref: EY, May 2015
So, WE NEED TO TALK!
IN ADDITION …
6
MANDATORIES (NSW TREASURY, INSW, DIRD)
• Whole of life and annual performance measurement
• All key projects delivered on time and on budget
• Annual CAPEX expenditure within +1% and -2%
• Terms used within reporting is compliant with the rest of the cluster
• Transport for NSW policies
• Transport Equip
• INSW Investor assurance process applies for all projects over $10m
1 OF 2
7
MANDATORIES (NSW TREASURY, INSW, DIRD)
• Regular gateway health check assessments between gates 1 and 5
• Reporting of INSW Tier 1 HPHR projects every month (pink reports)
• Reporting of INSW Tier 2 projects every 2mths (summary spreadsheet)
• To assess the amount of contingency provision in accordance with the national guideline
• Contingency Calculation, Allocation and Controls
2 OF 2
8
CONTINGENCY CALCULATION
RISK MANAGEMENT PROCESS
ISO 31000:2009, Risk Management – Principles and guidelines
CO
MM
UN
ICA
TE
AN
D C
ON
SU
LT
HB
327:2
010
MO
NIT
OR
AN
D R
EV
IEW
Establish Context
Analyse Risks
Evaluate Risks
Treat Risks
Identify Risks
RIS
K A
SS
ES
SM
EN
T
ISO
31
01
0
RISK & INTEGRATED PROJECT CONTROLS
• Risk definition: Effect of uncertainty on objectives
An EFFECT is a deviation from the expected – positive or negative
Risk has two types:
UNCERTAINTY (Planned, Inherent)
RISK EVENT (Un-Planned, Contingent)
Risk vs Issue:
RISK might happen = Consequence X Likelihood
ISSUE has happened = only Consequence
ALWAYS START FROM BASICS!!!
12
Allocated Cost/Schedule
(TAM / BP2)
P90 Cont
P50 Cont
Base
Estimate
P9
0 C
ont
P5
0 C
ont
Base
Schedule
CO
ST
SCHEDULE
P50 Escl
P90 Escl
Budget
(Announced)
Cost/Schedule Control & monitoring
CURRENT BASELINE INITIAL BASELINE FORECAST
Cost/Schedule Planning Cost/Schedule Control
PM Cont
available
Target
Cost
PM
Co
nt
Target
Schedule
CO
ST
SCHEDULE
Target
Allocated
(PM Budget) Escalation
Co
st T
o
Co
mp
lete
Actual
Cost
PM
Cont
availa
ble
SCHEDULE
RD Actual
duration
Estimate at
Completion
PM Cont
available
Escl. available
Cost To
Complete (excl.
Contingency &
Escalation)
Planned (excl. Cont)
CO
ST
Anticipated
completion
date
2 4
CONTINGENCY CALCULATION
Contingency Calculation
Deterministic
Factor based
Item based
Range based
Probabilistic
e.g. Monte Carlo
Schedule or Cost Risk Analysis
Integrated Schedule Cost Risk Analysis
CASE STUDY
Ref: TfNSW
KEY ELEMENTS OF PROBABILISTIC ESTIMATE
• ML assumptions for Base Estimate and Base Schedule
• Iterative inherent and contingent risks assessment
• Wide uncertainty range determination
• Reasonable Probability Density Functions
• To minimise optimism bias
• Correlation & relationships between model inputs
• Schedule contingency and its integration into risk model
• Contingency allocation across Delivery Packages
15
PROBABILISTIC ESTIMATION PROCESS
SCHEDULE COST RISK INTEGRATION
Schedule
Cost
Inherent &
Contingent
Risks
Overall Contingency (P10, P50, P90) + Allocation across Delivery Packages
Tornado Chart
Cashflow
Wet Weather
Risk
Workshops
& Review
Meetings
SCHEDULE RISK ANALYSIS (SRA) MODEL
COST RISK ANALYSIS (CRA) MODEL
Base Estimate Inherent Risks Contingent Risks
Correlation
KEY RESULTS
KEY EXCLUSIONS
• Additional scope that would change the nature and objectives;
• Acts of God;
• Delays to funding of the project;
• Changes to the nominated delivery strategy;
• Damage to reputation;
• Extreme risk events
• Operation and maintenance risks (other than commissioning);
• Risk of financing costs / interest rate variations; and
• The risk assessment of escalation.
21
PEDRAM DANESH-MAND DIRECTOR – RISK MANAGEMENT
+61 432 041 560
Zero AccessCase study of an international machine
safeguarding program
Dr Stephen Weber
19th May 2016
RISK Engineering Conference 2016
Safety Action Pty LtdSuite 114, 370 St Kilda Rd, Melbourne 3000T: 03 9690 6311F: 03 9690 6399www.safetyaction.com.au
History
• 30 Machinery Amputations (world-wide) over a 3 year period (2006-2008).
• Despite previous training, most local personnel did not fully understand the extent and integrity of guarding required.
• Local risk assessments and inspections continually failed to detect and report all the deficiencies.
• Company vision of Zero Harm
Issues with previous programs
• Risk assessment grading challenging
• Unclear responsibility for deployment,
mitigation, follow up & communication
• Diagnostic team size challenging
• Solutions database (sharing of solutions)
• Escalation process for significant risks
Zero Access Program
5 day training program conducted at 10 sites across 9 countries
Skill company’s super-users in Zero Access standards & risk assessment process
Conduct line-side Zero Access assessmentsto imbed practical learnings
Super-users roll out the program to all 200 factories world-wide
Zero Access Principles
1. No operator can accidentally or deliberately touch harmful machine parts
2. Rules and behaviour do not give zero access
3. To be a guard it must require a tool to remove it or be interlocked
4. Interlocks must be adjusted to prevent access until safe
Zero Access Principles5. To find all problems you have to assume they
are there, until proven safe
6. Physical access is a bigger problem than interlock category
7. Interlock maintenance & adjustment is more important than interlock category
8. Not all moving parts, holes or unsecured doors pose a hazard
Plant Safety RegulationsWHS Chp 5 & Vic OHS Regs Part 3.5(1) Guarding to prevent access to hazard point
(sfarp)
(2) Guarding hierarchy:- Fixed - Interlocked- Physical barrier (tool to remove)- Presence sensing safeguarding
Key Principles for Machine Guarding
1. Access must be prevented to all hazardous machinery parts e.g. mechanical & electrical. Reg 3.5.25(1)
2. Guards must be secured in place and require a tool to remove them OR be interlocked. Reg 3.5.25(2)
3. Guarding & interlocks to be durable and tamper proof. Reg 3.5.25(4) 4. All control buttons and levers must be clearly & durably labelled. Reg 3.5.26(1a) 5. Emergency stops must be coloured RED, labelled and, where practical, have a YELLOW
background and if shrouded operable by palm of hand. Reg 3.5.27(2b)
6. Where parts come close together the gap should be e.g. per EN and ISO and AS 4024.1803; a) > 25mm to prevent crushing finger b) > 100mm to prevent crushing hand c) > 120mm to prevent crushing arm
d) > 180mm to prevent crushing leg e) > 300mm to prevent crushing of head f) > 500mm to prevent body being crushed
7. Where access is required around machinery provide at least 1m wide walkway. If 1m not possible, provide at least 600mm wide access.
Key Principles for Machine Guarding
1. Unguarded hazards on top of machinery must be out of reach e.g. at least 2.7m from floor.
2. Safety fences to be at least 1.6m high (no foot holds), or RA to prove lower is safe. At least 900mm if electronic curtain or eye beams.
3. Gaps under safety fences or barriers to be < 180mm to prevent person access. If electronic curtain or eye beams, gap under < 300mm.
4. If aperture capable of (e.g. per EN and ISO and AS 4024.1801&2);
a) Finger-tip entry (gap 2mm to 6mm) then hazards must be > 10mm away.
b) Finger access (gap 6mm to 12mm) then hazards must be > 100mm away.
c) Hand access (gap 12mm to 20mm) then hazard must be > 120mm away.
d) Arm entry (gap 20mm to 120mm) then hazards must be > 850mm away e.g. arms reach.
e) Leg entry (gap 95mm to 180mm) then hazards must be > 1.1m away.
f) Person gaining entry (gap > 180mm) then reduce gap < 180mm or install tunnel e.g. provide tunnel over in-feed or out-feed conveyors.
No Access
Required
Work, butNo
Energy Required
Reach-InInterlockGuard
Whole Body Entry
(some energy)
Work, but Some
Energy Required
Zero Access
Guarding
LOTO Isolation
ProcedureInterlocks
Stop & Lock to PreventRe-Start
Non-LOTO
Procedure
Overview of Machinery SafeguardingPr
imar
y Sa
fety
Sys
tem
NormalOperation
Machinery Intervention Required
0 1 2 43
Risk Assessment
Key Project Findings
Guards Not; Secured, Fixed or Interlocked
Unauthorised access to tools
Panel not fully secured
Cover easily removed
Door not interlocked
Access Around, Through or Under GuardsAccess through in-feeds & out-feeds
Reaching over guardAccess under guard
Access through guard
Interlock Deficiencies
“Push-Button” type interlock easily defeated
Interlock allows door to open before stopping machine
Cover not interlocked
Other Deficiencies
Inadequate labelling of controls Isolation switch not labelled
Tripping hazards in walkway
Unauthorised warning sign
No LOTO tag
Types of Hazards
Types of Zero Access Hazards
0
10
20
30
40
50
60
70
80
Aranda Imaichi Karachi Melbourne St Louis Total
Guard not secure/ fixed/ locked
Access around guard/ hazard not guarded
Interlock
Other
Comparison of Risk Level for all Sites
Risk Level Percentage of Hazards Identified
High (Red) 5%
Moderate (Yellow)
68%
Low (Green) 28%
Types of Hazards Identified Percentages (rounded off)
Guard or panel not secured in place or unlocked 20%
Access around, under or over or hazard not guarded 50%
Interlock deficiencies 10%
Other including; labelling of controls, fall off machine, electrical hazard etc
20%
0 20 40 60 80
% RED
% YELLOW
% GREEN
Risks must be addressed per timeline:
• RED: within 1 year of diagnostic assessment
• Yellow: 30% within 1 year of assessment, and remaining
yellow within 2 years
• GREEN: Plan for action, as appropriate for site.
Timing for Control of Risks
Case Study – 3 years on
Every site world-wide assessed
17,000 machine hazards eliminated
Machinery guarding accidents virtually eliminated
Only 3 amputations in the 3 years since program rolled out (all LOTO failures)
Key Findings1. There are usually deficiencies in;
a) Machine guarding andb) Machine intervention practices
2. Similar models & age of equipment have similar number of hazards
3. Maintenance & inspection regime is important to sustain zero access
4. Be mindful of “blind spots”, unless assessment team trained
What does Risk-based Regulation
mean for Rail Safety?
Presentation to Risk 2016, Sydney
Steve Bickley
Director, Safety and Risk
May 2016
Office of the National Rail Safety Regulator 2
Should a safety regulator focus on:
1. What is illegal?
2. What is harmful?
Office of the National Rail Safety Regulator 3
Office of the National Rail Safety Regulator 4
Agenda
> A brief history of rail safety and regulation
> What is risk-based regulation?
> ONRSR’s approach
> Challenges to implementation
> Benefits for rail safety
Office of the National Rail Safety Regulator 5
ONRSR: Part of a great Australian rail journey
> Australia’s colonial rail networks
> State-based networks and rules
> 1990s: privatisation and state-based
regulation
> 1993: “A National Approach to Rail
Safety Regulation”
> 1996: agreement – nationally
consistent regulation
> 2009: COAG: national law, national
regulator
> January 2013: ONRSR commences
Office of the National Rail Safety Regulator 6
Rail Safety National Law – the Legal Basis (1)
> National law – originated in South Australia
> Other Australian states and territories have
progressively passed enabling legislation
> Western Australia latest to join (Nov 2015)
> Queensland expected in 2017
Office of the National Rail Safety Regulator 7
Rail Safety National Law – the Legal Basis (2)
Office of the National Rail Safety Regulator 8
Rail Safety National Law – the Legal Basis (3)
> ONRSR Commenced 20 January 2013
> Functions set out in law, include:
> to administer, audit and review an accreditation regime
> to work with industry to improve rail safety
> to conduct research, collect and publish information relating
to rail safety
> to provide, or facilitate the provision of advice, education
and training in relation to rail safety
> to monitor, investigate and enforce compliance with the Law
Office of the National Rail Safety Regulator 9
What is Risk-based Regulation?
The application of a systematic framework that prioritises regulatory activities
and deployment of regulators’ resources on an evidence-based assessment of risk
Baldwin & Black 2007; Black 2010
While regulators have always made regulatory design, implementation and allocation choices,
partly to manage limited resource, risk-based regulation formalises and provides consistent structure to the
decision making process
Sparrow 2000
Enterprise vs. Regulatory risk
REGULATORY Risks to the safety of railway operations in Australia that
ONRSR has the power to influence, through its
regulatory activity
e.g. train-to-train collision trackworker struck by train
Regulatory Risk Universe ONRSR Enterprise
Risk Universe
ENTERPRISE Risks with the
potential to impact the ability of ONRSR
to deliver on its objectives
e.g. loss of IT system
financial loss
Office of the National Rail Safety Regulator 11
ONRSR’s Approach to Risk-based Regulation
Office of the National Rail Safety Regulator 12
Why be Risk-based?
> Better targeted and more efficient use of resource
> Greater consistency of regulatory decisions
> Increased objectivity, clarity and transparency of
regulatory decisions
> Decision making that will stand up to greater scrutiny
Office of the National Rail Safety Regulator 13
We Administer a Risk-based Law
Office of the National Rail Safety Regulator 14
ONRSR’s Approach to Risk-based Regulation
> Developed based on research of good practice
> Designed to fit ONRSR’s role as set out by law
> Built recognising the co-regulatory framework
Focuses on the decisions ONRSR makes
and what risk-based requirements should
be applied
15
Scope of the RRM Framework
Office of the National Rail Safety Regulator
Tier 3 Decisions
Tier 2 Decisions
Tier 1 Decisions
16
Examples of Decisions
Tier 1 Decisions
Principal Focus of RRM Requirements e.g. Decision to accredit a rail operator
Office of the National Rail Safety Regulator
Tier 2 Decisions
Secondary Focus of RRM Requirements e.g. Decision to develop a new safety guideline
Tier 3 Decisions
No RRM Requirements e.g. Decision to select an IT service provider
17
Risk-based to what Degree? (1)
Office of the National Rail Safety Regulator
Decisions where:
• There is little potential impact to ONRSR’s ability to maintain and improve rail safety
• Taking a risk-based approach adds no value
• The consequence of not taking a risk-based approach is negligible
• The cost of taking a risk-based approach outweighs the benefit gained
Decisions where:
• There is a significant potential impact on ONRSR’s ability to maintain and improve rail safety
• Taking a risk-based approach adds significant value
• The consequence of not taking a risk-based approach could be catastrophic for rail safety
• The benefit gained by taking a risk-based approach outweighs the cost
Not Risk-based
Very Risk-based
18 Office of the National Rail Safety Regulator
RCL-0 The decision does not need to be informed by consideration of regulatory risk.
RCL-1 The decision will be informed by an implicit consideration of regulatory risk
RCL-2 The decision will be informed by implicit consideration of a pre-determined set of regulatory risk factors.
RCL-3 The decision will be informed by explicit consideration of a pre-determined set of regulatory risk factors.
RCL-4 The decision will be informed by an explicit, qualitative assessment of regulatory risk.
RCL-5 The decision will be informed by an explicit, quantitative assessment of regulatory risk.
Not Risk-based
Very Risk-based
Risk Consideration Levels (RCL)
Risk-based to what Degree? (2)
19
Example Risk-based Decision - Selecting National Priorities (1)
Office of the National Rail Safety Regulator
A national priority for ONRSR is defined as an area
of regulatory focus and which has the following
characteristics:
> Is an issue appropriate to focus compliance and
enforcement effort on;
> Applies to multiple ONRSR branches;
> Applies to multiple rail operators; and
> Requires a sustained focus by ONRSR of at least one year
20
Example Risk-based Decision - Selecting National Priorities (2)
Office of the National Rail Safety Regulator
REGULATORY INTELLIGENCE
ATSB Investigation Reports
Confidential Reports (REPCON)
Operator Notifiable Occurrences
Audit & Inspection Findings
Safety Performance Reports
Operator Investigation Reports
REGULATORY PRODUCTS
National Audit & Compliance Program
Branch Audit & Compliance Programs
Investigations
Rail Safety Report
Safety Bulletins
Drug and Alcohol Testing Program
Framework
Safety Improvement Projects
Policies, Guidelines & Fact Sheets
National Priorities Risk Assessment
Methodology
Prioritised set of National Priorities
Local Priorities for consideration
21
Example Risk-Based Decision - Selecting National Priorities (3)
Office of the National Rail Safety Regulator
Regulatory Risk Management Requirements:
1. A semi-quantitative, explicit risk assessment undertaken
2. Nominations based on an analysis of regulatory
intelligence
3. Nominations assessed against individually weighted,
regulatory risk factors
4. Operational stakeholders involved in setting national
priorities
5. Nominated areas that do not become national priorities
considered as local priorities
22
National Rail Safety Risk Model
Office of the National Rail Safety Regulator
• Existing regulatory risk framework largely relies on
internal (ONRSR) risk assessment
• Rail Industry Safety and Standards Board (RISSB) is
developing a national safety risk model
• ONRSR supporting RISSB’s work:
– Benefit to ONRSR as another source of regulatory intelligence
– Enables industry and ONRSR to be guided by the same national
safety risks - reinforcing co-regulation
Office of the National Rail Safety Regulator 23
Challenges to Implementation
Office of the National Rail Safety Regulator 24
Challenges (1)
It can’t all be risk-based
> Some things set by law: e.g. > Administering the National Rail
Safety Register
> Maintaining compliance with Records Management legislation
> Risk-based consideration can only be applied to what remains and where we have the ability to choose our approach
Office of the National Rail Safety Regulator 25
Challenges (2)
Getting the balance right
> We do not design decisions to
be risk-based for the sake of it
> Balance between relying on the
skills and judgment of staff vs.
formally risk-assessing
> We can’t use a Quantitative
Risk Analysis for every decision
but we also shouldn’t solely rely
on individuals
Office of the National Rail Safety Regulator 26
Challenges (3)
Trusting the System
> Different approaches in different
former regulators
> Usual challenge of ‘change
management’ and bringing
people on the journey
> Acceptance has been gained by
demonstrating the value
Office of the National Rail Safety Regulator 27
Benefits for Rail Safety
Office of the National Rail Safety Regulator 28
Benefits
Ultimately about improving rail safety
> Better alignment between regulatory activity and rail safety risk
> Making the best use of limited resources
> Increased transparency and better alignment between ONRSR and industry’s safety priorities
Questions?
Thank you
Simple, plain English project contingency and risk management
Peter TruemanMay, 2016
2
Background Contingency and risk management are being progressively made central to
the governance and management of major projects. This is as it should be; good practice will improve project outcomes and
reduce uncertainty. This presentation highlights some issues and opportunities to ensure risk
management and analysis remains useful and beneficial in project delivery.
1. Understand and manage risk properly first Risk should be understood and
treated thoroughly, like safety hazards Like safety, general risk treatments
should be tested rigorously Like PPE, $ should only be there as a
last line of defence
Safety hazard hierarchy of control1. Elimination
↓ 2. Substitution
↓ 3. Isolation
↓ 4. Engineering
↓ 5. Administration
↓ 6. Personal Protective Equipment (PPE)
Risk $ provisions should be a last resortBF1
Slide 3BF1 You will be talking to a lot Risk Managers so it maybe worth looking at noting the International Standard's (ISO 31000:2009) treatment techniques* Change likelihood of it occuring* Change consequence when it occurs* Avoid taking on the risk (qualify out)* Take on more risk if there is benefit (opportunity)* Remove the source that is causing the risk (safety hierarchy)* Share the risk with others (contract or insurance)* retain the risk (accept it)There should always be a cost benefit analysis of what treatment to do and how best to handle the risk.
Bronwyn Friday, 04/05/2016
4
2. Proper Project Planning Quantitative risk analysis is no substitute for proper estimating Cost review practice and contingency setting should be based on proper
project planning. Cost contingencies should be the last and smallest part of the analysis. The key component is a realistic asset solution and delivery plan, including
program (not a risk analysis).
Risk management and analysis follows
3. Risk analyses are generally conservative On a large number of similar projects, the residual
financial risk analysis was conservative (see chart). If generally representative, risk analyses are:
› good for ensuring funds are available if things go badly wrong
› misleading if used to report expected outcomes› Of no assistance in understanding and targeting
better than expected outcomes Opportunities and other causes of conservatism need
to be given much more attention Risk analyses should be benchmarked
Non-designed Projects - Actual Outcomes vs Risk Model Forecast
0
0.2
0.4
0.6
0.8
1
0.4 0.6 0.8 1 1.2 1.4 1.6 Out-turn Cost / Net Estimate
Cumu
lative
Prob
abilit
y
Actual OutcomeActual Outcome Best FitRisk Model
6
4. Conservatism should be addressed1. Opportunities are rarely identified and analysed sufficiently.2. They should be: they improve value for money.3. Types of opportunity that are often not properly analysed include:
a) Savings found in response to risks arising and costs being incurredb) Unanticipated, smart responses to mitigate risks as abovec) Over-valuations of likelihood and cost range of identified risksd) All sorts of opportunities that arise during delivery by smart, empowered peoplee) Time savings and time-related costs by smart, empowered people
4. “Unknown unknowns” contribute to unnecessary conservatism and do not belong in rigorous risk analysis.
5. Risk analysis should be used properly Drive lowest cost outcomes through the
setting and management to stretch targets, avoiding any unnecessary demand on contingencies.
Transparently forecast based on expected cost outcomes
Provision for worse case outcomes.
“Target the best, plan for the worst, report the facts”
8
6. Managers should manage to 1 budget What is achieved by reporting against a P50 and a P90? “Anchorage and adjustment” heuristic: if the money is there, it is likely to be
spent. Line managers at each level should manage to one budget. Scope and functionality increases are not risks. Risk should be managed against risk provisions in the appropriate part of
cost plans and reports. Expenditure of contingency (beyond risk provisions) should not be planned
for.
9
7. Reading the future over time Risk identification and evaluation is about predicting future events that may
happen No-one can read the future It follows that it is essential that risk identification, evaluation, treatment and
residual analysis is regularly and rigorously updated
10
Summary1. Understand and manage risk properly first2. Plan projects properly3. Recognise that risk models are generally conservative4. Address conservatism for better outcomes5. Use risk analysis properly: target the best, plan for the worst, report the
facts6. Manage to 1 budget7. Update risk analyses regularly
Simple measures to improve contingency and risk management
Risk Reduction of
Multifunctional Buildings Special emphasis on Antagonistic
Attacks and Domino Effects
Carl Pettersson
Multifunctional Buildings
Domino Effects
Antagonistic threats
Risk Analysis
Risk Analysis Method
Performace Based Design
Conclusions
Content
Multifunctional Building
One or several connected buildings hosting several functions
(e.g. societal) or occupancies (e.g. office, restaurant) where the
facility and its functions is one integrated whole. The definition
also includes underground facilities.
Town Hall
Town Hall Square,
Food Market,
Queen Victoria Building,
Train Station,
Venues,
Commercial offices,
Stores and shops
Multifunctional Building
Failure of one component can
provoke, by the domino effect, the
failure of other components up to
the point of a network-failure.
Domino effect
• Identify the networks
• Identify the dependent
components
Domino effect
• Identify the networks
• Identify the dependent
components
Domino effect
Domino effect
• Domino effect can
be observed
between several
networks that are
interconnected.
Domino effect
• Domino effect can
be observed
between several
networks that are
interconnected.
Domino effect
• Protective measures
• Redundancy
• Effectiveness
• Practicability
Domino effect
• Protective measures
• Redundancy
• Effectiveness
• Practicability
Domino effect
• Protective measures
• Redundancy
• Effectiveness
• Practicability
Domino effect
• Protective measures
• Redundancy
• Effectiveness
• Practicability
Antagonistic
Threats
Man-made attacks, against a specific target to which the
aggressor bears hostility, with the intention to achieve a
specific goal as a consequence of the attack.
Hostility
Objective
Consequence
Antagonistic Threat
Antagonistic
Targets
Antagonistic Threat
Iconic
Societal Importance
Temporary Events
High Profile People
High Occupant Loads
Complex
Antagonistic
Targets
Antagonistic Threat
Multifunctional
building
Iconic
Societal Importance
Temporary Events
High Profile People
High Occupant Loads
Complex
1. Identify hazards
2. Quantify the consequences
3. Identify hazard control options
4. Quantify the effects of the
options on the risks of the hazards
5. Select appropriate protection
Risk Analysis
REFERENCE
Nilsson, M. (2013) Fire safety evaluation of multifunctional
buildings – Special emphasis on antagonistic attacks and
protection of sensitive areas. Lic.-avh. Lunds tekniska
högskola. Lund: LTH, Avd. F. Brandteknik och
Riskhantering.
Risk Analysis - Method
REFERENCE
Nilsson, M. (2013) Fire safety evaluation of multifunctional
buildings – Special emphasis on antagonistic attacks and
protection of sensitive areas. Lic.-avh. Lunds tekniska
högskola. Lund: LTH, Avd. F. Brandteknik och
Riskhantering.
Risk Analysis - Method
The idea is that the
design utilizing risk
concepts and data as
significant factors in the
establishment of
performance objectives,
requirements and
criteria.
Stakeholders
Core functions
Assets/Protection objectives
Risk tolerance i.e. acceptance criteria
Qualitative analysis finding scenarios
Quantitative analysis
WCC (worst credible case)
AASW (all active systems working)
OASI (one active system at a time is
impaired)
Risk Analysis - Method
AASW (all active systems working)
Risk Analysis - Method
OASI (one active system at a time is impaired)
Risk Analysis - Method
How is performance based design used?
Performance based design
There is a need to consider domino effects
• Acknowledge dependencies, identify networks and
weaknesses in systems
• Redundancy and flexibility to mitigate escalating domino
effects
New design approach for multifunctional buildings
• Reconsider performance and acceptance criteria
• Use performance based design to considering extreme
events
Conclusions
RES Contingency GuidelineRisk Engineering Society (RES)
May 2016
Agenda
Introduction
Objective of RES Contingency Guideline
Project / Program / Portfolio
Contingency & Project Lifecycle
Contingency & Project Performance
Government Requirements
Contingency Management ProcessContingency CalculationContingency AllocationContingency Controls
Introduction
Objective
The RES Contingency Guideline provides a reference document for different approaches to sizing, allocating and controlling the most appropriate and reasonable contingency reserve (time and cost) at different stages of asset investment lifecycle for projects and programs while explicitly takes into account the risks facing the investment as well as decision‐makers' level of risk tolerance.
Project / Program / Portfolio
Project / Program / Portfolio
Contingency & Project Lifecycle
Contingency & Project Performance
Contingency & Government
Federal GovernmentThe TreasuryDepartment of Infrastructure and Regional Development (DIRD)
State Government
Independent Agencies e.g. Infrastructure NSW (INSW)
Contingency Management Process
Contingency Calculation
Contingency Calculation
Contingency Calculation
Contingency Allocation
Contingency Controls
Risk Engineering Society (RES)Pedram Danesh‐Mand, RES NSW President
0432 041 560, [email protected]
Risk Analysis and Functional Safety in Mining
Matt Goode MIEAust CPEng FSeng (TUV Rheinland)
2 2
Is functional safety too expensive?
3 3
The Right Tools for the Job
Functional Safety
- AS4024
- AS61508
- AS61511
- AS62061
Risk Assessments
PHA -
LOPA -
HAZOP -
Safety in Design
4 4
Risk Assessments
What makes the difference between good and bad risk assessments?
Risk Assessment
5 5
Risk Assessments
“We should get through everything by lunch, I have to be at the airport by 1”
6 6
Risk Assessments
“We’ve been doing this for years! It’s the same as the last one!”
7 7
Risk Assessments
“We’ve got over 85 years of experience in this room”
Rockefeller Plaza, September 1932
8 8
Risk Assessments
“We’ll cover that in a separate session”
9 9
Risk Assessments
“We’ll take a quick look at the issued for construction drawings for the shiploader”
10 10
Safety in Design
Functional Safety
- AS4024
- AS61508
- AS61511
- AS62061
Risk Assessments
PHA -
LOPA -
HAZOP -
Safety in Design
11 11
Safety in Design
Admin Buildings
TLO
rail
Main Site
Access Road
SUB
12 12
Safety in Design
What if Causes Consequence Consequence
Category Safeguard After Risk Reduction
S L RR
1. Material falls onto the roadway?
1. ripped belt CV200
1. Production Loss Revenue 1. Rip Detector
Switch
2. Emergency Stop
1 - Minor C - Possible Low
2. Potential Multiple Fatalities Personnel in Vehicles
Personnel 1. Rip Detector Switch
2. Emergency Stop
5 - Catastrophic E - Rare High
2. blocked chute CV100/CV200 transfer station
1. Potential Multiple Fatalities Personnel in Vehicles
Personnel 1. Blocked chute Switch
2. Emergency Stop
5 - Catastrophic E - Rare High
2. Production Loss Revenue 1. Blocked chute Switch
2. Emergency Stop
1 - Minor B - Likely Moderate
13 13
Safety in Design
Safety in design is more expensive the longer you wait
14 14
Functional Safety
Functional Safety
- AS4024
- AS61508
- AS61511
- AS62061
Risk Assessments
PHA -
LOPA -
HAZOP -
Safety in Design
15 15
Functional Safety
Maybe we can throw in some extra controls?
16 16
Functional Safety
Risk Assessment
Hazard LOPA Study SRS Design Testing Maintenance
Hazard LOPA Study SRS Design Testing Maintenance
Overstated
Hazard LOPA Study SRS
Design Testing Maintenance
Design Testing Maintenance
Missed Hazard
Understated Hazard
17 17
Functional Safety
“How much is all of this going to cost?”
18 18
In Summary…
• Risk assessments • Early, well maintained • Clear scope, no overlap or gaps • Correct technique • Avoid copy – paste from previous projects
• Safety in Design • Most effective hazard management strategy • Early implementation = lowest cost
• Functional Safety • Where appropriate • Does not replace safety in design • Cost is directly related to how well the other factors are implemented
1
Designing and creating a better Risk Matrix
2
Introduction
Laurie Bowman DRMP CCP PSP EVPCompany ‐ SynchronyCost Engineering Consultant with 20 years experienceCommittee member of Australian Cost Engineering Society (ACES)Supporting clients to improve their maturity in cost engineering, project controls and earned value management!
3
Presentation Overview
What is a risk assessment?
What is a risk matrix?
Why does the design of a risk matrix matter?
The 4 Key elements to create an effective risk
matrix
4
What is a risk assessment?
A systematic process of identifying and evaluating
the risks involved in a projected activity or
undertaking.
Typically categorised as “qualitative” and
“quantitative”.
Risk assessments inform decision making.
5
What is a risk matrix?
o RISK MATRIX – A tool used in risk analysis to rate
or rank the severity of risks in terms of their
combined impact (or consequence) and the risk’s
probability of occurrence.
o The matrix has consequence on one axis and
probability on the other with each intersecting node
given predetermined severity rating designations.
These categorised are typically either subjective
(e.g high, medium, low) or have a numerical basis.
6
Why have a risk matrix?
A Visual communication tool that raises awareness
Quick and simple for stakeholders to interpret and
use
Guide for decision making and prioritisation
Helps to get stakeholders thinking probabilistically
about the future
Can support more rigorous quantitative risk
modelling e.g. monte-carlo
7
Why is the design important?
It should be scaled appropriately to cover a wide range of probabilities and consequences
Improve assessment of risk severity for decision making It should reflect the organisations values – what matters
most Alignment between qualitative and quantitative
processes Severity of different risk types of risk can be compared
on the same scale Sustainability enhanced through multi-functional decision
making Standardised processes and categories Transparency and compliance with commercial and
financial reporting
8
4 key requirements:
Simplifed into 4 key requirements:
o Vertical Alignment - Aligned with the organisational values so that it can be used for decision making.
o Horizontal Alignment - Integrated scaling to enable comparison between risks of different types.
o Appropriate scaling – for alignment with quantitative risk processes.
o Consider the upside of uncertainty and capture opportunities.
9
Risk = Consequence X Probability
In 1711 Abraham De Moivre came up with the mathematical definition of risk as: The Risk of losing any sum is the reverse of
Expectation; and the true measure of it is, the product of the Sum adventured multiplied by the Probability of the Loss.
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Log-log Scaling – The Numerical Basis
Qualitative Descriptors
Negative Consequence
Insignificant Low Moderate High Critical
Quantitative Scales
Less than 103
($1,000)103 up to 104
($10,000)104 up to 105
($100,000)105 up to 106
($1,000,000)106 up to ~107
(~$10,000,000)
Like
lihoo
d
Almost Certain
10-1
Up to 100
(1.0)
100X103
=103 104 105 106 107
Likely
10-2
Up to 10-1
(0.1)
102 10-1X104
=103 104 105 106
Possible
10-3
up to 10-2
(0.01)
101 102 10-2X105
=103 104 105
Unlikely
10-4
up to 10-3
(0.001)
100 101 102 10-3X106
=103 104
RareLess than 10-4
(0.0001)10-1 100 101 102 10-4X107
=103
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Log-log Scaling – Example
Qualitative Descriptors
Negative Consequence
Insignificant Low Moderate High Critical
Quantitative Scales
Less than 103
($1,000)
103 up to 104
($10,000)
104 up to 105
($100,000)105 up to 106
($1,000,000)Over 106
($10,000,000)
Like
lihoo
d
Almost Certain
101
Up to 100
(1.0)
Medium High High Extreme Extreme
Likely
10-2
Up to 10-1
(0.1)
Medium Medium High High Extreme
Possible
10-3
up to 10-2
(0.01)
Low Medium Medium High High
Unlikely
10-4
up to 10-3
(0.001)
Low Low Medium Medium High
RareLess than
10-4
(0.0001)Low Low Low Medium Medium
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It’s all about the uncertainty
Risk Management is about dealing with uncertainty. Uncertainty can impact a range of project outcomes such as:o Profit / Asset Valueo Safetyo Environmento Social / Community relationships
13
Values
Organisations place importance on different project outcomes depending on their value (what matters to them). o Profito Health and Safetyo Reputationo Social / Community Relationshipo EnvironmentThe risk matrix should be designed to reflect those values.
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Vertical Alignment
15
Risks Guides and examples for Horizontal Alignment
Consequence Level
Consequence Category
Asset / Financial
Health & Safety EnvironmentSocial / Community
Relationship
Catastrophic > $10MMultiple fatalities, multiple
permanent disabilities or ill-health.
Permanent or widespread long term damage to the environment.
Collapse or complete shift of ecosystem processes.
Demand for government inquiry
MajorBetween $1M and
$10M
Single death &/or long-term illness or multiple serious
injuries
Long term, significant impact with an extreme change to both ecosystem structure and
function.
Adverse and extended national media
coverage
ModerateBetween $100k
and $1M
Injury; Possible hospitalisation & numerous
days lost
Ecosystem function altered to an unacceptable level with some function or major components
now missing &/or new species are prevalent.
Adverse capital city media coverage
MinorBetween $10k
and $100kMinor injury; Medical
treatment & some days lost
Maximum acceptable level of change in the environment structure with no material
change in function.
Adverse local media coverage only
Insignificant< $10k
No or only minor personal injury; First Aid needed but
no days lost
Measurable but minor change in the environment or ecosystem structure but no measurable
change to function
Negligible impact
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Risks Guides and examples for Horizontal Alignment
SocialEnvironmental
Social
Economic
17
Sustainability and Risk
o Sustainability themes are central to common project risk assessment processes. Economic, Social and Environmental sustainability.
o Risk assessments and risk matrices support sustainable decision making.
o Risk assessments should incorporate the full asset lifecycle and economic, social and environmental impacts.
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Ideal for Value Engineering Workshops
19
Test your risk matrix?
Once the categories have been agreed it is important to test the matrix. o Trial the matrix on a live projecto Support stakeholder in their first time useo Actively seek feedback to improve interpretation
and usability
20
The Benefits
Simple tool for engagement and order of magnitude appreciation of risk severity.
Great for gaining a high level judgement of significance. Alignment of qualitative and quantitative processes. Alignment of different disciplines. Standardization of categories for consistency. Does not address sensitivity – further analysis required – the
biggest is not always the most important. Cost benefit analysis required.
Does not address compounding risk less intuitive risks such as merge bias which is better captured using quantitative schedule risk analysis tools.
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What does a good one look like?
o Symmetryo Diagonal lines of equal risko Colour coding for visual association
Qualitative Descriptors
Negative ConsequenceInsignificant Low Moderate High Critical
Quantitative Scales
Less than 103
($1,000)
103 up to 104
($10,000)
104 up to 105
($100,000)105 up to 106
($1,000,000)Over 106
($10,000,000)
Like
lihoo
d
Almost Certain
101
Up to 100
(1.0)
Medium High High Extreme Extreme
Likely
10-2
Up to 10-1
(0.1)
Medium Medium High High Extreme
Possible
10-3
up to 10-2
(0.01)
Low Medium Medium High High
Unlikely
10-4
up to 10-3
(0.001)
Low Low Medium Medium High
RareLess than
10-4
(0.0001)Low Low Low Medium Medium
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Not so good
23
The Upside - Opportunity
Qualitative Descriptors
Negative Consequence Positive Consequence
Insignificant Low Moderate High Critical Critical High Moderat
e Low Insignificant
Quantitative Scales
Less than 103
($1,000)
103 up to 104
($10,000)
104 up to 105
($100,000)
105 up to 106
($1,000,000)
Over 106
($10,000,000)
Over 106
($10,000,000)
105 up to 106
($1,000,000)
104 up to 105
($100,000
103 up to 104
($10,000)
Less than 103
($1,000)
Like
lihoo
d
Almost Certain
101
Up to 100
(1.0)
Medium High High Extreme Extreme Extreme Extreme High High Medium
Likely
10-2
Up to 10-1
(0.1)
Medium Medium High High Extreme Extreme High High Medium Medium
Possible
10-3
up to 10-2
(0.01)
Low Medium Medium High High High High Medium Medium Low
Unlikely
10-4
up to 10-3
(0.001)
Low Low Medium Medium High High Medium Medium Low Low
RareLess than
10-4
(0.0001)Low Low Low Medium Medium Medium Medium Low Low Low
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In Summary
The risk matrix does not solve everything. It’s just one tool within a suite of tools for managing uncertainty and decision making. It can be a powerful tool to support sustainable solutions if it is designed well.
The Four keyso Vertical alignment with organisation’s values and
cultureo Scaling for alignment with quantitative processeso Horizontal alignment between different risk impact
typeso Consider the upside of risks and track opportunities
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References
o Clements, P. Sverdrup System Safety Course Notes, 1996.
o Cox, L.A. Jr., ‘What’s Wrong with Risk Matrices?’, Risk Analysis, Vol. 28, No. 2, 2008.
o Recommendations on the use and design of risk matrices, Duijm, Nijs Jan, Safety Science, 2015
26
Thank-you
Please feel free to contact me if you would like any further information on;1. Improving your Maturity in Cost Engineering, Project
Controls and Earned Value Management.2. Mentoring, coaching and training in Cost Engineering and
Project Controls3. AACE International Certification Preparation4. Risk Assessments, qualitative and quantitativeEmail: [email protected]
Phone (Australia): 61 413 140 796
Fracking, Unconventional Gas
and Risk
RISK 2016
Risk Engineering Conference
Engineers Australia
Paper Title: Fracking, Unconventional Gas and Risk
Author: Richard M Lightfoot, Casconsult Pty Ltd
1. To frack or not to frack?
2. What risks? Can they be defined, assessed, quantified or controlled?
3. Is society’s insatiable appetite for energy risking too much? Health and safety, environmental impact, water supply.
4. Society’s demand for energy from fossil fuels increases
yearly.
5. Shale gas now economical to recover. Discuss how it is
done.
– Directional drilling,
– High pressure hydraulic fracturing,
– Slickwater,
– Multi-well pads and cluster drilling
6. Operators can exploit gas supplies by having a
Social Licence. Discuss the effect on different
parties/stakeholders.
– Landowners, Native Title Holders, environmental parties,
communities and government,
– Prime agricultural land, surface and underground water,
communities, health and safety, welfare,
– Balance between legal right and social responsibility.
Growth of Natural Gas Exploration in Australia
7. Growth and potential of unconventional gas exploration in Australia
8. The unconventional gas and potential and drilling activities to 2013 as
seen in Figure below.
State or Territory Production Proved reserves Contingent
resources
Prospective
resources
Wells drilled
Queensland 264 41 124 Not available 164 000 1 000
NSW 3 284 to 3 919 527 to 3 757 14 401 10
Western Australia None None 3 275 to 5 898 427 000 15(b)
South Australia None none 1 725 to 6 807 45 000 to 268 000 13
Northern Territory None None None 257 276 10
Victoria None None 403 to 1 212 452 None
Tasmania None None None None None
Fig 2 Comparison of Australia and USA Unconventional gas resources (Lightfoot, 2015 SPE 176867-MS)
Arising Concern
9. Discuss the legal position with unconventional gas
exploitation/exploration in Australian states and territories
10. What have States and Territories done to address competing
interests
– Queensland (State Cropping Land Act)
– New South Wales
– Victoria
– Tasmania
– No bans in Western Australia, South Australia or Northern
Territory
11. Legislative control, States v. Federal.
Australia’s Legal Regime
12. Allocation of powers. Commonwealth v. States. No difference?
13. Australian Constitution. Does it give Commonwealth powers to
enact law over the environment? Principal power of
Commonwealth?
Ownership of petroleum and minerals
14. Australia, North America
15. Victoria, Petroleum Act 1998 (Vic), Mining Act 1958(Vic) and
subsequent legislation
Environmental Impact
16. Environment Protection Biodiversity Conservation Act 1999
(Commonwealth) – EPBC Act
– Responsible for (a) World Heritage sites; (b) National Heritage
places; (c) internationally important wetlands (Ramscar wetlands); (d)
nationally listed threatened species and ecological communities; (e)
listed migratory species; (f) nuclear actions (including uranium
mines); (g) Commonwealth marine areas; (h) the Great Barrier Reef
Marine Park. and (i) activities undertaken on land owned by the
Commonwealth or activities undertaken by Commonwealth agencies.
17. Approval must be sought from Commonwealth Environment Minister if
action is likely to have significant impact on a matter of national
environmental significance.
18. EPBC amended 2013. Commonwealth responsible for regulating
impact of CSG (not shale gas) and large scale coal projects
likely to impact on water resources.
19. “Water trigger” exception to regulatory jurisdiction of individual
states.
20. Risks, potential hazards, options to mitigate
Risk Management
Risk Assessment
Risk
Management
Due Diligence Good Faith
21. Principal risks
– Water supplies
– The environment
– Supply of energy
– Public health
Risk Assessment
22. First part of relationship with due diligence and good faith
23. Standard risk assessment does not always consider social
consequences
24. HVHF recently developed technology, no medium/long term effects
obvious
25. Chemicals used in fracking pollute surface and underground water
26. Currently identified risks
– Water contamination
– Air and greenhouse gas emissions
– Migrating and equipment leaked methane
27. Risk obvious in drilling, fracking, production and abandonment
28. Perfect engineering solutions
29. Operators see risks as low
Risk Arising from Fracking
29. To determine risks of High Volume Hydraulic Fracking (HVHF),
individual risk to be examined
30. Geological pathway
31. Identify harmful chemicals in each layer
32. Identify direction flow of fluids and gases with respect to fresh
water
Drilling Risk
33. Horizontal drilling v vertical drilling
34. Casing systems
35. Life of well
36. Fault lubrication
Hydraulic Fracturing
37. Outline process of hydraulic fracturing
38. Chemicals, transported (road accidents, spillages), storage, “flow
back”
39. Failure of casing and cementing wells
40. Fracking fluids and hazardous chemicals effect on environment,
people
Operator Risk
41. Failure to assess risk – puts social licence to operate at risk,
resulting in financial and economic consequences
42. All stages of operation – well, pipe lines, compressor stations,
downstream processing
43. Migrating gas and poor valve maintenance
.
Due Diligence
44. Methodology of due diligence
– Government and Operators apply prudence and responsibility
in assessment and decision making
– Standard of Care
– Develop Guidelines to protect water supplies, environment,
public health, cultural heritage, human rights, stakeholder
interests
45. Application
– Requires all parties to pursue honest engagement, common
ground and embrace alternate views to achieve a way forward
46. Impact assessment
– Social and environmental impact
Good Faith
47. Interpreted from Vienna Convention on the Law of Treaties
48. Ensuring all parties act in good faith to establish adequate risk
management
49. Going from ethical to legislative requirement although no universal
accepted definition
50. USA, Unified Commercial Code
51. Good Faith not embraced in England
52. National courts apply concept of Fair and Equitable Treatment
Public Policy
53. Principle of law for at least 150 years
54. Description
55. Specific groups will influence to change policy
56. Consolidated Assessed Risk
57. Peer review research identifies chemical transmission by casing
and cementing failures, fracture zones by activation of
subsurface geological faults and weakness zones. Separation
zones for gas and water wells to reduce risk to drinking water
supplies
Lack of Information on Chemicals Used in Fracking
58. Small number have CAS Regulatory Numbers on Material Safety
Data sheets. CAS number assists in determining health and
environmental data
59. Commonly used chemicals
60. In Australia, National Industrial Chemical Notification Assessment Scheme
(NICNAS) undertakes assessment of chemicals used in industry.
NICNAS only assessed 2 out of 23 chemicals used in fracking in
Australia
61. Essential to know characteristics of chemicals used in fracking
fluids
62. “Flow back”, toxic materials in formation, name toxic materials
Health and Environmental Risks of Some Fracking
Chemicals
63. Tetrakis (hydroxymethyl/phosphonium sulfate (THPS)
- Toxic to microorganisms, anti-fouling agent, cancer potential in rats
64. Sodium Persulfate
- Causes skin rashes and eczema, irritates eyes, long-term
exposure may cause changes in lung function
65. Ethylene Glycol
- Can irritate eyes, nose and throat, female workers – increased
risks of spontaneous abortion and sub-fertility
66. 2-Butoxyethanol
- High doses can cause reproductive and birth defects
67. Ethoxylated 4-nonylphenol
- May cause long term adverse effects in the aquatic environment,
disrupts normal hormone functioning in the body
68. Naphthalene
– Nasal and lung tumours in laboratory animals, humans exposed
to ingestion of naphthalene develop haemolytic anaemia
69. Methanol
– Highly toxic to humans, damage to central nervous system in
humans and animals as well as degenerative changes in the
brain and visual system
70. Isopropanol
– Reproductive toxin and irritant, central nervous system
depressant
71. Formamide
Teratogen, potential to affect the unborn child. Irritant to eyes and
may cause effects on the central nervous system
Conclusion
72. Society better informed of benefits and risks of fracking
73. Scepticism about benefits
74. Risk management needs to include due diligence and good faith
75. Specific groups will influence public policy change.
Facilitated by: Geoff Hurst FIEAust CPENG CPMSIA RSP (Aus)
Safety in Design &
Safety Case
18 –20 May 2016
Safety in Design & Safety Case - Abstract
Safety In Design is a topic of much discussion and consternation.
Safe design is just something we as engineers are trained to do as a matter of
course. There is difficulty when we are required by law to consult with other
stakeholders as a matter of compliance and what does this mean. Designers as
such are trained in the design process but are not necessarily engineers.
This facilitated presentation discusses the interactions and overlaps between the
legislated processes, design process, and engineering design. It then goes onto
show how these processes can be considered to produce a safe design. Safety
case is also considered and compared to the requirements of Safe Design. How
it can contribute to how the design process is evaluated.
Keywords: design, safety case, law, innovation, legislation, regulation, designers, engineers, risk,
collaboration, problem, FRAM, functional resonance, analysis, method,
Safety in Design & Safety Case
Conclusions
How is the law interpreted?
Introduction to Design & Safety Case
What is the intention of the Law?
How does Safety Case support Safe Design?
What does the Law say?
Reflection
Fail early
and often
Leading Creative Thinking
Safety in Design & Safety Case
Design is about getting the solution right.
Engineering applies the laws of nature to meet
the laws of man.
Safety Case presents the engineering
argument about how this is achieved.
Introduction to Design & Safety Case
IDENTIFY
ASSESS
CONTROL
REVIEW
Define the problem
Identify the alternative solutions
Select the best solution
Implement and review
the effectiveness.
Basic Problem Solving Process
The Law – Case Study
Due Diligence
SFAIRP
Reasonably Practicable
PCBU
Responsible Officer
Designer
Supervisor
The Law – Case Study
The role of Safety Case in the design
process and how
The Safety Case presents an argument
and
How diligence is achieved along side
The requirements for
Reasonably Practicable and
SFAIRP
will be illustrated by the facilitation of a
role play of a design – construct –
commission case study
REFLECTION
CONCLUSIONS
Facilitated by: Geoff Hurst FIEAust CPENG CPMSIA RSP (Aus)
Safety in Design &
Safety Case
18 –20 May 2016
A Critique on Assessing and Managing the Risks of Climate Change
Leigh D Appleyard
ACOR Consultants Group
O/H 1
RISK 2016
RISK ENGINEERING SOCIETY CONFERENCE
SYDNEY
18 – 20 MAY 2016
O/H 2
CHRONOLOGY OF ASSESSMENT REPORTS
1990 First Assessment Report of the Intergovernmental Panel on Climate change
1995 Second Assessment Report
2001 Third Assessment Report
2007 Fourth Assessment Report
2014-2015 Fifth Assessment Report
O/H 3
FIFTH ASSESSMENT REPORT
2014-2015
Working Group II (one of three), under “assessing and managing the risks of
Climate Change” stated
Working Group I introduced both a qualitative confidence level scale and a
quantitative likelihood scale express in probabilistic terms.
Working Group III extended the application of decision making processes under the
conditions of uncertainty, noting particularly
“Climate change involves complex interactions and changing
likelihoods of diverse impacts. A focus on risk, which is new in this
report, supports decision making in the context of climate change
and compliments other elements of this report. “
“Climate policy may be informed by a consideration of a diverse
array of risks and uncertainties, some of which are difficult to
measure, notably events that are of low probability but which would
have significant impact if they occur”
O/H 4
FIFTH ASSESSMENT REPORT
2014-2015
UNITED NATIONS FRAMEWORK
CONVENTION ON CLIMATE CHANGE
21 MARCH 1994
The Parties to the Convention noted, on the first page of the document
The work “risk” does not appear once in the 30 page document
“… that there are many uncertainties in predictions of climate
change, particularly with regard to timing, magnitude and regional
patterns thereof.”
O/H 5
O/H 6
WG1 authors adopted the following
THIRD ASSESSMENT REPORT
Confidence/Likelihood Chance ²
Virtually certain > 99% chance
(that a result is true)
Very likely 90% - 99% chance
Likely 66% - 90% chance
Medium likelihood 33% - 66%
Unlikely 10% - 33%
Very unlikely 1% - 10% chance
Exceptionally unlikely <1% chance
² “ Chance” was not specifically defined.
O/H 7
THIRD ASSESSMENT REPORT
WG2 authors, on the other hand, adopted the following simpler scales
Confidence/Likelihood Chance
Very high 95% or greater
High 67% - 95%
Medium 33% - 67%
Low 5% - 33%
Very low 5% or less
O/H 8
THIRD ASSESSMENT REPORT
No confidence levels were assigned in WG3, perhaps wisely so
O/H 9
COMMENTS ON THIRD ASSESSMENT REPORT
COMMENT 1
“ The IPCC’s strategy does not exactly match people’s common use of language, in
which the words used to describe the probability of an event also depend on the
event’s potential magnitude: the IPCC is communicating probability using language
commonly used to describe risk, the combination of probability and consequence.”
(Patt A.G, and SCHRAG D.P “ Using Specific Language to describe Risk and Probability,
Climate Change 61:17 – 30, 2003)
O/H 10
COMMENTS ON THIRD ASSESSMENT REPORT
COMMENT 2
“ The strategy of using specifically designed language to describe the probabilities
of climate change risks achieves important objectives, but may also introduce bias
into policy-makers responses. Intuitively, people use such language to describe both
the probability and magnitude of risks, and they expect communicators to do the
same. Assessors need to emphasize that the IPPC’s use of this language departs
from people’s expectations. Unless policy-makers appreciate this fact, their
response to the assessment is likely to be biased downward, leading to insufficient
efforts to mitigate and adapt to climate change.
(Patt A.G, and SCHRAG D.P “ Using Specific Language to describe Risk and Probability, Climate Change 61:17 – 30, 2003)
O/H 11
FOURTH ASSESSMENT REPORT
Martin Manning was a member of IPCC Working Group I Technical Support Unit. In
an article in Advances in Climate Change Research6 in 2006, Manning conceded:
“A key issue in developing guidance on uncertainty for the AR4 was
to resolve the issue of whether the diverging approaches used by
Working Groups I and II in the TAR should be brought together again
into a single scale, or whether the distinction should be clarified and
preserved in the AR4”
Martin Manning, Victoria University of Wellington, New Zealand
“The Treatment of Uncertainties in The Fourth IPCC Assessment Report:, ADV. Clim:Change Res., 2006, 2 (Suppl. 1) 13- 21
O/H 12
FOURTH ASSESSMENT REPORT
The standard terms used to define levels of confidence in this report are as given in
the IPCC Uncertainty Guidance Note, namely
Confidence Terminology Degrees of confidence in being correct
Very high confidence At least 9 out of 10 chance
High confidence About 8 out of 10 chance
Medium confidence About 5 out of 10 chance
Low confidence About 2 out of 10 chance
Very low confidence About 1 out of 10 chance
Note that ‘low confidence’ and ‘very low confidence’ are only used for areas of major
concern and where a risk-based perspective is justified.
O/H 13
FOURTH ASSESSMENT REPORT
LIKELIHOOD TERMINOLOGY
Likelihood Terminology Likelihood of the occurrence/outcome
Virtually certain >99% probability
Extremely likely >95% probability
Very likely >90% probability
Likely >66% probability
More likely than not >50% probability
About as likely as not 33 – 66% probability
Unlikely <33% probability
Very unlikely <10% probability
Extremely unlikely <5% probability
Exceptionally unlikely <1% probability
O/H 14
FOURTH ASSESSMENT REPORT
The authors drew the following distinction from completely unspecified assumptions
or logic:
No guidance was given as to what a “risk-based perspective” means, nor as to why
such an approach is limited to events which have a “2 out of 10 chance of less”.
“Note that ‘low confidence’ and ‘very low confidence’ are only used
for areas of major concern and where a risk-based perspective is
justified.”
O/H 15
COMMENTS ON THE
FOURTH ASSESSMENT REPORT
COMMENT 1
I have argued that the IPCC has oversimplified the issue of dealing with uncertainty in the climate system,
which can lead to misleading overconfidence. Consequently, the IPCC has neither thoroughly portrayed the
complexities of the problem nor the associated uncertainties in our understanding. Improved understanding
and characterization of uncertainty and ignorance would promote a better overall understanding of the
science and how to best target resources to improve understanding. A concerted effort by the IPCC is
needed to identify better ways of framing the climate change problem, exploring and characterizing
uncertainty, reasoning about uncertainty in the context of evidence-based logical hierarchies, and eliminate
bias from the consensus building process itself. The IPCC should seek advice from the broader community of
scientists, engineers, statisticians, school scientists and philosophers in strategizing about ways to improve
its understanding and assessment of uncertainty.
Improved characterization of uncertainty and ignorance and a more realistic portrayal of confidence levels
could go a long way towards reducing the “noise” and animosity portrayed in the media that fuels the public
distrust of climate science that is clouding the policy process. Once a better characterization of uncertainty is
accomplished (including indeterminacy and ignorance), then the challenge of community uncertainty is much
more tractable and ultimately more convincing.
Curry, J., “Reasoning about climate uncertainty”, Climate Change (2011) 108
O/H 16
COMMENTS ON THE
FOURTH ASSESSMENT REPORT
COMMENT 2
Quantitative uncertainty analysis emerged with risk analysis with structured expert judgement
(reviewed in Cooke 2013) and has spread in areas where decision making under uncertainty
is paramount. As yet it has played a small role in the climate debate. This is undoubtedly
related to the fact that no government agency is charged with managing or regulating climate.
The IPCC does not do research and cannot commission uncertainty studies; it can only report
on what has been done by others. However, the semantics of uncertainty that the IPCC has
adopted and published as guidance for lead authors is unhelpful and ultimately insufficient.
Even though uncertainty qualifiers, such as “likely” and “confident”, are given a precise
meaning, they cannot be propagated through a chain of reasoning and, more importantly,
they encourage defective reasoning under uncertainty. This is not due to an affliction of the
nontechnical lay public. The experts at the National Research Council, after ripe deliberation,
have dispelled that idea most convincingly.
Cooke, R.M., “Deep and Shallow Uncertainty is Messaging Climate Change”, (April 2014), Resources for the Future, RFFDP 14-11
O/H 17
FIFTH ASSESSMENT REPORT
SUMMARY FOR POLICYMAKERS
O/H 18
FIFTH ASSESSMENT REPORT
WORKING GROUP III – RISK MANAGEMENT FRAMEWORK
MITIGATION OF CLIMATE CHANGE
O/H 19
ARE WE THERE YET?
ANSWER: NO, NOT YET
By the way of example:
Further:
“In recent years several new risk perspectives have been developed
that are based on uncertainties and not probability. We will
demonstrate that these new approaches provide a stronger and
more appropriate basis for climate change analysis than those
adopted by (the) IPCC so far.”
“A key feature of these perspectives is the sharp distinction between
risk and uncertainty and how these two are measured. Much of the
IPCC terminology on risk and uncertainty lack this dichotomy.”
Aven T., and Renn, O, “An Evaluation of the Risks and Uncertainties in the IPCC Report on Climate Change.” Risk Analysis
Vol35, 4 April 2015, 701 – 712.
O/H 20
FUTURE REPORTS
Budescu concluded
Recommendations
These results provide strong justification for revising the way the IPCC communicates uncertainty to the public and policy
makers. I recommend continuing the use of the 7 verbal categories used in AR5 (Mastrandrea et al., 2010), but:
1. Change the threshold defining the bounds of the categories to
a. Reflect the general public’s intuitive and natural interpretation of the 7 words, and
b. Generate a partition (mutually exclusive and exhaustive categories) of the probability scale, excluding
overlapping categories.
2. Whenever one of the probabilistic terms is used, it should always be accompanied by a range of numerical
values.
3. The default range for each term should be the one listed in the translation table (see point 1 above), but if the
authors are sufficiently confident about a certain event, they should be allowed to narrow the range, as long as it
is consistent with the table. For example, if by default Likely is mapped into the 60% - 85% range, authors should
have the option to use a narrower range (for example, Likely (65% - 75%) if the data warrant such determination.
These changes would improve the effectiveness of the communication by appealing to readers who prefer different
communication modes, would facilitate communication across cultural and linguistic bounds and would allow IPCC
authors more flexibility.
“the effectiveness of communication of uncertainty can be easily improved by revising
the definition of the terms, in line with people’s natural understanding of these phrases”
Budescu, D.V. “Improving communication of uncertainty in the IPCC reports”, Advance Paper submitted to the IPCC Expert
Meeting on Communication, Oslo, Norway, 9 – 10 February 2016.
O/H 21
CONCLUDING REMARKS – WITH THANKS TO
ROGER COOKE
“The semantics of uncertainty that the IPCC has adopted and
published as guidance for lead authors is unhelpful and ultimately
insufficient.
Science-based uncertainty quantification is climate change can be
done, has been done, and should be done much more often”.
Cooke, R.M. “ Deep and Shallow Uncertainty in Messaging Climate Change, April 2014), Resources for the Future, RFFDP 14-11.
Advanced Project Scheduling and Schedule Risk Analysis Workshop
David T. Hulett, Ph.D. FAACEHulett & Associates, LLC
(c) 2016 Hulett & Associates, LLC 1
Agenda Project Scheduling
• Activity types• Logic – Precedence Diagramming Method• Total Float – Critical Path Method• Constraints• Resources• Updating (Statusing)• 10‐Point Scheduling Best Practices
(c) 2016 Hulett & Associates, LLC 2
Agenda Schedule Risk Analysis
• Why do Megaprojects fail ‐ Limitations of CPM scheduling
• Activities as probability distributions• Single paths, multiple paths – the “merge bias”• Criticality, Sensitivity of activities• Risk Data Collection• Probabilistic Branching and Correlations• Risk Drivers Method to Represent Discrete Risks
– Apply Uncertainty and Risk Drivers for pre‐mitigated results– Prioritize Risks for Risk Mitigation and post‐mitigated results
(c) 2016 Hulett & Associates, LLC 3
Fundamentals of PROJECT SCHEDULING
(c) 2016 Hulett & Associates, LLC 4
Why Do We Schedule a Project?
• Expression of our plan for planning, communicating
• To see if the plan is realistic against targets • Performing “what‐if” or trade studies analysis to improve the project plan
• Planning the resources required • Assigning tasks, recording performance and its implication for key dates
• Comparing performance to baseline plan• Re‐planning when needed
(c) 2016 Hulett & Associates, LLC 5
Schedule – Dynamic Model of the Project, not a Calendar (1)
• The schedule is a model of the project plan– Activities– Relationship logic between predecessor and successor activities
– Resources applied to the activities– Necessary external constraints
• If the facts (e.g., activity durations) change, the dates may change because activities are linked
• Artificial constraints in the computer model can frustrate the automatic calculation of the dates implied by changes in durations
(c) 2016 Hulett & Associates, LLC 6
Schedule – Dynamic Model of the Project, not a Calendar (2)
• A calendar uses constraints to set activities and events on particular pre‐determined dates as the input, not the output
• The schedule may not support the finish date• Do not force dates onto the schedule • Let the durations and logic determine the dates
(c) 2016 Hulett & Associates, LLC 7
Schedule Levels / Types
• Milestone schedule in concept phase• Summary schedule during early design phase and for strategic analysis (“what‐if,” trade‐offs, schedule risk)– Level 2 may be too summary to represent linkages– Level 3 is enough detail to do strategic and risk analysi
• Detailed schedule to work out resources, dates, assignments
• Analysis schedule – used for schedule risk analysis, may be the same as the summary schedule
(c) 2016 Hulett & Associates, LLC 8
Steps in Developing A Schedule
Define Activities
Sequence Activities
Estimate Resources
Estimate Durations
Analyze the Schedule
Status the Schedule
Use Actuals for Ex Post Analysis
These seemingly sequential activities are actually
performed simultaneously in
many cases
(c) 2016 Hulett & Associates, LLC 9
DEFINE ACTIVITIES
(c) 2016 Hulett & Associates, LLC 10
Define Activities –Use the Work Breakdown Structure
• The WBS contains all of the activities that must be done to complete the project.
• Activities in the WBS are the basis for schedules:– Complete – Delivery‐oriented – can do work, produce deliverables– The detailed schedule may extend to lower level than the WBS
• The cost estimate is often based on the WBS– Cost estimates are often developed at a higher level than schedule
– Cost elements and schedule activities should correspond at some level
(c) 2016 Hulett & Associates, LLC 11
Typical Work Activity
• Activity A101, Design Unit 1, is estimated to take 3 people 600 hours or 25 days
25Activity DESN101Design Widget 1Design Engineers3 level-5 engineers600 hrs. total
(c) 2016 Hulett & Associates, LLC 12
Milestone Activities
• Milestones placed in schedule to indicate important events– Used for summary or master‐schedule reporting– Milestones take no time, require no resources
• Start and finish milestones– Only activities with no predecessors or successors
• Inappropriate for deliveries if there is uncertainty– What if Fabrication and Delivery activity drives the milestone recording the arrival of materials
– “Then a miracle occurs?”
(c) 2016 Hulett & Associates, LLC 13
SEQUENCE ACTIVITIESPRECEDENCE DIAGRAMMING
METHOD (PDM)
(c) 2016 Hulett & Associates, LLC 14
Sequence Activities
• Implements the plan of project execution– Establishes preconditions for starting activities
• Precedence diagramming method logic available– Finish‐to‐Start (default)– Start‐to‐Start – Finish‐to‐Finish– Start‐to‐Finish (rare and tricky to use)
Make activities occur simultaneously, overlap
(c) 2016 Hulett & Associates, LLC 15
Finish‐to‐Start Relationship
• Finish‐to‐start (F‐S)– Default relationshipSuccessor cannot start until the predecessor finishes
– Successor may start late if some other predecessor pushes it out
F‐SPredecessor Successor
(c) 2016 Hulett & Associates, LLC 16
S‐S Relationship, F‐F Relationship
70
80
DESN501
DRFT501
S‐S
F‐FThe F‐F logic is needed or DESN501 will be a “dangling activity”
Successor may not start until predecessor starts, plus any lag timeMay start later, e.g. if required by another relationship
(c) 2016 Hulett & Associates, LLC 17
Use Activities Instead of Lags
DESN501a
DRFT501aF‐S
20DESN501b
50
50
DRFT501b
30
F‐S
This adds activities to keep from representing work with lags. Activity durations may be longer or shorter, lags are fixed duration
(c) 2016 Hulett & Associates, LLC 18
Lag Abuse
• Lags are often abused to make successor start on specific date
• What does the 87‐day lag represent?• Rx: find predecessors to determine the start date of the successor
Predecessor
Successor87‐day lag
(c) 2016 Hulett & Associates, LLC 19
Problem with Dangling Activities with S‐S Logic
Build
Draft Draft Long er
FS
FS
SS
SS
Desig n Desig n Long er
Lengthening of S-S Danglers
Can Build finish before Draft
and Draft before Design?
(c) 2016 Hulett & Associates, LLC 20
Examples of Dangling Activities with F‐F Logic
Build
DraftDraft Longer
FS
FS
FF
FF
Design
Build Longer
Lengthening F-F Danglers
Can Draft Start before Design
and Build start before Draft?
(c) 2016 Hulett & Associates, LLC 21
A Solution: S‐S and F‐F
Draft
FF
Design
SSBase
Design Longer
Draft
FF
Design
SS
Predecessor Takes Longer
Successor Takes Longer
Draft
FF
Design
SS
Draft Longer
Closing Off Danglers, Activities Longer, Right Answers
This is OK
This is OK
(c) 2016 Hulett & Associates, LLC 22
Two Relationships
General Rule with Logic, Best Practice
• ALL activities MUST have at least one "?‐S" Predecessor relationship AND one "F‐?" Successor relationship,
• The successor relationships must be the next activity that would be affected– Some schedulers just tie the logic to the final milestone – Lazy scheduling
Activity 101Predecessor Successor
F‐S or S‐S F‐S or F‐F
(c) 2016 Hulett & Associates, LLC 23
The Elusive Start‐to‐Finish Relationship
• Start‐to‐finish (S‐F)– Successor may not finish after the predecessor starts– Predecessor is later in time than successor – very confusing– Very unusual, often a finish‐to‐start in disguise
CODE450
PRINT225S‐FLogical Predecessor
Logical Successor
(c) 2016 Hulett & Associates, LLC 24
Define Activities Summary or Hammock Activities
• Hammock summarizes activities at a lower level of detail– Sometimes called Summary Activity (MS Project®)– Logic attaches hammock to detailed activities
• Linked to the detail activities– Start‐to‐start with the first detail activity– Finish‐to‐finish with the last detail activity– Duration is determined by the detail activities
• Hammocks are used:– For level of effort activities, to show resources that are LOE
– For display purposes
(c) 2016 Hulett & Associates, LLC 25
“Level of Effort” (aka Hammock) Task in Primavera P6
Construction Hammock starts with Construction on Unit 1 and ends with Unit 2 at 250 days. Has 4 successors, two with each construction activity.
(c) 2016 Hulett & Associates, LLC 26
Reasonable Durations
• Do not assume the activity goes as quickly as possible– This is unreasonable in real projects– Be honest and realistic with the estimates
• Committing to the bare bones scenario assumptions will put the project behind schedule immediately and throughout
• Fitting the durations to a politically‐determined completion date results in too‐short durations or estimates that will never be achieved
(c) 2016 Hulett & Associates, LLC 27
Three‐Point Estimate of Duration
• There is risk that the activities’ work will not be finished in the duration allocated (threat), or that it might be finished early (opportunity)
• Take into account these uncertainties to make a better (more realistic) estimate of duration
• BetaPERT estimate =(Opt. + 4xML + Pess. ) / 6• Triangle estimate = (Opt. + ML + Pess.) / 3• Requires collecting risk data
(c) 2016 Hulett & Associates, LLC 28
Compare the Triangular and Beta
Triang (250,300,48 0) and Beta(250,300,48 0)
Triang Mean=343
Beta Mean=322
Triang = 10%Beta = 19 %
Triang = 9 0%Beta = 9 8 %
0
1
2
3
4
5
6
7
8
9
10
250 300 350 400 450 500
Val
ues
in 1
0^ -3
(c) 2016 Hulett & Associates, LLC 29
ANALYZE THE SCHEDULETHE CRITICAL PATH METHOD (CPM)
(c) 2016 Hulett & Associates, LLC 30
Critical Path Method (CPM)
• Determine how long the project will take with deterministic durations
• This is determined by the longest contiguous path through the network– Determines the shortest project duration possible– Delay or lengthen of activities on this path will cause the project to finish later
• Which paths can be lengthened without delaying the schedule?– Those that are parallel with other paths that are longer
• If we knew what the durations were this would estimate the finish date, but risk intervenes
(c) 2016 Hulett & Associates, LLC 31
With Parallel Paths, One of Them May be Longer
• Procure‐Inspect is the “Critical Path”– It takes 14 days (9 + 5) vs. 11 days (8 + 3) on Fabricate‐Assemble
FINISH
FAB 100
PROC 200
ASSY 150
INSP 250
8 3
9 5
START
(c) 2016 Hulett & Associates, LLC 32
Convention: Activities Start and End on Working Days
• Start at the beginning of the day and end at the end of the day– The “AM ‐‐ PM Convention”
• A 5‐day activity starting at dawn day 1 ends at close of business day 5 and works days 1,2,3,4 and 5
TEST3532
Start d ay 1 Finish d ay 5
5
(c) 2016 Hulett & Associates, LLC 33
Forward Pass: Start the Next Activity “As Soon As Possible”
• If PROC 200 ends on working day 9, the INSP 250 can start on day 10, end on day 14– Beginning of day 6 is INSP 250’s “early start”– Day 14 is the “early finish” of INSP 250
1 9 10 14
9 5
PROC 200 INSP 250
(c) 2016 Hulett & Associates, LLC 34
Forward Pass Rule at Merge Point
• INTEG330 occurs after the last early finish of its predecessors ‐‐ End of day 14 from INSP250
• Milestones are an instant in time1 8 9 11
1 9 10 14
14
(c) 2016 Hulett & Associates, LLC 35
Backward Pass, Late Dates: How Late Can the Activity Finish / Start?
• Backward Pass starts from the early finish date of the project from the forward pass, – Working day 14 (from Procure‐Inspect path)
• Calculates how late an activity can finish and not delay the project’s completion date
ASSY 150
8 3
1 8 9 11
FAB 100
1412114
FINISH
14
START
(c) 2016 Hulett & Associates, LLC 36
Backward Pass Rule at Convergence Point
• Late finish derived from the earliest late start of its successors
4 1211 14
1
FINISH
FAB 100 ASSY 150
8 3
1 8 9 11
PROC 200 INSP 250
9 5
1 9 10 14
14
14
14109
START
(c) 2016 Hulett & Associates, LLC 37
Project Float
• Float indicates flexibility in scheduling
– “Slack” is old‐style term used in PERT (and MS Project)• If an activity has float
– Can be elongated or delayed without delaying project completion
– Indicator of flexibility (much float) or risk (little float)– Helps identify the Critical Path
• Total float is created on a path with a parallel path that is longer –this is different from “margin” added specifically for risk
• Open Ends (danglers) will cause false total float values
(c) 2016 Hulett & Associates, LLC 38
Compute Float:Late Dates Minus Early Dates
• Late finish ‐ early finish (14 ‐ 11 = 3)• Late start ‐ early start (12 ‐ 9 = 3)
– Use finish dates ‐‐ starts are not good if actuals
ASSY 150
8 3
1 8 9 11
FAB 100
1412114
Total Float = 14 - 11 = 3 d
(c) 2016 Hulett & Associates, LLC 39
Total Float is Shared along a Path
• Each activity on the path has the same float• Total float is shared by all activities along the path• These are the same 3 days of float!
– If FAB 100 becomes 11 days long, Path A float ==> 0– If ASSY 150 becomes 6 days long, Path A float ==> 0– If FAB 100 starts on day 4 (late starts), Path A becomes critical
(c) 2016 Hulett & Associates, LLC 40
Who “Owns” the Float?
• Project Manager “owns” float– Activity manager cannot use float without permission
• Float– Opportunity to handle problems as they arise– Could take resources from activities with high float and apply them to critical activities
• Preserve float as long as possible during execution for problems down the line
(c) 2016 Hulett & Associates, LLC 41
Free Float
• Activity that can delay without affecting the very next activity is said to have “free float”
• Free float occurs just before merge points• Computed by comparing
– Early finish date of an activity with– The early start date of each of its successors
• Free float represents flexibility without affecting any other activity– Pain‐free schedule flexibility
(c) 2016 Hulett & Associates, LLC 42
Free Float (continued)
87INTEG 330
FAB 100 ASSY 150
4 7
1 4 5 11
PROC 200 INSP 250
5 9
1 5 6 14
14
14
14
14
651
4
Free Float14 - 11 = 3dOnly
ASSY150 has free float of14 ‐ 11 = 3 d
START
(c) 2016 Hulett & Associates, LLC 43
Free Float (FF) and Total Float (TF)
Free Float is found on the last activity of a parallel path just before the merge point
(c) 2016 Hulett & Associates, LLC 44
CONSTRAINTS IN CPM
(c) 2016 Hulett & Associates, LLC 45
Constraints in CPM Scheduling
• Not Later Than (NLT) constraints are common– Project deliverables from the contract– Affects the backward pass only – can cause negative total float
• Not Earlier than (NET) affect the forward pass, may delay the successor
• ON such as Finish ON or Start ON
(c) 2016 Hulett & Associates, LLC 46
Finish Not Later Than Constraint Example
• Imposed finish constraint – FNLT day 11, not day 14
INTEG 330
PROC 200 INSP 250
9 5
1 9 10 14
14
11
1176-2
98
FAB 100 ASSY 150
8 3
1 8 9 11
111START
Negative Float
(c) 2016 Hulett & Associates, LLC 47
Effect of a FNLT Constraint: Negative Float
• Procure ‐‐ Inspect, the critical path– Now has float of 11 ‐ 14 = ‐3– Schedule plan is infeasible on this path
• Fabricate ‐‐ Assembly path, the slack path– Now has float of 11 ‐ 11 = 0– Not 3 as before– Significant risk that it will delay the project beyond 11 days
(c) 2016 Hulett & Associates, LLC 48
Secondary Float (SF) ‐‐Interior Milestone Constraint
• May be milestones for intermediate deliveries – Not final project completion, but important– Earn a bonus, incentive payment if make it– Pay penalties if miss it
• Could place a NLT constraint on a milestone• May get negative float within the project
(c) 2016 Hulett & Associates, LLC 49
Creating Secondary Float
• Completing INSP 250 NLT day 12, Float = ‐2 – Causes path to be infeasible, project completion is still OK
INTEG 330
PROC 200 INSP 250
9 51 9 10 14
14
14
1287-1
1211
FAB 100 ASSY 150
8 31 8 9 11
144START
(c) 2016 Hulett & Associates, LLC 50
Start‐No‐Earlier‐Than Constraints
• Soft Constraints:• Start Not Earlier Than (SNET) constraints affect the forward pass– Availability of resources, e.g. release from other project– Cash flow considerations, e.g. delay availability of money– Early dates are affected
• Anything that can delay an activity may use SNET– Funds available– Warm weather (northern construction)– Availability of new hardware platform
• Some of these are better represented as activities
(c) 2016 Hulett & Associates, LLC 51
Start Not Earlier Than (SNET) Constraint
• FAB100 must start not earlier than day 5– New Critical Path, new completion date
INTEG 330
PROC 200 INSP 250
9 51 9 10 14
15
15
1511102
98
FAB 100 ASSY 150
8 35 12 13 15
155START
(c) 2016 Hulett & Associates, LLC 52
“Start On” or “Finish On” Constraint
• Hard Constraint: On (ON) (Start or Finish) constraint is a definite date– Overrides both early and late dates– Affects both forward and backward passes
• In some software (e.g., P6) these are “mandatory” or “expected”
• Can cause bad things to happen in schedule
(c) 2016 Hulett & Associates, LLC 53
Some Rules about Constraints
• Constraints can be useful in developing the network– Negative float tells you where logic should be changed or where more resources are needed to shorten activities
• Leaving constraints in the working schedule can be dangerous– The schedule “looks good” and things are “going fine”
– In fact, negative float may be building up(c) 2016 Hulett & Associates, LLC 54
RESOURCE LEVELING
(c) 2016 Hulett & Associates, LLC 55
Managing Limited Resources by Leveling
• Do not schedule too many resources in any period– One activity gets the resource– Other activities are shifted out until resources become free
• Priorities can be set– First activity, with highest priority– Protect the critical path
• “Resource leveling” ‐‐ really activity shifting– Different programs handle this differently
(c) 2016 Hulett & Associates, LLC 56
Resource Limits and Leveling
• Suppose ASSY150 and INSP250 share the same resource and there is not enough to do both simultaneously
INTEG 330
PROC 200 INSP 250
9 51 9 10 14
14FAB 100 ASSY 150
8 31 8 9 11
(c) 2016 Hulett & Associates, LLC 57
Resource Limits and Leveling: Activity Shifting
• INSP250 shifts to Day 12 and project is delayed to day 16
PROC 200
9
1 9INTEG 330
INSP 250
5
12 16
16FAB 100 ASSY 150
8 3
1 8 9 11
START
(c) 2016 Hulett & Associates, LLC 58
STATUSTHE SCHEDULE
(c) 2016 Hulett & Associates, LLC 59
Status the Schedule
• Statusing an in‐process schedule is a minimum condition for the existence of a schedule– Where are we, relative to the schedule?– Where are we, relative to last week?– What does this imply about future dates?– What changes need to be made to improve the project?
• The weekly scheduling meeting is a place to recognize the changes– It may be too late to “push back” on reported prospective changes
– May need to adjust expectations– What about the cost estimate when schedule changes?
(c) 2016 Hulett & Associates, LLC 60
Update (Status) the Schedule
• Information reported for status e.g. weekly– Time Now – status date or data date– Start date for started activities– Finish date for activities that have finished– Actual duration to bring the in‐process activities to the data date
– Remaining duration for activities started but not finished• Do not use “percent complete” to status open activities
– Percent complete is in the eye of the beholder– Project new completion date, let the program compute %
(c) 2016 Hulett & Associates, LLC 61
Status Date in Primavera P6
Data Date 1 June 2012, All is good.Preliminary Authorization is 100%FEED 1 is 114 days actual and 86 days remaining, or 57% complete
(c) 2016 Hulett & Associates, LLC 62
How do You Handle Out of Sequence Progress?
• An activity is not scheduled to start since its predecessor is not completed, but it did start and progress is reported– How do you handle this?
• Two general alternatives– Progress Override– Retained Logic
• Which is your software’s default?• Which do you want to assume?
(c) 2016 Hulett & Associates, LLC 63
Progress Override Approach: The Task Manager Knows Best
• The task manager for Build Unit 2 has started before Design Unit 2 completes
• He may know something we do not, that it is OK to start early
• Progress override says Progress in the Field Overrides the Schedule
(c) 2016 Hulett & Associates, LLC 64
Retained Logic Approach: The Scheduler Knows Best
• As much as possible of the original logic is retained
• Make the remaining duration of Build Unit 2 wait until the Design is completed before going any further– The last 54 days of Build Unit 2 must wait until Design Unit 2 is completed
• Retained Logic says that the scheduler understands the logic of the schedule better, maybe know design will change
(c) 2016 Hulett & Associates, LLC 65
Scheduling Best Practices
(c) 2016 Hulett & Associates, LLC 66
Avoid Scheduling Abuses
Do not turn the schedule into a pretty “feel-good” calendar on the wall
that appears to support project date objectives
A schedule is an analytical and planning tool
The schedule will be used to manage a real-life project
(c) 2016 Hulett & Associates, LLC 67
http://www.gao.gov/products/GAO‐16‐89G
(c) 2016 Hulett & Associates, LLC 68
Apply GAO Best Practice Scheduling to Agency Schedules
• Can use tools such as Acumen Fuse, Steelray or Oracle Primavera Risk Analysis (Pertmaster) Schedule Check Report to perform analysis
• Check the results of any of these programs against the schedule in its native software – sometimes get incorrect results
(c) 2016 Hulett & Associates, LLC 69
BP 1: List All the Work
• Look to the WBS to see if it is all in the schedule, so follows the Integrated Master Plan and Integrated Master Schedule (IMP/IMS)
• Hard to tell if all of the work is really there even if WBS is represented
• Check that the process ensures that the entire WBS is represented in full– Take some samples of the WBS– Work with the CAMs to make sure all of their work is represented
(c) 2016 Hulett & Associates, LLC 70
BP 2: Sequence the Work
• Sequencing the work involves completeness and correctness
• Completeness of the logic involves:– Dangling activities– Lags and leads – Constraints– No logic on summary activities
• Correctness of logic is harder to discover. It requires knowledge of the project and avoidance of lazy scheduling – Tying many activities to the final milestone for convenience
– Realistic total float, critical paths(c) 2016 Hulett & Associates, LLC 71
BP 2: Avoid Dangling Activities
• Purpose is to make sure logic is complete and correct– Each activity needs at least one successor from its finish date and a predecessor to its start date
– The first and last activities are exceptions. So are activities with Actual Starts (do not need predecessors)
• Some standards just require that there be a predecessor and a successor – not sufficient
• This is a difficult criterion to check through the native schedule so third‐party software can help
(c) 2016 Hulett & Associates, LLC 72
BP 2: Dangling Activitieswith S‐S Logic ‐ General Rule
• ALL activities, except the first and last activity, MUST have at least one "?‐S" Predecessor relationship AND one "F‐?" Successor relationship
• Look for activities with just S‐S successors or just F‐F predecessors
• We do not propose any number or percentage of activities with missing or dangling logic as OK
Activity 101Predecessor Successor
F‐S or S‐S F‐S or F‐F
(c) 2016 Hulett & Associates, LLC 73
BP 2: Dangling LogicCorrect Successors
• The successor relationships must be to the next activity that would be affected, the most directly impacted activity related F‐S or F‐F
• We find key milestones with multitude of predecessors (e.g., one schedule has activities with 203, 152, 138, 116… predecessors)– There is nothing wrong with an activity (e.g., ORR, CDR) having multiple predecessors per se
– Are the predecessors and successors correct? Or is it “lazy scheduling”?
– Watch out for activities with many predecessors• Total Float (BP 7), Critical Path (BP 6) should be reasonable
(c) 2016 Hulett & Associates, LLC 74
BP 2: Lags and Leads
• A lag is used to represent the necessary passage of time that is not work but must occur, must take X days, and does not use resources– E.g., Concrete curing
• A lag delays the successor activity’s start or finish from the start or finish of the predecessor– Some lags (e.g., S‐S + 10 d) put activities in parallel– Some lags (e.g., F‐S + 5 d) delay the successor activity
• If the lag represents work, either in the predecessor or succor, its duration is uncertain– Make it an activity that can be risked, not a lag that is rigid in time
(c) 2016 Hulett & Associates, LLC 75
BP 2: Lags and Leads
• Inappropriate use of lags, especially to insert margins or put activities on specific dates– There is no number or percentage of inappropriate lags that would be acceptable (green in the red‐yellow‐green designations)
– In practice we do not much care about short (a few days) lags, though why are they inserted?
• Leads (negative lags) are dubious, difficult to justify and to use– Most schedulers avoid leads as being illogical. We flag all of these as questionable
– How do you know when you are 25 days (5 weeks) ahead of a future event?
(c) 2016 Hulett & Associates, LLC 76
BP 2: Add Activities to Avoid Lags
DESN501a
DRFT501aF‐S
20
DESN501b
50
50
DRFT501b
30
F‐S
This adds activities to keep from representing work with lagsBut the work probably requires resources and may have uncertain duration
so lags are inappropriateIf it is an administrative period, ask whether it could be different duration
(c) 2016 Hulett & Associates, LLC 77
BP 2: Difficulty with Negative Lags (Leads)
• Negative lag may mean, “Start successor 25 days (5 weeks) before predecessor finishes”– Get out your crystal ball for this one
F-S -25 d ay s
Pred ecessor
Successor
(c) 2016 Hulett & Associates, LLC 78
BP 2: Negative Lag (Lead) is aDifficult Assumption in Practice
• If predecessor takes 15 days longer, successor has now started 40 days before finish
F-S -25 d ate becom es 40 d ay lead
Pred ecessor
Successor
Delay
(c) 2016 Hulett & Associates, LLC 79
BP 2: Caution on using Start‐Not‐Earlier‐Than Constraints Instead of Lags
• SNET constraints have become more common in recent years
• SNET is often used to put a successor’s start on a specific date if it is later than its predecessors will allow– What is the cause of the date?– Funding, rainy season or team lead’s preference to delay?– Is it documented so it can be reviewed?
• Perhaps SNET is being used as a manual slipping of activities to accommodate a resource management issue– We do not often see resource leveling in these schedules
(c) 2016 Hulett & Associates, LLC 80
BP 2: Using a Fixed Lag or a SNET Constraint to Fix Successor’s Date
• Use lag to place successor on October 1, receipt of fiscal year money– This “works” only on day 1 before “things change” status– This logic may fail at the very first status date
F-S Lag X d ay sOctober 1
Desig n Item
Fabricate Item
(c) 2016 Hulett & Associates, LLC 81
BP 2: Using Fixed Lags may Shift the Successor Out Improperly
• Suppose the design is delayed at status review – With the lag, fabrication will be pushed out– Did we want this to occur?
October 1
Desig n Item
Fabricate Item
(c) 2016 Hulett & Associates, LLC 82
BP 2: Use “Start NET” Constraint To place Fabricate in the Next FY
• Using Start NET and F‐S but no lag– Successor still starts on its desired start date even if the predecessor is delayed, until September 30
Desig n Item
Fabricate Item
Start NET October 1
(c) 2016 Hulett & Associates, LLC 83
BP 3: Assign Resources to All Work Activities
• Resources are often loaded on the schedules, – There is little evidence that the schedule is used to level resources
• Contractors claim that resource management is done in other software
• Ask to see evidence that the results of resource management have been transferred from the “other software” to the schedule – Maybe this is the source of the SNET constraints
(c) 2016 Hulett & Associates, LLC 84
BP 4: Are Durations Realistic?
• Look for evidence of the basis of estimate (BOE)– What data and methods were used to determine durations
• Generally a detailed schedule requires short activities that are not longer than two review periods (e.g., 2 months)
• Some activities in the far future are “planning packages” that can be longer because not fully planned (e.g., “rolling wave planning”)
• Sometimes the longest activities are really level‐of‐effort (LOE) activities mis‐represented as task dependent
(c) 2016 Hulett & Associates, LLC 85
BP 5: Horizontal and Vertical Traceability
• Vertical traceability– Find all summary schedules or high‐level presentations of the schedule
– The highest level may even be a PowerPoint presentation or a PDF
– Check the important dates with the detailed schedules for the same data date
• Horizontal traceability (integration)– Jeopardized by open ends, dangling activities, reliance on lags and constraints (see BP 2)
(c) 2016 Hulett & Associates, LLC 86
BP 6: Realistic Critical Path
• Critical path usual definition is activities with least total float (< or = 0 days)– This is a “zero total float (or slack)” test
• Without any late date constraints (Finish ON, FNLT) a critical filter shows just those activities that drive the final date – the ideal critical path
• If there are constraints on intermediate milestones causing zero or negative float to those events– Many of the activities caught in the critical filter may have little impact on the ultimate milestone’s finish date
(c) 2016 Hulett & Associates, LLC 87
BP 6: Explore the Longest Path
• Check starting from the completion milestone and working back through “driving activities” to discover which activities are driving– This is a “zero free float” concept that identifies the driving predecessor(s) from the key deliverable
• Even with late date constraints the longest path should identify the drivers of the deliverable– The longest path may still have gaps of SNET constraints and unexplained lags
(c) 2016 Hulett & Associates, LLC 88
BP 7: Is Total Float Realistic?
• Total float (slack) represents the amount of flexibility in the schedule without delaying the final deliverable
• Float reflects the logic of the schedule• Total float is not inserted into the schedule to provide margin or risk buffers– Margin is a conscious act of inserting a new activity to provide for risk
– Float is the consequence of the structure of the schedule and estimated durations
• Many project managers do not look at their own total float
(c) 2016 Hulett & Associates, LLC 89
BP 7: Is Total Float Realistic?
• Some high float is correct, some is due to incomplete logic– Activities without successors at the end of their paths may exhibit large total float
• Often total float exposes incorrect logic – Activities with logic to a later or the final milestone will pass the BP 2 test of a F‐S successor
– They may have large total float, however, pointing to possible incorrect (even though complete) logic
• Find the high total float, tie the path to the correct successor and cure the float issue
(c) 2016 Hulett & Associates, LLC 90
BP 8: Conduct a Schedule Risk Analysis
• GAO and only a few other organizations (NSF, NASA) that believe that the static CPM schedule is just the beginning of knowing when the project may finish– Quantitative risk analysis using Monte Carlo simulation is the standard approach
• The risk analysis focuses on the risks to be mitigated– Has that risk analysis led to either risk mitigation or calibrating a contingency reserve of time?
• Is there an activity, margin or buffer for time contingency? Is it based on the SRA?
(c) 2016 Hulett & Associates, LLC 91
BP 9: Update (Status) the Schedule
• Check the data (status) date to see if the schedule has been updated recently
• Are there actual dates in the future?• Are there activities that started or finished in the past that do not have “actual dates?”
• When an activity has started but is not finished, do the actual and remaining durations agree with the Data Date?
• When activities are statused does this break the schedule logic? Is there any out‐of‐order progress? What does that imply about the logic?
(c) 2016 Hulett & Associates, LLC 92
BP 10: Baseline the Schedule
• The PMB in schedule and cost is a requirement
• If a baseline is established, actual progress can be compared to planned progress for variance calculations
• Earned value concepts can be used to translate variances into a new estimate of completion
(c) 2016 Hulett & Associates, LLC 93
Why do Megaprojects Fail so Often? Is this Related to Risk
Conduct Schedule Risk Analysis on Schedules, Particularly for
Large, Complex Projects
(c) 2016 Hulett & Associates, LLC 94
Mistakes made by Senior Business Managers and Sponsors
• From Industrial Megaprojects, Edward W. Merrow (2011 Wiley)
• Most mistakes are not made by the technical or engineering people, or even from the project controls people, but from senior management in a company, often in collusion with clients or sponsors
• These Seven Mistakes are quite common
(c) 2016 Hulett & Associates, LLC 95
Mistakes of Management that Get the Project in Cost and Schedule Trouble (1)
• I want it NOW!– “Schedule pressure dooms more megaprojects than any other single factor” (E. W. Merrow)
– Ambitious managers see early completion as ways for promotions
– But, every megaproject has an appropriate pace that becomes known early. Pronouncements do not change this pace
• Why do we have to spend so much up front?– Skimping on front‐end is “stupid.”– Front‐end planning and engineering takes 3% ‐ 5% of CAPEX. For Megaprojects this is a lot of money to sink into the project without physical results, but is necessary
(c) 2016 Hulett & Associates, LLC 96
Mistakes of Management that Get the Project in Cost and Schedule Trouble (2)
• We need to shave 20 percent off that cost number!– Construction task force is a counterproductive exercise– May just reduce estimates, this is foolish– May actually identify scope to come out, but the scope needs to be added back in later, so only temporary reduction in cost
• The contractors should carry the risk, they are doing the project– Fixed price contracts substitute for leadership. Relatively little risk is actually transferrable
– Confuses ceilings with floors – no project comes in at less than the LSTK price and many have paid much more
(c) 2016 Hulett & Associates, LLC 97
Some Findings about Project Overruns (1)
• From Megaprojects and Risk: an Anatomy of Ambition by Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter (Cambridge University Press, 2003)
• They characterize the history of cost overruns as “calamitous”
• Cost underestimating is common. Coupled with overestimating the benefits, which are often non‐measurable, insignificant or even negative, means that some of these projects should not have been approved
(c) 2016 Hulett & Associates, LLC 98
Some Findings about Project Overruns (2)
• Project promoters often avoid and / or violate established practices to get their projects started
• They assume or pretend to assume that things go according to plan in their project in the face of large, persistent overruns on similar projects
• The main cause of megaprojects problems is inadequate deliberation about risk and lack of accountability in the project decision making process
(c) 2016 Hulett & Associates, LLC 99
Some Findings about Project Overruns (3)
• We live in a “risk society” where deliberation about social, economic and political issues is bound to fail if it does not take risk into account
• It is untenable to act as if risk does not exist or to underestimate risk in megaproject development
• Risk cannot be eliminated but must be acknowledged much more explicitly than it is
• Actual experience from megaprojects shows the danger we may be in managing large projects
(c) 2016 Hulett & Associates, LLC 100
Some Findings about Project Overruns (4)
• Chunnel was overrun by 80% (this was a commercial project but with heavy oversight and involvement of politics, regulations – e.g., safety)
• Great Belt Link – a bridge tunnel between east Denmark and Europe, was 54% overrun
• Oresund Link bridge between Sweden and Denmark was 68% overrun
• The Big Dig in Boston was 196% overrun
(c) 2016 Hulett & Associates, LLC 101
LIMITS OF CPM SCHEDULING AND THE NEED FOR
SCHEDULE RISK ANALYSIS
(c) 2016 Hulett & Associates, LLC 102
Introduction
USAF Approach to Schedule Risk“A Most Probable Schedule (MPS) will be prepared by assessing the durations presented in the offeror’s MIPS (this means estimating the longest, the shortest, and the most likely duration for each task, activity, event, and milestone) and preparing a network‐based Monte Carlo simulation in order to determine a schedule that has a 90% probable completion date.”
Integrated Risk Management Guide, Aeronautical Systems Center (ASC), draft, 9 April 1994
(c) 2016 Hulett & Associates, LLC 103
Purpose of a Risk Analysis
• Promote the language of probability and use of its mathematics in risk analysis– Why do schedules overrun? Things do not go “according to plan”
• Examine elements of a project in detail, determining relationships and formulating a model
• Most people are less able to comprehend the whole of the problem than risk of the elements individually
(c) 2016 Hulett & Associates, LLC 104
Purpose of a Risk Analysis (continued)
• Risk analysis strategy– Describe the risks at the level of the activity– Use the schedule and Monte Carlo simulation to find the overall project schedule risk
• The essence is a statement of the probability of program outcomes
Source: Risk Assessment Techniques, Defense Systems Management College 1983
(c) 2016 Hulett & Associates, LLC 105
Overrun Risk is Not a New Issue
“Initial cost and schedule estimates for major projects have invariably been over‐optimistic. The risk that cost and schedule constraints will not be met cannot be determined if cost and schedule estimates are given in terms of single points rather than distributions”
(c) 2016 Hulett & Associates, LLC 106
Overrun Risk is Not a New Issue (continued)
“A formal risk analysis is putting on the table those problems and fears which heretofore were recognized but intentionally hidden.”
Source: “Final Report,” US Air Force Academy
Risk Analysis Study Team 1973
(c) 2016 Hulett & Associates, LLC 107
Schedule Risk Is Common, It’s Not just in Aerospace Projects
“The opening of Denver International Airport, originally scheduled for last October (1993), has been delayed yet again, this time until May 15 (1994) because of problems in troubleshooting its complex baggage system… The delay will cost the city, and United and Continental airlines a total of $30 million.”
Aviation and Space Technology, March 7, 1994, p. 32
(c) 2016 Hulett & Associates, LLC 108
Some Reasons for Schedule Risk
• Fundamental uncertainty in the work • Unrealistic baseline schedule• Natural, geological causes• Project complexity• Scheduling abuses• Relying on participants outside the organization • Subcontractor late
(c) 2016 Hulett & Associates, LLC 109
Some Reasons for Schedule Risk (continued)
• Design changes• Staffing Manufacturing problems• Contracting problems• Customer (government) not supportive• Cannot get subcontractor under contract
William Cashman, “Why Schedules Slip…” Air Force Institute of Technology (AFIT) Master’s Thesis, 1995
(c) 2016 Hulett & Associates, LLC 110
Why Schedule Risk Analysis over CPM?
• Assumptions may not be accurate or certain• Duration estimates are always uncertain• Duration estimates may also be biased
– Generally showing shorter durations than realistic• Risks have not been represented• Some risks (e.g., test failure) cause new activities to be needed
• Large projects can be very complex, and interfaces may magnify the risk to schedule
(c) 2016 Hulett & Associates, LLC 111
Pitfalls in Relying on CPM
• CPM network scheduling is static, not dynamic• Single‐point activity durations known with certainty
• OK only if everything goes according to plan
• CPM durations are really probabilistic assessments
There are no “facts” about the futureLincoln Moses, Statistician and Administrator of Energy Information in the US DOE
1977 Annual Report to Congress
(c) 2016 Hulett & Associates, LLC 112
Project Schedule Risk Analysis BasicsProbability Distributions and Path
Risk
(c) 2016 Hulett & Associates, LLC 113
Risk Analysis Answers Many Questions that CPM cannot
• Since the inputs are uncertain, the results are uncertain and we need to make statistical statements
• Can address questions CPM cannot• The 3 promises
1. What is the likelihood of meeting schedule?2. How much schedule contingency do we need to
provide?3. Where is there risk to the project schedule?
(c) 2016 Hulett & Associates, LLC 114
Risk of an Individual Activity
• Simple activity duration estimates are risky
Design Unit 1
30d
(c) 2016 Hulett & Associates, LLC 115
Uniform and Triangular Distributions
215 220 225 230 235 240
Distribution (start of interval)
0
20
40
60
80
100
120
140
160
180
200
Hit
s
0% 215
5% 216
10% 217
15% 218
20% 220
25% 221
30% 222
35% 224
40% 225
45% 226
50% 227
55% 229
60% 230
65% 231
70% 233
75% 234
80% 235
85% 237
90% 238
95% 239
100% 240
Cum
ulat
ive
Freq
uen
cy
Entire Plan : Duration
215 220 225 230 235 240
Distribution (start of interval)
0
50
100
150
200
250
300
350
400
Hit
s
0% 215
5% 218
10% 219
15% 221
20% 222
25% 223
30% 223
35% 224
40% 225
45% 226
50% 226
55% 227
60% 228
65% 229
70% 230
75% 231
80% 232
85% 233
90% 234
95% 236
100% 240
Cum
ulat
ive
Freq
uen
cy
Entire Plan : Duration
(c) 2016 Hulett & Associates, LLC 116
BetaPERT and Normal Distributions
215 220 225 230 235 240
Distribution (start of interval)
0
50
100
150
200
250
300
350
400
Hit
s
0% 215
5% 218
10% 219
15% 220
20% 221
25% 222
30% 223
35% 223
40% 224
45% 225
50% 226
55% 226
60% 227
65% 228
70% 228
75% 229
80% 230
85% 231
90% 232
95% 234
100% 240
Cum
ulat
ive
Freq
uenc
y
Entire Plan : Duration
215 220 225 230 235 240
Distribution (start of interval)
0
50
100
150
200
250
300
350
400
Hit
s
0% 212
5% 219
10% 221
15% 222
20% 223
25% 224
30% 224
35% 225
40% 226
45% 226
50% 227
55% 228
60% 228
65% 229
70% 230
75% 230
80% 231
85% 232
90% 233
95% 235
100% 243
Cum
ulat
ive
Freq
uenc
y
Entire Plan : Duration
(c) 2016 Hulett & Associates, LLC 117
Risk Along a Contiguous Schedule Path
• Path risk is the combination of the risks of its activities
StartDesign Unit
Build Unit Finish
Test Unit
Test Unit
This section assumes that all the risk is contained in the 3‐point estimateIn later sections we will update this assumption by using 3‐point estimates only for uncertainty and estimating error / bias. Risk events will be represented by Risk Drivers
(c) 2016 Hulett & Associates, LLC 118
Add Duration Risk to the Schedule using Triangular Distributions
This section features Primavera Risk Analysis©, formerly Pertmaster, owned by Oracle.
(c) 2016 Hulett & Associates, LLC 119
Monte Carlo Simulation Results for Really Simple Schedule
29 Aug 11 18 Sep 11 08 Oct 11
Distribution (start of interval)
0
20
40
60
80
100
120
140
160
180
200
220
240
Hits
0% 17 Aug 11
5% 29 Aug 11
10% 01 Sep 11
15% 03 Sep 11
20% 05 Sep 11
25% 06 Sep 11
30% 07 Sep 11
35% 09 Sep 11
40% 10 Sep 11
45% 11 Sep 11
50% 13 Sep 11
55% 14 Sep 11
60% 15 Sep 11
65% 16 Sep 11
70% 18 Sep 11
75% 19 Sep 11
80% 21 Sep 11
85% 23 Sep 11
90% 25 Sep 11
95% 29 Sep 11
100% 19 Oct 11
Cum
ula
tive
Fre
quen
cy
Entire Plan : Finish Date
CPM date is not even the most likely – That’s about 9/13
CPM date is about 16% Likely to be met
80% Target is 9/21
(c) 2016 Hulett & Associates, LLC 120
Schedule Risk with Parallel PathsThe “Merge Bias”
(c) 2016 Hulett & Associates, LLC 121
Risk at Merge Points: The “Merge Bias”
• Many parallel paths merge in a real schedule• Finish driven by the latest converging path • Merge Bias has been understood for 40
years
Start
Design Unit 1 Build Unit 1 Test Unit 1
Design Unit 2 Build Unit 2 Test Unit 2Finish
(c) 2016 Hulett & Associates, LLC 122
This Schedule has Three Parallel Paths
Each path has exactly the same structure CPM says this finishes September 3
(c) 2016 Hulett & Associates, LLC 123
Evidence of the Merge Bias
08 Sep 11 18 Sep 11 28 Sep 11 08 Oct 11 18 Oct 11
Distribution (start of interval)
0
50
100
150
200
250
Hit
s
0% 30 Aug 11
5% 09 Sep 11
10% 12 Sep 11
15% 13 Sep 11
20% 15 Sep 11
25% 16 Sep 11
30% 17 Sep 11
35% 18 Sep 11
40% 19 Sep 11
45% 20 Sep 11
50% 21 Sep 11
55% 22 Sep 11
60% 23 Sep 11
65% 24 Sep 11
70% 25 Sep 11
75% 26 Sep 11
80% 28 Sep 11
85% 29 Sep 11
90% 02 Oct 11
95% 04 Oct 11
100% 20 Oct 11
Cu
mu
lati
ve F
req
uen
cy
Entire Plan : Finish Date
Most Likely is now Sept 21
80thpercentile is now Sept 28
Likelihood of Sept 3 is < 1%(c) 2016 Hulett & Associates, LLC 124
Evidence of Merge Bias (continued)
Variation:7
20 Aug 11 25 Aug 11 30 Aug 11 04 Sep 11 09 Sep 11 14 Sep 11 19 Sep 11 24 Sep 11 29 Sep 11 04 Oct 11 09 Oct 11 14 Oct 11 19 Oct 110%
20%
40%
60%
80%
100%
Cu
mu
lati
ve P
rob
abil
ity
Each Path of the Schedule
Three Path Schedule
(c) 2016 Hulett & Associates, LLC 125
Monte Carlo Simulation and PERT
• A Monte Carlo simulation is the modern way to determine the impact of schedule risk at merge points
• An older way was the Program Evaluation and Review Technique (PERT) that used the Method of Moments analysis
PERT was better than single‐point scheduling but it always underestimated risk at merge points by missing the Merge Bias. See: David Hulett, “Project Schedule Risk Analysis: Monte Carlo Simulation
or PERT?” PM Network, February 2000, pp. 43 ff.
(c) 2016 Hulett & Associates, LLC 126
Risk Criticality and SensitivityTornado Diagrams
(c) 2016 Hulett & Associates, LLC 127
What are the Highest Risk Activities?
• Monte Carlo simulation– Activities on critical path in most iterations
• The path delaying the project may not be the critical path identified by CPM
• This is “Schedule Critical” not Technically Critical– Combination of risk and low float (slack)
This section shows traditional “tornado charts.” These are based on correlation concepts and are not really suited to schedule risk prioritization. In a later section we detail prioritization of Risk Drivers
(c) 2016 Hulett & Associates, LLC 128
What are the Highest‐Risk Activities?
“Critical” Unit 2 is Identified for Risk Mitigation
Units 1 & 3 are Shorter and Not Risk Mitigated
(c) 2016 Hulett & Associates, LLC 129
Criticality in Pertmaster
19%
19%
40%
40%
40%
45%
45%
45%
100%
100%000002 - Start
000015 - Finish
000004 - Design Unit 1
000005 - Build Unit 1
000006 - Test Unit 1
000012 - Design Unit 3
000013 - Build Unit 3
000014 - Test Unit 3
000008 - Design Unit 2
000009 - Build Unit 2
Th ree Path ProjectCriticality Index: All tasks
(c) 2016 Hulett & Associates, LLC 130
Duration Sensitivity – Correlation Concept
6%
8%
10%
18%
21%
29%
34%
42%
47%000006 - Test Unit 1
000014 - Test Unit 3
000004 - Design Unit 1
000012 - Design Unit 3
000005 - Build Unit 1
000013 - Build Unit 3
000008 - Design Unit 2
000010 - Test Unit 2
000009 - Build Unit 2
Th ree Path ProjectDuration Sensitivity: Entire Plan - All tasks
(c) 2016 Hulett & Associates, LLC 131
Cruciality = Criticality x Sensitivity
1%
2%
2%
7%
9%
12%
15%
17%
22%000006 - Test Unit 1
000014 - Test Unit 3
000004 - Design Unit 1
000012 - Design Unit 3
000005 - Build Unit 1
000013 - Build Unit 3
000008 - Design Unit 2
000010 - Test Unit 2
000009 - Build Unit 2
Th ree Path ProjectDuration Cruciality: Entire Plan - All tasks
(c) 2016 Hulett & Associates, LLC 132
Gather Good Quality Risk Data
(c) 2016 Hulett & Associates, LLC 133
Gather Good Quality Data
• Credibility comes from quality data• Results reflect the input data• The benefits of collecting data about project risk– Gain better understanding of the project– Build stronger project teams– Communicate better about project problems
(c) 2016 Hulett & Associates, LLC 134
Main Ideas about Risk Data
• Input data are gathered from people’s expert judgment– There are often no company or industry data bases on risk
• Concepts of risk are usually new to the participants Collecting “data” about the future is new to most people
• Some are reluctant to participate ‐‐ uncomfortable• Need corporate culture to be supportive• Need time and budget – part of the team’s job, not an extra
(c) 2016 Hulett & Associates, LLC 135
Independent Data Collection Organization
• Consider making the risk analysis activity independent of the project
Management Team
Risk Analysis
Project One
Project Two
(c) 2016 Hulett & Associates, LLC 136
Whom to Interview
• Usually it is people who have planned the work and are going to manage it
• Also interview experts not associated with the project• Interview individually, providing confidentiality so the
interviewees can speak freely about risk without fear of retribution
You may have to exclude the team leader Leaders may be too identified with their estimates or want to bias the results
(c) 2016 Hulett & Associates, LLC 137
Data Collection Issues
• Motivation Bias– Attempt to make the project look good– Attempt to evade the risk analysis process entirely– Hard to keep it objective because politics intervenes
• Cognitive Bias– Do not know the concepts, terms– Unable to envision or express the true extremes for ranges
– Just plain inexperienced
(c) 2016 Hulett & Associates, LLC 138
Sources of Motivational Bias
• Not willing to jeopardize the project• Unwilling to admit uncertainty or inability to do the job
• Afraid of telling people the estimates are not “solid” Identified with a specific number, result
• Afraid of “shoot the messenger” response– Could lose your job, not on the team
• Some consequences are just to terrible to contemplate
(c) 2016 Hulett & Associates, LLC 139
A Politically‐Set Corporate Ceiling
Ceiling Amount
Risk Denied
Probabi l ity Duration
(c) 2016 Hulett & Associates, LLC 140
Unstated Assumptions can Lead to Underestimation of Risk
Unspoken True High Range
RecognizedHigh Range
Probabil ity Duration
(c) 2016 Hulett & Associates, LLC 141
Cognitive Bias in Quantifying Project Risk
• Cognitive bias is common– Even though you want to estimate the risk you find it hard
– Inability to talk honestly about risk
Underestimation of risk is quite common
Overestimation is rare but could happen
(c) 2016 Hulett & Associates, LLC 142
Anchoring and Adjusting Bias
• “Anchor” on the baseline estimate– This estimate has been carefully compiled– It is thoroughly documented– It has an aura of exactness
• “Adjust” the extreme ranges only slightly from the anchor– The anchor takes importance beyond its credibility
See: A. Tversky and D. Kahneman, “Judgment under Uncertainty: Heuristics and Biases,” Science, Sept. 26, 1974
(c) 2016 Hulett & Associates, LLC 143
Picture of Underestimating Risk
Unbiased RangeRange Anchored on Most Likely
Probabi l ity
Duration
(c) 2016 Hulett & Associates, LLC 144
Availability Bias can Increase the Perception of Project Risk
Original Distribution
DramaticEvent
Probabi l ity
Duration
Resulting Distribution
Resulting Distribution calculated using Bayes’ Theorem
(c) 2016 Hulett & Associates, LLC 145
Probabilistic Branching
(c) 2016 Hulett & Associates, LLC 146
What if We May Fail a Test or Inspection? Probabilistic Branching
• Many projects have points where there is a possibility of failure, a discontinuous event
• Have to model the likelihood of the failure and its consequence for the schedule
• Called “Probabilistic Branching”
(c) 2016 Hulett & Associates, LLC 147
Model the Probabilistic Branch• Typically do not include failure in schedule
– Include FIXIT and Retest with 0 duration to reserve the 9/3 date
• Enter ranges for the new activities if they occur
(c) 2016 Hulett & Associates, LLC 148
Typical Bi‐Modal Result Distribution
28 Sep 11 17 Nov 11 06 Jan 12
Distribution (start of interval)
0
100
200
300
400
500
600
700
800
900
1000
1100
Hits
0% 28 Aug 11
5% 07 Sep 11
10% 10 Sep 11
15% 12 Sep 11
20% 14 Sep 11
25% 16 Sep 11
30% 17 Sep 11
35% 19 Sep 11
40% 21 Sep 11
45% 23 Sep 11
50% 25 Sep 11
55% 27 Sep 11
60% 30 Sep 11
65% 04 Oct 11
70% 20 Oct 11
75% 16 Nov 11
80% 21 Nov 11
85% 26 Nov 11
90% 01 Dec 11
95% 07 Dec 11
100% 02 Jan 12
Cum
ula
tive
Fre
quen
cy
Entire Plan : Finish Date
“Shoulder” is at 70%The 80% date is in the Failure Mode
(c) 2016 Hulett & Associates, LLC 149
Effect of Mitigating The Risk of Test Failure on an 80% Company
If taking 10 Days Longer in Build reduces probability to 10%, can save 46 days for an 80th percentile company
Variation:46
04 Sep 11 14 Sep 11 24 Sep 11 04 Oct 11 14 Oct 11 24 Oct 11 03 Nov 11 13 Nov 11 23 Nov 11 03 Dec 11 13 Dec 11 23 Dec 11 02 Jan 120%
20%
40%
60%
80%
100%
Cu
mu
lati
ve P
rob
abil
ity
(c) 2016 Hulett & Associates, LLC 150
Correlation between Activity Durations
(c) 2016 Hulett & Associates, LLC 151
Causes of Correlation
• Correlation between activity durations – When two activities’ durations “move together”– They are driven by a common risk driver– Using Pearson correlation, not Spearman Rank Order
TechnologyState‐of‐the‐
Art
Software Designing
Software Coding
(c) 2016 Hulett & Associates, LLC 152
Effect of Correlation
• Without correlation there is a lot of cancelling‐out between long and short durations in each iteration– The result is for moderate risk overall
• With correlation, long durations will occur together on an iteration and reinforce each other as long durations are added down the path– Same for short durations– There is reinforcing long‐long and short‐short so get higher‐highs and lower‐lows
(c) 2016 Hulett & Associates, LLC 153
This Matrix shows High Correlation
• Correlation is usually shown in a Correlation Matrix like this one
• Shows high correlation between all 3 activities
Design Build Test
Design 1.0 .9 .8
Build .9 1.0 .7
Test .8 .7 1.0
(c) 2016 Hulett & Associates, LLC 154
Install Correlation Coefficients between Activity Durations
(c) 2016 Hulett & Associates, LLC 155
Effect of Correlation is to Increase the Standard Deviation along the Path
Variation:5
Variation:5
14 Aug 12 19 Aug 12 24 Aug 12 29 Aug 12 03 Sep 12 08 Sep 12 13 Sep 12 18 Sep 12 23 Sep 12 28 Sep 12 03 Oct 12 08 Oct 12 13 Oct 12 18 Oct 12 23 Oct 120%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cum
ulat
ive
Pro
babi
lity
High correlation subtracts 5 days at the P‐20
Not much change near the mean
High correlation adds 5 days at the P‐80
(c) 2016 Hulett & Associates, LLC 156
Risk Driver Approach to Schedule RiskThe Basic Building Blocks are the Risks
Identified in the Risk Register Fill out the Risk Register during Interviews
(c) 2016 Hulett & Associates, LLC 157
Limitations with the Traditional 3‐point Estimate of Activity Duration
• Typical schedule risk analysis starts with the activity that is impacted by risks– Estimates the 3‐point estimate for optimistic, most likely and pessimistic duration
– Starts with the image of the risks on the activity duration
• Which risks cause the most overall schedule risk?These questions are typically answered by:– Sensitivity to activity durations– Criticality of activity durations
(c) 2016 Hulett & Associates, LLC 158
Some Problems with The Traditional Approach
• Can tell which activities are crucial, but not directly which risks are driving
• Makes poor use of the Risk Register that is usually available
• Cannot decompose the overall schedule risk into its components BY RISK– Ability to assign the risk to its specific risk drivers helps with communication of risk causes and risk mitigation
(c) 2016 Hulett & Associates, LLC 159
We Propose a Different Approach: Start with the Risks Themselves
• Drive the schedule risk by the risks already analyzed in the Risk Register
• For each risk, specify:– Probability it will occur– Impact on time if it does– Activities it will affect
• Starting with the risks themselves gives us benefits– Links qualitative analysis to the quantitative analysis– Estimates the impact of specific risks for prioritized mitigation purposes
– Correlations between activities happen automatically• Never have to guess at these coefficients again• Never get impossible matrices
(c) 2016 Hulett & Associates, LLC 160
Risk Factors Mechanics (1)
• The risk factor is assigned to one or several activities
• If the risk occurs on an iteration it will affect the durations of the activities it is assigned to by a multiplicative factor
• Risks can be assigned to one or more activities• Activity durations can be influenced by one or more risks
(c) 2016 Hulett & Associates, LLC 161
Risk Factors Mechanics (2)
• Risk Factors are assigned a probability of occurring on any iteration. – When the risk occurs, the factor used is chosen at random from the 3‐point estimate and operates on all activities to which it is assigned
– When not occurring on an iteration the risk factor takes the value 1.0, a neutral value
• When an activity is influenced by more than one risk, their factors are multiplied together, if they happen, on any iteration
(c) 2016 Hulett & Associates, LLC 162
Uncertainty, Estimating Errorand Estimating Bias
• Uncertainty, the inherent variability in project activities that arise because people and organizations cannot do things reliably on plan
• Estimating error – attaches to all types of estimates• Estimating bias – estimates may be slanted, usually toward shorter durations, to make desired project results
Inherent Variability is Similar to Common Cause Variability
• Inherent variability is similar to “common cause variation” described by Walter A. Shewhart and championed by W. Edwards Deming in process control
• Common cause variability is a source of variation caused by unknown factors that result in a steady but random distribution of output around the average of the data
• Common cause variation is a measure of the process’s potential, or how well the process can perform when special cause variation is removed
• Common cause variation is also called random variation, noise, non‐controllable variation, within‐group variation, or inherent variation.
http://www.isixsigma.com/dictionary/common‐cause‐variation/
Estimating Error (1)
• Estimating error is often attributed to a lack of information concerning specific issues needed to make up a duration or cost estimate for a WBS element– We may not have specific vendor information until the vendors bid. Vendor information is required for completed engineering
– Ultimately we do not necessarily have contractor bids• Each of these sources of information can be helpful to narrow the estimating error. Still, the estimates and even contractor bids are uncertain
Estimating Error (2)• The estimating range is often related to the “class” of estimate, determined by the level of knowledge and the method of estimating
• With less knowledge the “plus and minus” range would be large, but as more information is known it may become smaller
• Research shows that the actual range of uncertainty around estimates is larger than recommended by professional associations (including AACEI)
John Hollmann, 2012 AACE INTERNATIONAL TRANSACTIONS, RISK.1027: Estimate Accuracy: Dealing with Reality)
Ask Yourself these Questions about the Duration Estimates
• Was there pressure put on the estimator or scheduler – By prior expectations– Statements by management or – By the customer, or – Was pressure for early finish implicit in the competitive process?
• How long would this scope of work take if no pressure for an earlier date were brought to bear?– Contractors often claim that the schedule would take longer without pressure, “But, we can do it!”
Handling Estimating Bias
• When talking with project participants (management, team leaders, SMEs) we often find that they do not believe the values in the schedule– Motivational bias and cognitive bias are present
• With a range represented by optimistic, most likely and pessimistic values, these people present that the “most likely” duration or cost is not the value in the schedule for activities or estimate for cost elements– Often the “most likely” multiplier is 1.05 or 1.1 or more, indicating that the estimates are viewed as being 5%, 10% or more above those in the project documents
168
Summary of Inherent Variability and Estimating Error / Bias
• These sources of uncertainty have already occurred and are “baked in the cake” of the schedule and cost estimate being risked
• They are 100% likely so they can be represented by a 3‐point estimate (min, most likely, max) of multiplicative factors applied directly to activities’ durations
• Under‐reporting may be corrected and 3‐point estimates may be correlated
169
Introducing the Gas Production Platform Schedule
170
Three year+ schedule costing $1.57 billion. Using Polaris® from Booz Allen Hamilton
Applying Different Uncertainty Reference Ranges to Categories of Tasks
Each category of activity may have different levels of uncertainty, called “reference ranges.”
Five of the ranges have “most likely” values that differ from the durations in the schedule
Three (Engineering, Drilling and HUC) use the Trigen function to correct for suspected under‐reporting impact ranges
Risk on the Offshore Gas Production Platform ‐ Reference Range Uncertainties
With Uncertainty by category of task representing:• Inherent variability• Estimating error• Estimating bias
The CPM date is 20 March 2017
The P‐80 date is 30 July 2017 for a contingency just with Uncertainty of 4 + months
This is very likely irreducible. It represents the base that cannot be mitigated
Discrete Risks is Similar toSpecial Cause Variation
• Unlike common cause variability, special cause variation is caused by known factors that result in a non‐random distribution of output. Also referred to as “exceptional” or “assignable” variation. Example: Few X’s with big impact.
• Special cause variation is a shift in output caused by a specific factor such as environmental conditions or process input parameters. It can be accounted for directly and potentially removed and is a measure of process control.
http://www.isixsigma.com/dictionary/variation‐special‐cause/
Introducing Risk Drivers that Cause Additional Variation in the Simulation
Four risk drivers are specified. The first is a general risk about engineering productivity, which may be under‐ or over‐estimated, with 100% probability. It is applied to the two Design activities
100% Likely Risk Driver’s Effect on Design Duration
With a 100% likely risk the probability distribution of the activity’s duration looks like a triangle. Not any different from placing a triangle directly on the activity
Risk Driver with Risk at < 100% likelihood
With this risk, the Construction Contractor may or may not be familiar with the technology, the probability is 40% and the risk impact if it happens is .9, 1.1 and 1.4. It is applied to the two Build activities
With a 40% Likelihood, the “Spike” in the Distribution Contains 60% of the Probability
Here is where the Risk Driver method gets interesting. It can create distributions that reflect:• Probability of
occurring• Impact if it does occurCannot represent these two factors with simple triangular distributions applied to the durations directly
Risk Drivers Modelshow Correlation Occurs
• Correlation can be caused by identifiable risks that are assigned to two different activities– If the risk occurs it occurs for each activity– If the risk impact multiplier is X% it is X% for each activity
• We are not very good at estimating correlation coefficients, so generating them within the simulation is a better approach
• There still may be correlations among uncertainty (3‐point estimates)
Risk Drivers Generate Correlation between Activities (1)
Risk 1: Probability 100% Impact .9, 1.05, 1.3
Activity 1 Activity 2
Correlation (Activity 1, Activity 2) = 100%
Risk Drivers Generate Correlation between Activities (2)
Risk 1: Probability 100% Impact .9, 1.05, 1.3
Activity 1 Activity 2
Adding uncorrelated uncertainty reduces correlation (Activity 1, Activity 2) to 86%
Uncertainty Not Correlated: .85, 1, 1.2
But there is no such thing as 100% correlation! OK!
Risk Drivers Generate Correlation between Activities (3)
Risk 1: Probability 100% Impact .9, 1.05, 1.3
Activity 1 Activity 2
Correlation (Activity 1, Activity 2) = 64% (without uncertainty)
Risk 2: Probability 40%Impact .9, 1.1, 1.4
Risk 3: Probability 65%Impact .9, 1.15, 1.5
Activities Can be Influenced by More than One Risk Driver
An Organizational Risk has been added to the mix, assigned to all activities in the Offshore Gas Production Platform schedule
Adding Risk Drivers to Every Activity
With all risk Drivers including the Organizational Risk the P‐80 result is 25 January 2018, an additional 7 months
With Uncertainty the P‐80 was 30 July2017
The scheduled date is 20 March 2017
Parallel and Series RisksMultiplicative with Risk Drivers
If recovery from two risks can be accomplished simultaneously, they are entered in parallel
Risk 1 1.2 factor
Risk 2 1.05 factor
Use 1.2 Factor, the largest factor only
Risk 1 1.2 factor Risk 2 1.05 factor Use (1.2 x 1.05 = 1.26) Factor, multiply the two
If these two risks cannot be recovered from simultaneously, they are entered in series
Assign the Risks To Design 1 in Series and to Design 2 in Parallel
Specify each risk in parallel for Design 2, Series for Design 1
Three Risk Drivers Applied to One Activity In Series, To Another In Parallel
Risks in series often lead to very long durations, especially if there are many risks on the activity
Risks in Series on Design 1
Risks in Parallel on Design 2
Risk Prioritization Method
• Risks should be prioritized through the project schedule and the Monte Carlo simulation method to inform the risk mitigation exercise
• For management we need to identify those risks by “days saved” if they were fully mitigated so management can do benefit/cost
• For management we should identify “days saved” at the target level of certainty, say P‐80
Two Approaches to Risk Prioritization using Quantitative Methods
• Typical Tornado Diagram with Risks (not activities or paths) as the arguments help to prioritize the risks
• However, with the structure of the schedule the Tornado Diagram is instructive but not definitive– The order of the risks’ importance can change when one is removed, since that exposes other paths that were “risk slack paths” before
• Tornado Diagrams are not reliable with risks that are not 100% likely
Tornado Highlighting Risks, Not Activities or Paths
This special tornado diagram focuses on the entire impact of the risks, including their probability, impact range and the activities to which they are assigned
Still, it is based on correlation concepts
It shows Drilling Risk as an Opportunity, negatively correlated with finish date.
Correct to focus on risks but still measure is correlation
Benefits of the NewRisk Prioritization Approach
• Identify the level of uncertainty desired (P‐80)• Simulate the schedule as many times as there are risks
• Then Identify the risk that saves the most days when it is eliminated
• Focus on the risks at the P‐80 level of certainty and measure impact in “days saved”– These are 3 good measures for management to use when determining the mitigations that make sense
Iterative Approach to Prioritizing the Risk
• Purpose: determine which risks contribute the most days at the P‐80 level
• Compute the Baseline with All Risks In• Pass # 1: Simulate with each risk disabled in turn, recording the P‐80 date– The risk with the earliest P‐80 date is 1st priority– Take it out for Iteration # 2
• Pass # 2: Simulate the remaining risks, disabling each in turn, recording P‐80, choose earliest. Take it out for Iteration # 3
• Etc.
Picture of Prioritized Risks Selected by their Days Saved at P‐80
Iterative Approach to Prioritizing Risks (Based on Days Saved at P‐80)Risk # 1 2 3 4 5 6 7 8
Priority Level (Iteration #)
Abusive Bids
Offshore design firm
Suppliers Busy
Fab productivity
Geology unknown
Coordination during Installation
Problems at HUC
Resources may go to other projects
1 X X X X X X X 12 X X X 2 X X X3 X 3 X X X X4 X X X X 45 X 5 X X6 X X 67 7 X8 8
This is an example of the simulation strategy for a project with 8 risks. It requires 8 + 7 + 6 +….+1 or 36 separate simulations. This would take a long time by hand. At this point only Polaris has automated the process.
Schedule Risk Tornado with Risks Prioritized by Days Saved
Unlike typical activity tornado diagrams showing activities and based on correlation coefficients, this one is based on risk and is calibrated in days saved and computed at the P‐80
Table Showing Risks’ Days Saved
194Target for Mitigations is 178 days, risk‐by‐risk. Uncertainty alone accounts for 130 days. Total schedule contingency to P‐80 is 308 days.
Gas Platform‐1 ‐ Risk Prioritization (80%)Risk UID Name Days
Saved
8 The organization has other priority projects so personnel and funding may be unavailable 102
4 Fabrication yards may experience lower Productivity than planned 342 Engineering may be complicated by using offshore design firm 157 Fabrication and installation problems may be revealed during HUC 153 Suppliers of installed equipment may be busy 96 Installation may be delayed due to coordination problems 41 Bids may be Abusive leading to delayed approval 05 The subsea geological conditions may be different than expected ‐1
TOTAL DAYS SAVED WITH FULL MITIGATION OF RISKS 178Uncertainty (inherent, estimating error / bias) 130TOTAL CONTINGENCY DAYS WITH UNCERTAINTY & RISKS 308
Risk Mitigation Workshop(s)
• This is a workshop with the project manager, deputy PM, team leads, controls personnel, SMEs with experience
• Use the prioritized risk list– Start at the top– Working on risks lower on the priority list will not be effective. Those risks are not important until the top risk is dealt with as much as possible
– Determined by the structure of the schedule and which paths are risk critical – changes as risks are mitigated
195
Sample Risk Mitigation Entry
196
Risk: The organization has other priority projects so personnel and funding may be unavailable
Probability Low Most Likely High P‐80 Date P‐80 Cost
($ billions)
Pre‐Mitigated parameters 65% 95% 105% 125% 1/22/2018 $2.13
Mitigation Action
Establish this project as top priority ‐ needs top management action and commitment
Post ‐Mitigated parameters 15% 95% 100% 115% 10/20/2017 $1.99
Risk Owner: S. Smith Days saved Cost SavedDate of Action: Within 1 month Results 94 $0.14
Risk Action Owner: B. Blake Cost of
Mitigation $0.02Risk is not completely mitigated. Cost saved is the reduction of cost contingency reserve held for schedule risk. For Net Cost Saved subtract the $20 million cost of mitigation
Creating the Post‐Mitigated Scenario
• A risk post‐mitigated scenario can be constructed in the software– Partially mitigate each risk, in this case just by reducing probability by half
– Estimate the cost of the risk, in this case each risk’s mitigation = $50 million
– Run the post mitigated scenario• When schedule risks are mitigated the cost contingency
reserve can be reduced since some was held for schedule growth
• However, the cost of the project now includes the assumed $50 million cost of each mitigation
Partially Mitigate all Risks – Finish Date
Mitigating all risks (Here, just reducing the probability by half) moves the P‐80 date by total mitigation time of about 7.5 months.
Uncertainty Only
All Risks partially mitigated
Pre‐mitigation results
Partially Mitigate all Risks – Total Cost
Uncertainty Only
All Risks partially mitigated
Pre‐mitigation results
Notice the effect of the mitigation costs – in the red circle – these are included and still there is some cost savings, largely from the schedule risk mitigation
Conclusion (1)
• The schedule and cost are affected by uncertainty and risks
• Uncertainty, including inherent variability, estimating error and bias, is unlikely to be reduced on one project
• Risks, here represented by Risk Drivers with their probability and impact, are assigned to activities and resources
• Risks may be candidates for risk mitigation
(c) 2016 Hulett & Associates, LLC 200
Conclusion (2)
• Risk mitigation workshop:– Involves the project leaders, top team members– Deal with the risks in the order of the risk priority– Risks are unlikely to be fully mitigated
• To realize the benefits of risk mitigation, the organization needs to be committed to the mitigation actions– People and deadlines assigned– Periodic monitoring with top staff– Include mitigation steps in the schedule and budget
• Or else the risk mitigation exercise will be ineffective and the “all risks in” scenario becomes a forecast
(c) 2016 Hulett & Associates, LLC 201
Questions?
David T. Hulett, Ph.D., FAACEHulett & Associates, LLC
Los Angeles, CA+1 310 476‐7699
[email protected] / www.projectrisk.com
(c) 2016 Hulett & Associates, LLC 202
Advanced Project Scheduling and Schedule Risk Analysis Workshop
David T. Hulett, Ph.D. FAACEHulett & Associates, LLC
(c) 2016 Hulett & Associates, LLC 203
1
Clarifying Common Misuses of Safety Risk Language
Jim Whiting
risk@workplaces pty ltd
2
Lack of Clarity & Confidence
in Safety Discussions and Decision-Making
are often due to Misuses of Language
Belief 1:
50% of the problems in the world result from people
- using the same words with different meanings.
Belief 2:
the other 50% comes from people
- using different words with the same meaning.
Non – Agreed Language
Language is how we communicate and achieve
our shared vision, beliefs and culture.
Language allows interactions that develop mutual
respect, trust and understanding necessary for
development of relationships
Positive Relationships which can develop from
risk-based conversations between colleagues and
leaders are at the core of safety performance.
BUT !! If we impede or confuse
the safety communication process with
non-agreed unclear language and terminology
will ultimately prove to be a cultural carcinogen.
The word risk is used in everyday language in many different ways. It is
used to express ideas of :-
Danger hang-gliding is too risky for me
Probability there is a high risk that my football team ZZZZ will not
win the next championship match
Uncertainty I am not travelling by train—you can never be sure they
will run on time - it is too risky
Variability investing in small companies is risky, but the potential
returns make it worthwhile; and
Dread I would not live near a nuclear power station, it is too risky
It is worthwhile bearing in mind these different everyday nuances to the
word “risk” when it comes to telling people about risk and uncertainty. 6
7
Riscus - "Difficulty to avoid in the sea."
Hindi Punjabi
Indonesian
/ Malay
Korean Chinese
Japanese Thai
Filipino Vietnamese
Javanese
Tamil
Australian
Australian definition of risk
10
11
AS/NZS/ISO 31000
ISO 31000 CAN/CSA ISO 31000
ANSI/ASSE Z690.2
NBR ISO 31000
IRAM-ISO 31000
SANS 31000
IS/ISO 31000
SS/ISO 31000
GOST R ISO 31000
MS ISO 31000
JIS/ISO 31000 GB/T 24353
ISO 31000
ISO 31000
ISO 31000 ISO 31000
ISO 31000
AS/NZS/ISO 31000
International Adoption of ISO 31000
Integrated Management across all 7 Risk Domains
- based on common principles and processes of ISO 31000:2009
12
13
Traditional
Safety Terminology Preferred & Recommended
Risk Based Language
Loss Control /
Loss Prevention
Safety Risk Management – profits as well as losses –
enabling positive outcomes as well as preventing negatives
– maximizing the chances of gains, profits, benefits – Safety
is about a focus on maximizing chances of gains NOT
minimizing chances of losses
Safety - as absence of harm
– double negative
Safety - as presence of well-being
– double positive
Safe Acts / Conditions Standard, Agreed Acts / Conditions
Prevent, Stop, Eliminate Absolute, false confidence words – better to use simple
realistic terms “manage” or “control”
Unsafe Acts, Conditions
At-risk Behaviours,
Conditions
Nonstandard, Non- agreed Behaviours / Conditions
To accept a risk
Acceptable Risk
To tolerate a Risk– working with, never passively accepting
always uncomfortable – looking for how make the risk
ALARP
Tolerable Risk
See full list of Appendix 1 in Paper
available from [email protected]
1
6
12
18
24
30
36
Safety Environ Production
Employee’s method Supervisor / Company Standard
Extreme Risk
Very High Risk
High Risk
Medium Risk
Low Risk
Very Low Risk
Intolerable
Use of Risk Language during ALL Risk Conversations
- even Employee Counselling
© copyright 2010 risk@workplaces pty ltd
14
Low
Risk
High
Risk
Spectrum of Risk
Safety Threshold (eg speed limit)
Safe (zero risk) Unsafe ( risk )
© copyright 2010 risk@workplaces pty ltd
15
Definition of “SAFE”
© copyright 2010 risk@workplaces pty ltd
16
Safe / Unsafe Acts / Behaviours / Conditions
SWPs / SOPs /
Always use adjectives, “Standard” or “Agreed”
instead of “Safe”
“Non-Standard” instead of “Unsafe” when referring to :-
Acts / Behaviours / Conditions / Work Procedures / Operating
Procedures / Work Instructions etc.
At-risk Acts, Behaviours,
Conditions
Not defined, Non-standard, Non-agreed, Sub-Standard
Acts, Behaviours and Conditions
Prevent, Stop,
Eliminate
Absolute, false confidence words
- implies zero risk is achievable
- better to use simple realistic terms “manage” or “control”
Safe Risk of Harm is continually being managed to
ALARP - As Low As Reasonably Practicable – NOT zero
SAFE does NOT mean Zero Risk but means managed risk
• even following a procedure, a rule or a regulation still involves risk
• Zero Harm does not equal Zero Risk
Zero Harm is BOTH
an inspiration [ external – we inspire others]
and an aspiration [ internal – we set our own aspirations]
We can have Zero Incidents – This Job and the Next !
We can have Zero Incidents – Today and Tomorrow
but never a zero risk of incidents ever happening !!!!
Definition of “SAFE”
© copyright 2010 risk@workplaces pty ltd
17
Controls
Swiss Cheese Model – Layers of Protection LOPA – Defences at Depth
Safeguards / Mitigating Factors / Safety Measures / Barriers
Hazard
Exposure Target
Exposed Person
All risk controls are imperfect - with transparency and even “holes” in them.
The more controls / layers - the less likely the holes will line up
i.e. the less likely all will be missing or fail at the same time
Always use combinations of HARD and SOFT controls
© copyright 2010 risk@workplaces pty ltd
18
20
Is causation LINEAR 1-dimensional in real life ?
Consequence Consequence 1 Consequence 2
Causes of most incidents and risk in real life
are multidimensional & COMPLEX !!!!!
21
POSSIBLE POTENTIAL PROBABLE
The terms “Possible” “Probable”
NO YES
BLACK WHITE
PROBABLE HIGH LOW
“Possible” has no spread or range – it is possible OR it isn’t
“Probable” has a range / spread / spectrum from LOW to HIGH
POSSIBLE IMPOSSIBLE
In the definition of HAZARD,
“anything that has potential for harm?”
can imply –
Anything that could harm. possible
But it can also imply –
Anything that is likely or probable
to cause harm
Potential can suggest BOTH Possible and Probable
When deciding if an incident needs an extensive / brief
investigation, the policy usually requires the question :-
“what was the incident’s potential severity as well as its actual
severity?” This question is often interpreted as –
What other greater severities were possible ?
It is more meaningful to ask not just if a more severe outcome was
possible
but also how probable the factors needed to lead to a more severe
outcome would be,
if their causes were not found and not controlled better.
Potential can suggest BOTH Possible and Probable
Ask what scenario? would a more severe outcome require for it to occur
and then how probable? would that scenario be -is a more meaningful policy
to avoid excessive unnecessary investigations and their costs
L Likelihood Scale
= 5 Certain
= 4 Expected
= 3 Probable
= 2 Possible
= 1 Not Expected
http://www.abc.net.au/news/2015-07-23/new-terror-alert-system-endorsed-at-coag/6642734
27
6 X 6 version VERBAL
DESCRIPTOR Likelihood estimate
must consider the whole scenario
including chosen C
HISTORY / EXPERIENCE
Refer to databases &
Risk Registers only if past circumstances
the same as predicted
LIKELIHOOD as a
FREQUENCY Scenario including
chosen C could
happen
LIKELIHOOD as a
PROBABILITY Scenario including
chosen C could
happen
Esti
ma
te L
ikel
iho
od
of
Scen
ari
o n
eed
ed t
o le
ad
to
C
nee
ded
to
lea
d to
Ch
ose
n C
Guidance Notes R = L * C
ALMOST CERTAIN Has been occurr ing ALMOST ALL the
time in similar
organisations / industries
1000 PER YEAR 3 times a day or
m ore often
1 chance in 1 100% of situations
6 6 12 18 24 30 36
VERY LIKELY Has been occurr ing VERY REGULARLY 100 PER YEAR 1 chance in 10
10% of situations 5 5 10 15 20 25 30 LIKELY Has been occurr ing
REGULARLY MONTHLY
10 PER YEAR 1 chance in 100 1% of situations 4 4 8 12 16 20 24
UNLIKELY Has been occurr ing
NOW AND THEN 1 PER YEAR 1 chance in 1000 3 3 6 9 12 15 18 VERY UNLIKELY Has been occurr ing
RARELY 1 IN 10 YEARS 1 chance in 10 000 2 2 4 6 8 10 12
ALMOST NO LIKELIHOOD /rare very exceptional
Has been occurring ALMOST NEVER
1 IN 100 YEARS or even less
1 in 100 000 Or even less 1 1 2 3 4 5 6
How to use the Semi - Quantitative L*C matrix L Choose Consequence of Interest / Concern
C 1 2 3 4 5 6 1. First step is for group to choose a Risk Domain and a
Consequence of most interest or concern – one at a time. 2. It is illogical to guess and argue about what is the “most likely”
OR the “most reasonable” Consequence. All C’s s are “possible” 3. Estimates of the Likelihood L of the scenario can only be made
after agreement by the group on exactly what is the specific Consequence and Risk Question.
4. First estimates should be made independently. 5. Spread of first estimates always indi cates lack of agreement on
what risk factors / events / circumstances are in the scenario or not. Delphi discussion will narrow the spread of estimates.
6. When estimating L of the scenario, always use the first 2 columns. Don’t allow past personal experience s to dominate and lead to over - or under - estimates of future Likelihood .
7. Remember you r estimate is for ALL the events and risk factors occurring and ALL risk controls not working - NOT just one.
8. Use either o r both the 3 rd and 4
th columns ONLY if relevant . 9. Novice risk estimators usually estimate pessimistically and
conservatively and hence over - estimate the Likelihood of everything going wrong at the same time .
Safety / Health
Minor Injury / Illness
Medical (doctor) T reatment
Single Serious Injury / ill ness
Multiple S erious injuries / ill
Single F atality / fatal illness
M ultiple Fatalities /Illnesses
Quality Minor Non - conform ity Defect
Moderate Non - conform ity Defect
Serious Non Conformity Defect
Very Serious Nonconform ity Defect
Major Non - Conformity Defect
Multiple Major Non - conformities
Environ I mpact no lasting E effects
Moderate short term E impacts
Serious short term E harm Impact
Serious medium term E harm
Major long term E impact
Extreme irreversible
E impact
Financial / Commercial
< $ 1 , 000 < $ 10 , 000 < $ 50,000 <$100,000 < $500,000 >$1,000,000
Asset
Damage
Minor< 1 day prodn loss
Moderate < 1 week prod loss
Serious < 1 m th prod loss
Very serious < 6 mth loss
Major < 1 year
Very Signific > 1 year loss
Reputation /Brand
Minor PR harm
Moderate PR harm
Serious PR harm
Very Serious PR harm
Major PR harm
Extreme PR Harm
HR Minor HR effects
Moderate HR effects
Serious HR effects
Very Serious HR effects
Major HR effects
Extreme HR effects
L
Scale
VERBAL DESCRIPTORS Defined sequence or scenario is the
credible combination of events and
risk factors / circumstances required
to lead to the chosen Consequence.
Likelihood estimate must consider
the whole scenario including the
chosen C
PAST HISTORY /
EXPERIENCE
[ refer to databases and
risk registers ]
{ Must be confident that
risk factors have not / will
not change]
Estimate
L
6
ALMOST CERTAIN the defined
sequence or scenario can happen
because ALL risk events / risk
factors would be ALMOST
CERTAIN to occur or be present
Whole scenario incl C has
been occurring ALMOST
ALL the time in ours or
similar organisations
industries
5 VERY LIKELY
MOST risk factors
VERY LIKELY to occur
Has been occurring
VERY REGULARLY
4 LIKELY
MANY risk factors
LIKELY to occur
Has been occurring
REGULARLY
3 UNLIKELY
MANY risk factors
UNLIKELY to occur
Has been occurring
NOW AND THEN
2 VERY UNLIKELY
MOST risk factors
VERY UNLIKELY to occur
Has been occurring
RARELY
1 ALMOST NO LIKELIHOOD
ALMOST ALL risk factors
VERY EXCEPTIONAL AND RARE
to occur
Has been occurring
ALMOST NEVER
© copyright 2009 risk@workplaces pty ltd
Likelihood Scale
Use of Risk Assessments and
Risk Based Conversations
during EVERY “safety” meeting or discussion
Every time safety is being discussed / described / argued / communicated,
then risk assessments are required to make safety risk communications more
objective and less emotional.
For example, whenever you are asking questions similar to :-
- Should we do the job this way or that ?
- Which project should have a higher priority ?
- Which way is the “safer” way? - meaning which is “lower overall risk” ?
- Which is the best tool, plant, equipment for this job ?
- Which risk control options are better than the others ?
- Which route should be taken ?
- Which roster is best for managing fatigue ?
- What time do we allocate to this incident investigation ?
IN fact, every time any safety decision needs to be made,
do at least a qualitative [ but preferably a Semi – Q ] Risk Assessment !!!
AND talk accurate risk language !!!! © copyright 2010 risk@workplaces pty ltd 29
Better risk understanding NOT more risk taking
workplacesrisk @ pty ltd
30
Thank You
Jim Whiting
risk@workplaces pty ltd
31
On the giving of advice…
OCHS12001
David Skegg MSSc Grad Dip(OHM) CHOHSP JP
Lecturer (Teaching Scholar)Transport & Safety SciencesSchool of Human Health and Social SciencesAccident Forensics LaboratoryBundaberg QLD
Summary
• What happens if the advice you get is wrong?
• Is the advice on “safety” you receive “professional”?
• What does a “safety professional” look like?
Professionalism
• What makes a “professional”?– Any employee engaged in work predominantly intellectual
and varied in character as opposed to routine mental, manual, mechanical, or physical work; involving the consistent exercise of discretion and judgment in its performance; of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time; requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study in an institution of higher learning … as distinguished from a general academic education or from an apprenticeship or from training in the performance of routine mental, manual, or physical processes
http://www.lectlaw.com/def2/p095.htm [viewed 4 April 2016]
Professionalism – the simple definition
• Has knowledge not available to the ordinary person
• Adheres to a Code of Ethics
Dine, K (1998) The Role of Experience in an Occupational Health and Safety Professional. VIOSH Grad Dip(OHM) Dissertation. Federation University, Ballarat, Victoria
Needed knowledge
• Science• Engineering• Law• Cognition• Management Planning • Investigation
– Outcome analysis– Biomechanics– Victim Pathology
• Literacy, and• Numeracy (Inferential statistics)
AQF Level 7 Qualification as a minimum
Be reasonable…
Statutes say (e.g.)…• (b) the degree of harm that might result…• (c) what the person concerned knows, or ought
reasonably to know, about:• (i) the hazard or the risk; and• (ii) ways of eliminating or minimising the
risk; and• (d) the availability and suitability of ways to eliminate
or minimise the risk; and• (e) after assessing the extent of the risk … the cost
associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.”
Commonwealth Work Health and Safety Act (2011) s18
Defining “:Reasonable”
• Was there a duty to care?• Was that duty breached?, and• Did Damage arise from that breach?
(Bowen, 1989)
Defining “Reasonable”
• Wyong Shire Council v Shirt (1980) HCA12; (1980) 146 CLR 40
• The "Wagon Mound" (No. 2) (1967) AC
• Munnings v Hydro-Electric Commission [1971] HCA 27
• Nagle v Rottnest Island Authority [1993] HCA 76; 177 CLR 423
• Romeo v Conservation Commission of the Northern Territory [1998] HCA 5; 192
Quality of advice
• Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] UKHL 4; (1964) AC 465
• Robinson v National Bank of Scotland, 1916 S.C. (H.L.) 154
• Blyth v Birmingham Waterworks (1856) 11 Ex R781
• Paris v Stepney Borough Council 102 [1950] UKHL 3; [1951] AC 367; [1951]
• March v Stramere (1991) 171 CLR 506
• Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59
Acta est fabula, plaudite
THE POST FOSSIL FUEL DILEMMA RISK 2016 Sydney 19-20May16Thomas I F , Porter N A , Lappas P
1.0 Introduction
2.0 Assessing whether sustainable sources can cope2.1 Arid-area-growing non-food salt-tolerant species2.2 Available land and the land/energy balance
3.0 Safer ways of generating nuclear power3.1 Introduction3.2 The thorium cycle3.3 Nuclear fusion3.4 Waste disposal
4.0 The way ahead according to sociologists, philosophers and economists4.1 Social and environmental issues4.2 Human population4.3 Before fossil fuels4.4 Ecological sustainability and economic degrowth4.5 Jevons’ Paradox4.6 Continuing our current level of energy use unabated4.7 Risks to human society4.8 Chrematistics, oikonomia and existential risk4.9 Complete social re-organisation
5.0 Conclusions; 6.0 Bibliography
2.0 Assessing whether sustainable sources can cope
2.1 Arid-area-growing non-food salt-tolerant species
Salvadora persica (toothbrush tree)
Sarcocornia quinqueflora (beaded samphire)
Crithmum maritimum (rock samphire)
Ralph’s Cupboard (Samphire Island, Cornwall)
Salicornia dolichostachya (long-spiked glasswort)
River Exe estuary (Dawlish Warren, Devon)
2.2 Available land and the land/energy balance
500 EJ biofuel land required post fossil fuels (WBGU) 2500 Mha
Currently available farmland 400 Mha
Halophyte land available (estimated) 1200 Mha
Balance required from other renewable sources 900 Mha
BUT the WGBU figure is underestimated according to my calculations
500 EJ biofuel land area required (I F Thomas)
Minimum required 4000 Mha
Maximum required 12,900 Mha
For both estimates we have a range of 12% to 64% of the land required
BUT don’t forget, we keep on increasing our global energy consumption !
So either –
we need to go seriously nuclear
Or more wisely -
start controlling our population and our never ending greed for economic growth.
So let us at least consider :-
3.0 Safer ways of generating nuclear power …
The thorium cycle
Nuclear fusion
3.1 Introduction
Current global nuclear power production :-438 reactors and another 67 under construction (15 use the Thorium Cycle)Nuclear reactors produced 60 EJ (2010) of 500+ EJ current global energy use
3.2 The thorium cycle
Thorium-232 More abundantDoesn’t need enrichmentLongest half-life waste is 30 years (caesium-137)Reactor operates at atmospheric pressureCan consume existing nuclear waste & old weaponsDoes not generate weapons-grade materials
Liquid Fluoride Thorium Reactor (LFTR) – established technology
Molten Salt Reactor (MSR) – established technology
Oak Ridge National Laboratory 1964-69
3.3 Nuclear fusion
Much available fuel – Deuterium (2H), Tritium (3H)
Does not produce radioactive waste directly
Tokamak (Swiss experimental plant shown overleaf)
ITER (construction commenced in 2013; start-up circa 2033 (???)
(Britain will be first by 2030 says Kingham, CEO of Tokamak Energy)
BUT this is a long way off and despite being safer by producing nominallyno radioactive waste,
will the process be safe ?
will it be cost effective ?
Variable-configuration fusion reactor at the Ecole Polytechnique Federale de Lausanne, Switzerland
Scale model of a cross-section through the Cadaranche ITER fusion reactor
3.4 Waste disposal
The World Nuclear Association (WNA) claims that deep geological storage is
‘Disposal’ …. I say it is storage
Imagine the people of the distant future, coming across a large hill like the one in the next slide and gazing in wonder about what it might be –is it some kind of ancient tomb ?
They will be as curious as we are about the pyramids –they will not leave it alone until it is too late
This is quite a realistic prospect unless the records thousands of years hence are clear to them unlike our experiences with Egypt and Meso-America
Deep geological ‘disposal’ site at Forsmark, Sweden – a pyramid for the future ?
4.0 Views of sociologists, philosophers and some economists
4.1 Social and environmental issues
We all know about the dilemma of ‘climate change’. I first learned of it formally, in a lecture at the School of Botany at Melbourne University, presented by Dr Peter Attiwill in 1981. It is growth-oriented politicians who deny it
We all know about the 2599 IUCN Red List critically endangered animal and 2240 plant species. Some humans mistakenly regard them as less important than people. Those who try to protect them cannot always do enough without political and business support. (Sir David Attenborough)
Not so many of us know that land-grabbing in developing countries by wealthy, developed European nations is occurring on a massive scale to allow them to grow fuel and food. Almost one-third of the area of Europe has been grabbed and the people displaced. (The International Land Coalition)
4.2 Human population
We are still in the exponential growth phase
See what happens to bacteria after that. We and all living creatures are the same in this regard. But we just take no notice.
Human growth curve 1800-2100 Microbial growth curve 10 hours
4.3 Before fossil fuels
4.4 Ecological sustainability and economic degrowth
4.5 Jevons’ Paradox
4.6 Continuing our current level of energy use unabated
4.7 Risks to human society
4.8 Chrematistics, oikonomia and existential risk
4.9 Complete social re-organisation
Professor John Urry (Lancaster University), says
When we discovered fossil fuels we should have either left them in the ground for the future or rationed them : we should certainly do so now.
Energy is not just another commodity, it is the pre-requisite of all commodities
Only mad men and economists believe that infinite growth is possible in a finite world (Kenneth Boulding)
And yet we hurtle along in our greedy growth-before-all style of living, on our way to what many consider to be a very serious demise.
To avoid the apocalypse we must gain wisdom and develop technological maturity with aims like :-
(i) equality and sustainability for all people, (ii) recognition of the rights of other species, (iii) abandoning the objectives of accumulation
and wealth
Greed (chrematistics) must end and be replaced with Aristotle’s oikonomia (Nicolas Georgescu-Roegen, founder of ecological economics)
To avoid the apocalypse, we need to voluntarily degrow (Georgescu-Roegen; Jan van Bavel) and depopulate (Herman Daly) or go extinct before reaching technological and moral maturity (Nick Bostrom)
The only way we can grow our population and our economy indefinitely is by populating other planets.
If we do this we should be OK.
If we do not gain wisdom and full international co-operation before colonising elsewhere, we will go prematurely extinct. ( Professor Nick Bostrom, Oxford University)
5.0 Conclusions
2568 non-food, halophyte oil-producing species are available; only 25 have been researched to date. Much more work must be done
Numerous non-food halophyte species can be grown in Australia but it doesn’t happen. You see, we have plenty of unsustainable fuels so we don’t need to bother
There is only enough land in the world to grow between 12% and 64% of fuel needs when fossil fuels run out – more likely the former.
There is a safer way of generating nuclear power namely use of the thorium cycle. When and if nuclear fusion is possible, this too may be safer
Radioactive waste may not be disposed of, only stored unless the Sun is the destination- this is possible but with enormous cost and risk. Some existing wastes are amenable to consumption by the thorium cycle
Half lives of some wastes are measured in Giga years – humans cannot think that far ahead and therefore should not create such a ‘monster’ for future civilisations
Developed world green fuel mandates are displacing peoples, causing extinctions and harming the environment in countries where land is being ‘grabbed’.
World population continues to grow exponentially. Unless we change this, nature will cause the inevitable levelling off and rapid drop.
The continuing rise in population and associated inequalities of consumption between developed and developing countries have led to fundamental difficulties such as inequitable availability of food, energy and sanitation
All of the world’s human-caused difficulties would be overcome if we controlled our population to a sustainable level and abandoned the current economic mantra of ‘indefinite growth’ in favour of some form of ‘economic degrowth’
It is unlikely that such a change will succeed by dictate. Rather, there needs to come into being a ‘collective realisation’ and resulting ‘collective conscience’ to cause change
Many fear that given human nature this is most unlikely to happen. Others argue that, as we ourselves are a part of nature, our survival instinct and associated greed are themselves natural
The difference between humans and other species perhaps, is that we realise that change is needed and we have the ability to make it happen. This in the author’s view is our collective moral obligation.
Appendix : Some current degrowth practices
1. Sharing of information via the internet
2. Open exchange of information via Peer-to-Peer (P2P) practices w/o copyright, patents etc
3. Creative Commons licencing
Movements such as :-
4. 100 Resilient Cities5. Tiny House6. Transition Towns7. Co-housing
Modelling Weather Risk for Project Schedule Risk Analysis
RISK 2016 ConferenceSydney, Australia
19 May 2016
BACKGROUND: Speaker BioBACKGROUND: Speaker Bio
January 2016© 2016 Australasian Project Planning 2
Civil Engineer and a certified AACEi Planning and Scheduling Professional (PSP) with 15 years’ experience in Project Planning, Scheduling, Controls & Schedule Risk Analysis
Specialist Planning & Controls consultant in areas of, Time Location Reporting, Graphical Path Planning and Schedule Risk Analysis
Santosh BhatSantosh Bhat
CONTENTSCONTENTS
January 2016© 2016 Australasian Project Planning 3
Project schedules
Weather risk
Weather contingency in schedules
Schedule risk application
Assessment of weather risk
INTRODUCTIONINTRODUCTION
January 2016© 2016 Australasian Project Planning 4
Australia is a broad geographic continent with a range of climates and associated weather
Australian Climate Influences(Australian Bureau of Meteorology, 2016)
INTRODUCTION (cont)INTRODUCTION (cont)
January 2016© 2016 Australasian Project Planning 5
For construction projects, weather uncertainty is both an inherent and contingent form of risk
Considerations and techniques for incorporating weather risk into probabilistic models for project schedule risk analysis
PROJECT SCHEDULESPROJECT SCHEDULES
January 2016© 2016 Australasian Project Planning 6
Schedules are networks representing activities and events – models of projects
Provide time phasing of methodologies, resources, costs and allow determination of project critical paths
Forecasting & Scenarios
PROJECT SCHEDULES (cont)PROJECT SCHEDULES (cont)
January 2016© 2016 Australasian Project Planning 7
Scope
Activities/TasksWorks to be undertakenDurations Milestone EventsLevels of Detail
Dependencies
Relationships/LinksBetween activitiesRelationship type eg. Finish to StartDetermines time‐phasing of activities
Work Periods
CalendarsAvailable Work periodsNon – Available eg. Holidays, RDO’sWeatherApplicable Scope
PROJECT SCHEDULES (cont)PROJECT SCHEDULES (cont)
January 2016© 2016 Australasian Project Planning 8
Critical Paths
Activities/TasksDrivers to achieving completionCritical activities and dependenciesNear-criticality
Time Phasing
CalendarsActivitiesResourcesCosts
ASSESSING WEATHER RISKASSESSING WEATHER RISK
January 2016© 2016 Australasian Project Planning 9
Base schedules contain no contingency allowances and represent expected durations of activities and overall project duration
An assessment of the uncertainty and impacts of weather needs to consider: sources of weather risk, thresholds and impacts
“If the wind blows over 60km/h, we stop work"
SOURCES OF WEATHER RISKSOURCES OF WEATHER RISK
January 2016© 2016 Australasian Project Planning 10
Inherent Weather RiskRainfall
Heat or cold
Wind and dust
Sea height
(Australian Bureau of Meterology, 2016)
Contingent Weather RiskFlooding
Cyclones
Extreme Heat or Cold
WEATHER THRESHOLDSWEATHER THRESHOLDS
January 2016© 2016 Australasian Project Planning 11
Thresholds set the weather risk. Examples of such thresholds include:
Any period where wave height greater is than 1m will result in marine fleets returning to harbour.
Rainfall over 5mm in a day will cause earthworks operations to cease
Work specifications prohibit the pouring of concrete in temperatures greater than 35°C
WEATHER IMPACTSWEATHER IMPACTS
January 2016© 2016 Australasian Project Planning 12
Impacts of weather risk need to take into consideration:
Direct impacts, eg. rain effects earthworks more than internal works
Indirect impacts, eg. supply or delivery scope
Precision of data: eg. Rain occurring mostly outside work periods (nights)
EXAMPLEEXAMPLE
January 2016© 2016 Australasian Project Planning 13
Example Project Schedule:
17km highway on NSW mid‐north coast
“Dry” schedule – ie base schedule.
JYEAR 1
F M A M J J A S O N D JYEAR 2
F M A M J J A S O N D JYEAR 3
F M A M J J A S O N D
APPROVALS
Contract Award
DESIGN
ZONE 1 CONSTRUCTION
ZONE 2 CONSTRUCTION
ZONE 3 CONSTRUCTION
Traffic Open
Project Completion
EXAMPLE (cont)EXAMPLE (cont)
January 2016© 2016 Australasian Project Planning 14
Rainfall data: number of mean days over specified quantity of rain
EXAMPLE (cont)EXAMPLE (cont)
January 2016© 2016 Australasian Project Planning 15
Set thresholds and impacts (loss factors)
Determine lost work periods due to rainfall
Activity >1mm >5mm >10mm >25mm >50mm
Earthworks 1 1 2 2 3
Structures 0 1 1 1 2
Paving 0 1 1 2 2
SCHEDULE CONTINGENCYSCHEDULE CONTINGENCY
January 2016© 2016 Australasian Project Planning 16
Weather risk as an inherent risk, is added to base schedules using horizontal contingency allocation:
JYEAR 1
F M A M J J A S O N D JYEAR 2
F M A M J J A S O N D JYEAR 3
F M A M J J A S O N D JYEAR 4
F M A M J J A S O N D
APPROVALS
Contract Award
DESIGN
ZONE 1 CONSTRUCTION
ZONE 2 CONSTRUCTION
ZONE 3 CONSTRUCTION
Traffic Open
Project Completion
Traffic Open
Project Completion
+9 months
EXAMPLEEXAMPLE
January 2016© 2016 Australasian Project Planning 17
Returning to the previous example:
Apply “Wet” calendars to schedule activities
SCHEDULE RISK APPLICATIONSCHEDULE RISK APPLICATION
January 2016© 2016 Australasian Project Planning 18
Previous application of weather contingency uses deterministic values – no uncertainty
Weather is a highly uncertain event, a variable that can be an opportunity or a threat
SCHEDULE RISK MODELLINGSCHEDULE RISK MODELLING
January 2016© 2016 Australasian Project Planning 19
Estimate Uncertainty Risk
Inherent RisksUncertainty in known and estimated durations
Discrete Risks
Contingent RisksUncertainty in unknownactivities with uncertain durations
Calendar RisksUncertainty in schedule work periods
PROBABILISTIC CALENDARSPROBABILISTIC CALENDARS
January 2016© 2016 Australasian Project Planning 20
Method One – Periods of Non Work
Method Two – Windows of Downtime
PROBABILISTIC CALENDARS (cont)PROBABILISTIC CALENDARS (cont)
January 2016© 2016 Australasian Project Planning 21
Resultant Probabilistic Calendars
Y1 Y2 Y3 Y4
Earthworks
Superstructure
PROBABILISTIC CALENDARS (cont)PROBABILISTIC CALENDARS (cont)
January 2016© 2016 Australasian Project Planning 22
Result of Modelling Weather Risks only
Dry Completion date of 23‐Sep‐Y3
P50 of 27‐Feb‐Y4 (vs “wet” 26‐Jun‐Y4)
EXAMPLEEXAMPLE
January 2016© 2016 Australasian Project Planning 23
Result of Modelling Weather Risks only
Reasons for variation between Probabilistic P50 vs Deterministic Mean include:
Weather Opportunities
Rain days occur on non‐work days in model
JYEAR 1
F M A M J J A S O N D JYEAR 2
F M A M J J A S O N D JYEAR 3
F M A M J J A S O N D JYEAR 4
F M A M J J A S O N D
APPROVALS
Contract Award
DESIGN
ZONE 1 CONSTRUCTION
ZONE 2 CONSTRUCTION
ZONE 3 CONSTRUCTION
Traffic Open
Project Completion
Traffic Open
+9 months
Project Completion
+5 months
WEATHER & OVERALL SCHEDULE RISKWEATHER & OVERALL SCHEDULE RISK
January 2016© 2016 Australasian Project Planning 24
Weather forms only one component of an overall Schedule Risk Analysis
To determine contribution, requires sensitivity analysis by removing each risk at a time
EXAMPLE ‐ ACTUAL RAINFALLEXAMPLE ‐ ACTUAL RAINFALL
January 2016© 2016 Australasian Project Planning 25
Month Days Work Days
Calc. Lost Days
Y1 >5mm
Y2 >5mm
Y3 >5mm
Y4>5mm
JAN 31 22 9.9 7 6 2 9
FEB 28 24 12.7 7 12 7 6
MAR 31 24 9.8 5 3 7 3
APR 30 24 8.3 4 5 1 4
MAY 31 26 7.7 1 3 1 9
JUN 30 25 5.6 6 4 0 0
JUL 31 26 4.5 1 1 1 0
AUG 31 26 3.2 1 0 4 2
SEP 30 25 4.1 1 1 0 6
OCT 31 26 6.9 1 0 1 2
NOV 30 26 9.1 3 10 4 7
DEC 31 18 8.1 3 3 8 8
Q&AQ&A
January 2016© 2016 Australasian Project Planning 26
QUESTIONS ? &
THANK YOU
QUESTIONS ? &
THANK YOU
www.austprojplan.com.au :web
[email protected] :email
www.austprojplan.com.au :web
[email protected] :email
BackgroundLiteratureObjectiveGenetic AlgorithmsModel DevelopmentUser Interface: InputCalculationsUser Interface: Output
ConclusionRecommendations
Construction site layout is the arrangement of temporary facilities in space and time throughout the construction stage where:
Site space is scarcePositioning of facilities impacts costsOptimized layouts reduce project cost, increase work efficiency and overall productivity
Site layout involves identification and placement of temporary facilities:
Site officesCranesStorage areasFabrication shopsWarehousesEntrancesExitsTemporary roadsWater tanks
Factors affecting the site layout problem:Project type and sizeAccess and traffic routesMaterial storage and handlingOperational areasOrganization of work Location of permanent buildings
Nature of site layout problems:Highly dynamicInterrelated with other management tasks
Several researchers developed models:Static models: assumes facilities are fixed over timePhased models: splits project in phases and optimizes phases separatelyMathematical modelsMinimization of total potential energyIntegration of fuzzy sets
Developing a model for optimum dynamic site layout of two‐phase construction projects
consisting of two phases or buildings that are part of one project taking into account mobilization, demobilization, operation,
relocation and traveling costs using Genetic Algorithms
Mimics the natural biological evolution and social behavior of species through the survival of the fittestGAs have recently emerged as a robust search procedure for complicated problems with many successful applicationsGenerate useful solutions for optimization and search problems by natural evolution: inheritance, mutation, selection and crossover.
Mod el
User input
Project data
Costdata
Timedata
Proximity module
Genetic algorithm processor
Model Output
Closeness relationship scale
Cost Module
Overlap constraint
Closeness relationship
Optimized facilities’ positioning over project timeline
Border constraint
Optimization software specificationsUser friendly software, Evolver TM V.5.5 Microsoft ExcelPopulation: 50Cross over rate: 0.5Mutation rate: 0.1
VariablesX and Y coordinates of the facilities centroidsOrientation of facilities
ObjectivesMinimize the site score to satisfy closeness relationshipMinimize the cost of facilities relocationOperate building 1 while building 2 is under construction.
Model compositionTechnical module: basic project data, type, size, parties, estimate value, descriptionDatabase module: time and cost dataProximity module: closeness relationship data including the relationship scaleOptimization module: GA processor, objective, constraints, costs
Case Study: Twin tower retail mall2 buildings constructed sequentially1st building would operate simultaneously with the commencement of construction of the 2nd buildingNot all facilities will be needed throughout the whole project construction duration
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
Site
Operable Area of F1
Fixed Building 1
Fixed Building 2
Contractor's Offices
Carpentry Workshop
Laboratory
Rebar Workshop
Equipment Workshop
Closed Warehouse
Piping Workshop
E/M Workshop
Fuel Station
Labors Facilities
Labors Toilets
First Aid Facility
Generator Sheds
Guard House
Parking Shed
Access Roads
Building 1
Building 2
Building 1
Building 2
B1Under
construction
B2Under
Construction
Building 1
Operable Area of Building 1
Project Schedule
Ref Work packages Phase 1 Phase 2 P1A Structural works
P1B Architectural finishing & MEP
P1C FF&E, testing & commissioning
P2A Structural works
P2B Architectural finishing & MEP
P2C FF&E, testing & commissioning
0 4 8 12 16 20 24 28 32 36 40 44 48 Time (months)
Ref Description Size Time schedule (months) L W 0 4 8 12 16 20 24 28 32 36 40 44 48
S Site 100 100
S1 Operation of F1 50 50
F1 Fixed Building 1 25 25
F2 Fixed Building 2 25 25
A Offices 12 6
B Carpentry 6 4
C Laboratory 3 3
D Rebar Workshop 12 6
E Equip. Workshop 8 6
F Warehouse 8 6
G Piping Workshop 6 4
H E/M Workshop 5 4
I Fuel Station 3 3
J Labors Facilities 6 6
K Labors Toilets 6 4
L First Aid Facility 3 3
M Generator Sheds 3 3
N Guard House 3 3
O Parking Shed 4 3
STEP 1: Enter Project DataProject DescriptionProject type RetailProject Name Twin tower retail development mallThe Employer ABCThe Contractor XYZThe Engineer EFGEstimated Project Value
Problem Description
Mobilization Cost per m2
Demobilization Cost per m2
Operation Cost per m2 / monthTraveling Cost per m2 / m'Relocation Cost per m2 / m'Duration of P1A (months) 8Duration of P1B (months) 14Duration of P1C (months) 2Duration of P2A (months) 8Duration of P2B (months) 14Duration of P2C (months) 2
10
Twin tower retail development mall with two buildings, 1 and 2. Building 1 will operate immediately when complete and construction shall commence in building 2 when building 1 is complete.
10,000,000.00
200200205
STEP 2: Define Closeness Relationship ScaleCloseness Relationship ScaleAbsolutely necessary (A) A 81Especially Important (E) E 37Important (I) I 9Ordinary closeness (O) O 3Unimportant (U) U 1Undesirable (X) X 0
Step 3: Select the relationships between the facilities for Structural worksCode Description L W S F1 F2 A B C D E F G H I J K L M N OS Site 100 100F1 Fixed Building 1 25 25F2 Fixed Building 2 25 25A Contractor's Offices 12 6 E EB Carpentry Workshop 6 4 A A XC Laboratory 3 3 I I O OD Rebar Workshop 12 6 A A X I UE Equipment Workshop 8 6 I I X U U UF Closed Warehouse 8 6 I I X X X X XG Piping Workshop 6 4 O O X U U U O UH E/M Workshop 5 4 O O X U U U O U EI Fuel Station 3 3 I I X U U U E X I IJ Labors Facilities 6 6 E E X E I E E O E E UK Labors Toilets 6 4 E E X E E E E O E E U AL First Aid Facility 3 3 A A U E E E E O E E O E OM Generator Sheds 3 3 O O O I O I I X E E A U U IN Guard House 3 3 U U O I I I I E I I U U U U UO Parking Shed 4 3 U U A U U U U X U U U U U U U U
Step 4: Select the relationships between the facilities for Architectural & MEP worksCode Description L W S F1 F2 A B C D E F G H I J K L M N OS Site 100 100F1 Fixed Building 1 25 25F2 Fixed Building 2 25 25A Contractor's Offices 12 6 E EB Carpentry Workshop 6 4 O O XC Laboratory 3 3 O O O OD Rebar Workshop 12 6 O O X I UE Equipment Workshop 8 6 I I X U U UF Closed Warehouse 8 6 I I X X X X XG Piping Workshop 6 4 A A X U U U O UH E/M Workshop 5 4 A A X U U U O U EI Fuel Station 3 3 O O X U U U E X I IJ Labors Facilities 6 6 E E X E I E E O E E UK Labors Toilets 6 4 E E X E E E E O E E U AL First Aid Facility 3 3 E E U E E E E O E E O E OM Generator Sheds 3 3 O O O I O I I X E E A U U IN Guard House 3 3 U U O I I I I E I I U U U U UO Parking Shed 4 3 U U A U U U U X U U U U U U U U
Step 5: Select the relationships between the facilities for FF&E and Testing & CommissioningCode Description L W S F1 F2 A B C D E F G H I J K L M N OS Site 100 100F1 Fixed Building 1 25 25F2 Fixed Building 2 25 25A Contractor's Offices 12 6 E EB Carpentry Workshop 6 4 O O XC Laboratory 3 3 O O O OD Rebar Workshop 12 6 O O X I UE Equipment Workshop 8 6 E E X U U UF Closed Warehouse 8 6 A A X X X X XG Piping Workshop 6 4 I I X U U U O UH E/M Workshop 5 4 I I X U U U O U EI Fuel Station 3 3 O O X U U U E X I IJ Labors Facilities 6 6 I I X E I E E O E E UK Labors Toilets 6 4 I I X E E E E O E E U AL First Aid Facility 3 3 I I U E E E E O E E O E OM Generator Sheds 3 3 O O O I O I I X E E A U U IN Guard House 3 3 U U O I I I I E I I U U U U UO Parking Shed 4 3 U U A U U U U X U U U U U U U U
B1Under
construction
Calculations are conducted on all work packages on both phases. A sample stage is presented.Model optimizes all work packages across construction cycle.
Ref Work packages Phase 1 Phase 2 P1A Structural works
P1B Architectural finishing & MEP
P1C FF&E, testing & commissioning
P2A Structural works
P2B Architectural finishing & MEP
P2C FF&E, testing & commissioning
0 4 8 12 16 20 24 28 32 36 40 44 48 Time (months)
CalculationsCode Description Length Width X Y Orientation dh dv dh/2 dv/2 Xc Yc X1 X2 X3 X4 X5 Y1 Y2 Y3 Y4 Y5 Xmx Ymx Xch Ych TS Site 100 100 0 0 1 100 100 50 50 50 50 0 100 100 0 0 0 0 100 100 0 X X X X XS1 Operable Area of F1 50 50 0 0 1 50 50 25 25 25 25 0 50 50 0 0 0 0 50 50 0 X X X X XF1 Fixed Building 1 25 25 25 25 1 25 25 13 13 38 38 25 50 50 25 25 25 25 50 50 25 X X X X XF2 Fixed Building 2 X X X X XA Contractor's Offices 12 6 29 50 2 6 12 3 6 32 56 29 35 35 29 29 50 50 62 62 50 94 88 0 0 0B Carpentry Workshop 6 4 53 58 1 6 4 3 2 56 60 53 59 59 53 53 58 58 62 62 58 94 96 0 0 0C Laboratory 3 3 57 62 1 3 3 1.5 1.5 59 64 57 60 60 57 57 62 62 65 65 62 97 97 0 0 0D Rebar Workshop 12 6 35 50 1 12 6 6 3 41 53 35 47 47 35 35 50 50 56 56 50 88 94 0 0 0E Equipment Workshop 48 37 1 48 48 48 37 37 37 X X X X XF Closed Warehouse 8 6 47 53 2 6 8 3 4 50 57 47 53 53 47 47 53 53 61 61 53 94 92 0 0 0G Piping Workshop 40 35 1 40 40 40 35 35 35 X X X X XH E/M Workshop 75 43 1 75 75 75 43 43 43 X X X X XI Fuel Station 3 3 53 55 2 3 3 1.5 1.5 55 57 53 56 56 53 53 55 55 58 58 55 97 97 0 0 0J Labors Facilities 6 6 56 52 1 6 6 3 3 59 55 56 62 62 56 56 52 52 58 58 52 94 94 0 0 0K Labors Toilets 6 4 62 52 2 4 6 2 3 64 55 62 66 66 62 62 52 52 58 58 52 96 94 0 0 0L First Aid Facility 3 3 59 58 2 3 3 1.5 1.5 61 60 59 62 62 59 59 58 58 61 61 58 97 97 0 0 0M Generator Sheds 3 3 41 56 2 3 3 1.5 1.5 43 58 41 44 44 41 41 56 56 59 59 56 97 97 0 0 0N Guard House 3 3 44 56 2 3 3 1.5 1.5 46 58 44 47 47 44 44 56 56 59 59 56 97 97 0 0 0O Parking Shed 4 3 39 60 1 4 3 2 1.5 41 62 39 43 43 39 39 60 60 63 63 60 96 97 0 0 0
Closeness RelationshipCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices EB Carpentry Workshop A XC Laboratory I O OD Rebar Workshop A X I UE Equipment WorkshopF Closed Warehouse I X X X XG Piping WorkshopH E/M WorkshopI Fuel Station I X U U U XJ Labors Facilities E X E I E O UK Labors Toilets E X E E E O U AL First Aid Facility A U E E E O O E OM Generator Sheds O O I O I X A U U IN Guard House U O I I I E U U U U UO Parking Shed U A U U U X U U U U U U
WeightsCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 37B Carpentry Workshop 81 0C Laboratory 9 3 3D Rebar Workshop 81 0 9 1E Equipment WorkshopF Closed Warehouse 9 0 0 0 0G Piping WorkshopH E/M WorkshopI Fuel Station 9 0 1 1 1 0J Labors Facilities 37 0 37 9 37 3 1K Labors Toilets 37 0 37 37 37 3 1 81L First Aid Facility 81 1 37 37 37 3 3 37 3M Generator Sheds 3 3 9 3 9 0 81 1 1 9N Guard House 1 3 9 9 9 37 1 1 1 1 1O Parking Shed 1 81 1 1 1 0 1 1 1 1 1 1
Distances in X between shapes centroidsCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 5.5B Carpentry Workshop 18.5 24C Laboratory 21 26.5 2.5D Rebar Workshop 3.5 9 15 17.5E Equipment WorkshopF Closed Warehouse 12.5 18 6 8.5 9G Piping WorkshopH E/M WorkshopI Fuel Station 17 22.5 1.5 4 14 4.5J Labors Facilities 21.5 27 3 0.5 18 9 4.5K Labors Toilets 26.5 32 8 5.5 23 14 9.5 5L First Aid Facility 23 28.5 4.5 2 20 11 6 1.5 3.5M Generator Sheds 5 10.5 13.5 16 1.5 7.5 12 17 22 18N Guard House 8 13.5 10.5 13 4.5 4.5 9 14 19 15 3O Parking Shed 3.5 9 15 17.5 0 9 14 18 23 20 1.5 4.5
Distances in Y between shapes centroidsCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 18.5B Carpentry Workshop 22.5 4C Laboratory 26 7.5 3.5D Rebar Workshop 15.5 3 7 10.5E Equipment WorkshopF Closed Warehouse 19.5 1 3 6.5 4G Piping WorkshopH E/M WorkshopI Fuel Station 19 0.5 3.5 7 3.5 0.5J Labors Facilities 17.5 1 5 8.5 2 2 1.5K Labors Toilets 17.5 1 5 8.5 2 2 1.5 0L First Aid Facility 22 3.5 0.5 4 6.5 2.5 3 4.5 4.5M Generator Sheds 20 1.5 2.5 6 4.5 0.5 1 2.5 2.5 2N Guard House 20 1.5 2.5 6 4.5 0.5 1 2.5 2.5 2 0O Parking Shed 24 5.5 1.5 2 8.5 4.5 5 6.5 6.5 2 4 4
Diagonal distances between shapes centroidsCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 19.3003B Carpentry Workshop 29.129 24.331C Laboratory 33.4215 27.541 4.3D Rebar Workshop 15.8902 9.4868 16.6 20.4083316E Equipment WorkshopF Closed Warehouse 23.1625 18.028 6.71 10.7004673 9.8G Piping WorkshopH E/M WorkshopI Fuel Station 25.4951 22.506 3.81 8.06225775 14 4.5J Labors Facilities 27.7218 27.019 5.83 8.51469318 18 9.2 4.7K Labors Toilets 31.7569 32.016 9.43 10.1242284 23 14 9.6 5L First Aid Facility 31.8277 28.714 4.53 4.47213595 21 11 6.7 4.7 5.7M Generator Sheds 20.6155 10.607 13.7 17.0880075 4.7 7.5 12 17 22 18N Guard House 21.5407 13.583 10.8 14.3178211 6.4 4.5 9.1 14 19 15 3O Parking Shed 24.2539 10.548 15.1 17.613915 8.5 10 14 19 24 20 4.3 6
Distances in horizontal direction between shapes corner coordinatesCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 15.5B Carpentry Workshop 15.5 6C Laboratory 14 4.5 4.5D Rebar Workshop 18.5 9 9 7.5E Equipment WorkshopF Closed Warehouse 15.5 6 6 4.5 9G Piping WorkshopH E/M WorkshopI Fuel Station 14 4.5 4.5 3 7.5 4.5J Labors Facilities 15.5 6 6 4.5 9 6 4.5K Labors Toilets 14.5 5 5 3.5 8 5 3.5 5L First Aid Facility 14 4.5 4.5 3 7.5 4.5 3 4.5 3.5M Generator Sheds 14 4.5 4.5 3 7.5 4.5 3 4.5 3.5 3N Guard House 14 4.5 4.5 3 7.5 4.5 3 4.5 3.5 3 3O Parking Shed 14.5 5 5 3.5 8 5 3.5 5 4 3.5 3.5 3.5
Distances in vertical direction between shapes corner coordinatesCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 18.5B Carpentry Workshop 14.5 8C Laboratory 14 7.5 3.5D Rebar Workshop 15.5 9 5 4.5E Equipment WorkshopF Closed Warehouse 16.5 10 6 5.5 7G Piping WorkshopH E/M WorkshopI Fuel Station 14 7.5 3.5 3 4.5 5.5J Labors Facilities 15.5 9 5 4.5 6 7 4.5K Labors Toilets 15.5 9 5 4.5 6 7 4.5 6L First Aid Facility 14 7.5 3.5 3 4.5 5.5 3 4.5 4.5M Generator Sheds 14 7.5 3.5 3 4.5 5.5 3 4.5 4.5 3N Guard House 14 7.5 3.5 3 4.5 5.5 3 4.5 4.5 3 3O Parking Shed 14 7.5 3.5 3 4.5 5.5 3 4.5 4.5 3 3 3
Overlap check in X or YCode Description F1 F2 A B C D E F G H I J K L M N OF1 Fixed Building 1F2 Fixed Building 2A Contractor's Offices 0B Carpentry Workshop 0 0C Laboratory 0 0 0D Rebar Workshop 0 0 0 0E Equipment WorkshopF Closed Warehouse 0 0 0 0 0G Piping WorkshopH E/M WorkshopI Fuel Station 0 0 0 0 0 0J Labors Facilities 0 0 0 0 0 0 0K Labors Toilets 0 0 0 0 0 0 0 0L First Aid Facility 0 0 0 0 0 0 0 0 0M Generator Sheds 0 0 0 0 0 0 0 0 0 0N Guard House 0 0 0 0 0 0 0 0 0 0 0O Parking Shed 0 0 0 0 0 0 0 0 0 0 0 0
Cost CalculationsCode Description P1A P1B P1C P2A P2B P2C SubtotalA Contractor's Offices 14400 X X X X X 14400B Carpentry Workshop 4800 X X 4800 X X 9600C Laboratory 1800 X X X X X 1800D Rebar Workshop 14400 X X 14400 X X 28800E Equipment Workshop X 9600 X X 9600 X 19200F Closed Warehouse 9600 X X X X X 9600G Piping Workshop X 4800 X X 4800 X 9600H E/M Workshop X 4000 X X 4000 X 8000I Fuel Station 1800 X X X X X 1800J Labors Facilities 7200 X X X X X 7200K Labors Toilets 4800 X X X X X 4800L First Aid Facility 1800 X X X X X 1800M Generator Sheds 1800 X X X X X 1800N Guard House 1800 X X X X X 1800O Parking Shed 2400 X X X X X 2400
122600
Mobilization Cost
Cost CalculationsCode Description P1A P1B P1C P2A P2B P2C SubtotalA Contractor's Offices X X X X X 14400 14400B Carpentry Workshop 4800 X X 4800 X X 9600C Laboratory X X X X X 1800 1800D Rebar Workshop 14400 X X 14400 X X 28800E Equipment Workshop X 9600 X X 9600 X 19200F Closed Warehouse X X X X X 9600 9600G Piping Workshop X 4800 X X 4800 4800 14400H E/M Workshop X 4000 X X 4000 X 8000I Fuel Station X X X X X 1800 1800J Labors Facilities X X X X X 7200 7200K Labors Toilets X X X X X 4800 4800L First Aid Facility X X X X X 1800 1800M Generator Sheds X X X X X 1800 1800N Guard House X X X X X 1800 1800O Parking Shed X X X X X 2400 2400
127400
Demobilization Cost
Cost CalculationsCode Description P1A P1B P1C P2A P2B P2C SubtotalA Contractor's Offices 11520 20160 2880 11520 20160 2880 69120B Carpentry Workshop 3840 X X 3840 X X 7680C Laboratory 1440 2520 360 1440 2520 360 8640D Rebar Workshop 11520 X X 11520 X X 23040E Equipment Workshop X 13440 X X 13440 X 26880F Closed Warehouse 7680 13440 1920 7680 13440 1920 46080G Piping Workshop X 6720 X X 6720 X 13440H E/M Workshop X 5600 X X 5600 X 11200I Fuel Station 1440 2520 360 1440 2520 360 8640J Labors Facilities 5760 10080 1440 5760 10080 1440 34560K Labors Toilets 3840 6720 960 3840 6720 960 23040L First Aid Facility 1440 2520 360 1440 2520 360 8640M Generator Sheds 1440 2520 360 1440 2520 360 8640N Guard House 1440 2520 360 1440 2520 360 8640O Parking Shed 1920 3360 480 1920 3360 480 11520
309760
Operation Cost
Cost Calculations Relocation to P1B Relocation to P1C Relocation to P2A Relocation to P2B Relocation to P2C Relocation costCode Description ΔX ΔY r ΔX ΔY r ΔX ΔY r ΔX ΔY r ΔX ΔY r rtotal SubtotalA Contractor's Offices 5 1 5 0 0 0 1 7 7 6 0 6 0 2 2 20 14522B Carpentry Workshop X X X X X X X X X X X X X X X 0 0C Laboratory 7 5 9 14 2 14 6 20 21 23 7 24 3 1 3 71 6375D Rebar Workshop X X X X X X X X X X X X X X X 0 0E Equipment Workshop X X X X X X X X X X X X X X X 0 0F Closed Warehouse 6 4 7 8 5 9 7 23 24 0 1 1 0 0 0 42 20010G Piping Workshop X X X X X X X X X X X X X X X 0 0H E/M Workshop X X X X X X X X X X X X X X X 0 0I Fuel Station 1 1 1 3 6 7 0 15 15 1 6 6 2 6 6 36 3198J Labors Facilities 0 1 1 0 6 6 4 18 18 0 0 0 0 0 0 25 9158K Labors Toilets 5 6 8 1 6 6 10 23 25 5 5 7 5 5 7 53 12748L First Aid Facility 0 1 1 2 3 4 14 7 16 0 4 4 5 18 19 43 3865M Generator Sheds 9 4 10 8 0 8 2 11 11 3 6 7 0 7 7 43 3846N Guard House 15 4 16 14 0 14 2 11 11 0 0 0 0 2 2 43 3843O Parking Shed 2 2 3 1 1 1 3 13 13 3 6 6 1 5 5 27 3291
80855
Cost Calculations Traveling cost P1A Traveling cost P1B Traveling cost P1C Traveling cost P2A Traveling cost P2B Traveling cost P2C Traveling costCode Description ΔX ΔY r ΔX ΔY r ΔX ΔY r ΔX ΔY r ΔX ΔY r ΔX ΔY r rtotal SubtotalA Contractor's Offices 6 19 19 1 18 18 1 18 18 25 1 25 19 1 19 19 2 19 116 41719B Carpentry Workshop 19 23 29 X X X X X X 16 1 16 X X X X X X 45 5356C Laboratory 21 26 33 14 21 25 28 19 34 9 14 17 14 7 16 17 6 18 143 6427D Rebar Workshop 4 16 16 X X X X X X 19 6 19 X X X X X X 35 12669E Equipment Workshop X X X 19 6 19 X X X X X X 1 21 21 X X X 40 9554F Closed Warehouse 13 20 23 19 24 30 11 19 21 8 17 18 8 16 17 8 16 17 127 30457G Piping Workshop X X X 17 14 21 X X X X X X 5 16 16 X X X 37 4495H E/M Workshop X X X 27 15 30 X X X X X X 0 15 15 X X X 45 4495I Fuel Station 17 19 25 16 18 24 13 24 27 12 14 18 11 20 23 13 14 19 137 6176J Labors Facilities 22 18 28 22 17 27 22 23 31 1 16 16 1 16 16 1 16 16 132 23844K Labors Toilets 27 18 32 22 12 24 21 18 27 6 16 16 1 21 21 6 16 16 136 16379L First Aid Facility 23 22 32 23 21 31 25 18 31 14 0 14 14 4 15 9 14 17 139 6254M Generator Sheds 5 20 21 14 24 28 6 24 25 17 10 20 14 4 15 14 11 18 125 5635N Guard House 8 20 22 23 24 33 9 24 26 14 10 17 14 10 17 14 8 16 131 5893O Parking Shed 4 24 24 2 22 22 2 23 23 21 10 23 18 5 19 17 10 19 130 7784
187138
Cost CalculationsCode Description Subtotal Subtotal Subtotal Relocation Traveling TotalA Contractor's Offices 14400 14400 69120 14522 41719 154162B Carpentry Workshop 9600 9600 7680 0 5356 32236C Laboratory 1800 1800 8640 6375 6427 25042D Rebar Workshop 28800 28800 23040 0 12669 93309E Equipment Workshop 19200 19200 26880 0 9554 74834F Closed Warehouse 9600 9600 46080 20010 30457 115747G Piping Workshop 9600 14400 13440 0 4495 41935H E/M Workshop 8000 8000 11200 0 4495 31695I Fuel Station 1800 1800 8640 3198 6176 21614J Labors Facilities 7200 7200 34560 9158 23844 81962K Labors Toilets 4800 4800 23040 12748 16379 61767L First Aid Facility 1800 1800 8640 3865 6254 22359M Generator Sheds 1800 1800 8640 3846 5635 21722N Guard House 1800 1800 8640 3843 5893 21976O Parking Shed 2400 2400 11520 3291 7784 27395
122600 127400 309760 80855 187138 827753
Dynamic Site Layout Problem integrating Building Operations
Project DataProject DescriptionProject type RetailProject Name Twin tower retail development mallThe Employer ABCThe Contractor XYZThe Engineer EFGEstimated Value
Problem Description
ScoreScore calculationSite Score 94,586.58 Cost Score (/10) 82,775.29 Combined Score 7,829,431,479.73
Twin tower retail development mall with two buildings, 1 and 2. Building 1 will operate immediately when complete and construction shall commence in building 2 when building 1 is complete.
10,000,000.00
B1Under
construction
B1Under
construction
B1Under
construction
B1Under
construction
Building 1
Operable Area of Building 1
Building 1
Operable Area of Building 1
Building 1
Operable Area of Building 1
B2Under
construction
B2Under
construction
B2Under
construction
Investigated the integration of dynamic site layout in phased construction projects where a model is presented to illustrate the site layout process over the project phases and across the project scheduleCost module considers the cost of mobilization, demobilization, operation, relocation and traveling cost the project durationCase study of a twin tower retail development project to apply the model onFuture work to fully integrate the site layout and detailed scheduling operations. It can also include other less tangible measures such as environmental and safety aspects.
Further study is recommended to:Address improving the method for generation of initial solutions while integrating with detailed project schedulingConsidering environmental and safety aspects, orientation constraints, 3‐dimensional shapes, irregular shapes, varying shapes sizes and multiple‐objective optimizationFully integrate the site layout and detailed scheduling operations.
Andayesh, M., & Sadeghpour, F. (2013). A Mathematical Model for Dynamic Site Layout Planning. CSCE General Conference.Montreal: Canadian Society of Civil Engineering.Andayesh, M., & Sadeghpour, F. (2013). Dynamic site layout planning through minimization of total potential energy. Automation in Construction , pp. 92‐102.Easa, S. M., & Hossain, K. M. (2008). New Mathematical Optimization Model for Construction Site Layout. Journal of Construction Engineering and Management , pp. 653‐662.Elbeltagi, E., & Hegazy, T. (2001). A Hybrid Al‐Based System for Site Layout Planning in Construction. Computer‐Aided Civil and Infrastructure Engineering , Volume 16 (Issue 2), pp. 79‐93.Elbeltagi, E., Hegazy, T., & Grierson, D. (2005). Comparison among five evolutionary‐based optimization algorithms. Advanced Engineering Informatics , Volume 19 (Issue 1), pp. 43‐53.El‐Rayes, K., & Said, H. (2009). Dynamic Site Layout Planning Using Approximate Dynamic Programming. Journal of Computing in Civil Engineering , Volume 23 (Issue 2), pp. 119‐127.El‐Rayes, K., & Said, H. (2013). Performance of global optimization models for dynamic site layout planning of construction projects. Automation in Construction , pp. 71‐78.Mawdesley, M. J., & Al‐Jibouri, S. H. (2003). Proposed genetic algorithms for construction site layout. Engineering Applications of Artificial Intelligence , pp. 501‐509.Xu, J., & Li, Z. (2012). Multi‐Objective Dynamic Construction Site Layout Planning in Fuzzy Random Environment. Automation in Construction , pp.155‐169.
Thank you
THE PROJECT DATA SPECIALISTS
The Devil IS the Detail and the Law of Unintended Consequences
By Greg WruckGNT Project [email protected]
THE PROJECT DATA SPECIALISTSWho Am I?• Civil Engineer• Many project roles, including Design, Construction Management, Commissioning, Contracts, Project Management, QA ……..
• Primarily in Mining and Heavy Infrastructure Industries on Owner, EPCM and Contractor sides.
• Currently specialising in Project Controls
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 2
THE PROJECT DATA SPECIALISTSWho am I (cont.)I am also a systems implementer and Information Management specialist.This means that I:• Collect Information• Categorise Information• Report on InformationI “get” detail and understand its importance.I’m also a keen observer of how a pre‐occupation with detail can introduce risks to a project.
RISK 2016 – The Devil in the Detail and the Law of Unintended Consequences 3
THE PROJECT DATA SPECIALISTSIntroduction• Why the Devil IS the Detail• Identification of Risks• Analysis of (unintended) Consequences• Mitigation – What Can we do about it?
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 4
THE PROJECT DATA SPECIALISTS
Would you Consider These Risks?• Project Manager 30% non‐productive time• Controls Manager 50% non‐productive time• Contracts Manager 50% non‐productive time• Reduced ability to plan medium / long term• Incentive Plan not achieving desired outcome• Reactive, rather than proactive management
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 5
THE PROJECT DATA SPECIALISTSDefinition of the Problem• Computers have dramatically changed how we manage projects.
• We can now collect more information than we could ever hope to use.
• Yet there are many instances where this is not translating to better‐run projects
• Simply having more information / detail may may increase risk if it limits the ability of those managing the project to make effective decisions.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 6
THE PROJECT DATA SPECIALISTS
Common Responses to Problem• Need another register /report• Think of a better incentive structure• Crack down harder• Drill in deeper
In summary, seek more detail.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 7
THE PROJECT DATA SPECIALISTSWhy the Devil IS the Detail?
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 8
DIMENSIONS
WBS OBS Commodity
TRANSACTIONS
CONSUMERS / PRODUCERS
SOURCES USES
Work PackPerson
BudgetForecast
CommitmentInvoice Earned Transmittal
TimesheetProgress
DiaryInspection
Delivery
RFI
Accounting
Schedule
Doc Control
Email Social MediaInventory
BIM
3D ModelEstimating Work Flow
EquipmentArea
Time
Company
AssetAsset
BoardManager
Supervisor ContractorOwnerConsultant
Tenderer
DesignerPublic
EmployeeHRControls
ContractsEngineering
EstimatingDoc Control
SECURITY
SINGLE SOURCE OF TRUTH CLOUD VS ON‐PREMISE
AGGREGATION
Collaboration
EVMTask List
Status
Progress
CHANGEDecision
Inventory
THE PROJECT DATA SPECIALISTSOne Size Does Not Fit All• Management wants the “big Picture”• Strip out values for public consumption• HR wants everything by Employee• Engineering wants everything by WBS• Contracts wants everything by Contract• Estimating wants everything by Commodity• Construction wants everything by Area• Commissioning wants everything by System• Project Controls wants everything!• Everyone wants a (different) Dashboard
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 9
THE PROJECT DATA SPECIALISTS
The Lowest Common Denominator• Traditional theories tell us that to manage all of these competing demands, we need to work to the “lowest common denominator”.
• Why can’t we just collect the data at the lowest level, and then “pivot” it out to get any report we want?
• This traditional approach doesn’t take into account the complexities of managing large amounts of information.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 10
THE PROJECT DATA SPECIALISTSCommercial Constraints• Incentive schemes often drive unexpected behaviours
• Can introduce vast complexities to managing even a simple contract
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 11
THE PROJECT DATA SPECIALISTS
Sharing Information and Collaboration
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 12
ORG A
ORG B
ORG C
ORG D
ORG E• Not as easy as it seems
• Balance security vs ease of access
• Who “owns” information?• How to manage actions?
THE PROJECT DATA SPECIALISTSComparing Apples and Oranges
• When information comes from many different sources, how do you integrate it?
• Eg. Is Edward Hillary from one system, the same person as HILLARY, Ted from another system?
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 13
THE PROJECT DATA SPECIALISTSTechnical Challenges• When information resides in multiple different repositories, it can be difficult to integrate it.
• Some technical challenges include:– Moving information between Excel spreadsheets– Available Skills / Authorisation to move information to/from databases
– Information captured at different levels in different systems
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 14
THE PROJECT DATA SPECIALISTS
System of Record vs. Project Management System• A system of record (eg. Accounting system), must by nature be relatively fixed and rigid.
• A project management system by contrast should have more flexibility built in to accommodate the inevitable changes throughout the life of a project.
• If a system of record is used as the primary Project Management System, this can introduce challenges.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 15
THE PROJECT DATA SPECIALISTSChanging Requirements• Setting up Information Management systems can take a significant amount of time.
• Should requirements change after setup, it can be difficult to recover from that.
• Important point to remember is that you can always roll information up, but it’s difficult to expand it out once captured.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 16
THE PROJECT DATA SPECIALISTSThe Fundamental Problem• More information / detail does not necessarily mean more informed decision making if it is not possible to use it effectively.
• Furthermore, it can lead to increased project risk if it results in the people charged with executing the project becoming swamped with inaccurate, or conflicting information.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 17
THE PROJECT DATA SPECIALISTS
Consequences of Inability to Handle Detail• Decision‐making compromised • Planning compromised• Inefficient use of resources• Lost opportunity due to focus on the wrong things
• Response time to issues can increase
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 18
THE PROJECT DATA SPECIALISTS
Law of Unintended Consequences• are outcomes that are not the ones foreseen and intended by a purposeful action (Wikipedia)
• Often the cause of much un‐necessary detail in a project.
• Typically as a result of commercial or contractual mechanisms designed to achieve a particular outcome.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 19
THE PROJECT DATA SPECIALISTS
Don’t Confuse Data with Information • Garbage in, garbage out• Always consider “pedigree” of information• Don’t be blinded by it• Don’t forget to “look outside”
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 20
THE PROJECT DATA SPECIALISTS
Streamline Reporting and Data Capture• If your team spends more time reporting than analysing, you may have a problem.
• Reporting, while important, is generally rear‐looking, analysis should ideally be forward looking.
• Focus on streamlining reporting and data capture processes early in project
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 21
THE PROJECT DATA SPECIALISTSBuild Resilient Interfaces• Don’t allow requirements of one process to compromise another
• Allow different disciplines to work at different levels, with common aggregation points.
• If information resides in different systems, identify flat‐file integration / reconciliation points
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 22
THE PROJECT DATA SPECIALISTSStreamline Information Sharing
• If information needs to be shared, don’t put un‐necessary barriers in the way
– Eg. Ensure that technical solutions to information transfer are as streamlined as possible
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 23
THE PROJECT DATA SPECIALISTS
Use Intelligent Coding Structures• Use intelligent coding structures that can roll up / down to suit different requirements.
• Limit Coding structures to those that are absolutely necessary. Each additional code that is added magnifies effort to maintain it.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 24
THE PROJECT DATA SPECIALISTSConclusion• Excessive focus on detail can severely hamper senior management ability to manage project.
• Incentive schemes can have unintended consequences.
• Ensure that you are setup to handle an “appropriate” level of detail for your project.
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 25
THE PROJECT DATA SPECIALISTSThankyouGreg WruckGNT Project Solutions(0433) 950 498gwruck@gntprojectsolutions.com.auwww.GNTProjectSolutions.com.au
RISK 2016 – The Devil IS the Detail and the Law of Unintended Consequences 26
Advancing the Acceptance of Risk Based Design Beyond Engineers:Past, Present and Future
Edmund Ang, Fire & Risk Engineer
May 20, 2016
If I h ave seen furth er, it is by stand ing on th e sh ould ers of g iants.
Isaac Newton
Advancing the acceptance of risk risk based designOur challenge; our solution
Presentation Overview
Risk and Fire Engineering: Pasta) A brief historyb) How fire engineering evolved
Risk and Fire Engineering: Presenta) State of risk informed design b) Examples of risk based design
Risk and Fire Engineering: Futurea) Confined adoption and acceptanceb) What can we do?
Advancing the Acceptance of Risk Page 4
123
Risk and Fire Engineering: Past
- Safety in general: • Reactionary• Retrospective
- Great fire of Rome, 64 AD• Narrow and scatter build• 3 of 14 districts destroyed • Better urban planning • Fire safety measures
Advancing the Acceptance of Risk Page 5
Archeo Guida Roma. The great fire of Rome. [Online] Available from: http://www.archeoguidaroma.com/blog/great-fire-rome
Risk and Fire Engineering: Past
- Great fire of London, 1666• Bakery fire• Tight building distances• ~80% of city damaged• Manual fire suppression pump
Advancing the Acceptance of Risk Page 6
Wikipedia. The great fire of London. [Online] Available from: https://en.wikipedia.org/wiki/Great_Fire_of_London
Risk and Fire Engineering: Past
- Earliest fire safety legislation• 12th century; London Mayor• Stone walls and no thatched roof
- Development of fire legislation• Historical fires• Reaction after a catastrophic fire• Addressed hazard, not risk
- Great Boston fire, 1872• Revised fire legislation• Better regulated construction
Advancing the Acceptance of Risk Page 7
Wikipedia. Great Boston fire. [Online] Available from: https://en.wikipedia.org/wiki/Great_Boston_Fire_of_1872
Risk and Fire Engineering: Past
- Iroquois Theatre Fire, 1903• Theatre fire; badly designed exits• Legislation on means of egress
- Triangle Shirtwaist Factory, 1911• High rise factory fire; locked doors• Legislation on high rise buildings• NFPA 101 Life Safety Code
- Fire safety engineering in the 80s• Prescriptive design• BCA Deemed to Satisfy • London’s Section 20; NFPA 101
Advancing the Acceptance of Risk Page 8
Journey to Firefighter. Iroquois Theatre fire. [Online] Available from: http://journeytofirefighter.com/wp-content/uploads/IroquoisTheaterFire1903.jpg
New Deal Network. Triangle Shirtwaist Factory. [Online] Available from: http://newdeal.feri.org/images/ac38.gif
Risk and Fire Engineering: Past to Present
- Performance based fire safety engineering• Beginning in late 80s• Increasingly creative architecture• Advancement in construction methods• Improved fire science research• Enabled by legislation and codes
- Performance based design• International Fire Engineering Guidelines• Qualitative and quantitative approaches• Absolute rather than risk based• Worst case, i.e. 1 in 1000 years event
Advancing the Acceptance of Risk Page 9
British Steel plc, Swinden Technology Centre. The Behaviour of Multi-Storey Steel Framed Buildings in Fire. [Online] http://www.mace.manchester. ac.uk/project/research/structures/strucfire/DataBase/References/ MultistoreySteelFramedBuildings.pdf, 1999.
Risk and Fire Engineering: Present
- Risk based design• Not as common in design• Infrastructure: Transport, power, nuclear• Major industrial: LPG, refinery
- Fire safety related legislation• Risk based approach• Value of statistical life
- UK residential sprinklers• Risk informed legislation• Sprinklers to height > 30 m
Advancing the Acceptance of Risk Page 10
BRE. Effectiveness of sprinklers in residential premises. [Online] http://www.bre.co.uk/page.jsp?id=422
Risk and Fire Engineering: Present
- Building Code of New Zealand• Department of Building and Housing• Risk based criteria• Expected risk to life• Design scenarios; performance criteria
- Building Code of Australia • Process of quantification• Risk to establish high level requirements• Quantification of performance
Advancing the Acceptance of Risk Page 11
ABCB. Building Code of Australia. [Online] http://www.abcb.gov.au/Resources/Publications/NCC/NCC-2016-Volume-One.
Risk and Fire Engineering: Present
- London Overground Class 378• Open wide gangways (OWG)• Single open connection – major fire issues (but!)
Better passenger comfort and security• Performance and risk based design• All approvals by risk informed stakeholders
Advancing the Acceptance of Risk Page 12
Wikipedia.. British Rail Class 378. [Online] https://en.wikipedia.org/wiki/British_Rail_Class_378
Risk and Fire Engineering: Present
- SFAIRP and ALARP• So Far As Is Reasonably Practicable• As Low As Reasonably Practicable• Rail infrastructure
Advancing the Acceptance of Risk Page 13
TfNSW. Sydney Metro Northwest. [Online] http://nwrail.transport.nsw.gov.au/News/Latest-news
From past to present examples, who are the common stakeholders?
Risk and Fire Engineering: Present to Future
- Common stakeholders• Risk engineers and professionals• Informed stakeholders
- What about other stakeholders and decision makers?
Advancing the Acceptance of Risk Page 15
Meacham, B. J. A risk informed performance based approach to building regulation. [Online] https://www.researchgate.net/publication/260386688
Risk and Fire Engineering: Future
Advancing the Acceptance of Risk Page 16
Future improvement to risk based design
Future improvement to risk based design
Methodology for risk informed design
Methodology for risk informed design
Advanced modelling of consequences
Advanced modelling of consequences
Quality of data and inputs for design
Quality of data and inputs for design
Quantification of the acceptance criteria for risk
based design
Quantification of the acceptance criteria for risk
based design
Achieving acceptance and buy-in for wider
stakeholders
Achieving acceptance and buy-in for wider
stakeholdersUncertainty modellingUncertainty modelling
Risk and Fire Engineering: Future
Advancing the Acceptance of Risk Page 17
General stakeholders’ view of risk
Safe Unsafe
or
Risk and Fire Engineering: Future
Advancing the Acceptance of Risk Page 18
Informed stakeholders’ view of risk
Safer Riskier
Acceptable risk managed to SFAIRP
Risk and Fire Engineering: Future
Advancing the Acceptance of Risk Page 19
Advancing the acceptance of the risk based approach
beyond engineers
Advancing the acceptance of the risk based approach
beyond engineers
LegislationLegislation EducationEducation SimplificationSimplification
Risk and Fire Engineering: Future
- Legislation • Fundamental to increase the acceptance of risk
• Foundation for approvers and stakeholders
• Legal recognition for risk based design
• Quantifiable performance requirements – How safe is safe?
Advancing the Acceptance of Risk Page 20
Reference not availableMalarden University Sweden. The Metro Project. [Online] http://www.metroproject.se/Pubs/METRO_report%20(final).pdf
Risk and Fire Engineering: Future
- Education• Public engagement, e.g. media
• For example, The Engineer’s Lament by Malcolm Gladwell on The New Yorker
• Technical seminars and discussions with stakeholders
• Heritage standardsReview of current requirementsTechnology has improvedChange in perspective
Advancing the Acceptance of Risk Page 21
Risk and Fire Engineering: Future
- Simplification• Do stakeholders and decision makers need a 500 page report?
• Majority of our stakeholders are not risk engineers• Consider how risk based designs are presented• Tailoring works according to audience• Distilling the risk based design to key fundamentals• Positive challenge and peer review
Advancing the Acceptance of Risk Page 22
Convoluted Conciseor
Risk and Fire Engineering: Future
- My three suggestions1. Develop a business case
Can we develop a business case? Tens of millions spent on safety provisions for low probability event unlikely to happen over the functional lifeCan we rationalise and spend 20% of that on provisions that passengers and operators will use everyday?
2. A united and wide reaching voiceDo we have a coordinated and formal voice to reach a wider audience, particularly decision makers and politicians? Engineers Australia Risk Engineering Society
3. Finally - take ownership and let’s talkIndividually we can take responsibility and engage with the wider audienceTake every opportunity to engage, talk and help others understand
Advancing the Acceptance of Risk Page 23
In summary
To advance the acceptance of risk based design
Legislation, Education and Simplification.
Thank YouAcknowledgementAndy Petrie (Network Rail Consulting)
Edmund Ang
May 20, 2016
Goran GelicSenior Associate
19 May 2016
Building Information Modelling (BIM) in Australian Standards Contracts - Risks and Liabilities RISK 2016 Conference
#36882857 2
Overview
■ What is BIM
■ BIM contracting in Australia
■ Implementation of BIM in Australian Standards contracts
■ Key legal risksand other risks
#36882857 3
Overview of BIM – what is it?
#36882857 4
What is BIM?
■ 3D model with intelligence
■ New approach to design development and project delivery (IPD)
■ Different forms of BIM (see next slides)
■ Savings in time and cost
■ Improvement in health and safety
■ Australian BIM based projects
□ Sunshine Coast Public University Hospital
#36882857 5
BIM models (Level 0 to 3)
#36882857 6
BIM models – federated model
#36882857 7
Contractual implementation of BIM in Australia
■ BIM guidelines present but no BIM friendly contracts (yet)
■ BIM not currently mandated in Australia (all levels of Government)
■ Federal Government not inclined to mandate BIM (yet)
■ Some State Government running BIM pilot programs (WA, VIC)
#36882857 8
Implementation of BIM in Australian Standards (AS) contracting■ Level 0 BIM (2D design only)
□ can use AS contracts
□ generally no amendments to AS contracts required (but some changes could be made to improve design process depending on project profile)
■ Level 1 BIM (2D design plus some modelling without intelligence)
□ can use AS contracts – same approach as for Level 0 BIM
■ Level 2 BIM (separate 3D models with intelligence)
□ can use AS contracts (but need to use BIM brief / BIM protocol / BIM execution plan)
□ AS contracts need to be amended on BIM issues
■ Level 3 BIM (fully integrated model)
□ option 1 – use current form of contract with amendments (not preferred)
□ option 2 – develop new form of contract (preferred)
#36882857 9
BIM – key legal risks
■ Key legal risks□ must have BIM brief, BIM protocol and BIM execution plan
□ responsibility and liability
– for inputs
– for updates / changes / rectification
– for security of data and corruption of data
– for outputs
□ IP (ownership of input data and BIM model)
□ access to (and security) of BIM model and other resources (e.g. software platform)
□ communication / coordination between the BIM contracting parties
□ permitted uses of BIM model (across the supply chain)
□ BIM technical and project team requirements (LOD levels etc)
#36882857 10
BIM – other key risks
■ Insurance issues (updating policies or new policies to cover BIM issues)
■ Organisational issues (investing in new technology, training, culture change)
■ Technology issues (software, desktop, file format, file exchange format)
■ Others (new way of working)
#36882857 11
Questions?
RISK2016
Right Level of Contingency for a Complex Project
Presenter: SANTHOSH THERAKAM
20 05 2016
Agenda
Topic
What is a Complex Project?
Mapping Complexity using 5DPM Model
Mapping Complexity using WHOW Model
EPC Contracting Model
Case Study
Questions
Quotes“We must always remember that projects that are hard are not necessarily complex.
It is my belief that there are four elements to project complexity.
First: technical complexity Second: cost complexity
Third: schedule complexity Fourth: political complexity”
Jeff Worley, former VP of The Boeing Company
Quotes“You know you are in a Complex Project
when your actions as a manager have effects that are
difficult to predict, or unexpected.”
Terry Williams, Dean of Hull University Business School
Quotes“The key to recognising complexity is to analyse it.
The key to managing complexity is to understand where the complexity originates, and
ensure that a strategy is put in place up front to manage each element of complexity identified by the analysis.”
Simon Henley, former Director Service Strategy for Rolls Royce
What is Complex?Cynefin Framework
A perspective on the evolutionary nature of complex systems, including their inherent uncertainty
Complex adaptive systems theory, cognitive science, anthropology, narrative patterns and evolutionary psychology, to describe problems, situations, and systems.
Explores the relationship between man, experience, and context
What is Complex?
Cynefin Framework
What is Complex?
Leading Complex Projects by Kaye Remington 2011
What is Complex?
(Strategic Highway Research Program, 2012)
SimpleCertainty of same results every time
ComplicatedHigh degree certainty of outcomes
SpaceX
ComplexUncertainty of outcome remains
Complex
What is complex for one need not necessarily be complex for another
Complex
Dimensions of Complexity
Dimensions of Complexity
Strategic Highway Research Program, 2012
Scope – Delivery Uncertainty Matrix
Why EPC?
EPCA design and construct contract where a single contractor takes responsibility for all elements of contract:
• Design (engineering);
• Construction; and
• Procurement.
Conventional methods
Case Study – Waste to Energy
Typical Process Flow ‐WtE
Constraints Increasing Complexity
Risk Mud Map – Battery Limits
Risk Appetite & Informed Decision
Questions
Thanks
Delivering Complex Infrastructure
RISK 2016, 19 May 2016David Cox, Category Manager – Construction and Operations
About Brisbane City Council:
• Australia’s largest local government• Serving over 1.1 million residents• $22 billion asset base• $2.6 billion budget in 2015/16• Over 7,000 permanent employees
Capital Works ~$5 billion over 5 years
Anzac Square Restoration
Legacy Way - 4.6km Road TunnelICB 4-laning
12 Flood Resilient and Accessible Ferry Terminals
Bicentennial Bikeway – part of $120m over 4 years invested in bikeways
TomTom Traffic Index• TomTom measures traffic congestion in over 200 cities around the
world• Brisbane ranks 88• Amongst major Australian and New Zealand cities, Brisbane ranked
the best ahead of Adelaide (81), Perth (73), Melbourne (60), Auckland (41) and Sydney (21).
Infrastructure Delivery – Flexibility to match the market
TransApexTransApex involves the sequential delivery of:1. CLEM7 (blue) – opened 2010
2. Go Between Bridge (yellow) – opened 2010
3. Airport Link (green) – opened 2012
4. Legacy Way (maroon) – opened 2015
Prevailing Economic ConditionsStock Market Indices
2,000
3,000
4,000
5,000
6,000
7,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20106,000
8,000
10,000
12,000
14,000
Al l Ords
Dow Jones CLE
M7 G
BB
APL
LW -
PPP
LW -
DC
MO
TransApex Benefits
• Significant travel time savings recorded on all TransApex routes • Major time savings of up to 71% achieved via the Legacy Way tunnel and
Clem7• Consistent and reliable journey times observed on all TransApex routes which
translates to making the journey on-time, all-the-time• Improved travel times on alternative surface routes
Case Study – Kingsford Smith Drive Upgrade Project
• Originally planned as 3 stage delivery• Stage 1 completed mid – 2011• Stage 2 & 3 now delivering as a single stage D&C
contract
Constraints / challenges
• Construction in urban area (residential, retail, commercial, industrial stakeholders)
• Construction under high traffic volumes in very constrained corridor
• Sensitive environmental issues• Service relocations• S1 sewer relining• Construction work in River• Steep gradient of River bedrock• River traffic
Step 6 –Approval
• 3 approval levels within a week
• Public domain• Portion of bid
costs paid to unsuccessful tenderers
Step 5 –Negotiation
• 4 weeks• Address contract
non-compliances• Clarify technical
details• Finalise risk
allocation• Price certainty• Final scoring• Deed of
Confirmation and Commitment
Step 4 –Evaluation
• 10 weeks• Technical• Financial and
commercial• Urban design• Tender
presentations• Clarifications• Shortlist to 2
consortia
Step 3 –RFP
• 14 weeks• 4 consortia• Interactive
tendering• 100s of RFIs
managed through Aconex
Step 2 – EOI
• Financial strength
• Proposal delivery
• Design experience
• Construction experience
Step 1 – Project Needs
• Reference design and performance requirements
• Investigation and field testing to reduce risk
• Community consultation and preparation
• Transaction manager
• Tender and Project Deeds
• Independent verification
• Probity
KSD Procurement Process
Kingsford Smith Drive Upgrade Evaluation Organisation Structure
Technical Advisor Legal Advisor Delivery Advisor BCC Team
Transaction Team
Evaluation Panel
Project Finalisation Committee
Council / Civic Cabinet
ProbityAdvisor
Kingsford Smith Drive Upgrade Indicative Evaluation Criteria
Key Criteria (4) Sub-Criteria (8)1. Commercial (a) Commercial
(b) Contractual(c) Governance
2. Technical (a) Infrastructure and Transport Network Solution(b) Design & Construction Approach
3. Urban & Environmental (a) Urban Design Solution(b) Environmental Impacts / Outcomes
4. Financial (a) VFM (includes D&C contract sum, total project cost, risks retained or transferred )
Additional sub-levels of criteria used to reach a score for each sub-criteria and criteria
Rock
Managing Geotechnical Risk
Managing Geotechnical RiskContext: significant problems previously in Brisbane River Mitigation:
• Geotechnical investigations and bathometric survey• Test piling (>$1 million)• Innovation through D&C contractor• Effective risk transfer through Project Deed,
independent verification and effective contract management
Managing Flood RiskContext: 2011 Brisbane River FloodMitigation:
• Extensive flood modelling (Mike 21)• Defined increase in afflux allowed• Clear design encroachment boundaries• Q2000 scour protection and 100 year life
13 January 2011
Managing PUP RiskContext: multiple services including 100 year old S1 sewer and gas mainMitigation:
• Reline S1 first and monitor vibration• Include utility owners in interactive tendering• Part of critical path – ensure that utilities are ready• Retain cost risk for gas main
Kingsford Smith Drive S1 critical sections
Cooksley StRiverview Tce
Theodore St
Kingsford Smith Drive Risk – S1 Failure
Crown failure
S1 sewer main Excavation
Zone of potentially fractured rock
Pipe degradation
Failure in Alluvial MaterialFailure in Rock
Reference Design:• 5m cantilever• >1200 piles
D&C contract design:• 7m cantilever• <240 piles
Questions?
Using stability classes F and
G in the development of
Incident Action Plans
RISK 2016: Friday 20th May
Presenter: Patrick Walker
Co-author: Lachlan Dreher
Major Hazard Facility & Requirements for Incident
Action Plans
• Major Hazard Facility (MHF) Regulations require an
Operator to demonstrate that risks are adequately
managed at their facility
• Regulations require the development of emergency
plans (EPs)
• As part of EPs, scenario specific incident action plans
are developed for individual major incidents
• Incident action plans detail the potential on-site and off-
site effects
What is an Incident Action Plan?
• Information necessary to manage a major incident
• Details concerning the major incident:
• Description
• Process isolation
• Response equipment on-site
• Required additional resources
• Extent of effects (on-site & off-site).
• Training tool used to test systems against the
requirements of the emergency event
• Used in consultations with emergency services
Incident Action Plan Example: Major Incident and
Response Information
Incident Action Plan Example:
Illustrating the Extent of Impacts
Quantifying the Impact of a Major Incident
• Consequence modelling is used to determine the extent
of the impact (effects) of a major incident
• Consequence modelling software packages (e.g. DNV-
GL PHAST) are used to evaluate the impact of:
• Radiant heat from fires
• Overpressure from explosions
• Harmful concentrations from toxic releases
• Various consequence types rely on gas dispersion
modelling (e.g. flammable vapour clouds, toxic impacts)
…all models are wrong, some are useful…
Gas Dispersion Modelling Inputs
• Specify major incident details:
• Material, Temperature, Pressure
• Hole Size
• Release location, orientation, height
• Specify impact criteria (effect) of interest
• E.g. Onset of fatality for toxic releases
• Specify weather conditions for local area
• Wind Speed
• Temperature
• Stability Class
Stability Class: Definition
• Stability class describes the turbulence generated by
natural forces in the atmosphere
• Vertical mixing caused by air particle movement
• General states of atmospheric stability:
• Stable – Calm evening
• Neutral – Overcast / windy evening
• Unstable – Sunny day
• Main influencing parameters:
• Solar insolation
• Cloud cover
• Wind speed
Stability Class: Classification
• Classification schemes estimate an appropriate
stability class based on readily measurable variables
• Very low wind speed (<2 m/s) - lack of quantitative
knowledge as, in practice, surface plume unlikely to
have any definable travel
Wind Speed,
m/s Solar Insolation Night Time
Strong Moderate Slight Thin Overcast or
>1/2 low clouds
<3/8
cloudiness
<2 A A-B B - -
2-3 A-B B C E F
3-4 B B-C C D E
4-6 C C-D D D D
>6 C D D D D Pasquill, F., “The estimation of the dispersion of windborne material", The Meteorological Magazine, Vol. 90, No. 1,063, Feb. 1961.
Effect of Stability Class on Dispersion:
Lighter than Air Gas Release
Stable Stability Classes: E & F
• In dispersion modelling, stable conditions are used
to represent "worst-case" impacts
• Stability class E classified by:
• Slightly stable conditions
• Night-time, low wind speeds (2-4 m/s)
• Negative net radiation
• Stability class F classified by:
• Moderately stable conditions
• Night-time, low to very low wind speeds (<3 m/s)
• Moderate negative net radiation
Additional Stable Stability Class: G
• Extremely stable
• Rare occurrence
• Associated with the following situations:
• Clear night with ground frost / heavy dew
• Over water
• Arid rural areas
• Classification:
• Night-time
• Very low wind speed (<2 m/s) to near windless
• Significant negative net radiation
Summary of Stability Class Selection
• Stability classes A-F selected from well-established
classifications
• Applicable to different situations
• Basis for selecting stability class G less clear:
• Typically not adopted in classifications
• Stability class F preferred for very light wind
• Associated with specific situations
• Use of stability class G requires consideration as to
whether the very specific atmospheric conditions are
actually possible for the location
Importance of Appropriate Selection:
Release from chlorine drum
• Small liquid release from chlorine drum (920 kg)
• Toxic vapour dispersion modelling of effects to a
specific toxic impact criteria
• Examine night-time wind speed / stability class
categories:
• 1.5/F ; 1.5/G
• 1.0/F ; 1.0/G
• Mid-range surface roughness:
• Parkland, bushes; numerous obstacles
Release from chlorine drum: Influence of Stability
Class / Wind Speed Categories
Effect of Stability on Chlorine Release
• Comparing the effect of stability class on the
dispersion of a chlorine release
• For a given wind speed,
• Stability class G impact distance is more than
double than that for stability class F
• Demonstrates that the inappropriate selection of
stability class leads to larger impact zones
• Significant implications for incident action plans
Gas Dispersion Modelling and Stability Class
Horizontal (σy) spread
Vertical (σz) spread
Witlox, H. W. M., Holt., A., “A unified model for jet, heavy and passive dispersion
incident droplet rainout and re-evaporation", CCPS 1999 UDM paper (10-06-29).
Representing Stability Classes in Gas Dispersion
Model
• Stability classes are represented in the dispersion
models using Gaussian dispersion coefficients
• Dispersion coefficients describe the horizontal (σy)
and vertical (σz) spread of the cloud in the “passive”
dispersion phase
• Dispersion coefficients are derived from
experimental results and theory
Deriving Dispersion Coefficients Correlations
McMullen, R., “The Change of Concentration
Standard Deviations with Distance", APCA
NOTE-BOOK, Vol. 25, No. 10, Oct. 1975.
Barad, M.L. (Editor) (1958): Project Prairie
Grass, A Field Program In Diffusion.
Summary of Dispersions Coefficients Correlations
• Correlations for stability classes A-F obtained from
experimental observations and theory
• For stability class G, no dispersion coefficients /
experimental data available to derive correlations
• Correlations derived by interpolating from the
dispersion coefficients for stability classes A-F
• Assumes less dispersion for G than F
• Actual dispersion characteristics ill-defined
• Irregular, meandering, no definable travel
Understanding Gas Dispersion Model & Stability
Class: Release from Ethylene Isotainer
• Large liquid release from Ethylene Isotainer
• Vapour dispersion modelling to lower explosive limit
• Stable atmospheric categories:
• 2.0/E
• 1.5/F ; 1.5/G
• 1.0/F ; 1.0/G
• Mid-range surface roughness:
• Parkland, bushes; numerous obstacles
Horizontal Release: Momentum Jet, Impact Criteria
Reached before Transition to Passive Dispersion
Release Angled Down: Momentum Jet Transitions to
Passive Dispersion before Impact Criteria Reached
Conclusion
• Gas dispersion modelling is critical component of incident
action plans (e.g. toxic releases)
• Quantification of off-site impact
• Impact of dispersion influenced by stability class selection
• Inappropriate use of the extremely stable condition leads
to overstated impact distances
• Exercise caution in using extremely stable conditions
• With uncertainty surrounding the actual dispersion
behaviour, the usefulness of results becomes limited
R4Risk
Level 14, 222 Kings Way (PO Box 5023)
South Melbourne VIC 3205
P: 03 9268 9700
F: 03 8678 0650
www.r4risk.com.au
Thank you
Jeff Jones CPRM, AFRMIA, RPEQ, MIEAust, Lead Auditor (QMS)
“Risk & Opportunity in a State of Development”
Challenges with developments occurring on top of existing
petroleum pipelines.
Presentation Objective
1. Illustrate the AS 2885 “Safety Management Process” as a good example of an embedded risk assessment process in an Australian Standard and mature industry methodology
2. Highlight some of the challenges of the pipeline industry threat control and risk assessment process, particularly for existing pipelines under the pressures of land & urban development within a “state of development”
3. Share the 4-pillars approach…
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Where are existing pipelines?
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Pipeline Acts & Regulations 1. AS 2885.3: Operation & maintenance
• Encroachment / location class – requires Licensee to review the pipeline’s Safety Management Study (SMS) to assess the impact and advise the developer of the impact.
• Additional measures may be required to meet the requirements of AS2885.1, particularly where land use changes become high consequence areas and more stringent control requirements arise.
• The SMS process & Risk Assessment is performed in accordance with AS2885.1
2. AS2885.1: Design & Construction • Clause 2.1 Basis of Safety Section
• Mandatory requirements are specified for control of external interference threats • Mandatory requirements are specified in high consequence areas for elimination of
rupture and maximum energy release rate
• Clause 4.2 Route • For an existing pipeline, changes in land use from those for which the pipeline was
designed introduce an obligation for a safety management study of the pipeline and where required, the implementation of design and/or operational changes to comply with the safety obligations of the Standard.
• Clause 4.7 Special Provisions for High Consequence Areas • retrospective assessment of no-rupture & maximum energy release rate is required for
existing pipelines
7
So what’s the problem…. AS 2885.1 Clause 4.7.4 Change of Location Class
Where there are changes in land use planning along the route of existing pipelines to permit T1, T2, I or S development, a safety assessment shall be undertaken and additional control measures implemented until it is demonstrated that the risk from a loss of containment involving rupture is ALARP.
This assessment shall include analysis of at least the alternatives of the following;
a. MAOP reduction (to a level where rupture is non-credible)
b. Pipe replacement (with no rupture pipe)
c. Pipeline relocation (to a location where the consequence is eliminated)
d. Modification of land use (to separate the people from the pipeline)
e. Implementing physical and procedural protection measures that are effective in controlling threats capable of causing rupture of the pipeline
8
AS 2885 SMS & Risk Process
9 AS2885.1 Figure 2.3.1 Pipeline Safety Management Process
4b. Location Class for WCC area AS2885.1 Section 4 Design • Safety of pipelines and pubic is paramount
• Determined by land use within the “measurement length” – determined from a radiation contour analysis
• Primary location class - R1, R2, T1 and T2
• Secondary location class – S, I, HI, CIC, W
Location class dictates pipeline wall thickness for resistance to penetration, depth of cover, external interference protection controls, pipeline marking and special provisions.
10
5a. Risk Assessment Methodology
11 AS2885.1 Figure 2.3.1 Pipeline Safety Management Process
Threats to a pipeline
AS2885.1 APPENDIX C Threat Identification The following list presents some of the most commonly identified threats: • External Interference • Corrosion • Natural events • Operations and maintenance • Design defects • Material defects • Construction defects • Intentional damage
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5c. Risk Assessment Methodology
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5d. Risk Assessment Methodology
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5e. Risk Assessment Methodology
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* Subject to Copyright – available from SAI Global website
4 Pillars life-cycle approach…
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4 Pillars life-cycle approach…
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Conclusions
1. Risk assessments work best when they are embedded within established methodologies/ practices / management systems
2. Existing pipelines need to be “unearthed” and catered for in the front-end planning and development stages of “developments”
3. Keep a balanced sense of democracy for all stakeholders
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1 Revision 0, 2016 Copyright 2016.
Presented by
Marcus Punch
CPEng, NER, RPEQ
Marcus Punch Pty. Ltd
Risk and Reliability
Mobile: +61 (0)432168849
Email: [email protected]
Web: www.marcuspunch.com
Think Control, Not Risk !
RISK 2016
20th May 2016
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Objectives
The objectives of this presentation are to explain:
The essential concepts, principles and requirements for
ensuring health and safety that are contained in the Model WH&S
Act and Regulations and their implications.
The strengths and weaknesses of current risk management
approaches with respect to the Model WH&S Act and Regulations.
An enhanced framework for work health and safety-related risk
management that encompasses the essential concepts, principles
and requirements of the Model WH&S Act and Regulations.
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1. Essential Concepts, Principles & Requirements
A RACE-HORSE AFTER WH&S
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Key Sections… The Model WH&S Act (these Sections apply generally)
Section 17 – persons conducting a business or undertaking (PCBUs) to
eliminate risks “so far as is reasonably practicable”, or if not reasonably
practicable, reduce risks “so far as is reasonably practicable”.
Section 18 – defines ‘reasonably practicable’.
Section 19 – PCBUs to ensure safety of workers and others “so far as is
reasonably practicable”.
Section 22 - designer PCBU must ensure “so far as is reasonably
practicable”, that plant, substance or structure is designed to be without
risks to the health or safety of persons.
Section 27 – “officers” of PCBUs to exercise “due diligence”.
The Model WH&S Regulations (these Sections only apply to hazards /
risks / activities covered by regulations)
Section 34 – PCBUs to identify reasonably foreseeable hazards.
Section 35 – same as Section 17 of the Act.
Section 36 – PCBUs to use the hierarchy of control measures.
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The Key Duties…
ABC Pty. Ltd.
PCBU
Directors &
Senior
Management
Officer/s of a PCBU
Workers &
Others
Duty owed to workers and
others – ensure safety ‘so
far as is reasonably
practicable’.
Duty owed to the
PCBU – exercise
‘due diligence’
Duty owed to
themselves and each
other & duty to follow
reasonable
instructions.
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Who / What is a PCBU?
A PCBU may be a company, trust,
unincorporated body or association,
or a partnership.
The Crown is also a PCBU -
through its departments and
statutory agencies.
Individual persons can be PCBUs
(eg. as a sole trader, a partner in a
partnership, or self-employed
person).
Individuals who are involved in a
business or undertaking as a
worker or officer only are not
PCBUs.
Individual householders may be
PCBUs if they engage a worker
(eg. a nanny, or work carried out for
a home business).
ABC Pty. Ltd.
PCBU
Workers &
Others
Duty owed to workers and
others – ensure safety ‘so
far as is reasonably
practicable’.
Duty owed to
themselves and each
other & duty to follow
reasonable
instructions.
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What is ‘Reasonably Practicable’?
A duty-holder must meet the standard of behaviour
expected of a reasonable person (from the law of ‘tort’
– informed, capable, aware of the law, fair-minded) in
the duty-holder’s position and who is required to comply
with the same duty.
There are two elements:
what can be done - what is possible, given the
circumstances.
whether it is reasonable, in the circumstances to do
all that is possible.
This means that what can be done should be done
unless it is reasonable in the circumstances to do
something less (see the Safe Work Australia Interpretive
Guideline).
In legal proceedings, the content of regulations / codes
/ standards / guidelines and expert witness
testimony helps determine what the ‘reasonable person’
would have done.
Likelihood
Degree of
Harm
Reasonable
Knowledge of
Hazard / Risk &
Safeguards
Availability and
Suitability of
Safeguards
Cost
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The Origin of ‘Reasonably Practicable’
Edwards v. National Coal Board
(NCB) ([1949] All ER 743 CA) was
an important case in English case
law.
Mr. Edwards died in an accident
after the supporting structure for the
mine roadway gave way.
The case concerned whether it was
"reasonably practicable" to prevent
even the smallest possibility of a
rock fall in a coal mine.
The NCB argued that it was too
expensive to shore up every
roadway in all of its mines.
The court decided that not all of the
roadways needed shoring up - just
the ones that required it.
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The Origin of ‘Reasonably Practicable’
Lord Asquith’s judgement ([1949] All ER 743 CA):
“Reasonably practicable is a narrower term than ‘physically
possible’ and implies that a computation must be made... in
which the quantum of risk is placed in one scale and the
sacrifice involved in the measures necessary for averting
the risk (whether in time, trouble or money) is placed in the
other and that, if it be shown that there is a great
disproportion between them – the risk being insignificant in
relation to the sacrifice – the person upon whom the
obligation is imposed discharges the onus which is upon
him.”
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The ALARP Principle
From Edwards V NCB evolved the ALARP principle, that risk
shall be made ‘As Low As Reasonably Practicable’.
ALARP is not about meeting a pre-defined ‘tolerable risk’ level.
For a risk to be ALARP it must be demonstrated that the
sacrifice involved in reducing the risk further would be grossly
disproportionate to the benefit gained.
ALARP is not just about disproportionality of the financial costs
and benefits. It includes time, money and trouble
(inconvenience).
However, do not under-estimate the usefulness of a Financial
Cost/Benefit Analysis (CBA) for getting expenditure on a
safety improvement approved.
But be aware that any CBA is only as good as the
assumptions you put into it!
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SFAIRP & ALARP Following the Robens Report into UK WH&S laws in the 1972, the
UK WH&S Act 1974 introduced the ‘So Far As Is Reasonably
Practicable’ (SFAIRP) concept.
SFAIRP re-focusses the standard of care away from the ‘level of risk’
to the ‘controls’. However, SFAIRP and ALARP are both aimed at
achieving the same outcome.
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‘Reasonably Practicable’ in Australia
From the Safe Work Australia Interpretive Guideline:
If the degree of harm is significant (eg. death or
serious injury is at least moderately likely) it is likely
that the cost of available and suitable safeguards
would never be so disproportionate as to justify a
decision not to implement them.
If the degree of harm is significant and you cannot
afford to implement an available and suitable
safeguard, you should not engage in the activity
that gives rise to that hazard or risk.
Capacity to pay is not relevant. A duty-holder
cannot expose people to a lower level of protection
simply because it is in a lesser financial position than
another duty-holder.
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“Due diligence” is a duty that applies to “officers” of PCBUs,
(but not the PCBU itself, or its workers).
Section 27(1)…
If a person conducting a business or undertaking has a duty or obligation
under this Act, an officer of the person conducting the business or
undertaking must exercise due diligence to ensure that the person
conducting the business or undertaking complies with that duty or
obligation.
“Officer” is defined in Section 9 of the Corporations Act 2001.
Due Diligence
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Who is an officer of a PCBU? A director or secretary of a corporation.
A person
who makes, or participates in making decisions that affect the
whole or a substantial part, of the business of the corporation; or
who has the capacity to affect significantly the corporation’s
financial standing;
in accordance with whose instructions or wishes the directors of
the corporation are accustomed to act;
A receiver, or receiver and manager, of the property of a corporation.
An administrator of a corporation.
An administrator of a deed of company arrangement executed by a
corporation.
A liquidator of a corporation.
An officer of the Crown or a public authority can be an officer of a
PCBU.
See McKie v Al-Hasani and Kenoss Contractors Pty. Ltd. ([2015]
ACTIC1).
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“Due diligence” (defined in Section 27(5)) refers to how well the
organisation is run by the “officers of the PCBU”…
1. to acquire and keep up-to-date knowledge of work health and safety matters
2. to gain an understanding of the nature of the operations of the business or
undertaking of the person conducting the business or undertaking and generally of
the hazards and risks associated with those operations
3. to ensure that the person conducting the business or undertaking has available for
use, and uses, appropriate resources and processes to eliminate or minimise
risks to health and safety from work carried out as part of the conduct of the
business or undertaking
4. ensure that the person conducting the business or undertaking has appropriate
processes for receiving and considering information regarding incidents,
hazards and risks and responding in a timely way to that information;
5. to ensure that the person conducting the business or undertaking has, and
implements, processes for complying with any duty or obligation of the person
conducting the business or undertaking under this Act;
6. to verify the provision and use of the resources and processes referred to in
paragraphs 3 to 5.
Due Diligence
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The “officers” (eg. directors, etc…) are responsible for ensuring that
the PCBU (eg. the corporation) is properly managed, so that the PCBU
can meet its duty to ensure the safety of workers.
Due Diligence is a different duty to SFAIRP and it applies to
different duty-holders!
ie. ‘Due Diligence’ is not a natural consequence of meeting the
primary duty of the PCBU (SFAIRP).
Due Diligence
ABC Pty. Ltd.
PCBU
Directors &
Senior
Management
Officer/s of a PCBU
Workers &
Others
Duty owed to workers and
others – ensure safety ‘so
far as is reasonably
practicable’.
Duty owed to the
PCBU – exercise
‘due diligence’
Duty owed to
themselves and each
other & duty to follow
reasonable
instructions.
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‘Reasonably Foreseeable’
Model Regulation, Section 34 – PCBU’s to identify reasonably foreseeable
hazards.
Foreseeability - the facility to perceive, know in advance, or reasonably
anticipate that damage or injury will probably ensue from acts or omissions.
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Defining ‘Reasonably Foreseeable’
Donoghue v Stevenson [1932] UKHL 100. The ‘neighbour principle’:
“…you must take reasonable care to avoid acts or omissions which you
can reasonably foresee would be likely to injure your neighbour."
Bolton v Stone [1951] AC 850. Harm is ‘reasonably foreseeable’ if it isn't:
“…thought to be physically impossible or because the possibility of its
happening would have been regarded as so fantastic or farfetched that
no reasonable man would have paid any attention to it”.
Wyong Shire Council v Shirt [1980] 146 CLR 40. A risk does not have to
be probable or likely to be reasonably foreseeable. An unlikely risk can
also be reasonably foreseeable. A risk is not reasonably foreseeable if it is
"far-fetched or fanciful".
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‘Reasonably Foreseeable’ and Risk Identification
• Low likelihood does not necessarily exclude a risk from being
‘reasonably foreseeable’.
• Even if an event has never happened before, this does not exclude it
from being ‘reasonably foreseeable’.
• Use formal, facilitated, systematic, multi-disciplinary team approaches
to increase the chance that reasonably foreseeable hazards are
identified.
• See SA/SNZ HB89 and/or IEC31010 for risk identification techniques.
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Hazard Elimination & Risk Control
• Model Act, Section 17 & Model Regulations, Section 35 – PCBU’s to
eliminate risks “so far as is reasonably practicable”, or if not reasonably
practicable, reduce risks “so far as is reasonably practicable”.
• Model Regulations, Section 36 – PCBU’s to use the hierarchy of control
measures.
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Apply the hierarchy of control measures to determine the
‘reasonably practicable’ risk controls for this risk of a person
falling onto the railway tracks and being injured or hit by a train.
Example –Reasonably Practicable
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2. Risk Management Approach
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AS/NZS ISO31000 – Spot the Problem.
5.3.5 - The organisation should
define criteria to be used to
evaluate the significance of risk.
Some criteria can be imposed
by, or derived from, legal and
regulatory requirements.
5.4.4 - Decisions (about risks)
should be made in accordance
with legal, regulatory and
other requirements.
5.5.1 - Risk treatment involves a
cyclical process of:
⎯ assessing a risk treatment;
⎯ deciding whether residual
risk levels are tolerable;
See the new HB205 for
application guidance for
safety-related risks.
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‘Tolerable Risk’ = Pre-defined Target Level of Risk
Risk Controls
Reducing Risk
Tolerable
Risk
Target
Hazard
Identification
?
Source: Adapted from AS61508.5
Risk matrices
and numerical
‘tolerable risk’
targets are set
by an
organisation /
industry / etc....
Initial
Risk
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The Elephant in the Room…
‘Tolerable risk’ targets are subjective – they vary between organisations,
industries, countries etc…
The risk analysis methods used to analyse and evaluate ‘risk level’ are
inherently subjective (especially the estimation of risk likelihood).
Even if a target ‘tolerable risk’ level (eg. green area of a risk matrix) is
demonstrated / achieved, other suitable safeguards might still be available.
A PCBU must ensure, so far as is reasonably practicable, the health and
safety of workers (Model WH&S Act, Section 19).
The concept of ‘reasonably practicable’ is an objective test in law,
focussed on the dictum “what can be done, should be done”.
The achievement of a subjective ‘tolerable risk’ target (eg. green area of a
risk matrix) has no bearing on the test of what is ‘reasonably practicable’!
In respect of WH&S law, the criteria for tolerance / acceptance of a risk must
be the achievement of SFAIRP.
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The technical capability of a risk control to effect the
elimination or net reduction of risk.
‘Control effectiveness’ evaluation is concerned with the
‘suitability’ of risk controls – it helps us select the best controls
for the circumstances.
‘Little is said about control effectiveness in standards.
‘Suitability’ & Control Effectiveness
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The function of a risk control is to stop the accident
sequence (ie. arrest it), or to deviate its propagation to a
less severe consequence (ie. deflect it).
Risk Control: “arrests or deflects an accident event
sequence”.
arrest: stop, catch, seize and hold.
deflect: turn aside, bend or deviate.
What is a risk control…….really?
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A tangible / physical object or system, which of itself,
arrests/deflects an unwanted event.
May be passive (eg. machine guard) or active (eg.
pressure relief valve).
May be automatically operated (eg. fire suppression
system) or able to be manually operated (eg. manual
plant shut-down).
It may be preventive (eg. transformer fault
protection) or mitigating (eg. transformer bund).
What is a risk control…….?
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A human act (eg. behaviour or response to stimuli), which
of itself, arrests/deflects an unwanted event.
May be derived from the contents of a procedure,
training or experience about what is expected of a
person in a given situation.
May be preventive or mitigating.
Can often be described using a verb / noun pair.
eg. obey speed restrictions, isolate electrical supply,
apply emergency brake, wear safety glasses, drink
water.
What is a risk control…….?
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It is suggested that the most effective controls are:
Pro-active (or Preventive) – they prevent the unwanted event,
rather than mitigate the consequences.
Potent (ie. efficacy) – they are technically capable of arresting
or deflecting the accident sequence without imposing additional
risk.
Responsive – they are in place prior to the unwanted event or
operates within sufficient time to arrest or deflect the accident
sequence.
Robust – they can cope with changes to the operating
environment.
Realistic – are value for money, simple, ease of legacy.
Reliable – have a high probability of successful operation when
required.
What is ‘Control Effectiveness’…2P4R.
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Evidence-based, Specifiable, Measureable and Auditable.
What is ‘Control Effectiveness’…ESMA.
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3. An Enhanced Framework
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Think Control, Not (Level of) Risk!
1. Acknowledge the legislative context.
2. Take a lifecycle-management
approach to safety.
3. Use ‘safety case’ concepts,
emphasising:
• Pre-emptive justification of the use
(and non-use) of particular risk
controls.
• Construction of safety arguments.
4. Use a risk management process
tailored to meet the legislative context,
emphasising:
• Appropriate risk identification and
analysis techniques.
• The acceptance criteria for hazards /
risks is the “reasonably
practicable” test, not a pre-defined
‘tolerable risk’ target.
• Control effectiveness evaluation as
a means to identify the most suitable
risk controls for identified hazards /
risks (and reject unsuitable ones).
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Revision 0, 2016 Copyright 2016.
Think Control, Not (Level of) Risk! The Golden Rule:
.....start with what can be done and only do less where it
is reasonable to do so.
That is:
1. Try to eliminate the hazard / risk first.
2. Then use the hierarchy of risk controls (substitution,
isolation engineering, administrative, PPE).
3. Ensure that all known, available and suitable controls
are considered and the most effective are chosen.
4. Justify any controls that are not used – eg. ineffective,
net risk increase. The argument of gross
disproportionality can only be used if the likelihood or
degree of harm is low (ie. minor injuries).
5. If the potential for harm is significant (ie. death or
serious injury) then all known, available and suitable
controls should be used, or stop the activity giving rise to
the hazard / risk.
6. Capacity to pay is not relevant !
Likelihood
Degree of
Harm
Reasonable
Knowledge of
Hazard / Risk &
Safeguards
Availability and
Suitability of
Safeguards
Cost
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Think Control, Not (Level of) Risk!
Source: Adapted from
AS/NZS ISO31000.
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Revision 0, 2016 Copyright 2016.
Richard Johnstone & Michael Tooma, Work Health & Safety Regulation in Australia – The Model Act, 2012, ISBN 978-1-86287-881-5.
Marcus Punch, Think Control, Not Risk ! – Mastering Health and Safety Under the Model WH&S Act, 2015, ISBN 978-0-9807660-3-5.
Safe Work Australia, Interpretive Guideline - The Meaning of Reasonably Practicable.
Safe Work Australia, Interpretive Guideline - The Meaning of PCBU.
Safe Work Australia, Interpretive Guideline - The Health and Safety Duty of an Officer Under Section 27.
Safe Work Australia, How to Manage Work Health and Safety Risks – Code of Practice.
AS/NZS HB205 Managing Safety-related Risk.
Questions & Further Reading.......
May 2016 Alive Information
May 2016 Alive Information
Who Is a Risk Engineer ?
II guess I should have defined the job a bit better
e
We actually would have preferred a
tunnel
The engineer told me he’d done one of these before.
May 2016 Alive Information
Engineering
Today
Risk Management
Has become risk
segmentation &
allocation
Complex & Legal
Commercial
Relationships
Inadequate focus on
Engineering task-
specific issues
Insurance Risks
are harder to
Understand and
assess
Litigation can be
time-consuming
costly and
unpredictable
Unrealistic
Community
Expectations in
Relations to
Engineering Risk
Procurement is
often the
‘Tick the box’
variety
Who Is a Risk Engineer ?
May 2016 Alive Information
The Bow-Tie Engineer
May 2016 Alive Information
May 2016 Alive Information
Design Basis
not clear from the start
Tight Budget
influenced by client’s need to get project sanction
Communication
Client dealing directly with Contractors; Project Manager not informed
Contract
Variation claims poorly managed
Scope Changes through project; not fully assessed
Impact on Schedule
of scope changes not fully considered
Project Handover
Poor handover of scope and contractual basis from Sales to Project Manager
Summary of typical issues in complex project delivery Risks
Equipment Under Control EUC
May 2016 Alive Information
SIL Continuous Control
Probability of dangerous
Failure/ Hour
MTBF
(Mean Time Between Failure)
Years between Failure
4 1E-8 1E-9 114,155 – 11, 416
3 1E-7 1E-8 11,416 – 1,142
2 1E-6 1E-7 1,142 - 114
1 1 E-5 1E-6 114 - 11
May 2016 Alive Information
Risks
A-2
Figure A-1: Deliberate Safety Risk Management Process
May 2016 Alive Information
Power
Water
Infrastructure
Transport
Chemical
Bio Medical
Manufacture
Agricultural
A-2
Figure A-1: Deliberate Safety Risk Management Process
Risks
May 2016 Alive Information
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
Ris
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Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
Ris
kB
usin
ess R
isk
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ineeri
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RIs
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Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
Ris
kB
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ess R
isk
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ineeri
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RIs
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Syste
ms
Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
• Hazard (static) – a risk
that only has loss
associated with it
• Dynamic – a risk that has
positives and losses
associated with it
May 2016 Alive Information
A-2
Figure A-1: Deliberate Safety Risk Management Process
Dynamic Risk Profile
May 2016 Alive Information
Level of Risk
Dynamic Risk
May 2016 Alive Information
Risk
Innovation
May 2016 Alive Information
Often used
Easily understood
Wrongly used
Wrong results
May 2016 Alive Information
The most widely implemented of these countermeasures have been education, limitation of
Value of Risk within Project
Dynamic Risk Profile: Hospital
Integration of Risk
• SIL for Steamer
• Virus contamination
• Nuclear Medicine
• Ergonomics
• IT Corruption
May 2016 Alive Information
Dynamic Risk Profile: Plastic
Recycling Integration of Risk
• Quality of multiple
inputs
• Specifications of
potential products
• Energy Consumption
• Corporate Risk Levels
• Flexibility of machinery
May 2016 Alive Information
May 2016 Alive Information
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
Ris
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isk
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ineeri
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RIs
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men
tal
Ris
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Man
ag
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men
t
Syste
ms
Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
Ris
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Syste
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Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
Concept Pre-Feasibility FeasibilityValidation &
Kick Off
Detail Design &
Procurement
Construction & Pre-
commissioning
Commissioning
& Performance
Trials
Handover &
Closeout
Maintenance
& Operation
Develop Project
Risk Register
Preliminary Hazard
Analysis
Options
Assessments
Cost Contingency
Analysis
Safety in Design(SID)
System Review
Benefits Cost RatioSchedule Risk
Analysis
Contingency Planning
Analysis/Review
Options
Assessment
Social & Change
Management Review
Crisis Management
Plan
Failure Mode, Effects &
Crtical Analysis (FMECA)
Maintenance &
Relaiability Assessments
Hazard & Critical Control
PointFire Safety Studies
Hazard & Operability
(HAZOP)
Assset Management &
Vulnerability Studies
Facility Layout AssessClosure Plan
Assessments
Safety Integrity Level (SIL)
Options AssesConstructability Risk
Assessments
What If AnalysisControl Hazard &
Operability(CHAZOP)
Task Specific OHS Risk
Assessments
Environmental Case
Dang. Goods
Environment
Management
Implementation
Review & Audit
Risk Management
System
Dangerous Goods
Hazardous Substances
Asess
Facility layout
Assessment
Value Engineering
Analysis
Risk Perception &
Acceptability
Studies
Preliminary Hazard
& Critical Point
(HACCP) Study
Project Execution
Plan Review
Task Specific OHS
Risk Assessments
Task Specific OHS
Risk Assessments
Constructability Risk
ReviewSafety Case
Assessments
Studies Project Execution
Pro
ject
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Syste
ms
Handover & Operations - Life
Review & Audit of Risk
Plans
Re-run/ Validate
Cost & Schedule
Contingencies
Develop Project
Risk Management
Systems
Training on
implementation of
Project Risk
Management Plan
Due DiligenceAudit
Options
Assessments
Review & Audit
Risk Management
System
Review & Audit
Risk Management
System
Hazard ID
Workshops
Develop Project
Risk Management
Plans
Safety Case StudiesReview & Audit of Risk
Plans
Environmental
Management Plan
Project Screening
Business
Continuity &
Disaster Recovery
Preliminary Hazard
Analysis
Probity Review & Audit
Review & Audit Risk
Management System
Project Environment
Protection Strategy
(PEDS)Environmental
Management System
Challenges of Risk Engineers
• Continuity of Risk across disciplines
• Integration of risk segments
• Leadership to integrate different teams
• Promote dynamic risks for innovation
• Maintain active risk registers
• Manage & Collaborate with broad
groups
May 2016 Alive Information
Which is Dynamic which is Static ?
May 2016 Alive Information