Engineering Risk Analysis

Table of Contents

1. Introduction .................................................................................................................................................... 3

Risk Analysis ....................................................................................................................................................... 3

Project Risks ....................................................................................................................................................... 3

Engineering Risks ................................................................................................................................................ 3

Australian/New Zealand Risk Management Standard ....................................................................................... 3

2. Qualitative Risk Analysis ................................................................................................................................. 4

Managing risks ................................................................................................................................................... 4

Risk analysis process - structured approach to risk management ..................................................................... 4

3. Risk analysis: case studies ............................................................................................................................... 5

Risk of low rainfall and cable breaking (Tasmania) ............................................................................................ 5

Risk of unstable ground (tunnelling project) ...................................................................................................... 6

Risk of flood inundating sensitive assets (residential housing development) ................................................... 6

Risk of odour complaint (chemical process facility) ........................................................................................... 6

Risk of road usage differing from forecasts (toll road)....................................................................................... 6

Risk of rider colliding with car (urban shared roadway) .................................................................................... 6

Risk of derailment (tourist railway) .................................................................................................................... 7

4. Mining case study & risk workshops .............................................................................................................. 7

Mining case study ............................................................................................................................................... 7

Risk analysis workshops ..................................................................................................................................... 9

5. Approach to Risk – Qualitative Techniques .................................................................................................... 9

Risk standards (ISO 31000) ................................................................................................................................. 9

Framework for managing risk .......................................................................................................................... 10

Risk register ...................................................................................................................................................... 10

Risk analysis ...................................................................................................................................................... 10

Risk evaluation ................................................................................................................................................. 11

Risk treatment .................................................................................................................................................. 11

Monitoring and review ..................................................................................................................................... 11

6. Functional Reliability .................................................................................................................................... 11

Fishbone analysis ............................................................................................................................................. 11

Functional reliability ......................................................................................................................................... 13

Safety Classification Systems ........................................................................................................................... 13

7. Functional Reliability: MW case study .......................................................................................................... 15

MW Railway Signalling ..................................................................................................................................... 15

Background preparation ............................................................................................................................... 15

Project Risk Assessment/Risk Management Plan ......................................................................................... 15

Project Execution .......................................................................................................................................... 15

Project Review ( ............................................................................................................................................ 15

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1. Introduction Table of Contents
- Risk Analysis
- Project Risks
- Engineering Risks
- Australian/New Zealand Risk Management Standard
1. Qualitative Risk Analysis
- Managing risks
- Risk analysis process - structured approach to risk management
1. Risk analysis: case studies
- Risk of low rainfall and cable breaking (Tasmania)
- Risk of unstable ground (tunnelling project)
- Risk of flood inundating sensitive assets (residential housing development)
- Risk of odour complaint (chemical process facility)
- Risk of road usage differing from forecasts (toll road).......................................................................................
- Risk of rider colliding with car (urban shared roadway)
- Risk of derailment (tourist railway)
1. Mining case study & risk workshops
- Mining case study...............................................................................................................................................
- Risk analysis workshops
1. Approach to Risk – Qualitative Techniques
- Risk standards (ISO 31000)
- Framework for managing risk
- Risk register
- Risk analysis
- Risk evaluation
- Risk treatment
- Monitoring and review
1. Functional Reliability
- Fishbone analysis
- Functional reliability
- Safety Classification Systems
1. Functional Reliability: MW case study
- MW Railway Signalling
  - Background preparation
  - Project Risk Assessment/Risk Management Plan
  - Project Execution
  - Project Review (
- MW A/C Panel Overhaul
  - Risk Negotiation at Contracting
  - Risks in Project Delivery
  - Corrective Action Report (CAR)
1. Functional Reliability: Siemens case study
- Vertical Risk Levelling
- Redesign Crisis – Case Study
- Quantifying Risk on Human Errors
- Monitoring, Control and Review
- Document Metrics

Evaluate the risks  decisions made based on the outcome of the risk analysis  risks ranked in terms of likelihood, possible cost and consequence to determine treatment priorities and where attention is needed most
Treat the risks  assess risk treatment options and prepare and implement treatment plans with consideration of priorities and resources
Monitoring and review  monitor activities and processes to determine effectiveness of measures taken to treat risk (data evaluation, audit, compliance measurement)

2. Qualitative Risk Analysis

Qualitative risk analysis is commonly used in all industries & technical disciplines and used for all aspects of project management (planning, procurement, design, construction, maintenance, operations).

Managing risks

Why manage risks

1. Commercial reasons  statutory and legal requirements, market and revenue management, cost management, reputation, business improvement (profitability) 2. Environmental reasons  statutory and legal compliance, enhancement of reputation 3. Social reasons  statutory and legal compliance (access for disabled), ‘employer of choice’ status, health & safety management, community liveability enhancement (Melbourne’s tourism – ‘most liveable city’) In what situations might we manage risks 1. Personal  financial management, reputation and career advancement, statutory and legal obligations as a professional 2. Business organisations  statutory and legal requirements, market assessment and revenue projections, reputation and business credibility requirements 3. Government organisation  statutory and legal requirements, budget control, political direction and support, reputation and stakeholder support Where are we likely to participate in risk management 1. Employee  planner, designer, project engineer, auditor 2. Manager  safety of employees, project or sections of a project 3. Business owner  statutory and legal compliance, commercial success, customer satisfaction (making sure products are delivered in time, are of sufficient quality, overall customer experience)

Risk analysis process - structured approach to risk management

A systematic process that is ongoing and requires ongoing communication and consultation with stakeholders and a consultative team (ensure risks are identified effectively)  the Australian Standards provide principles and generic guidelines on risk management

1. Establish the Context  Understand the corporate risk profile and project risk context and the risk owner under consideration (who is responsible for the risk)  AS/NZ code outlines a suitable process that can be followed for project organisations/situations  many organisations have their own risk management policies and procedures, identified priority risk categories and corresponding risk management strategies. 2. Identify Risks  Identify the hazards and risks (What can happen that could affect the project, when and where would it occur, how and why could it occur)  context of the risk is important in identifying risks and hazards (time period under consideration will depend on the context of the risk analysis, e.g. project life cycle, effective life of asset, peak operation period, emergency situations) Hazard is an event or situation that may give rise to a risk Risk is the chance of something happening that will have an impact on an organisation’s or person’s ability to achieve business or personal objectives Control Measure  an action taken to reduce the frequency and/or severity of a risk

Engineering Risk Analysis, Study notes of Risk Analysis

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