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History and Concept Evolution of Risk Management
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History and Concept Evolution of Risk
Management
Practical Perspective and Empirical Evidence
in Manufacturing Sector
(
/
)
eshwayne@gmail.com
Phone:0922516248
201901 Concept Evolution of Risk and Risk Management
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Risk ?
Definition (common sense)
Risk=Accident
= ( )
Risk: Undesirable Result of Uncertainty
Result is the undesirable outcome or accident/injury.
Uncertainty is the unknown of odds or causal relationship as well as
contributing factors to the outcome of the undesirable accident/injury.
201901 Concept Evolution of Risk and Risk Management
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Risk = The Act of GOD..
Risk: Undesirable Result of Uncertainty
Undesirable result/ outcome = accident, injury or loss.
Uncertainty is the unknown of odds or causal relationship as well as
contributing factors to the undesirable outcome.
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Risk = The Act of GOD..
Risk: Can t Be Avoided or Managed. Thus..
Risk Management : Beg (Bribe) the Mercy of Gods
201901 Concept Evolution of Risk and Risk Management
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Risk = The Act of GOD..
Risk: Can t Be Avoided or Managed. Thus..
Risk Management : Snoop the Willing of God
201901 Concept Evolution of Risk and Risk Management
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Empirical Evidence
The Effect of Risk = The Act of GOD.. Risk Management : Beg (Bribe) the God
1995 !
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201901 Concept Evolution of Risk and Risk Management
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Risk = The Act of GOD..
Risk: Can t Be Avoided or Managed. Thus..
Risk Management: Mutual Aid
201901 Concept Evolution of Risk and Risk Management
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Risk = The Act of GOD..
Risk: Can t Be Avoided or Managed. Thus..
Risk Management: Insurance, Diversify and Hedging
201901 Concept Evolution of Risk and Risk Management
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Mind Your Own Business and Risk (Don’t Worry about God’s Decision )
201901 Concept Evolution of Risk and Risk Management
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Risk ?
(common sense)
Risk = Accident = ( G
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Accident = an unfortunate incident that happens unexpectedly.
Accident = Unexpected, non-aware, unprepared (D
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=> What need to be expected, aware and prepared?
201901 Concept Evolution of Risk and Risk Management
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Risk = Accident
Accident = Unexpected, non-aware, unprepared . Thus..
Risk Management : To Expect, Aware and Prepare
Potential and Possibility of Harm and Hazardous situation
Pay attention to harm situation and hazardous material or energy
Accident = Hazard
Hazard
Definition (ISO-45001)
Hazard: source with a potential to cause injury and/or ill health
Source 201901 Concept Evolution of Risk and Risk Management
+
P:11/166
Risk = Accident Hazard
Accident = harm situation and hazardous material or energy . Thus..
Risk Management = Hazard Identification
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Risk = Accident = Hazard
Risk Management = Hazard Identification
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Source: 201901 Concept Evolution of Risk and Risk Management
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Risk = Accident =Hazard
Risk Accident and Human Error can Be Avoided by Awareness! Thus..
Risk Management = Identify Hazards and Label them!
201901 Concept Evolution of Risk and Risk Management
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Risk = Accident =Hazard
Risk and Human Error can Be Avoided by Awareness! Thus..
Right to Know
Risk Management = Hazards Communication, Notification and Training!
Source: OHSA USA
https://www.osha.gov/harwoodgrants/
grantmaterials/fy2010/sh-21000-10
201901 Concept Evolution of Risk and Risk Management
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Empirical Perspective
The Effect of Hazard Communication is Unclear.
Hazards Communication and training is part of Injury and Illness Prevention Program. The
solo effect of Hazards Communication program on injury incidence is not disclosed yet
The causal association from ¦Hazard Label and Communication §via ¦Safety Awareness
and Behavior" to ¦Reduce Risk and Accident Incidence§ is not disclosed yet.
201901 Concept Evolution of Risk and Risk Management
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Empirical Perspective
The Effect of Hazards Communication is Unclear.
Safety knowledge Mediate the effect of Hazards Communication on Accident Prevention.
Lack off knowledge and awareness is always parts of accident.
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Academic Argument
Situation Awareness is a Multi-dimensional Concept ( Black Box) .
Different situational understandings are incompatible, conflicts arise which in turn lead to
safety-compromising incidents.
SA is heavily influenced by system design. Valid tools for assessing the affects of different
design concepts on SA is needed in this area.
The relationship between distraction and SA is complex and being distracted does not simply
lead to diminished SA.
In complex collaborative systems, more communications does not necessarily equate to better
SA and tight coupling and sharing of information be not be appropriate.
There are ethical concerns associated with attributing ¨loss of SA as a direct cause of
accidents in safety critical systems.
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Empirical Evidence
The Effect of Safety Training is Recognized.
It is general believed that training program is associated with the reduce of injury incidence.
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Inspiration of Taylar (Management Science) & Heinrich (Accident Analysis)
Analysis the task as a series of movement
Review the happening of accident as a series of event (Domino Metaphor)
Frederick Winslow
Taylor1856-1915
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Hazard = Accident = Risk ?
Hazard: source with a potential to cause injury and/or ill health
Risk: effect of uncertainty (Definition of ISO-45001)
Effect is a deviation from the expected ¿ positive or negative.
Uncertainty is the state, even partial, of deficiency of information related to,
understanding or knowledge of, an event, its consequence, or likelihood.
Risk is often expressed in terms of a combination of the consequences of an
event and the associated "likelihood" of occurrence.
201901 Concept Evolution of Risk and Risk Management
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Hazard Accident Risk
Risk: effect of uncertainty
Effect is a deviation from the expected ¿ positive or negative.
Uncertainty is the state, even partial, of deficiency of information related to,
understanding or knowledge of, an event, its consequence, or likelihood.
(= ) (changes in circumstances)
Risk or Safety depends on the context => Break down context and association
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Source: http://psas.scripts.mit.edu/home/get_pdf.php?name=1-1-Beginners-Tutorial-part1.pdf
201901 Concept Evolution of Risk and Risk Management
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Risk Hazard Accident
Chain/Series of Events or Behavior leads the victim to contact Hazard
(Energy or Chemical )
•
Hazard + Chain/Series of Events => Accident© Æ Ç È É Ê Ë
201901 Concept Evolution of Risk and Risk Management
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P:23/166
Risk = From Hazard via Series/Chain of events to Accident
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( series/chain of events)”
Hazard (Source)=> Event (behavior/Media) => Accident (Injury)
Guidelines for Hazard Evaluation Procedures, 3rd Edition | AIChE
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk and Accident can Be Avoided via..
Risk Management : Analysis and Stop the Series/Chain of Events
=> Take Actions and Add Defenses between Hazard and Loss/Victim !
1920-30 national safety congresses (NSC)Õ "
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Risk = Series/Chain of events to Accident
Risk and Accident can Be Avoided via..
Risk Management :
Analysis and Break down the process or accident (Follow the example of Taylar)
Do something within the Series/Chain of Events!
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
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Risk = Series/Chain of events to Accident
Risk Management= Break down process+ Identify Hazard
e.g., Job Safety/Hazard Analysis
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down process + Identify Hazard + Risk Matrix
Risk: effect of uncertainty (Definition of ISO-45001)
Risk is often expressed in terms of a combination of the consequences of an
event and the associated "likelihood" of occurrence.
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down + Identify Hazard + Risk Matrix
e.g., ISO-45001
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down + Identify Hazard + Risk Matrix
e.g., HazOp ¢ 0 Z
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201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down + Identify Hazard + Risk Matrix
e.g., HazOp ¢ 0 Z
(2/3) " (" Í # $ 2 )% & g I ' Å
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down + Identify Hazard + Risk Matrix
e.g., HazOp ¢ 0 Z
(2/3) " % & g Z /( 9 (Á Â ² ) )3 â ã * ¾
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management= Break down + Identify Hazard + Quantify Risk
e.g., Dow Chemical F&EI +
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Risk = Series/Chain of events to Accident
Risk Management : Analysis and Stop the Series/Chain of Events
=> Take Actions and Add Defenses between Hazard and Loss/Victim !
Layers of Protection and Reliability Engineering(. / 0 . I
201901 Concept Evolution of Risk and Risk Management
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Risk = Series/Chain of events to Accident
Risk Management : Analysis and Stop the Series/Chain of Events
=> Take Series of Protection and Defenses between Hazard and Loss/Victim
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Empirical Perspective
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201901 Concept Evolution of Risk and Risk Management
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Empirical Perspective
The Event-based thinking Go a Wrong way. NO P ( O Q R( Û S RÉ & T U 0 > V
201901 Concept Evolution of Risk and Risk Management
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Empirical Perspective
The Event-based thinking Go a Wrong way.
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Empirical Perspective
The Event-based thinking Go a Wrong way.
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201901 Concept Evolution of Risk and Risk Management
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Empirical Perspective
The Event-based thinking Go a Wrong way. Hindsight and Heuristic Bias
Risk = Series/Chain of events to Accident
=> Take Actions and Add Defenses between Hazard and Loss/Victim !
Risk Management = F G H I
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RM 2.0 Accident = Risk of Hazard + Omission (Out of Control)
Accident = Problem of Reliability and Control
RM 2.0 (Madness) : Obsessed in the game (blaming and fixing )
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Inspiration of Deming (System Thinking) & Reason (Accident Analysis)
Risk is a Systematic and Organizational Problem
Human Factor & Organizational Context underlying (Cheese Metaphor)
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Risk : Effect of Uncertainty
Practical and Operational Meaning
RM 3.0 Accident = Technical+ Human +
Organizational Factors (interaction)
Effect is a deviation from the expected ¿ positive or negative.
Uncertainty is the state, even partial, of deficiency of information related to,
understanding or knowledge of, an event, its consequence, or likelihood.
Risk = f (changes in circumstances) = f (system, context)
Risk Management = Manage the System
201901 Concept Evolution of Risk and Risk Management
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Risk = f (changes in circumstances) = f (system, context)
Accident is side effect of the operation (Safety and Risk is Incidental of the system )
Risk Management = Manage the System
What is System?
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Risk = f (changes in circumstances) = f (system, context)
Accident is side effect of the operation (Safety and Risk is Incidental of the system )
Risk Management = Manage the System
What is System? - Safety Culture (Psychological) Perspective
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201901 Concept Evolution of Risk and Risk Management
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Leadership and Management
Imperfection, unprofessional, non-integrity
201901 Concept Evolution of Risk and Risk Management
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Underlying Mental Models
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Incompatible(= Conflict) Goals
Compromise integrity of all aspects
201901 Concept Evolution of Risk and Risk Management
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Risk = f (changes in circumstances) = f (system, context)
Accident is side effect of the operation (Safety and Risk is Incidental of the system )
Risk Management = Manage the System (Safety Awareness)
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Risk = f (changes in circumstances) = f (system, context)
System/ Context= Technical Factor, Human Factor and Organizational Factor
Risk Management = Manage Latent Failures in the System
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201901 Concept Evolution of Risk and Risk Management
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Risk = f (changes in circumstances) = f (system, context)
System/ Context= Technical Factor, Human Factor and Organizational Factor
Risk Management = Manage Latent Failures in the System
Risk Management = Golden Sample + Benchmark ( t 0 # $ Á R )
201901 Concept Evolution of Risk and Risk Management
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Empirical Evidence
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Academic Argument
Safety Culture is the result of Natural Section
Natural selection and safety culture within a small/ medium sized enterprise (SME)
AuthorXBenjamin Brooks SourceXJournal of Safety Research 39 (2008) 7385
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Academic Argument
Number of employees Predict injury incidence Better than Safety Culture
The utility of a workplace injury instrument in prediction of workplace injury
AuthorXChristie Fullarton, Mark Stokes
SourceXAccident Analysis and Prevention 39 (2007) 2837
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Deming’s Perspective on System
System: composed of interrelated components
•
Quality (variation/ incident) is a systematic process.
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Deming’s Perspective on System
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Deming’s Perspective on System
Theory of Profound Knowledge
Appreciation of a system
•
•
•
•
•
•
•
A system is complex
Everyone must share the understanding and commitment to the
aim
Leader understand the interconnectedness and interdependence
The people, free of fear and competition within the system can
band together
Each component is obligated to contribute its best to the system
as a whole.
Competitiveness within the system leads to loss for the system.
Each component works interdependently with the other
components.
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Deming’s Perspective on System
Theory of Profound Knowledge
The psychology of change
•
Resistance to change• Feel devalued and without ownership
• Industrial style thinking has lead to management
styles of command and control.
• workplace and schools encourage individual
completeness, authority, and one-right answer
•
People are born with intrinsic motivation, selfesteem, desire to learn, creativity and joy in
accomplishment, and a need for freedom and
belonging.
Leader must gain & communicate a shared identity
leader serves the people with clear vision and
guidance to empower them.
Training in creativity, communication and
interpersonal skills may be necessary.
•
•
•
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Deming’s Perspective on System
Theory of Profound Knowledge
Theory of Knowledge
•
•
•
•
Learning process requires several steps (PDSA):
1) forming a theory,
2) making predictions based on past experiences,
3) testing the theory,
4) checking the results.
Knowledge is developed from the application of theory.
Theory provides a window from which to view the
situation and gives meaning to experience.
Prediction based in theory provides a foundation for
planning a course of action.
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Deming’s Perspective on System
Theory of Profound Knowledge
Understanding Variation
•
•
•
•
•
Variation is a natural, inevitable part of life.
The goal of continuous improvement is to reduce the range of
variation over time, and adjusting the level to the desired level.
Almost all variation within a process is due to chance causes,
inherent in the design of the process.
Management controls the design of the process.
People within the system are limited by that design.of action.
Shewhart Cycle
201901 Concept Evolution of Risk and Risk Management
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PDSA
Organization Viewpoint- ISO-45001
201901 Concept Evolution of Risk and Risk Management
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Empirical Evidence
Association Between OSHMS and Accident Incidence p q r s <
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Empirical Evidence
Association Between OSHMS and Accident Incidence p q r s <
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Practical Perspective
Why OSHMS is Not working (to reduce Injury or accident incidence) ?
The System is viewed as fragmental component and process, and process is viewed
as procedure (paper work)
Lack of knowledge (variation, and mitigation of accident and risk)
Lack of Appreciation (the SYSTEM, and mental psychology )
201901 Concept Evolution of Risk and Risk Management
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Practical Perspective
Continuous Improvement is a Dream
Systematic Equilibrium and Resource Constraints
Safety and
Integration
Resources
+
+
Quality and Timeliness of Safety
+
and Integration Analyses
+
Resource
P ressure
Safety and
Integration P riority
B /R
1
"Resource
Allocation"
Satisfaction of
F unding
Organization
- -
R1
P ressure to
Deliver
+
"Safety Rework
Cycle"
+
Work Rate
B1
Schedule "Delays cause
Delays - P ressure"
R2
+
Subtle
Mistakes
+
B urnout
"B urnout
Cycle"
B /R
2
"Cost Overruns"
R3
"B urnout
Rework Cycle"
-
System
Completion Rate
-
System
+
Lifecycle Cost
201901 Concept Evolution of Risk and Risk Management
Design Tasks to be Unsatisfied Safety
Reworked
Requirements
R4
"Accumulating
Waivers"
Operational
Workarounds
Source: Nancy G. Leveson
A Systems Approach to Safety Engineering
P:65/166
Practical Perspective
(Cross-Sectional) Organizational Context
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201901 Concept Evolution of Risk and Risk Management
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Practical Perspective
(Longitudinal) Drift to Failure
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Systems and organizations migrate toward accidents
(states of high risk) under cost and productivity pressures
in an aggressive, competitive environment
Source: Nancy G. Leveson A Systems Approach to Safety Engineering
201901 Concept Evolution of Risk and Risk Management
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Practical Perspective
Deming is some kind of Guru…(in some degree)
Big Question:
“Human behavior is
not simple statistic or
linear equation”
The probability of
human error is NOT
Normal Distribution nor
Reasonable
Bigger Question:
“How a good person
fix the bad system? “
There is no easy way,
simple answer nor
empirical knowledge..
201901 Concept Evolution of Risk and Risk Management
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Inspiration of Leveson (STAMP) & Hollnagel (FRAM)
RM 3.0 : Risk is a Systematic Issue and Accident is Probability
RM 4.0 Redesign the System and Reform Metal Model
Leveson (Macro viewpoint) :
•
Control the interaction and interface among
components
•
Redesign the Controlling system (put safety
requirement and constraints in design phase)
Hollnagal (Micro viewpoint) :
•
Accident is emerged from the functional resonance
(interaction among components)
•
Build Model and Simulation the Resonance (tail
event)
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201901 Concept Evolution of Risk and Risk Management
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201901 Concept Evolution of Risk and Risk Management
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Conclusion and Discussion
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End
What is the Truth and Reality?
Look at the “machine ”(law/ organization/ system/ risk…) from the higher level.
eshwayne@gmail.com
Phone:0922516248
201901 Concept Evolution of Risk and Risk Management
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