Risk Management in the Built Environment
Qualitative and Quantitative Risk
Management
By Professor Simon Burtonshaw-Gunn – licensed under the Creative Commons Attribution – NonCommercial – Share Alike License
http://creativecommons.org/licenses/by-nc-sa/2.5/
Risk Management in the Built Environment
School of the Built Environment
MSc Construction Management
Risk Management in the Built Environment
Presentation 2: Qualitative Risk Analysis and
Quantitative Risk Evaluation
Professor Simon Burtonshaw-Gunn
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
• Risk management plan
• Identified risks
• Overall risk ranking for
the project
• Project status
• List of prioritised risks
Process
• Project type
• Data precision
• Scales of probability and
impact
• Assumptions
• Risk probability and impact
• Probability/ impact risk rating matrix
• Project assumptions testing
• Data precision rating
• List of risks for
additional analysis and
management
• Trends in qualitative
risk analysis results
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Tools and techniques for Qualitative Risk analysis include
•
Risk probability and impact;
•
Probability impact matrix;
•
Ishikawa (Fishbone diagrams);
•
Fault trees; and
•
Failure Mode and Effect Analysis (FMEA)
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Risk
Identification
Cost
Impact
Schedule
Impact
Performance
Impact
Criticality
Score
Risk 1
L
L
L
L
Risk 2
H
H
H
H
Risk 3
H
L
L
M
Risk 4
VL
VL
H
H
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Consequence
Severity
People
Assets
Environment
Frequency
Reputation
0
No
injury
No damage
No
effect
No
impact
1
Slight
injury
Slight
damage
Slight effect
Slight
impact
2
Minor
injury
Minor
damage
Limited
effect
Limited
impact
3
Major
injury
Localised
damage
Localised
effect
Considerable
impact
4
1-3
fatalities
Major
damage
Major effect
National
impact
5
Multiple
fatalities
Extensive
damage
Massive
effect
International
impact
A:
B:
C:
D:
Manage for continuous
improvement
Incorporate
risk reduction
measures
Intolerable
E:
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Some types of control are more effective than others in reducing risk,
these are listed below in order of increases control effectiveness:
•
•
•
•
•
•
Personal Protective Equipment – is it available and used? Is it fit
for purpose?
Administration – do the organization’s procedures need to
change? Are the project team able to change them? Can the
organization provide more training?
Separate – can time, distance, shields or guards be used to give
the project protection from the hazard?
Engineer – can a less hazardous design be developed? Can the
equipment be modified?
Substitute – can the hazard be replaced with a less harmful one?
Eliminate – can the hazard be removed all together? Is there a
better way?
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
CAUSES ……..
Resources
Materials
Root causes
. . . EFFECTS
Effect / /
Effect
problem
problem
statement
statement
Plant and
Machinery
Method and
Processes
Measurement
and Standards
The “cause and effect” or “Ishikawa” diagram
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
TIP: Make sure everyone agrees on the problem statement.
Include as much information as possible on the "what,"
"where," "when," and "how much" of the problem. Use data
to specify the problem.
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Draw major cause categories or steps in the production or service
process. Connect them to the "backbone" of the fishbone chart.
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Place the brainstormed or data-based causes in the appropriate
category.
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Ask repeatedly of each cause listed on the "bones”, Why does it happen?"
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Hospital example . . . .
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Exercise:
Your
Problem
or Risk
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Item
1
2
Failure
mode
Cause of
failure
Effect
Remedy:
recommend
action
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
• Prioritised list of
quantified risks
• Risk Management Plan
Quantitative
Risk Process
• Identified risks
• List of prioritised risks
• Probabilistic analysis
of the project
• Probability of
achieving the cost and
time objectives
• Trends in quantitative
risk analysis results
• List of risk for additional
analysis and management
• Interviewing
• Historical information
• Sensitivity analysis
• Expert judgement
• Decision tree analysis
• Other planning inputs
• Simulation
Risk Management in the Built Environment
Qualitative Risk Analysis and Quantitative Risk Evaluation
Risk
ID
Date
Risk
description
and
consequences
Probability
P=1 to 3
Impact
(severity)
S= 1 to 3
Detection
difficulty
D = 1 to
3
Rankin
g
PxS
xD
Mitigating
or
avoiding
action
Action
by:
Risk Management in the Built Environment
School of the Built Environment
MSc Construction Management
Risk Management in the Built Environment
Presentation 3: Qualitative Analysis and
Quantitative Risk Evaluation
Professor Simon Burtonshaw-Gunn