Session F2D3
Technical Risk Management
As the Connectivity in a Capstone Design Course
Pete Hylton
Mechanical Engineering Technology Department
Purdue School of Engineering and Technology
Indiana University / Purdue University at Indianapolis
Abstract
Many high-tech industries have recently begun to institute Technical Risk Management
(TRM) as a part of major design efforts. The US Department of Defense has started
requiring that TRM procedures be defined in proposals and that all major reviews include
a risk management section. Even where TRM is not required by government edict, many
businesses are instituting their own internal requirements for it. This means that today’s
engineering and technology graduates would benefit from an exposure to TRM processes.
But there is even more of an advantage to introducing this in the classroom. Properly
applied, Technical Risk Management can be used in a Capstone Design Course as a
means of tying together the various concepts that have been studied during the entire
college career. This connectivity can be a welcome addition to such a course. The TRM
process consists of four phases, Risk Identification, Risk Assessment, Risk Mitigation,
and Risk Management. The Risk Mitigation phase forces the design team into critical
problem solving mode early in the program, avoiding last minute panics. The mitigation
steps that must be developed, tie together the topics that have been studied in courses
leading up to the Capstone Design Class. This process can be tailored to the individual
curriculum in a relatively straight-forward manner, making it applicable to all technical
programs.
Introduction
Before joining the academic community, the author participated in several aerospace
programs which utilized Technical Risk Management (TRM) processes. The benefits to
the programs in terms of time savings, and resource allocation were remarkable. Lewis
Branscomb expressed it well in the forward to a government sponsored paper entitled
Managing Technical Risk,1 when he said “ The risks associated with science based
commercial innovations are real and often hard to quantify and circumscribe. These risks
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
contribute to business failures, but more importantly to underinvestment in the early
stages of research and to opportunities foregone.” Although it is generally the high-tech
industries that have begun to implement TRM processes, the benefits should be
applicable to any industry, regardless of level of technology. Early identification,
assessment, and mitigation of program risks, greatly reduces the chance of failure.
Once he began teaching full time, one of the classes that the author was responsible for
was the Capstone Design Class for his department. During the course of the first
semester, it became obvious that the students would benefit from development of some
sort of connectivity between all the various topics that they had studied in the four years
leading up to their last semester. TRM was an obvious mechanism for accomplishing
this. Each semester since, the author has introduced TRM concepts in the class, and has
required the design teams to perform a full technical risk analysis of their design project.
This has forced them to recall material from their previous classes and integrate it into
both their design projects and their design review presentations.
Thus the students leave their final semester with two things. They have a better
understanding of the inter-related nature of the various topics they have studied for four
years, and how these topics fit into the overall design effort of a new project. They also
have exposure to a new concept which is gaining popularity in the industrial
environment, thus making them more marketable upon graduation.
Implementation Strategies
Regardless of school or curriculum, TRM can be integrated easily into any Capstone
Design Course. The TRM process consists of four phases, Risk Identification, Risk
Assessment, Risk Mitigation, and Risk Management. The Risk Identification phase will
cause students to look at their design and evaluate all possible modes of failure. The Risk
Assessment phase helps students to evaluate how much risk each possible failure poses to
the project. This leads to the prioritization of the various analyses and design
modifications required for success. The Risk Mitigation phase leads the students into
critical problem solving. While they probably would have gotten there anyway, all too
often it would have been at the last minute and created ensuing panics. By using TRM,
they are forced into problem solving mode earlier in the project, thus avoiding the panic
mode. The steps developed in the risk mitigation plan will be driven by the student’s
course of study. However, the concepts are equally viable for mechanical design,
computer software development, or planning a banquet. The fourth step of the TRM
process, is Risk Management. In the real world, this is actually the longest step, because
it involves following through with the mitigation plan, and ensuring that the risk is
actually reduced. This is the one portion of the process that cannot be effectively
demonstrated in the classroom, since it covers an extended period of time. However, it
must be impressed upon the student, that without a follow-through to completion, the first
three steps are wasted.
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
Risk Identification
It is never too early in a design project to identify a potential risk. Thus the author makes
his design teams to perform a risk identification almost immediately after they arrive at a
basic design concept. A team brainstorming session is a good way to begin. Each
member of the team should try to objectively evaluate possible failure modes. All those
which are identified should be treated as a valid risk to the project during the
brainstorming. Furthermore, no effort should be made to determine relative importance
or to design new solutions to eliminate the risks at this time. After the initial risk
identification, the team should continue to consider any new risks that come up as the
project progresses as a product of detailed design work or analysis.
Risk Assessment
Forcing the design team to take a hard look at possible failure modes is a good move in
and of itself. But which ones are the most important? In industry it is important to
determine which risks need to have resources allocated to them first. This is done using a
Risk Assessment, or scoring system. Each risk that has been identified is considered for
its likelihood and its consequence.
Likelihood is the probability that the failure might actually occur. These probabilities
will have to be educated guesses based by the team members. Although Kumamoto and
Henley 2 base their approach to risk likelihood on probabilistic design calculations, they
also recognize that, “Unfortunately, the likelihood is not always exact; probability,
percentage, frequency, and ratios may be based on subjective evaluation. Verbal
probabilities such as rare, possible, plausible, and frequent are also used.” In the
classroom, it will be necessary to estimate the probabilities. For the example, the author
recommends that his students use five subjective graduations (low, minor, moderate,
significant, high).
Next the impact, or consequence should be determined. Consequences are even harder
than probabilities to relate to hard numbers. Again Kumamoto and Henley 2 say that
“verbal and ambiguous terms such as catastrophic, severe, and minor may be used
instead of quantitative measures.” Consequences definitely need to be tailored to the
particular project. The consequences associated with a mechanical effort such as a bridge
design are greatly different from the consequences of failure in a software routine.
However, virtually any project will have some kind of impact in the following categories:
•
•
•
Budget Impact
Schedule Impact
Technical Effort Impact
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
Figure 1. Risk Assessment Scoring Matrix
Risk Scoring Matrix
for Quantification
.3
.5
.7
.8
.9
.2
.4
.6
.7
.8
.2
.3
.5
.6
.7
.1
.3
.4
.5
.6
.1
.2
.3
.5
.6
High
Sig
Probability of
Occurrence Mod
(Po)
Min
Low
Legend
High
Mod
Low
Low
Min
Mod
Sig
High
Consequence of Occurrence
(Co)
In order to prioritize which risks need attention first, the previously discussed
probabilities and consequences must be reduced to a Risk Score via the scoring matrix
shown in Figure 1. This matrix can also be tailored to specific projects, but in general,
risks with both high probability and high consequence receive the highest risk score. The
scoring matrix quantifies the risks in a way that allows them to be prioritized and it
allows them to be categorized into three simple and easily comprehensible levels. These
levels (High, Medium, and Low) are usually color coded (Red, Yellow, and Green) in
industry as a means of highlighting which risks are the biggest concern. This color
coding seems like a silly oversimplification to most engineers. But E.L. Jarrett explains
that the corporate executive is the member of the organization which deals ultimately
with risk decisions, and “even if it were possible to develop complex representations of
risk accurately, it is difficult for the executive to deal with them. Instead, the executive is
able to deal with a few scenarios and possible cases, and only with three general levels of
conceptual risk associated with them: High Risk, Medium Risk, and Low Risk.” 3
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
Risk Mitigation Plans
Developing a Risk Mitigation Plan is the most useful and challenging step. The design
team must plan and schedule a series of steps that will reduce the high risk items to low
risk scores. This is the step where the team must plan a course of action that reduces the
risk to acceptable levels. This forces the use of problem solving skills which are
frequently underdeveloped in college students. In a Capstone Design Course, this is the
stage that can be used to achieve connectivity between many of the core course topics
which have preceded the Senior Design class. In a mechanical curriculum, concepts from
Statics, Dynamics, Strength of Materials, Materials, Computer Analysis,
Thermodynamics, Fluids, Instrumentation, and Kinematics can all be connected. In an
electrical curriculum the concepts and courses would be different, but nonetheless, it is
possible to tie such issues as hardware, software, controls, and interfaces together.
Risk Management
The fourth and final stage of the process is the actual management of the risks.
Identifying, Assessing, and Mitigation Planning are meaningless if the plans are not
followed to completion, ensuring that each step is completed. Students will not be able to
follow this portion all the way to completion, but should execute all the steps that are
consistent with the extent of the design effort in which they are involved.
Example
The author typically models the Risk Management process to the students by walking
through an example from the aerospace industry, involving the design of a large jet-thrust
directing vane that serves as a control surface for a vertical take-off aircraft.
Identification
First, the uses and operation of the vane must be described to the students. Then the
students are afforded the opportunity to brainstorm risks associated with the vane. One
of the risks that always arises is vane failure.
Risk Assessment
Since failure of the vane means loss of thrust directional control in vertical take off mode,
it has potentially catastrophic effects for the aircraft. And, since the students know
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
nothing about the design of the vane, they must assess it as having a fairly high
probability of occurrence at the outset. This places the vane failure risk well into the red
portion of the scoring matrix, thus assuring that it must receive immediate attention and
resources.
Risk Mitigation
At this point the professor and students jointly develop a series of risk mitigation steps,
based on concepts that the students are familiar with from their course work. Beginning
steps involve estimating loading on the vane using concepts from Statics, then
performing simple hand calculations for stress and deflection from Strength of Materials
and comparing these calculations against data from their Materials course, thus tying
together these three classes. If the resulting assessment predicts that the component will
survive, then there is a sound basis for lowering the probability of failure, thus moving in
a positive direction on the risk matrix. However, since these calculations are only
preliminary, due to their approximate nature, the amount of reduction in risk is limited.
Next, the students are asked to consider how the impact of such a failure can be
evaluated. Fluid Mechanics and Controls issues can be drawn into the effort in an
attempt to determine if complete loss of aircraft is likely in the event of failure. If this
study indicates that the loss of airframe is less likely than initially feared, then the
severity of consequence can be reduced, again moving toward the green part of the
matrix. After that, concepts from CAD modeling and FEM analysis can be drawn-in to
show how better stress results could be generated. If this shows the same promising
results that the hand calculations showed, then confidence is even higher, and the
probability of failure further reduces. Finally, the students can use what they learned in
Instrumentation class to develop plans for verifying stresses under actual testing, which
could bring the project well into the green portion of the assessment matrix. Although
other curriculums would have far different examples, it would be relatively easy to
envision similar examples for any technical design project.
Risk Management
Unfortunately, it is not possible to follow this step through to completion due to the time
constraints of a semester long course. Nonetheless, it is important that students
understand that unless this step is followed to completion, there is no gain.
Conclusion
The concepts of Technical Risk Management can be easily incorporated into a Capstone
Design Class yielding two major benefits. First, the students must pull together concepts
from a variety of classes in order to execute the TRM process. Secondly, they end their
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education
university career knowing the concepts of TRM which gives them another marketable
skill when entering the growing number of industries where Technical Risk Management
is becoming a mandatory part of the design process.
References
1.
2.
3.
Branscomb, Lewis, et al. Managing Technical Risk, US Department of Commerce, NIST GCR
00-787, 2000.
Kumamoto, Hiromitsu & Ernest Henley. Probabilistic Risk Assessment and Management for
Engineers and Scientists. IEEE Press, 1996, p 2-22.
Jarrett, E.L. “Effect of Technical Elements of Business Risk on Decision Making,” Managing
Technical Risk, US Department of Commerce, NIST GCR 00-787, 2000.
PETE HYTON
Mr. Hylton currently serves as an Assistant Professor of mechanical engineering technology for the Purdue
School of engineering and Technology at Indiana university / Purdue University at Indianapolis. He has
25 years of experience in the aerospace industry in the areas of system dynamics and project design
leadership.
Proceedings of the 2005 ASEE Gulf-Southwest Annual conference
Texas A&M University-Corpus Christi
Copyright © 2005, American Society for Engineering Education