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 …

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

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

CONTINGENCY CALCULATION

RISK MANAGEMENT PROCESS

ISO 31000:2009, Risk Management – Principles and guidelines

Establish Context

Analyse Risks

Evaluate Risks

Treat Risks

Identify Risks

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!!!

Allocated Cost/Schedule

(TAM / BP2)

P90 Cont

P50 Cont

Estimate

Schedule

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

Schedule

SCHEDULE

Target

Allocated

(PM Budget) Escalation

Actual

availa

SCHEDULE

RD Actual

duration

Estimate at

Completion

PM Cont

available

Escl. available

Cost To

Complete (excl.

Contingency &

Escalation)

Planned (excl. Cont)

Anticipated

completion

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

PROBABILISTIC ESTIMATION PROCESS

SCHEDULE COST RISK INTEGRATION

Schedule

Inherent &

Contingent

Overall Contingency (P10, P50, P90) + Allocation across Delivery Packages

Tornado Chart

Cashflow

Wet Weather

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.

PEDRAM DANESH-MAND DIRECTOR – RISK MANAGEMENT

Pedram.DaneshMand@aquenta.com.au

+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

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

Aranda Imaichi Karachi Melbourne St Louis Total

Guard not secure/ fixed/ locked

Access around guard/ hazard not guarded

Interlock

Comparison of Risk Level for all Sites

Risk Level Percentage of Hazards Identified

High (Red) 5%

Moderate (Yellow)

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

0 20 40 60 80

% 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?

Agenda

> A brief history of rail safety and regulation

> What is risk-based regulation?

> ONRSR’s approach

> Challenges to implementation

> Benefits for rail safety

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

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

> 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

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

ONRSR’s Approach to Risk-based Regulation

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

We Administer a Risk-based Law

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

Scope of the RRM Framework

Office of the National Rail Safety Regulator

Tier 3 Decisions

Tier 2 Decisions

Tier 1 Decisions

Examples of Decisions

Tier 1 Decisions

Principal Focus of RRM Requirements e.g. Decision to accredit a rail operator

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

Risk-based to what Degree? (1)

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)

Example Risk-based Decision - Selecting National Priorities (1)

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

Example Risk-based Decision - Selecting National Priorities (2)

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

Example Risk-Based Decision - Selecting National Priorities (3)

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

National Rail Safety Risk Model

• 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

Challenges to Implementation

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

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

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

Benefits for Rail Safety

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

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

BF1 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

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

0.4 0.6 0.8 1 1.2 1.4 1.6 Out-turn Cost / Net Estimate

lative

abilit

Actual OutcomeActual Outcome Best FitRisk Model

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”

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

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

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 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

• Redundancy

• Effectiveness

• Practicability

Domino effect

• Redundancy

• Effectiveness

• Practicability

Domino effect

• 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.

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)

AASW (all active systems working)

OASI (one active system at a time is impaired)

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

Thank you

Carl Pettersson

carl.pettersson@holmesfire.com

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

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 Allocation

Contingency Controls

Risk Engineering Society (RES)Pedram Danesh‐Mand, RES NSW President

0432 041 560, res@engineersaustralia.org.au

Risk Analysis and Functional Safety in Mining

Matt Goode MIEAust CPEng FSeng (TUV Rheinland)

Is functional safety too expensive?

The Right Tools for the Job

Functional Safety

- AS4024

- AS61508

- AS61511

- AS62061

Risk Assessments

LOPA -

HAZOP -

Safety in Design

Risk Assessments

What makes the difference between good and bad risk assessments?

Risk Assessment

Risk Assessments

“We should get through everything by lunch, I have to be at the airport by 1”

Risk Assessments

“We’ve been doing this for years! It’s the same as the last one!”

Risk Assessments

“We’ve got over 85 years of experience in this room”

Rockefeller Plaza, September 1932

Risk Assessments

“We’ll cover that in a separate session”

Risk Assessments

“We’ll take a quick look at the issued for construction drawings for the shiploader”

Safety in Design

Functional Safety

- AS4024

- AS61508

- AS61511

- AS62061

Risk Assessments

LOPA -

HAZOP -

Safety in Design

Admin Buildings

Main Site

Access Road

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

Safety in Design

Safety in design is more expensive the longer you wait

Functional Safety

- AS4024

- AS61508

- AS61511

- AS62061

Risk Assessments

LOPA -

HAZOP -

Safety in Design

Functional Safety

Maybe we can throw in some extra controls?

Functional Safety

Risk Assessment

Hazard LOPA Study SRS Design Testing Maintenance

Overstated

Hazard LOPA Study SRS

Design Testing Maintenance

Missed Hazard

Understated Hazard

Functional Safety

“How much is all of this going to cost?”

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

Designing and creating a better Risk Matrix

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!

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

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.

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.

Why have a risk matrix?

A Visual communication tool that raises awareness

Quick and simple for stakeholders to interpret and

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

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

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.

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.

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)

Almost Certain

Up to 100

100X103

=103 104 105 106 107

Likely

Up to 10-1

102 10-1X104

=103 104 105 106

Possible

up to 10-2

(0.01)

101 102 10-2X105

=103 104 105

Unlikely

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

Log-log Scaling – Example

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)

Almost Certain

Up to 100

Medium High High Extreme Extreme

Likely

Up to 10-1

Medium Medium High High Extreme

Possible

up to 10-2

(0.01)

Low Medium Medium High High

Unlikely

up to 10-3

(0.001)

Low Low Medium Medium High

RareLess than

(0.0001)Low Low Low Medium Medium

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

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.

Vertical Alignment

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

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

Risks Guides and examples for Horizontal Alignment

SocialEnvironmental

Social

Economic

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.

Ideal for Value Engineering Workshops

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

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.

What does a good one look like?

o Symmetryo Diagonal lines of equal risko Colour coding for visual association

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)

Almost Certain

Up to 100

Medium High High Extreme Extreme

Likely

Up to 10-1

Medium Medium High High Extreme

Possible

up to 10-2

(0.01)

Low Medium Medium High High

Unlikely

up to 10-3

(0.001)

Low Low Medium Medium High

RareLess than

(0.0001)Low Low Low Medium Medium

Not so good

The Upside - Opportunity

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)

Almost Certain

Up to 100

Medium High High Extreme Extreme Extreme Extreme High High Medium

Likely

Up to 10-1

Medium Medium High High Extreme Extreme High High Medium Medium

Possible

up to 10-2

(0.01)

Low Medium Medium High High High High Medium Medium Low

Unlikely

up to 10-3

(0.001)

Low Low Medium Medium High High Medium Medium Low Low

RareLess than

(0.0001)Low Low Low Medium Medium Medium Medium Low Low Low

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

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

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: laurie@synchrony.net.au

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

– 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

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

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

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

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

RISK 2016

RISK ENGINEERING SOCIETY CONFERENCE

SYDNEY

18 – 20 MAY 2016

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

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”

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.”

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.

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

No confidence levels were assigned in WG3, perhaps wisely so

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

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

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

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

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

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

SUMMARY FOR POLICYMAKERS

O/H 18

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

Agenda Project Scheduling

• Activity types• Logic – Precedence Diagramming Method• Total Float – Critical Path Method• Constraints• Resources• Updating (Statusing)• 10‐Point Scheduling Best Practices

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

Fundamentals of PROJECT SCHEDULING

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

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

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

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

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

DEFINE ACTIVITIES

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

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

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?”

SEQUENCE ACTIVITIESPRECEDENCE DIAGRAMMING

METHOD (PDM)

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

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

S‐S Relationship, F‐F Relationship

DESN501

DRFT501

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

Use Activities Instead of Lags

DESN501a

DRFT501aF‐S

20DESN501b

DRFT501b

This adds activities to keep from representing work with lags. Activity durations may be longer or shorter, lags are fixed duration

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

Problem with Dangling Activities with S‐S Logic

Draft Draft Long er

Desig n Desig n Long er

Lengthening of S-S Danglers

Can Build finish before Draft

and Draft before Design?

Examples of Dangling Activities with F‐F Logic

DraftDraft Longer

Design

Build Longer

Lengthening F-F Danglers

Can Draft Start before Design

and Build start before Draft?

A Solution: S‐S and F‐F

Design

SSBase

Design Longer

Design

Predecessor Takes Longer

Successor Takes Longer

Design

Draft Longer

Closing Off Danglers, Activities Longer, Right Answers

This is OK

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

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

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

“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.

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

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

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 %

250 300 350 400 450 500

ANALYZE THE SCHEDULETHE CRITICAL PATH METHOD (CPM)

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

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

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

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

PROC 200 INSP 250

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

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

1 8 9 11

FAB 100

1412114

FINISH

Backward Pass Rule at Convergence Point

• Late finish derived from the earliest late start of its successors

4 1211 14

FINISH

FAB 100 ASSY 150

1 8 9 11

PROC 200 INSP 250

1 9 10 14

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

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

1 8 9 11

FAB 100

1412114

Total Float = 14 - 11 = 3 d

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

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

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

Free Float (continued)

87INTEG 330

FAB 100 ASSY 150

1 4 5 11

PROC 200 INSP 250

1 5 6 14

Free Float14 - 11 = 3dOnly

ASSY150 has free float of14 ‐ 11 = 3 d

Free Float (FF) and Total Float (TF)

Free Float is found on the last activity of a parallel path just before the merge point

CONSTRAINTS IN CPM

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

Finish Not Later Than Constraint Example

• Imposed finish constraint – FNLT day 11, not day 14

INTEG 330

PROC 200 INSP 250

1 9 10 14

1176-2

FAB 100 ASSY 150

1 8 9 11

111START

Negative Float

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

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

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

1287-1

FAB 100 ASSY 150

8 31 8 9 11

144START

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

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

1511102

FAB 100 ASSY 150

8 35 12 13 15

155START

“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

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”

RESOURCE LEVELING

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

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

Resource Limits and Leveling: Activity Shifting

• INSP250 shifts to Day 12 and project is delayed to day 16

PROC 200

1 9INTEG 330

INSP 250

16FAB 100 ASSY 150

1 8 9 11

STATUSTHE SCHEDULE

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?

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 %

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

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?

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

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

Scheduling Best Practices

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

http://www.gao.gov/products/GAO‐16‐89G

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

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

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

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

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

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

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

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?

BP 2: Add Activities to Avoid Lags

DESN501a

DRFT501aF‐S

DESN501b

DRFT501b

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

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

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

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

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

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

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

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

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

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)

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

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

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

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

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?

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?

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

Why do Megaprojects Fail so Often? Is this Related to Risk

Conduct Schedule Risk Analysis on Schedules, Particularly for

Large, Complex Projects

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

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

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

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

• 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

• 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

• 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

LIMITS OF CPM SCHEDULING AND THE NEED FOR

SCHEDULE RISK ANALYSIS

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

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

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

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”

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

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

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

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

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

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

Project Schedule Risk Analysis BasicsProbability Distributions and Path

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?

Risk of an Individual Activity

• Simple activity duration estimates are risky

Design Unit 1

Uniform and Triangular Distributions

215 220 225 230 235 240

Distribution (start of interval)

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

Entire Plan : Duration

215 220 225 230 235 240

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

BetaPERT and Normal Distributions

215 220 225 230 235 240

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

215 220 225 230 235 240

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

Risk Along a Contiguous Schedule Path

• Path risk is the combination of the risks of its activities

StartDesign Unit

Build Unit Finish

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

Add Duration Risk to the Schedule using Triangular Distributions

This section features Primavera Risk Analysis©, formerly Pertmaster, owned by Oracle.

Monte Carlo Simulation Results for Really Simple Schedule

29 Aug 11 18 Sep 11 08 Oct 11

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

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

Schedule Risk with Parallel PathsThe “Merge Bias”

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

Design Unit 1 Build Unit 1 Test Unit 1

Design Unit 2 Build Unit 2 Test Unit 2Finish

This Schedule has Three Parallel Paths

Each path has exactly the same structure CPM says this finishes September 3

Evidence of the Merge Bias

08 Sep 11 18 Sep 11 28 Sep 11 08 Oct 11 18 Oct 11

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

Most Likely is now Sept 21

80thpercentile is now Sept 28

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%

Each Path of the Schedule

Three Path Schedule

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.

Risk Criticality and SensitivityTornado Diagrams

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

What are the Highest‐Risk Activities?

“Critical” Unit 2 is Identified for Risk Mitigation

Units 1 & 3 are Shorter and Not Risk Mitigated

Criticality in Pertmaster

100%000002 - Start

000015 - Finish

000004 - Design Unit 1

000005 - Build Unit 1

000006 - Test Unit 1

Th ree Path ProjectCriticality Index: All tasks

Duration Sensitivity – Correlation Concept

47%000006 - Test Unit 1

Th ree Path ProjectDuration Sensitivity: Entire Plan - All tasks

Cruciality = Criticality x Sensitivity

22%000006 - Test Unit 1

Th ree Path ProjectDuration Cruciality: Entire Plan - All tasks

Gather Good Quality Risk Data

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

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

Independent Data Collection Organization

• Consider making the risk analysis activity independent of the project

Management Team

Risk Analysis

Project One

Project Two

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

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

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

A Politically‐Set Corporate Ceiling

Ceiling Amount

Risk Denied

Probabi l ity Duration

Unstated Assumptions can Lead to Underestimation of Risk

Unspoken True High Range

RecognizedHigh Range

Probabil ity Duration

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

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

Picture of Underestimating Risk

Unbiased RangeRange Anchored on Most Likely

Probabi l ity

Duration

Availability Bias can Increase the Perception of Project Risk

Original Distribution

DramaticEvent

Probabi l ity

Duration

Resulting Distribution

Resulting Distribution calculated using Bayes’ Theorem

Probabilistic Branching

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”

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

Typical Bi‐Modal Result Distribution

28 Sep 11 17 Nov 11 06 Jan 12

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

“Shoulder” is at 70%The 80% date is in the Failure Mode

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%

Correlation between Activity Durations

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‐

Software Designing

Software Coding

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

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

Install Correlation Coefficients between Activity Durations

Effect of Correlation is to Increase the Standard Deviation along the Path

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%

High correlation subtracts 5 days at the P‐20

Not much change near the mean

High correlation adds 5 days at the P‐80

Risk Driver Approach to Schedule RiskThe Basic Building Blocks are the Risks

Identified in the Risk Register Fill out the Risk Register during Interviews

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

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

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

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

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

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

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

Introducing the Gas Production Platform Schedule

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%

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!

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

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

Sample Risk Mitigation Entry

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

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

Questions?

David T. Hulett, Ph.D., FAACEHulett & Associates, LLC

Los Angeles, CA+1 310 476‐7699

david.hulett@projectrisk.com / www.projectrisk.com

Advanced Project Scheduling and Schedule Risk Analysis Workshop

David T. Hulett, Ph.D. FAACEHulett & Associates, LLC

Clarifying Common Misuses of Safety Risk Language

Jim Whiting

risk@workplaces pty ltd

jim@workplaces.com.au

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

Riscus - "Difficulty to avoid in the sea."

Hindi Punjabi

Indonesian

/ Malay

Korean Chinese

Japanese Thai

Filipino Vietnamese

Javanese

Australian

Australian definition of risk

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

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

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

Tolerable Risk

See full list of Appendix 1 in Paper

available from jim@workplaces.com.au

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

Spectrum of Risk

Safety Threshold (eg speed limit)

Safe (zero risk) Unsafe ( risk )

Definition of “SAFE”

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”

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

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 !!!!!

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

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

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

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

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

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

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 !!!

Better risk understanding NOT more risk taking

workplacesrisk @ pty ltd

Thank You

Jim Whiting

risk@workplaces pty ltd

jim@workplaces.com.au

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

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

Project schedules

Weather risk

Weather contingency in schedules

Schedule risk application

Assessment of weather risk

INTRODUCTIONINTRODUCTION

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)

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

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)

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)

Critical Paths

Activities/TasksDrivers to achieving completionCritical activities and dependenciesNear-criticality

Time Phasing

CalendarsActivitiesResourcesCosts

ASSESSING WEATHER RISKASSESSING WEATHER RISK

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

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

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

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

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

APPROVALS

Contract Award

DESIGN

ZONE 1 CONSTRUCTION

ZONE 2 CONSTRUCTION

ZONE 3 CONSTRUCTION

Traffic Open

Project Completion

EXAMPLE (cont)EXAMPLE (cont)

Rainfall data: number of mean days over specified quantity of rain

EXAMPLE (cont)EXAMPLE (cont)

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

Weather risk as an inherent risk, is added to base schedules using horizontal contingency allocation:

JYEAR 1

APPROVALS

Contract Award

DESIGN

ZONE 1 CONSTRUCTION

ZONE 2 CONSTRUCTION

ZONE 3 CONSTRUCTION

Traffic Open

Project Completion

Traffic Open

Project Completion

+9 months

EXAMPLEEXAMPLE

Returning to the previous example:

Apply “Wet” calendars to schedule activities

SCHEDULE RISK APPLICATIONSCHEDULE RISK APPLICATION

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

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

Method One – Periods of Non Work

Method Two – Windows of Downtime

PROBABILISTIC CALENDARS (cont)PROBABILISTIC CALENDARS (cont)

Resultant Probabilistic Calendars

Y1 Y2 Y3 Y4

Earthworks

Superstructure

PROBABILISTIC CALENDARS (cont)PROBABILISTIC CALENDARS (cont)

Result of Modelling Weather Risks only

Dry Completion date of 23‐Sep‐Y3

P50 of 27‐Feb‐Y4 (vs “wet” 26‐Jun‐Y4)

EXAMPLEEXAMPLE

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

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

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

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

QUESTIONS ? &

THANK YOU

QUESTIONS ? &

THANK YOU

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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

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

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

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

P2A Structural works

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

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

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 Solutionsgwruck@gntprojectsolutions.com.au

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?

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

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.

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.

THE PROJECT DATA SPECIALISTSWhy the Devil IS the Detail?

DIMENSIONS

WBS OBS Commodity

TRANSACTIONS

CONSUMERS / PRODUCERS

SOURCES USES

Work PackPerson

BudgetForecast

CommitmentInvoice Earned Transmittal

TimesheetProgress

DiaryInspection

Delivery

Accounting

Schedule

Doc Control

Email Social MediaInventory

3D ModelEstimating Work Flow

EquipmentArea

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

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.

THE PROJECT DATA SPECIALISTSCommercial Constraints• Incentive schemes often drive unexpected behaviours

• Can introduce vast complexities to managing even a simple contract

Sharing Information and Collaboration

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?

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

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.

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.

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.

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

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.

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”

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

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

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

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.

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.

THE PROJECT DATA SPECIALISTSThankyouGreg WruckGNT Project Solutions(0433) 950 498gwruck@gntprojectsolutions.com.auwww.GNTProjectSolutions.com.au

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

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

Archeo Guida Roma. The great fire of Rome. [Online] Available from: http://www.archeoguidaroma.com/blog/great-fire-rome

- Great fire of London, 1666• Bakery fire• Tight building distances• ~80% of city damaged• Manual fire suppression pump

Wikipedia. The great fire of London. [Online] Available from: https://en.wikipedia.org/wiki/Great_Fire_of_London

- 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

Wikipedia. Great Boston fire. [Online] Available from: https://en.wikipedia.org/wiki/Great_Boston_Fire_of_1872

- 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

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

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

BRE. Effectiveness of sprinklers in residential premises. [Online] http://www.bre.co.uk/page.jsp?id=422

- 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

ABCB. Building Code of Australia. [Online] http://www.abcb.gov.au/Resources/Publications/NCC/NCC-2016-Volume-One.

- 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

Wikipedia.. British Rail Class 378. [Online] https://en.wikipedia.org/wiki/British_Rail_Class_378

- SFAIRP and ALARP• So Far As Is Reasonably Practicable• As Low As Reasonably Practicable• Rail infrastructure

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?

Meacham, B. J. A risk informed performance based approach to building regulation. [Online] https://www.researchgate.net/publication/260386688

Risk and Fire Engineering: Future

Future improvement to risk based design

Methodology for risk informed design

Advanced modelling of consequences

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

General stakeholders’ view of risk

Safe Unsafe

Informed stakeholders’ view of risk

Safer Riskier

Acceptable risk managed to SFAIRP

Advancing the acceptance of the risk based approach

beyond engineers

Advancing the acceptance of the risk based approach

beyond engineers

LegislationLegislation EducationEducation SimplificationSimplification

- 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?

Reference not availableMalarden University Sweden. The Metro Project. [Online] http://www.metroproject.se/Pubs/METRO_report%20(final).pdf

- 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

- 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

Convoluted Conciseor

- 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

In summary

To advance the acceptance of risk based design

Legislation, Education and Simplification.

Thank YouAcknowledgementAndy Petrie (Network Rail Consulting)

Edmund Ang

edmund.ang@aecom.com

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?

#36882857 12

Contact

Goran GelicSenior AssociateT +61 2 8241 5659E ggelic@mccullough.com.au

RISK2016

Right Level of Contingency for a Complex Project

Presenter: SANTHOSH THERAKAM

20 05 2016

Agenda

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

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

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20106,000

10,000

12,000

14,000

Al l Ords

Dow Jones CLE

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

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

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

• 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

E: solutions@r4risk.com.au

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…

Where are existing pipelines?

In our backyards…

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

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

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.

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

5c. Risk Assessment Methodology

5d. Risk Assessment Methodology

5e. Risk Assessment Methodology

* Subject to Copyright – available from SAI Global website

4 Pillars life-cycle approach…

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

Presented by

Marcus Punch

CPEng, NER, RPEQ

Marcus Punch Pty. Ltd

Risk and Reliability

Mobile: +61 (0)432168849

Email: marcus@marcuspunch.com

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.

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.

Workers &

Others

practicable’.

Duty owed to

themselves and each

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

Reasonable

Knowledge of

Hazard / Risk &

Safeguards

Availability and

Suitability of

Safeguards

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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

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

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.

Directors &

Senior

Management

Officer/s of a PCBU

Workers &

Others

practicable’.

Duty owed to the

PCBU – exercise

‘due diligence’

Duty owed to

themselves and each

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

Target

Hazard

Identification

Source: Adapted from AS61508.5

Risk matrices

and numerical

‘tolerable risk’

targets are set

organisation /

industry / etc....

Initial

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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

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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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

Reasonable

Knowledge of

Hazard / Risk &

Safeguards

Availability and

Suitability of

Safeguards

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Think Control, Not (Level of) Risk!

Source: Adapted from

AS/NZS ISO31000.

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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

Who Is a Risk Engineer ?

II guess I should have defined the job a bit better

We actually would have preferred a

tunnel

The engineer told me he’d done one of these before.

Engineering

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 ?

The Bow-Tie Engineer

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

SIL Continuous Control

Probability of dangerous

Failure/ Hour

(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

Figure A-1: Deliberate Safety Risk Management Process

Infrastructure

Transport

Chemical

Bio Medical

Manufacture

Agricultural

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

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

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

ineeri

Handover & Operations - Life

Review & Audit of Risk

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

Safety Case StudiesReview & Audit of Risk

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

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

System Review

Analysis

Analysis/Review

Options

Assessment

Social & Change

Management Review

Crisis Management

Maintenance &

(HAZOP)

Assset Management &

Assessments

Operability(CHAZOP)

Assessments

Environmental Case

Dang. Goods

Environment

Management

Implementation

Review & Audit

Risk Management

System

Dangerous Goods

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

ReviewSafety Case

Assessments

ineeri

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

Environmental

Management Plan

Project Screening

Business

Continuity &

Disaster Recovery

Preliminary Hazard

Analysis

Review & Audit Risk

Management System

Project Environment

Protection Strategy

(PEDS)Environmental

Management System

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

System Review

Analysis

Analysis/Review

Options

Assessment

Social & Change

Management Review

Crisis Management

Maintenance &

(HAZOP)

Assset Management &

Assessments

Operability(CHAZOP)

Assessments

Environmental Case

Dang. Goods

Environment

Management

Implementation

Review & Audit

Risk Management

System

Dangerous Goods

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

ReviewSafety Case

Assessments

ineeri

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

Environmental

Management Plan

Project Screening

Business

Continuity &

Disaster Recovery

Preliminary Hazard

Analysis

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

Dynamic Risk Profile

Level of Risk

Dynamic Risk

Innovation

Often used

Easily understood

Wrongly used

Wrong results

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

Dynamic Risk Profile: Plastic

Recycling Integration of Risk

• Quality of multiple

inputs

• Specifications of

potential products

• Energy Consumption

• Corporate Risk Levels

• Flexibility of machinery

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

System Review

Analysis

Analysis/Review

Options

Assessment

Social & Change

Management Review

Crisis Management

Maintenance &

(HAZOP)

Assset Management &

Assessments

Operability(CHAZOP)

Assessments

Environmental Case

Dang. Goods

Environment

Management

Implementation

Review & Audit

Risk Management

System

Dangerous Goods

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

ReviewSafety Case

Assessments

ineeri

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

Environmental

Management Plan

Project Screening

Business

Continuity &

Disaster Recovery

Preliminary Hazard

Analysis

Review & Audit Risk

Management System

Project Environment

Protection Strategy

(PEDS)Environmental

Management System

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

System Review

Analysis

Analysis/Review

Options

Assessment

Social & Change

Management Review

Crisis Management

Maintenance &

(HAZOP)

Assset Management &

Assessments

Operability(CHAZOP)

Assessments

Environmental Case

Dang. Goods

Environment

Management

Implementation

Review & Audit

Risk Management

System

Dangerous Goods

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

ReviewSafety Case

Assessments

ineeri

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

Environmental

Management Plan

Project Screening

Business

Continuity &

Disaster Recovery

Preliminary Hazard

Analysis

Review & Audit Risk

Management System

Project Environment

Protection Strategy

(PEDS)Environmental

Management System

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

System Review

Analysis

Analysis/Review

Options

Assessment

Social & Change

Management Review

Crisis Management

Maintenance &

(HAZOP)

Assset Management &

Assessments

Operability(CHAZOP)

Assessments

Environmental Case

Dang. Goods

Environment

Management

Implementation

Review & Audit

Risk Management

System

Dangerous Goods

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

ReviewSafety Case

Assessments

ineeri

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

Environmental

Management Plan

Project Screening

Business

Continuity &

Disaster Recovery

Preliminary Hazard

Analysis

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

Which is Dynamic which is Static ?

Risk Engineering Society RISK 2016 Conference

Leadership & Management

Transcript of Risk Engineering Society RISK 2016 Conference

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