Project time risk analysis through simulation

An inherent weakness in the management of large scale projects is the failure to achieve the scheduled completion date. When projects are planned with the objective of time achievement, the initial planning plays a vital role in the successful achievement of project deadlines. Cost and quality are additional priorities when such projects are being executed. This article proposes a methodology for achieving time duration of a project through risk analysis with the application of a Monte Carlo simulation technique. The methodology is demonstrated using a case application of a cross-country petroleum pipeline construction project.

Forecasting and risk analysis applied to management planning and control

The aim of this research was to improve the quantitative support to project planning and control principally through the use of more accurate forecasting for which new techniques were developed. This study arose from the observation that in most cases construction project forecasts were based on a methodology (c.1980) which relied on the DHSS cumulative cubic cost model and network based risk analysis (PERT). The former of these, in particular, imposes severe limitations which this study overcomes. Three areas of study were identified, namely growth curve forecasting, risk analysis and the interface of these quantitative techniques with project management. These fields have been used as a basis for the research programme. In order to give a sound basis for the research, industrial support was sought. This resulted in both the acquisition of cost profiles for a large number of projects and the opportunity to validate practical implementation. The outcome of this research project was deemed successful both in theory and practice. The new forecasting theory was shown to give major reductions in projection errors. The integration of the new predictive and risk analysis technologies with management principles, allowed the development of a viable software management aid which fills an acknowledged gap in current technology.

Calculating the balance between water resources and water demands:an approach using risk analysis

Predicting future need for water resources has traditionally been, at best, a crude mixture of art and science. This has prevented the evaluation of water need from being carried out in either a consistent or comprehensive manner. This inconsistent and somewhat arbitrary approach to water resources planning led to well publicised premature developments in the 1970's and 1980's but privatisation of the Water Industry, including creation of the Office of Water Services and the National Rivers Authority in 1989, turned the tide of resource planning to the point where funding of schemes and their justification by the Regulators could no longer be assumed. Furthermore, considerable areas of uncertainty were beginning to enter the debate and complicate the assessment It was also no longer appropriate to consider that contingencies would continue to lie solely on the demand side of the equation. An inability to calculate the balance between supply and demand may mean an inability to meet standards of service or, arguably worse, an excessive provision of water resources and excessive costs to customers. United Kingdom Water Industry Research limited (UKWlR) Headroom project in 1998 provided a simple methodology for the calculation of planning margins. This methodology, although well received, was not, however, accepted by the Regulators as a tool sufficient to promote resource development. This thesis begins by considering the history of water resource planning in the UK, moving on to discuss events following privatisation of the water industry post·1985. The mid section of the research forms the bulk of original work and provides a scoping exercise which reveals a catalogue of uncertainties prevalent within the supply-demand balance. Each of these uncertainties is considered in terms of materiality, scope, and whether it can be quantified within a risk analysis package. Many of the areas of uncertainty identified would merit further research. A workable, yet robust, methodology for evaluating the balance between water resources and water demands by using a spreadsheet based risk analysis package is presented. The technique involves statistical sampling and simulation such that samples are taken from input distributions on both the supply and demand side of the equation and the imbalance between supply and demand is calculated in the form of an output distribution. The percentiles of the output distribution represent different standards of service to the customer. The model allows dependencies between distributions to be considered, for improved uncertainties to be assessed and for the impact of uncertain solutions to any imbalance to be calculated directly. The method is considered a Significant leap forward in the field of water resource planning.

Planning for project control through risk analysis:a case of petroleum pipeline laying

Projects that are exposed to uncertain environments can be effectively controlled with the application of risk analysis during the planning stage. The Analytic Hierarchy Process, a multiattribute decision-making technique, can be used to analyse and assess project risks which are objective or subjective in nature. Among other advantages, the process logically integrates the various elements in the planning process. The results from risk analysis and activity analysis are then used to develop a logical contingency allowance for the project through the application of probability theory. The contingency allowance is created in two parts: (a) a technical contingency, and (b) a management contingency. This provides a basis for decision making in a changing project environment. Effective control of the project is made possible by the limitation of the changes within the monetary contingency allowance for the work package concerned, and the utilization of the contingency through proper appropriation. The whole methodology is applied to a pipeline-laying project in India, and its effectiveness in project control is demonstrated.

Emerging of human factor in risk analysis of home care service

Risk management in healthcare represents a group of various complex actions, implemented to improve the quality of healthcare services and guarantee the patients safety. Risks cannot be eliminated, but it can be controlled with different risk assessment methods derived from industrial applications and among these the Failure Mode Effect and Criticality Analysis (FMECA) is a largely used methodology. The main purpose of this work is the analysis of failure modes of the Home Care (HC) service provided by local healthcare unit of Naples (ASL NA1) to focus attention on human and non human factors according to the organization framework selected by WHO. © Springer International Publishing Switzerland 2014.

Project risk management:a combined analytic hierarchy process and decision tree approach

Time, cost and quality achievements on large-scale construction projects are uncertain because of technological constraints, involvement of many stakeholders, long durations, large capital requirements and improper scope definitions. Projects that are exposed to such an uncertain environment can effectively be managed with the application of risk management throughout the project life cycle. Risk is by nature subjective. However, managing risk subjectively poses the danger of non-achievement of project goals. Moreover, risk analysis of the overall project also poses the danger of developing inappropriate responses. This article demonstrates a quantitative approach to construction risk management through an analytic hierarchy process (AHP) and decision tree analysis. The entire project is classified to form a few work packages. With the involvement of project stakeholders, risky work packages are identified. As all the risk factors are identified, their effects are quantified by determining probability (using AHP) and severity (guess estimate). Various alternative responses are generated, listing the cost implications of mitigating the quantified risks. The expected monetary values are derived for each alternative in a decision tree framework and subsequent probability analysis helps to make the right decision in managing risks. In this article, the entire methodology is explained by using a case application of a cross-country petroleum pipeline project in India. The case study demonstrates the project management effectiveness of using AHP and DTA.

Managing risk in a large rural electrification programme in India

Rural electrification projects and programmes in many countries have suffered from design, planning, implementation and operational flaws as a result of ineffective project planning and lack of systematic project risk analysis. This paper presents a hierarchical risk-management framework for effectively managing large-scale development projects. The proposed framework first identifies, with the involvement of stakeholders, the risk factors for a rural electrification programme at three different levels (national, state and site). Subsequently it develops a qualitative risk prioritising scheme through probability and severity mapping and provides mitigating measures for most vulnerable risks. The study concludes that the hierarchical risk-management approach provides an effective framework for managing large-scale rural electrification programmes. © IAIA 2007.

Risk management in build-operate-transfer projects

Construction projects are risky. A build-operate-transfer (BOT) project is recognised as one of the most risky project schemes. This scheme has been employed rather frequently in the past few decades, in both developed and developing countries. However, because of its risky nature, there have been failures as well as successes. Risk analysis in an appropriate way is desirable in implementing BOT projects. There are various tools and techniques applicable to risk analysis. The application of these risk analysis tools and techniques (RATTs) to BOT projects depends on an understanding of the contents and contexts of BOT projects, together with a thorough understanding of RATTs. This paper studies key points in their applications through reviews of relevant literatures and discusses the application of RATTs to BOT projects. The application to BOT projects is considered from the viewpoints of the major project participants, i.e. government, lenders and project companies. Discussion is also made with regard to political risks, which are very important in BOT projects. A flow chart has been introduced to select an appropriate tool for risk management in BOT projects. This study contributes to the establishment of a framework for systematic risk management in BOT projects.

Construction risk management:a quantitative approach

Conventional project management techniques are not always sufficient for ensuring time, cost and quality achievement of large-scale construction projects due to complexity in planning and implementation processes. The main reasons for project non-achievement are changes in scope and design, changes in Government policies and regulations, unforeseen inflation) under-estimation and improper estimation. Projects that are exposed to such an uncertain environment can be effectively managed with the application of risk numagement throughout project life cycle. However, the effectiveness of risk management depends on the technique in which the effects of risk factors are analysed and! or quantified. This study proposes Analytic Hierarchy Process (AHP), a multiple attribute decision-making technique as a tool for risk analysis because it can handle subjective as well as objective factors in decision model that are conflicting in nature. This provides a decision support system (DSS) to project managenumt for making the right decision at the right time for ensuring project success in line with organisation policy, project objectives and competitive business environment. The whole methodology is explained through a case study of a cross-country petroleum pipeline project in India and its effectiveness in project1nana.gement is demonstrated.

Risk based decision support system for effective implementation of projects

Conventional project management techniques are not always sufficient to ensure time, cost and quality achievement of large-scale construction projects due to complexity in planning, design and implementation processes. The main reasons for project non-achievement are changes in scope and design, changes in government policies and regulations, unforeseen inflation, underestimation and improper estimation. Projects that are exposed to such an uncertain environment can be effectively managed with the application of risk management throughout the project's life cycle. However, the effectiveness of risk management depends on the technique through which the effects of risk factors are analysed/quantified. This study proposes the Analytic Hierarchy Process (AHP), a multiple attribute decision making technique, as a tool for risk analysis because it can handle subjective as well as objective factors in a decision model that are conflicting in nature. This provides a decision support system (DSS) to project management for making the right decision at the right time for ensuring project success in line with organisation policy, project objectives and a competitive business environment. The whole methodology is explained through a case application of a cross-country petroleum pipeline project in India and its effectiveness in project management is demonstrated.

The board of directors, executives and risk knowledge management

Enterprise Risk Management (ERM) and Knowledge Management (KM) both encompass top-down and bottom-up approaches developing and embedding risk knowledge concepts and processes in strategy, policies, risk appetite definition, the decision-making process and business processes. The capacity to transfer risk knowledge affects all stakeholders and understanding of the risk knowledge about the enterprise's value is a key requirement in order to identify protection strategies for business sustainability. There are various factors that affect this capacity for transferring and understanding. Previous work has established that there is a difference between the influence of KM variables on Risk Control and on the perceived value of ERM. Communication among groups appears as a significant variable in improving Risk Control but only as a weak factor in improving the perceived value of ERM. However, the ERM mandate requires for its implementation a clear understanding, of risk management (RM) policies, actions and results, and the use of the integral view of RM as a governance and compliance program to support the value driven management of the organization. Furthermore, ERM implementation demands better capabilities for unification of the criteria of risk analysis, alignment of policies and protection guidelines across the organization. These capabilities can be affected by risk knowledge sharing between the RM group and the Board of Directors and other executives in the organization. This research presents an exploratory analysis of risk knowledge transfer variables used in risk management practice. A survey to risk management executives from 65 firms in various industries was undertaken and 108 answers were analyzed. Potential relationships among the variables are investigated using descriptive statistics and multivariate statistical models. The level of understanding of risk management policies and reports by the board is related to the quality of the flow of communication in the firm and perceived level of integration of the risk policy in the business processes.

Information system planning in drug service:a case study

The development of an information system in Caribbean public sector organisations is usually seen as a matter of installing hardware and software according to a directive from senior management, without much planning. This causes huge investment in procuring hardware and software without improving overall system performance. Increasingly, Caribbean organisations are looking for assurances on information system performance before making investment decisions not only to satisfy the funding agencies, but also to be competitive in this dynamic and global business world. This study demonstrates an information system planning approach using a process-reengineering framework. Firstly, the stakeholders for the business functions are identified along with their relationships and requirements. Secondly, process reengineering is carried out to develop the system requirements. Accordingly, information technology is selected through detailed system requirement analysis. Thirdly, cost-benefit analysis, identification of critical success factors and risk analysis are carried out to strengthen the selection. The entire methodology has been demonstrated through an information system project in the Barbados drug service, a public sector organisation in the Caribbean.

A sustainable supply chain study of the Indian bioenergy sector

In India, more than one third of the population do not currently have access to modern energy services. Biomass to energy, known as bioenergy, has immense potential for addressing India’s energy poverty. Small scale decentralised bioenergy systems require low investment compared to other renewable technologies and have environmental and social benefits over fossil fuels. Though they have historically been promoted in India through favourable policies, many studies argue that the sector’s potential is underutilised due to sustainable supply chain barriers. Moreover, a significant research gap exists. This research addresses the gap by analysing the potential sustainable supply chain risks of decentralised small scale bioenergy projects. This was achieved through four research objectives, using various research methods along with multiple data collection techniques. Firstly, a conceptual framework was developed to identify and analyse these risks. The framework is founded on existing literature and gathered inputs from practitioners and experts. Following this, sustainability and supply chain issues within the sector were explored. Sustainability issues were collated into 27 objectives, and supply chain issues were categorised according to related processes. Finally, the framework was validated against an actual bioenergy development in Jodhpur, India. Applying the framework to the action research project had some significant impacts upon the project’s design. These include the development of water conservation arrangements, the insertion of auxiliary arrangements, measures to increase upstream supply chain resilience, and the development of a first aid action plan. More widely, the developed framework and identified issues will help practitioners to take necessary precautionary measures and address them quickly and cost effectively. The framework contributes to the bioenergy decision support system literature and the sustainable supply chain management field by incorporating risk analysis and introducing the concept of global and organisational sustainability in supply chains. The sustainability issues identified contribute to existing knowledge through the exploration of a small scale and developing country context. The analysis gives new insights into potential risks affecting the whole bioenergy supply chain.