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  3. How is the pandemic affecting Australia and other nations (from a risk engineering perspective)? What is the difference between individual and societal risk and how does each relate to the pandemic response? How are governments balancing the economic and public health risks? What about a long term plan including economic recovery? What is outrage risk and how can it be managed? How long will the restrictions need to be in place? What risk management/ risk engineering tools and techniques are useful during the crisis? What risk management procedures should be in place for engineering workplaces? How can engineers can help people live and work more safely and productively during the crisis and recovery? Will COVID-19 change the way we do risk engineering?
  4. AS/NZS ISO 31000:2018 defines ‘risk’ as “the effect of uncertainty on objectives” and ‘risk management’ as “coordinated activities to direct and control an organization with regard to risk”. Therefore it is implied that ‘engineering risk’ is the effect of uncertainty on engineering objectives. If we accept that risk engineering is a specialised form of risk management, then to be consistent with ISO 31000, ‘risk engineering’ could be defined as coordinated activities to direct and control an organization with regard to engineering risk. The key advantages of defining risk engineering in this way is that we do not need to redefine ‘engineering’ and we remain consistent with ISO 31000 terminology.
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    Speaker - David Skegg Synopsis Resilience is often defined in the context of how a “system” behaves to recover from an abnormal circumstance, but resilient performance is more than that. A system is said to perform in a manner that is resilient when it can sustain required operations under both expected and unexpected conditions, by adjusting its functions prior to, or following, events (changes, disturbances, and opportunities). Resilience Engineering (RE) looks for ways to enhance the ability of systems to succeed under varying conditions. Resilience is not a single quality as such, and a system cannot be typified as “resilient” – but it is possible to describe the system’s performance as being resilient in a defined context. Since resilience refers to something that a system does rather than to something that a system has, it is not meaningful to propose a single or simple ‘measurement of resilience’ or even to refer to 'levels of resilience'. But it is possible to consider the extent to which each of the four potentials that provide the basis for resilient performance are present in, or supported by, the system. About the Speaker David Skegg has a Master’s degree in Safety science, and recently as Teaching Scholar with CQUniversity at the Accident Forensics laboratory in Bundaberg. Previously with Clyde, Babcock-Hitachi as Manager HSE, and Aurora Energy (Tamar Valley) Pty Ltd [AETV] as Manager, Systems and Compliance, David has been associated with successful significant projects over many years, following his senior management experience with an engineering consultancy. David’s international work has involved short course training to senior managers, especially in the Gulf Cooperative Countries (GCC) of Saudi Arabia, and the Emirates. He has been a Director of JAS-ANZ, and has been a Special Advisor to the Regional Director of the World Health Organisation.
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    During today's webinar on Australian Capital Projects – Risk Management, Project Controls and COVID-19 Pedram Danesh-Mand mentioned some useful references for calculating contingency and escalation in projects. I've posted them here for easy reference. Risk Engineering Society Contingency Guideline: https://rebok.engineersaustralia.org.au/search/?q=contingency&quick=1 Australian Government Cost Estimation Guide: https://investment.infrastructure.gov.au/about/funding_and_finance/cost_estimation_guidance.aspx Pedram also mentioned some guideline for escalation from the AACEI, which he recommended as a secondary reference for Australian projects. The full documents are only accessible to AACE members, but links to samples are below: http://web.aacei.org/docs/default-source/toc/toc_58r-10.pdf https://web.aacei.org/docs/default-source/toc/toc_68r-11.pdf?sfvrsn=4
  7. During today's webinar on Australian Capital Projects – Risk Management, Project Controls and COVID-19 Pedram Danesh-Mand mentioned some useful references for calculating contingency and escalation in projects. I've posted them here for easy reference. Risk Engineering Society Contingency Guideline: https://rebok.engineersaustralia.org.au/search/?q=contingency&quick=1 Australian Government Cost Estimation Guide: https://investment.infrastructure.gov.au/about/funding_and_finance/cost_estimation_guidance.aspx Pedram also mentioned some guidelines for escalation from the AACEI, which he recommended as a secondary reference for Australian projects. The full documents are only accessible to AACE members, but links to samples are below: http://web.aacei.org/docs/default-source/toc/toc_58r-10.pdf https://web.aacei.org/docs/default-source/toc/toc_68r-11.pdf?sfvrsn=4
  8. Introduction Over the past 20 years, processes have been developed to identify and manage risks in complex projects to implement risk-based approaches for better cost and schedule estimation. However, these processes generally treat cost and schedule separately instead of integrating them in one model. Integrating cost and schedule is highly relevant as schedule delays are often the root cause of severe cost overruns. Process The process used for developing an integrated cost and schedule model is: The base cost estimate is reviewed, subjected to uncertainties and integrated into the Work Breakdown Structure (WBS) Identified risks are assessed (probable cost & time impact) and integrated into the WBS and construction schedule Risks are assigned to tasks in the project’s schedule. Subsequently, completion date, critical paths and delays due to risks are simulated (using Monte Carlo simulation) Cost impacts due to time delays are calculated with time-related costs and integrated into the WBS Project Cost including uncertainty is available at all WBS levels and for all cost components. This process is summarised in the diagram below. Diagram courtesy of Taylor Burns, RiskConsult, GmbH Sources The information on this page was primarily sourced from: Text provided by Taylor Burns, Project Engineer, RiskConsult, GmbH Peer review conducted by Pedram DaneshMand, Director, Project Risk Consulting, Audit, Assurance & Risk Consulting, KPMG CEVP-RIAAT Process—Application of an Integrated Cost and Schedule Analysis by Philip Sander and Martin Entacher from RiskConsult and John Reilly from John Reilly International.
  9. Introduction The Cost Estimation and Validation Process (CEVP) is a process used to address the common concerns associated with large complex projects. These include: Why do project costs seem to always go up? Why can’t the public and/or private owners be told exactly what a project will cost? Why can’t projects be delivered at the cost quoted at the start of the project? CEVP opens the 'black box' of estimating, ensures cost transparency, and provides a basis for senior management decisions. Process In CEVP, estimates are comprised of two components: the base cost component and the risk component. Base cost is defined as the planned cost of the project if everything materialises as planned and assumed. The base cost does not include contingency but does include the normal variability of prices, quantities and like units. Once the base cost is established, a list of risks is identified and characterised (including both opportunities and threats, and listed) in a risk register. This process is shown in the diagram below, which is conducted according to the following principles: bring project and CEVP team (including subject matter experts) together in workshops promote openness to risks which may occur (culture of realism without cognitive bias <link>) create mutual understanding of the project integrate uncertainties <link> in all phases create a clear project structure which includes base cost, risk and escalation. Diagram courtesy of Taylor Burns, RiskConsult, GmbH This risk assessment replaces general and vaguely defined contingency with explicitly defined risk events that include the associated probability of occurrence plus impact on project cost and/or schedule for each risk event. Risk is usually developed in a CEVP Cost Risk Workshop. The validated base cost, base variability and the probable consequence of risk events are combined in a simulation model (such as RIAAT) to produce an estimated range of cost and schedule, with probabilities of achieving a particular cost or schedule outcome. The output is a rich data set of probable cost and schedule, potential impact of risk events, ranking of risks, and risk impact diagrams. Outputs An example of the probabilistic cost outputs can be seen in the diagram below. Note that similar S-Curves can be derived for schedule. The three S-Curves shown below are made up of the following cost components: Base cost: the cost if “all goes according to plan” without contingencies Uncertainty cost: the variability of prices, quantities and time frames Risk cost: the cost resulting from threats and opportunities that might occur Escalation cost: additional costs resulting from inflation Diagram courtesy of Taylor Burns, RiskConsult, GmbH As shown in the diagram above, once uncertainty, risk cost and escalation are considered through the CEVP process, the probability of the originally budget not being exceeded is only 20 per cent. Sources The information on this page was primarily sourced from: Text provided by Taylor Burns, Project Engineer, RiskConsult, GmbH Peer review conducted by Pedram DaneshMand, Director, Project Risk Consulting, Audit, Assurance & Risk Consulting, KPMG CEVP-RIAAT Process—Application of an Integrated Cost and Schedule Analysis by Philip Sander and Martin Entacher from RiskConsult and John Reilly from John Reilly International.
  10. RAMS RAMS (Reliability, Availability, Maintainability, Safety) is a management process used to avoid failures during the planning stage of projects. RAMS Management ensures that systems are defined, risk analyses are performed, hazards are identified and detailed reviews and safety cases are executed and reported. One specific goal is to provide hard evidence to achieve authorisation for operations. These terms can be summarised as follows: Reliability – as ability to perform a specific function and may be assessed as design reliability or operational reliability Availability – as ability to keep a functioning state in the given environment Maintainability – as ability to be timely and easily maintained (including servicing, inspection and check, repair and/or modification) Safety – as ability not to harm people, the environment, or any assets during a whole life cycle. Fault Tree Analysis The Fault Tree Analysis (FTA) is the core of probabilistic safety value analysis. The FTA depicts the functional system and quantifies all relevant factors to evaluate reliability, availability, maintainability and safety of the complete system. All components of a system will be evaluated systematically and analysed according to their roles and functions within the system. Starting at the Top Event (System Failure) all functions, and the assigned failure status of the system’s components are evaluated. This results in a Boolean Model (Fault Tree) which is quantified by the characteristic reliability values. The logical linking of events is based on the following graphical elements as shown in the diagram below. Diagram courtesy of Taylor Burns, RiskConsult, GmbH Example results After completing the analysis, the following example information (see diagram below) can be used to help improve the safety of the system. In the below example it was found that due to an error in a braking system that the reliability was only 78 per cent. By taking a low risk tolerant approach and using the VaR95 value we can determine that the down time within one year will be less than 6.5 hours, and in this case the corrective maintenance costs would be in the order of $6200. For the full example please see the following link. Diagram courtesy of Taylor Burns, RiskConsult, GmbH Analysing the example braking system for safety of a period of one hour, we can see the system has a high level of safety, with the average probability of a dangerous failure per hour being 4.8E-11. Diagram courtesy of Taylor Burns, RiskConsult, GmbH Sources The information on this page was primarily sourced from: Text provided by Taylor Burns, Project Engineer, RiskConsult, GmbH Peer review conducted by Pedram DaneshMand, Director, Project Risk Consulting, Audit, Assurance & Risk Consulting, KPMG RiskConsult RIAAT Software RAMS Analysis webpage, 2019.
  11. Introduction Probabilistic Safety Value Analysis is a process that uses the Reliability, Availability, Maintainability and Safety (RAMS) process combined with Fault Tree Analysis (FTA). It is designed to achieve the following objectives: evaluate the soundness of a system check if all safety requirements are fulfilled (using RAMS) create a better understanding of context, causes and effects evaluate critical failure combinations (Minimal Cut Sets) provide a description of potential for optimisation via comprehensive assessment support probabilistic methods to model uncertainty Outcomes Based on the results of probabilistic safety value analysis, measures can be taken to optimise the system such as: optimisation of the system structure creation of additional redundancies replacement of particularly susceptible components with more robust components installation of monitoring systems to detect faults at an early stage adjustment of maintenance intervals and scope avoidance of common cause failures. Sources The information on this page was primarily sourced from: Text provided by Taylor Burns, Project Engineer, RiskConsult, GmbH Peer review conducted by Pedram DaneshMand, Director, Project Risk Consulting, Audit, Assurance & Risk Consulting, KPMG RiskConsult RIAAT Software RAMS Analysis webpage, 2019.
  12. We've updated the Further Reading section of the Complexity and Risk Management topic in the REBOK wiki with Warren Black's recommendations to further explore the ideas he talked about in his recent webinar. His suggestions are also in the slide below.
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    Hi Tim, Glad you enjoyed the webinar! Warren's suggestions have been added to the REBOK wiki post on Complexity and Risk Management under Further Reading (at the end).
  14. The recordings for our last two webinars are now available! Risk Management and COVID-19: how can REBOK help? by Geoff Hurst FIEAust CPENG NER CHOHSP (Director & Founder @ ENGENEOHS Pty Ltd) Coronavirus – Lessons in Risk, Resilience & Complex Systems by Warren Black, Founder & Principle of Complexus You can access all of our previous webinar recordings at this link: https://rebok.engineersaustralia.org.au/webinar_records.html/
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    This was a great talk by Warren. One of the questions asked (by me) was a recommended reading list for novices in complex systems. Warren and Geoff indicated that they could provide this list. Geoff suggested that this list could be put on REBOK. It does not seem to be available yet. Can it be made available? Many thanks. Tim
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    Australian Capital Projects – Risk Management, Project Controls and COVID-19 Presenter - Pedram Danesh-Mand, Director of KPMG Australia, NSW President of Risk Engineering Society (RES) Webinar description The full impact of COVID-19 on the Australian construction sector will become more apparent over the next quarter, but there has been much speculation regarding the outcomes for the industry and potential risk mitigation strategies as well as opportunities to make the sector more resilient for future challenges. Infrastructure and construction businesses continue to be faced with the challenges of improving productivity and successful project delivery. Through a review of some impacts on the sector due to COVID-19 and also by sharing KPMG’s recent construction survey results globally and in Australia, the speaker will highlight the opportunities for the sector to improve its productivity by developing and implementing robust governance, project controls, data-based solutions and new digital technologies. Armed with these capabilities, organisations will be more resilient and better positioned to safe-guard themselves in future. Presenter bio With a successful record of executive positions and as an industry innovation award winner, Pedram is currently leading and inspiring teams for setting a benchmark in delivery of Integrated Project Controls (Scope, Time, Cost, Risk) and Project Risk Management to provide clients transparent and practical risk engineering solutions in developing and delivering major projects. Prior to this, Pedram was Jacobs Technical Director (Risk) across Asia Pacific and also Head of Planning & Risk for UGL in a wide range of projects across Transport, Water, Power Generation, Coal, LNG/Oil & Gas. Presentation slides Capital projects beyond covid_20200602.pdf
  17. The World Economic Forum (WEF) has recently released a report examining the economic consequences and risk resulting from the global COVID-19 Pandemic. A summary of key findings from the WEF website is below. You can download the full report at this link. https://www.weforum.org/reports/covid-19-risks-outlook-a-preliminary-mapping-and-its-implications
  18. Yes Geoff. The ISO definition of complexity is pretty close to the one typically used by social scientists since the mid 1960s. The management and political sciences have needed to distinguish between complicated and complex decision systems. In 1965, Herbert Simon described a complex system as “one made up of a large number of parts that interact in a nonsimple way. In such systems, the whole is more than the sum of the parts, not in an ultimate, metaphysical sense, but in the important pragmatic sense that, given the properties of the parts and the laws of interaction, it is not a trivial matter to infer the properties of the whole.” Simon was of course describing political decision systems. Simon, Herbert A. 1965. The Architecture of Complexity, in General Systems Yearbook vol 10. pp. 63-64.
  19. https://www.iso.org/obp/ui/#iso:std:iso:ts:22375:ed-1:v1:en Thank you Kevin, Interesting that they try do define "Complexity": 3.1 complexity condition of an organizational system with many diverse and autonomous but interrelated and interdependent components or parts where those parts interact with each other and with external elements in multiple end non-linear ways Note 1 to entry: Complexity is the characteristic of a system where behaviour cannot be determined only as the sum of individual variables behaviours. 3.2 parameter specific value describing the measurable or theoretical features of the elements of a system
  20. Good pick up Kevin. We will modify this statement to reflect the intent as you correctly describe it.We should also recognise that standards offer a benchmark in performance or process that is a minimum expectation and if something better is warranted, then this should be done where the precautionary principle applies like in WHS and Environmental legislation. Intros time there is more and more expectation that the precautionary principle is applied to other risks like reputation risk or political risk because the negative outcomes are often unacceptable: Royal commissions , enquiries, bad press etc.
  21. An interesting ISO technical specification in the ISO22300 (Societal security) series is: ISO/TS 22375:2018 Security and resilience — Guidelines for complexity assessment process. This document discusses organisational complexity and how one might asses complexity to improve societal security and resilience.
  22. In the introduction to REBOK there is a statement: "Risk management of engineering design is also mandated under international standards." It is important to understand that the use of ISO and Australian Standards are not mandatory unless legislation requires them to be used. Also, ISO 31000 is a set of guidelines including principles, framework and process. Its intent is for use by people to create and protect value in organisations by managing risks, setting and achieving objectives and improving performance. The application of the guidelines can be customised to any organisation and its operating context. The words "shall" and "must" are not used in this standard except in the foreword in relation to ISO's responsibilities. There is nothing written into this standard that mandates the use of any of the guidelines. Therefore the referenced statement in the REBOK introduction should be re-written to clarify the intent of the statement. If the intent is to reference legislation that mandates the use of ISO 31000 or other international risk management and resilience standards then it would be better to be clear about that.
  23. Draft ISO/DIS 22300:2020 currently defines complexity as the "condition of an organisational system with many diverse and autonomous but interrelated and independent components or parts where those parts interact with each other and with external elements in multiple-end non-linear ways." This definition is subject to change in the final publication.
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    WEBINAR - Coronavirus - Lessons in Risk, Resilience & Complex Systems SPEAKER - Warren Black (Founder & Principle of Complexus) As disruptive as the Coronavirus crisis has been, there is no doubting this is a monumental case example of modern risk management within complex situations. Consider how the crisis has already demonstrated the concepts of disruption, emergence, resilience, chaos, the butterfly effect, systems thinking and many other complex systems phenomena. Join us as we discuss what practical lessons and insights into modern day risk management (particularly within complex situations) we can learn from the Coronavirus Case Study so far. About the speaker Warren Black is an Engineer, Risk Professional and Complex Systems’ Thinker who has particular interest in understanding how the complexity sciences might offer a better means to controlling emergent risks within highly complex, operating environments. Warren consults to industry on how to improve Governance, Risk & Assurance practices so that they may reflect not only the degree of investment at risk, but also the specific complexities in play. He is currently engaged in a higher degree in research (PhD) program, whereby he is Investigating a Systems Thinking Approach to managing Complex Risks, at the Queensland University of Technology, Engineering Faculty. Recording Presentation slides Risk, Resilience & Complex Systems - REBOK Webinar - 19 May 2020.pdf
  25. Thanks for posting this, Geoff. Just a note that to download this monograph PDF file you need to register as a member of the REBOK community. Registration is free and open to anyone with an interest in risk engineering.
  26. CCPS Monograph: Risk Based Process Safety In Disruptive Times Executive Summary This CCPS Monograph provides insights for managing Process Safety during and following the COVID-19 pandemic and similar crises. A CCPS task force has assembled this monograph based on their own experiences and expertise as well as input from CCPS member company representatives. The monograph is organized by the RBPS elements. Although human factors is not a RBPS elements, human factors is addressed in Process Safety Culture, Stakeholder Outreach, and Conduct of Operations. The following table identifies the insights offered in this document. Each insight is described in the monograph. The bold topics are viewed as those of highest importance. RBPS in Disruptive Times V3.1.pdf
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