:AACE CERTIFICATION 2009-2010:

The 8th Week blogs I have interest to share my experience related to the TCM framework – 7.6-1 Risk Management- Plan the risk for management. One of my projects is Structural Asset integrity. I have feel that this project is a good example on how if we not correctly implementing plan Risk Management.
Risk management is applicable to all enterprise and all asset or project life cycles(1).I would say FEL-1, 2,3 execution, operation and decomisioning is a whole project life cycles. I was introduce to asset integrity project in the middle of FEL-3 phase. The FEL-2 feasibility study phase was manage by the sponsor (management) via a team, and I would say it prepare in rush without involving the project manager.
This situation start when the project was triged by serious accident in the processing plant when 150T silo @ 4th floor building, flooded with flux silica for converting process was immediately fallen to ground and destroy all equipments in the lower level. Luckily no people were working around the area at that time. From technical investigation conclude that the silo main steel structural member fail due to uncontrolled corrosion attack and take off almost whole of steel thickness.
In order the have a quick mitigation plan, the management initiate to compose a team, consist of junior engineer and some senior manager to investigate overall processing plant building condition due to corrosion attack and demanding report in a short timeframe. The report is a feasibility study as a base for the FEL-3. This pressure to the team makes the level of feasibility study is not delivering clear and sufficient scope and assessement for FEL-3 and execution requirement; wich potentially not achiving the objective of the project.

Above problem can be observed from a number point of view as per TCM framework. But on this opportunity I would observed from 7.6-1 Plan for risk management-TCM frame. At this stage the scope of risk management should establish (e.g. objective, method, measure, assumption etc). The scope should align with the strategic asset requirement and project implementation basis (1).
The FEL-2 described above was insufficiently developed by the team; the reviewed aspect such as method, assumption and measure established, is not comprehensive to cover all aspect of the risks, in order establishing the scope of risk. One of the problem at that time is shortage of specialist/senior engineer to do the assessment to obtain proposed risk factor, and mitigation to the problem while management keep pushing for result, so no time for outsourcing in rush.
The very early step of the assessment is to asses the process buildings in the processing plant base on level of business impact if we loosing the services due to collapses/catastrophic. Then the risk factor from an internal develop matrix are selected, also event probability in order to have risk score to every individual building. In the TCM framework mention, diversity on the risk management team is strongly encouraged, with participation by stakeholder and end user; and somehow experience and judgment are essential to the effective risk management(1).
But in this case, as mention above, the required condition is not established since most of team is have not enough experience on this problem, so it look producing the simplified feasibility study.

In the other side, to consider strategic asset objective as an input of “Plan for risk management” is required too. By reviewing strategic asset will show us projection of asset investment strategy in the planning horizon. The missing link in in this case, the team, was not taking into account of asset strategy framework when developing scope alternative. They are not involved the planning horizon from on the asset manager for the future plant expansion.

What happen now when project execute? now some selected - refurbished building, is not in-services anymore. Not because it collapse, but because not far from the refurbishment schedule of the buildings by this project, there is another project execute to modified the process flow then dismantling all set of equipments (e.g. piping, pump,conveyor etc) from the refurbished buildings; and moves it into new plant facility. So, the refurbished building now stand still but for nothing, just empty building with small process inside. How much capital spends for the refurbishment to an asset is not bring back the value since insufficient preparation on risk planning and decision making.

I think this is a good lesson learn for my future project regard to “plan for risk management” in addition to decisionmaking. It give me a lesson how important to established sufficient scope of risk (e.g. objective, method, assumption etc) along project lifecycle stage, with consider strategic asset requirement and project implementation basis.

B/R, Farid Maloni

1), TCM framework, p.160, chapter 7.6 Risk Management