Hazards and Risk Management - Example

Hazards and Risk Management Name Professor Institution Course Date 1. Ticklists Used in Risk Assessment and their Layouts In risk assessment, ticklists are crucial. They ensure that all needed information is collected during the survey. According to Fire Protection Association (FPA), the ticklist that can be used in Fire Risk Assessment is divided into six stages, and they include: Stage 1: Identifying the Fire Hazards Stage 2: Identifying the individuals at Risk Stage 3: Eliminating, Controlling, or Avoiding the Fire Hazards Stage 4: Analyzing whether the available fire safety materials and regulations are sufficient or require improvements. Stage 5: Recording the Findings Stage 6: Carrying out periodic review of the assignment Table 1 Shows a Ticklist Layout incorporating all these stages Stage 1: Identification of the Fire Hazards 1 Are there systems meant for controlling flammable liquids and gases, and the amounts of combustible materials that are stored within the work place? 2 Are those systems working effectively? 3 Are all the flammable and combustible materials stored safely? 4 Are heaters fixed way from combustible and flammable materials, and are they fitted with appropriate guards? 5 Are all portable electrical gadgets or equipment inspected on a regular basis and fixed with the appropriately rated fuses? 6 Are the wiring systems periodically inspected by a competent person? 7 Is the application of multi-point adapters and extension leads kept to a minimum? 8 Are the flexes operated in safe areas where they cannot be damaged? 9 Is the upholstery in good condition? 10 Are the workplaces free from combustible waste material and rubbish? 11 Is the smoking area designated and is it provided with enough ashtrays? 12 Are there appropriate measures put in place for protection against risks associated with arson? 13 Have suitable measures been taken to ensure that flames and smoke does not spread from one building compartment to another? Stage 2: Identifying the Individuals Whose Life Could be at Risk 14 Are there enough numbers of exits with suitable width for all the people present? 15 Do those exits direct individuals to a safe place? 16 Are all the escape routes and guard-ways free from any obstructions? 17 Are all the escape routes free from any slipping and tripping hazards? 18 Do stairs and steps require some repair? 19 Are all exits unlocked while the premises are being used? 20 Can anyone open the devices securing the final exits immediately and in an easy way without the use of any key? 21 Are the internal fire doors properly labeled and kept closed under normal circumstances? 22 Do doors on all the escape routes open in the travel direction? 23 Do self closers on all the escape routes operate efficiently? 24 Are all the escape routes properly labeled? 25 Is there sufficient lighting on all the escape routes? 26 Are there measures and plans put in place to assist visitors and disabled members of staff during evacuation from the premises? Stage 3: Eliminating, Controlling and Avoiding the Fire Hazards 27 Are there mechanisms used to avoid the use of flammable and combustible materials? 28 Are there reasonable measures in place to prevent cases of arson? 29 Is the staff trained on how to use fire equipments and call the fire extinguishers? 30 Have you sought advice from your insurers about fire protection of the premises? Stage 4: Consideration on Whether the Already Existing Fire Safety Gadgets are Enough or Require Some Improvement 31 Is the lighting on all the escape routes working properly and regularly maintained? 32 Are the fire alarms in proper working conditions? 33 Are the alarm systems tested on weekly basis? 34 Are the fire-fighting equipments in proper working conditions? 35 Are the fire blankets and extinguishers located in suitable positions? 36 Is the number of extinguishers sufficient for the premises? 37 Are the fire-fighting equipments regularly serviced by competent people? 38 Are the call points visible and unobstructed? Stage 5: A Record of the Findings 39 Have you recorded the findings out of fire risk assessment? 40 Have you informed the staff or their representatives about the assessment results? 41 In case there is a formal report that you have prepared, have you shown it to the staff or the representatives of the staff? 42 Do all the members in different working place know about the risks which you have identified? 43 Have the individuals in direct control over some workplaces been notified about the findings? 44 Is there a sufficient and prominent display of fire notices throughout the working places? 45 Are there clear plans that must be followed in case of a severe fire? 46 Are the copies of major emergency plans in more than one workplace? Stage 6: Periodic Performance of Risk Assessment 47 Are there procedures to enhance periodic review of fire risk assessment? Table 1 In terms of risk assessment for a display screen, the ticklist used has this layout: Part A: This section is for official use and for entries like “name of assessor”, “workstation”, “ Date of assessment”, and “Department”, among other details. Part B: This section forms the largest part of assessment. It covers on the desk, screen, keyboard, document holders, environment, work routines, maintenance, and about the end users. It also contains information on fire drill (employee observations) Part C: This part is meant for heads of departments or faculty or their nominee. It contains a form with columns on “action”, “who performed the action” and “date when the action was completed”. 2. SWOT Analysis, PEST Analysis, and STEEPLE ANALYSIS SWOT ANALYSIS This is very important during risk assessment or when auditing an environment and an organization. It focuses on the Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is mainly subjective. In other words, it is very hard for two people to come up with final versions of SWOT that are same (Manuel, 2008). Therefore, it is not wise to entirely rely on SWOT. It should always be applied in relation to competition. Table 2 below highlights on what should be covered under SWOT analysis. Strengths Strengths can be things that add value. For instance: The distinctiveness and expertise Innovations A good Location or catchment area Administration Quality e.g. a power brand Reputations Wide ranges in a single shop Conveniences Weaknesses Weakness can lead to loss of value. E.g. A poor location at range Poor reputation or quality Low distinctiveness Inexperience The challenge of controlling a wide business territory. Opportunities Opportunities can be an upcoming market, like the Internet, joint ventures, mergers, strategic alliances with other local and global retailers or the opportunity of moving into an ineffective competitor or into new international markets. Threats Threats may include, but not limited to: price wars, new competitor, innovative competitor, taxation, competitors with better distributions both locally and internationally. Table 2: SWOT Analysis PEST Analysis PEST stands for both Political, Economic, Socio-cultural and Technological factors. PEST analysis is of great benefit to any project or process or industrial activity, especially before anything can be started (Hakiki, 2008). It mainly considers all the industries, including the internal environment, micro-environment and macro-environment. The internal environment includes the office technology, staff, wages, finance, among other related things. The micro-environment also touches on the agents, customers, suppliers, competitors, whereas the macro environment takes care of the economic forces, legal or political forces, socio-cultural forces, and the technological forces. Table 3 Below Highlights a Summary of the PEST Factors Political Factors Such factors investigate at how stable the political environment is, how the government policies influence policies on taxation activities, the government position on some political activities, the effect of government policies on the economy, the government view on religion and culture, and also the government involvement in some relevant trading agreements. Economic Factors These factors cover on the state of the industrial economy for both the long and short term. They also cover on inflation, interest rates, employment, and the long-term plans for economy. Socio-Cultural Factors The socio-cultural factors cut across the dominant religion, the attitudes towards the industry, how the quality of language and culture affect the industry, how much leisure time the customers have, age of the wealth of the population, and the strength of the populations’ opinion on some green issues. Technological Factors These factors are crucial for the competitive advantage and are also a driver towards globalization. How technology affects distribution, how it allows for a cheap and quality industry, how technology enables some significant innovation, and if the technology offers new ways of communicating with consumers. Table 3: Summary of PEST Factors A Sample of a PEST Proforma Fig 1: Pest Proforma STEEPLE Analysis The following factors are covered under STEEPLE analysis. a) Socio-cultural Factors such as income distribution, population demographics, lifestyle changes, levels of education, and the attitude of the people towards leisure and work. b) Technological Factors such as new discoveries speed of transferring technology, government expenditure on research, and industrial focus on technology. c) Economic Factors, such as GNP trends, business cycles, inflation, interest rates, levels of disposable incomes, and unemployment. d) Environmental Factors, such as environmental protection laws, and the Local Authority Policies. e) Political Factors, such as taxation policies, government stability, and foreign trade regulations. f) Legal Factors, such as discrimination laws, monopoly legislations and employment laws. g) E-business Factors, such as email marketing, video conferencing, selling and buying through the Internet. 3. Risk Ranking with FN-Diagram Risk ranking is a technique used in risk assessment. It helps in identify whether a risk is tolerable or intolerable. It also helps one to identify which mitigation measures should be prioritized. The information obtained in crucial in decision making. In risk assessment, the survey team classifies hazards as per their relative risk. The risk ranking matrix is used. For example, a matrix may be employed, and sometimes a matrix, especially for clients who want to record even very low risk hazards. Risk ranking entails two dimensions of risk, that is, likelihood (probability) and severity (consequence). In order to use the risk matrix, every hazard that is identified and meets the minimum set of criteria is rated depending on the potential it has relative to other hazards. In addition, probability of having a fatality due to the potential of a given severity is estimated. An example of a risk ranking matrix Likelihood SEVERITY Fig 2: Risk Ranking Matrix Simple Risk Analysis Elementary Risk = Consequence X Probability Consequence can be: Low = illness/ minor injury/ damage, or no lost time Medium = injury/ damage or time is lost High = serious injury/ death/ or serious illness Probability can also be: Low = unlikely or remote Medium = will occur in the course of time if measures are not put in place to prevent it High = is likely to occur in the immediate or near future. When performing risk ranking, we use the rule that every hazard on the ticklist can be ranked according to the order of its significance. A score is then given to each hazard, and the sum of the hazard is computed. Expert judgment is highly required. An example of a Fire Risk Ranking Ranking Frequency Severity Safeguards 1 Never been observed Negligible Invulnerability 2 A rare event Cosmetic Secure 3 Statistics exists Superficial Contained 4 Occasional Peripheral Compensative 5 Sporadic Significant Suppressive 6 Probable Structural Moderate 7 Periodic Serious Strategic 8 Regular Permanent effect Minimal 9 Likely Critical Superficial 10 Constant Catastrophic Prone Table 4: An example of Fire Risk Ranking Numerically, a risk ranking matrix can be represented as shown: High 3 6 9 MEDIUM 2 4 6 LOW 1 2 3 SMALL MEDIUM LOSS LARGE 2=acceptable 4=unacceptable In elementary risk score, we have a minimum score of 3 (3 x 1) out of the max score of 9. If appropriate safety standards are not maintained, the risk score may increase beyond the set limits of acceptance. According to the checklist, some ticks are crucial than others. The ticks are weighed into some which are “critical”, some “minor” and some “significant”. In order to get the total score, the ticks are added up. For example, the society’s aversion to several casualty accidents is very strong. The perception is clear in the sense that a single accident capable of killing 1000 individuals is worrying than 1000 accidents that can only kill a single person. Using an FN-diagram to express the relation between the frequency of the accident and the sum of fatalities leads to the results shown in Fig 3. Fig 1: FN Diagram The FN-diagram gives a more compressive image of risk. It expresses the assessment of risk not only in terms of the average number of deaths, but also the catastrophic risk of accidents killing several people at the same time. 4. PHA, FMEA, FMECA, HazOP, and HACCP Preliminary Hazard Analysis (PHA) PHA is the second assessment that comes immediately after the initial assessment of the hazards. It is intended for identification of all the hazards, the trigger mechanism in place and the implications that come with it. PHA analysis starts in the early design stages and increasingly becomes detailed as the design develops. The Outline of PHA Method a) The stage of data acquisition At this stage, all the plans, legislation, rules, lists of materials, hardware, layout, tests, and processes are specified. The limits of the subsequent assessments are designed at this stage. Errors should be considered, and it is crucial to ensure that all the information is as accurate as possible and that nothing is omitted. b) Identifying all the likely hazards Hare, all possible hazards are identified and include: the poison, narcotic, explosive, flammable, corrosive, infectious, cold, hot, natural catalytic, magnetic, electrostatic, sprung, rotating, pressures, falling body, voltages, weapons, natural disaster and crowds, among others. c) Drawing up a table for hazards and effects All the information is combined in a table (as one shown in Table 4) to enable subsequent considerations. It forms the heart of the analysis process. The table consists 12 pieces of information covering each hazard. The final table is still subject for review and revision. Column Content 1 Reference no 2 The source of hazard 3 Location of the hazard 4 Trigger 5 Likely accident 6 Impacts 7 Warning Devices 8 The safeguards 9 Contingencies 10 Frequency 11 Criticality of ranking 12 Comments Table 4 The column on frequency requires an expert opinion. It requires some knowledge on probability or rate at which we expect the accidents. Failure Mode, Effect and Criticality Analysis (FMECA) This kind of analysis is similar to PHA except that specific emphasis is laid on various failure modes. FMECA is performed at the later stages of design work. The following is an outline of the steps involved in FMECA Step 1: Specifying the scope of the assessment Step 2: Listing all the components involved within the scope Step 3: Filling out an FMECA form Step 4: Listing the sources of information that has been used Step 5: Giving out a report that includes the conclusion and recommendations. A Sample FMECA Form Column Content Example 1 The reference number of the component 51F12 2 The name or description of the component Tire 3 Function Pulling the car along 4 Failure mode deflation 5 Trigger Glass on the roads 6 Effects Skid, or car stopped 7 Detection None 8 Safety Belts, anti lock brakes 9 Failure rates 3 10 Criticality Car wrecking 11 Comments Make sure the spare is ready Table 5: A Sample FMECA Form Triggers will include decay, friction, wear, shock, fire, explosion, vibration, natural disaster, exposure to light or magnetic fields, overload, chemical leakages, human error, plane crash, control failure, climatic variation, senility, sabotage, and several other factors. FMEA FMEA entails the following four steps. Step 1: Describing the processes whose failure mode is sought Step 2: Listing all the possible ways the process may fail Step 3: Identifying the failure symptoms which may be detectable Step 4: Determining the impacts of each failure possibility HAZARD AND OPERABILITY STUDIES (HazOP) This method is famous in risk assessment. A set of engineers meet in order to brainstorm. The results obtained out of the qualitative survey consist of safeguards and consequences, and are summarized in the HazOP table and submitted alongside the report and recommendations that are meant to enhance the processes (Klets, 1992). The main weakness of HazOP is that it mainly considers single deviations (Wells, 1998). The Following are the Five Steps used under HazOP Step 1: Defining the activity Step 2: Defining the problems of interest, such as safety and health issues, and environmental concerns. Step 3: Subdividing the activity. The nodes and deviations are listed. The appropriate keywords are used. Step 4: Conducting HazOP reviews. Each deviation is discussed at each node of the activity. The safeguards and recommendations are used in completing the Proforma. Step 5: Implementing the recommendations by using the Cost-benefit analysis. Hazard Analysis & Critical Control Point Assessment (HACCP) This version of assessment is similar to FMEA and has the following six steps: Step 1: Listing key-points in fabrication of a product, and assessing the risk of each in turn Step 2: Identifying sensitive control points Step 3: Identifying the acceptable standards of each control Step 4: Describing the actions that can be taken when there is a critical limit deviation Step 5: Describing the monitoring processes to adjust control and verifying how HACCP is working Step 6: Creating the records for auditing 5. Fault Trees One way of breaking failure into contributory factors in through use of fault trees. The contributing factors are arranged logically so that they can be examined. Trees consist of connected digraphs that do not have cycles. When a tree is BINARY, it means that the branching is always in two parts, but when the trees are joined together, and there are no cycles, what results is a FOREST. Every node has an arc towards the top and root but at the same time, these nodes can have any number of branches (in integer form). The leaves have got no branches. We use the logic of truth and false in the study of fault trees. Consider the questions and answers shown in Table 6 bellow: Question Answer A Are elephants grey? True B Are elephants pink? False A Do fish swim in water True B Do fish whistle? False Using a circuit notation, the information in Table 6 can be represent by two tree diagrams as shown: Fig 3 From the tree diagrams above, some probability can be developed. For instance: Fault trees are used when dealing with system failures. The probability may be very small numbers. For example, if the and the P (B) = 3.5 X 10-4 , then: P(A and B) =4.2 x10-12 whereas the P (A or B) = P(A) +P (B). In developing a fault tree, we use “backward logic” (Kendall, 1970). In other words, we follow from loss/failure backwards to the causes. Conventionally, fault trees are drawn right from the centre-top downwards as we add the contributing causes. The top event is normally referred to as the “fault” whereas the foot of the tree contains the end-points called the terminal events or “leaves”. Once the tree has been built, more factors can be substituted or added leading to occurrence of two questions: “Which event is the hazard?” and , “What contributes to that hazard?”. In terms of logic gates, a fault tree can be draw as shown: Fig: 4 6. Common Cause Analysis Common cause analysis embraces the techniques that are based on deductive analysis, and specifically aimed at identifying the non-independence between some events that would otherwise be treated as independent events (Sutton, 2003). Common cause analysis is significant since it can undermine qualitative and quantitative risk analyses, and even the design. The outline of the process of common cause analysis Fig 6: Outline of Common Cause Analysis Common-cause analysis can specifically take into consideration on how different physical technologies are related, and how a failure in one could lead to a failure in the other. This enables identification of interactions and where those interactions invalidate the claims of independence. 7. Reliability Block Diagram Normally, a reliability block diagram is used to perform system reliability analysis and also availability analyses for systems that are large and complex. The block diagrams are used to show the relationships between various systems. The whole structure of the block outlines the logical interaction of different failures within the system (Billinton, 1992). The left hand side starts with the input node, and the parallel and series systems in the diagram conclude towards the right hand side where we have the output node. In other words, the diagrams consist of a single input node and a single output node. Once the blocks have been properly used to represent a complex system, the MTBT, failure rate, reliability and availability can be calculated. If the configuration changes, the result also changes. The block generally corresponds to the real physical arrangement of the components of a given system. A parallel connection shows redundancy of the system. It is joined by several links or paths. As example of reliability block diagram for a parallel system Fig 7: Reliability Block Diagram for a Parallel System An example of a Reliability Block Diagram for A Series System Fig 8: Reliability Block Diagram for a Series System A reliability block diagram for both parallel and series system can be as shown: Fig 9: Reliability Block Diagram for a Parallel and Series Systems Combined The topmost event is system failure, and beneath it are failure components placed with ORs and ANDs where: AND stands from parallel systems e.g. B is parallel to C and both B & C are parallel to D OR stands for series systems e.g. A is in series to the resultant of B & C 8. Even Trees Note, in fault trees, reverse logic is used, whereby you start at the end and work toward the beginning. PHA is followed. However, for event trees, the forward logic is used. We start at the beginning and work towards the end. FMEA analysis is followed and is strongly linked to reliability. For example, let’s consider a series system shown below: From this block, there are four possibilities that will be achieved over time Kreyszig, 2004). Probability I. AND II. AND III. AND IV. AND The Even Tree 9. Cost Benefit Analysis This technique is used in risk assessment to determine the monetary value of social costs and benefits of a given entity over a specified period of time. The method is used to evaluate a number of plans in order to decide which is the best or has more benefits. When talking of benefits, they may not necessarily be financial. All the benefits, including factors such as, individual comfort, social health, and ecological security, among others, have to be considered. The following two different plans can be used to illustrate a PARETO IMPROVEMENT in cost-benefit analysis Plan A Plan B Cost the wealthy - - Cost to the poor $ 0.1m - Benefit to the wealthy $1m $0.4m Benefit to the poor - $0.4m Net benefit $0.9m $0.8m In this illustration, the total benefit to society is greater if the poor loose and the wealthy gain. Naturally, the society may not allow this. However, we would prefer keeping the highest net profit of $0.9m. In order to do this, “state aid” can be used to transfer benefit to the poor from the wealthy. The aid can be in the form of grants, tax concessions, subsidies, among others. In such an arrangement, known as a PARETO IMPROVEMENT, everyone stands to benefit as shown in the table below: Plan A Cost to the poor $0.1m but 0.5m is transferred as state aid maps to $0.4m Benefit to the wealthy $1m but $ 0.5m is taxed and maps to 0.5 The net benefit $0.9m 10. Utility Function According to Harold (1997), a utility function is used to specify the well being of consumers for all the different combination of products consumed. It sometimes includes other considerations. The function can be used to represent the welfare of individuals and even their preferences. A Plot of Utility against the Wealth of Individuals Assessed is as shown: Utility Curve 11. Business Continue Planning This refers to all the activities that are needed in order to keep the process running during the time of interruptions or displacement of the normal operations (David, 1969). The following events may call for business continue planning: Failure of the equipment Power disruptions Human errors Sabotage or strike Fire Natural disasters Business continue planning is necessary because disasters may occur at any time. There is need to be prepared all the time so that the business remains competitive even if there is a disaster. Table 5 Shows a Summary of a Business Continue Planning Process Stage Description 1 Identifying the drivers of an organization 2 Defining a breaking point 3 Determining Options 4 Evaluating and Selecting Alternatives 5 Documenting the Business Continue Planning 6 Implementing, Testing and Maintaining the Plan 12. The Pros and Cons of the Different Methods that are Used in Risk Assessment A range of both qualitative and quantitative methods are used in risk assessment (Edmund, 2007). There are a number of pros and cons associated with each method. Quantitative Method Pros of Quantitative Method in Risk Assessment a) In this method, the results obtained are entirely based on objective metrics and processes that are independent. This eliminates subjectivity and any amount of guesswork. b) A lot of emphasis is laid on determination of the value of an asset and mitigation of the risk. c) Cost-benefit analysis is employed under this method. This is very crucial when it comes to making management decision. d) The results obtained under quantitative method can be expressed in a language that is specific to management. For instance, the results can be relayed in monetary terms, probabilities, or percentages. The Cons of Quantitative Method in Risk Assessment (Vose, 2002) a) This method entails calculations, some of which are very complex and consume a lot of time. b) According to history behind this method, it only works better with an already identified automated tool and knowledge base. As a result, it may lead to higher costs. c) It is not easy to coach the participants in the process because this method is normally not delivered on a personal level. Qualitative Method The Pros of Qualitative Method in Risk Assessment a) This method is simpler since it does not have any complex calculations. b) There no need of determining the value of the asset in monetary terms. Determining the value of an asset in monetary terms can be very tedious and in some cases, impossible for an assessor to carry out. Even the system owners find it difficult to value intangible assets such as customer goodwill and reputation. c) Also, there is no need of quantifying threat frequency. d) Further, it is easier to engage the non-technical and the non-security staff while using this method. The Cons of Qualitative Method in Risk Assessment a) This method is subjective. b) The quality and the results of risk assessment under this method entirely rely on the quality and expertise of the management team that is carrying out risk assessment. c) The effort of developing the monetary value of the targeted asset is quite limited. d) The method does not provide a basis for cost-benefit analysis which may later be used to mitigate the risk. 13. Allocating a Fixed Budget to Respond to the Risks as Assessed Allocating a fixed budget can be a bit challenging. One has to sit down and do the mathematics to ensure that all the crucial things are taken care of. The fixed expenses have to be identified as well as the flexible expenses. The fixed budget expenses include all costs that do not vary from one month to another (Donald, 2008). Such expenses should be listed. Additionally, flexible expenses should be considered. By definition, we can say that such expenses can be changed from time to time. Another thing to consider in allocation of a fixed budget are the needs and desires of the business. A priorities list should be made so that crucial things are done first or taken care of by the fixed budget. It is also important to revisit the goals and objectives of a company or business. Some requirements remain fixed due to policies or government requirements. For instance, government taxes should be part of the fixed budget that is allocated. 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Yung, D 2004, Principles of Fire Risk Assessment in Buildings, John Wiley & Sons. Read More