Risk Management Plan for the New Facility for Beauty Therapy and Complementary Health - Term Paper Example

Project Risk Management Name Institution Course Date RISK MANAGEMENT PLAN FOR THE NEW FACILITY FOR BEAUTY THERAPY AND COMPLIMENTARY HEALTH. 1. Executive Summary This essay serves to deliver a strong administration framework which will make certain that all levels of jeopardy and insecurity during the project are managed appropriately for the rest of the project without causing additional delays to the project schedule. Since the risk management process happens throughout the duration of the project, the included risk register shall be considered only a snap shot of the relevant risks at any given point in the duration of the project. This plan will accomplish this through defining the following: • The process identified for analysis, and risk evaluation during the remainder of the project • How the contractor will develop and deploy risk alleviation strategies aiming to decrease the impact or probability of risks • How many times the plan will be reviewed during the project and the definitive process for review including those involved • The various roles and responsibilities for risk management personnel • The process of reporting on risk status including changes therein, and how this information will be collected and passed on to the navigation committee • A full risk register that will have all identified project risks, the assigned grading, and the recognized risk alleviation policies that will either lessenthe Possibility or effect of each threat on the project. 2. Introduction Threat administration serves to identify possible problems before they occur so that the person or organization can allocate the appropriate resources as needed across the life of the project to mitigate negative impact on achieving the project objectives. This ensures that the project is completed successfully with minimal deviations from the original schedule. The risk management approach in the New Facility for beauty therapy and Complimentary Health, Class Rooms and Offices project will ascertain, evaluate, and alleviate risk where probable and frequently monitor the identified dangers throughout the duration of the task with the emergence of new risks or a change in status of the identified risks. Since risk management is a continuous process throughout the project, this hazard administration plan and the accompanying hazard record should be considered as timestamps of the pertinent hazards at a given point in time. Where needed, the procedure for hazard categorization, evaluation, and the ensuing progress of hazard countermeasures will include further discussion with the course-plotting committee members, the New Facility for beauty therapy and Complimentary Health, Class Rooms and Offices reference group, project team members, and other pertinent stakeholders. 3. Risk Assessment 3.1. Identification Risk identification is the systematic process of ascertaining risks that may potentially prevent the enterprise, program, or schedule from achieving its defined objectives. The process includes the documentation and communication of concerns to the relevant stakeholders. Risk identification ascertains pertinent threats that may lead to a reduction in the project output, a decrease in output quality, or an increase in the cost, time, and material outlays. During the project initiation stage, the risks were identified through several techniques involving the key players in the project who are the owner’s team, the design team, and the contractor teams. The owner’s team from the NSW department of commerce included the proposed facility managing personnel, expected users, and other interested parties. The design team was composed of the architect including both primary and secondary consultants in the design process. The contractor team was composed of the primary contractor who is the general contractor for the entire project and the subcontractor representatives for the major trades. As the process involves many organizations, it was necessary to have a holistic approach to identify and eliminate or mitigate risks. Evaluating the risks during the project initiation stage allowed for accelerankedachievements as all the teams involved have a clear understanding of the relevant project expectations and boundaries. One of the methods used in identifying risks is through brainstorming. As we are a successful company that has handles such complex projects before, we have several personnel who have experience on managing risks for such projects. Brainstorming was done with the stakeholders who would be full-time members of the project implementation team. We also consulted our risk management plans from previous similar projects to get ideas on the risks that might be applicable to this project. This method also allows us to learn from experience for better delivery of services to future clients. The types of risk identified have been categorized as follows: Contractual Poor incentives Deliberate contract manipulation miscommunication Design Defective or incorrect design Incorrect material quantities Lack of a coordinated design (Mechanical, structural, electrical etc Design done by unqualified designers Inconsistency between the specifications, bill of quantities, and the drawings Physical Materials supplied are defective Construction equipment and material safety Accidents due to substandard safety procedures Public security Wide ranging equipment and labor productivity Logistics Hurried site investigation Tight project program Unavailability of materials, labor, or equipment Legal Ambiguous work legislations Delayed resolution of dispute Legal disputes during construction among the parties of the project No assigned arbitrators to aid in resolving disputes fast Environmental Adverse weather conditions Unforeseeable environmental factors such as floods and earthquakes Management Poor communication channels between the involved stakeholders Complexity of project may result in ambiguous planning Changes in management Management of resources financial Delays in scheduled contract payments Unreliable cash flow Inflation during the course of the project construction Discrepancies between the specifications and implementation due to misunderstanding of project documentation Changes in design Actual material and labor quantities differ from those in the project contract Time constraints may lower quality of output 3.2. Analysis and Evaluation Risk analysis is a systematic process that allows for early identification and management of any risks that may undermine the key objectives of a project. The objective of risk analysis is to ascertain the potential impacts of various risks to the program. In this sense, the areas of risk in this project are cost, time, quality, and environmental sustainability. Risks that could impact the project costs include changes in design, tight project schedules, price inflation of construction materials in the duration of the project, excessive bureaucracy in administrative government departments, an inaccurate cost estimate and inaccurate program scheduling. Time related risks include design variations, inadequate program scheduling, a tight program schedule, inappropriate construction program planning, and performance or quality expectations. Some of the risks that may lead to quality issues include a tight program schedule, low management competency of project subcontractors, inaccurate cost estimates, high quality expectations, unavailability of enough skilled labor, changes in construction programs, and a lack of coordination between project participants. From this hazards will be categorized as A, B, C, D or N in relation to the following environment: Likelihood Importance Low Medium High DANGEROUS Low N D C A Medium D C B A High C B A A Risk Alleviation Alleviation of risks comprises the recognition of actions to lessen the probability that a risk will occur, diminish the effect of a risk that does befall as eventuality action. This policy also comprises recognizing the phase of the task when the act should be commenced; either before the start of or during the task at a specific stage. The table below is useful in controlling how hazards will be preserved in terms of preparation and deployment of alleviation strategies during the course of the Project. Extenuation policies are frequently only prepared and organized for Rankings A to C, nonetheless where an existing hazard classified at D appears probable to be elevated, and extenuation approaches should be on stand-by. Rank Probable Action A Extenuation actions, to lessen the probability and significance, to be recognized and executed as soon as the mission begins as a priority. B Alleviation actions, to lessen the probability and urgency, to be recognized and suitable actions employed during project implementation. C Alleviation actions, to lessen the possibility and significance, to be identified and costed for conceivable action if funds allows. D To be recorded; no action is desirable unless classifying upsurges over time. N To be recorded; no action is desirable unless sorting increases over time. In a construction site, there are many forms of risk, some can be identified before the project like the ones that will be listed in this document some will be identified and their Alleviation actions formulated during the project. Contract risks that include revenue leakage and cost overruns, quality failures and loss of bargaining power are risk that lead to loss of money, failure to achieve the purpose of providing the needed services to the facility for therapy and complimentary health. Such risk are to be mitigated during the early stages of contract agreements. A business case for the project has to be produced and vetted and ensuring that an in-depth understanding of the contract is achieved by the concerned parties. As the project is beginning to commence, many forms of unforeseen risk from authorities, management and all stakeholders can be averted by ensuring that key positions in the project are filled with qualified and if applicable certified personnel. A first aid kit and a first aider, an ambulance service will remain on call during all working hours. This is to act as a contingent measure for risk that involve site accidents. During the excavation stage, if engineers will recommend the use of explosives for excavation fire extinguishers should be provided to lessendamages in case of a fire. Machinery is used vastly in a construction site, this is because of their numerous advantages like time saving, and reduction in labour cost and others, the breakdown of machinery will impact negatively on the outcome of the project by increasing cost and loss of time. This calls for proper and on time maintenance of every machine as will be directed by the technician. 5 Hazard Monitoring Risk administration is a critical course that should be incorporankedinto the administration progressions for any project. It should also be treated as a management process as unalleviated issues may lead to significant risks for the project. An examination of the hazard and issues register will be embark on fortnightly to ensure that the project stakeholders are kept abreast of emerging risk at any time during the duration of the project. As project activities continue and are completed, the pertinent risk factors and events will also be monitored to determine if trigger events have already occurred that would indicate the risk has become a concern. Using the trigger events documented during the risk analysis and Alleviation phases, the NSW Department of Commerce will have the authority to implement any contingency plans considered suitable. The day to day risk Alleviation processes will also be directed and enacted by the project manager. Once contingency plans are approved and initiated, they will be added to the project work schedule and be tracked and reported as project activities. It is important to note that the risk management will continue throughout the duration of the project. This process will include sustained undertakings in risk identification, assessment, planning for newly identified risks, monitoring trigger conditions, and devising and implementing contingency plans. Some risk attributes such as the probability and impact can change during the course of the project and should therefore, be reported as well 5.1. Addressing immediate unforeseen Risks In situations where unforeseen risks occur, the individual identifying the risk will notify the project managers immediately. Those notified will then assess the situation to determine its possible effect on achieving project objectives. If needed, the project manager will then identify a proper Alleviation strategy and then assign resources as required. The project risk manager is ultimately responsible for documenting the risk factor of upcoming risks and the appropriate Alleviation strategy. 6. Roles and Accountabilities of Course-plotting Committee The ultimate responsibility for ensuring that the project follows proper risk management procedures lies with the NSW Department of Commerce and the Project Course-plotting committee who should be there from the initial stages of risk categorization and examination. The hazard register in addition to the Risk Management Plan will provide both the development manager and the steering committee with enough details on the identified project hazards and the danger administration processes proposed to deal with those risks. The steering committee will continually review both grade A and B on a monthly basis using the updated information provided by project status reports. This will enable them to provide guidance and direction to the project manager. When additional risks emerge or the risk Probabilityof existing threats changes, the danger committee is also entitled to an updated risk register for consideration. 6.1. The project hazard manager is responsible for i. The creation and employment of a Project Risk Administration Plan ii. Organizing consistent risk administration sessions where the status of existing risks can be monitored and emerging risk identified iii. Assessing identified risks and developing appropriate risk Alleviation strategies iv. Ensuring that risks graded A receive close monitoring v. providing steady status reports to the steering committee 6.2. Project Team all members of the New Facility for beauty therapy and Complimentary Health, Class Rooms and Offices project team have the duty of supporting the project executive in the risk classification and management process. This includes continued monitoring through the lifecycle of the project. Appendix A: New Facility for beauty therapy and Complimentary Health, Class Rooms and Offices Risk Register (as at 05/12/2016) Ranking for Possibility and Significance for each risk L Ranked as Low E Ranked as Extreme (Used for Significance only) M Ranked as Medium NA Not Assessed H Ranked as High Grade: Combined effect of Probability/Seriousness Seriousness Likelihood low medium high EXTREME low N D C A medium D C B A high C B A A Recommended actions for grades of risk Grade Risk Alleviation actions A Alleviation actions, to lessenthe Probabilityand seriousness, to be identified and implemented as soon as the project commences as a priority. B Alleviation actions, to lessen the Probabilityand seriousness, to be identified and appropriate actions implemented during project execution. C Alleviation actions, to lessen the Probability and seriousness, to be identified and costed for possible action if funds permit. D To be recorded - no action is needed unless Ranking increases over time. N To be recorded - no action is needed unless Ranking increases over time. Change to Grade since last assessment NEW New risk  Ranking decreased — No change to Grade  Ranking increased Reference Lev, V., and Michael T., (2007). Project Decisions: The Art and Science. Management Concepts. Vienna. VA Read More