RISK MANAGEMENT TOOLS

Risk Radar ®
Risk Radar ® is a risk management database that is designed to help project managers identify, prioritize, and communicate project risks in a flexible and easy-touse form. Risk Radar ® defines the Risk State using two qualitative values: (1) Probability (2) Impact Risk Radar ® calculates a Risk Exposure (RE) value based on the assigned probability and impact using the following formula. RE = Probability x Largest Impact
Probability Level A B C
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Criteria Remote Unlikely Likely

Probability 0.1 0.3 0.5
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D E

Highly Likely Near Certainty Impact Definitions

0.7 0.9

Impact Technical 0 Does not apply 1 2 3 Minimal or no impact Acceptable with some reduction in margin Acceptable with significant reduction in margin Acceptable, no remaining margin

Schedule Does not apply Minimal or no impact

4

5

Additional resources required, able to satisfy Minor slip in key 5-7% milestones; not able to meet need date Major slip in key 7-10% milestones or critical path impacted Unacceptable Can’t achieve key > 10% major program milestone milestone

Cost Does not apply Minimal or no Impact <5

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Risk Levels
Risk Exposure Range 0.1 to 0.7 0.9 to 2.1 2.5 to 4.5 Risk Level Low Medium High

Risk Level mapping
Probability E Medium (0.9) D Low (0.7) C Low (0.5) B Low (0.3) A Low (0.1) 1 Risk Level (Risk Exposure) Medium High High (1.8) (2.7) (3.6) Medium Medium High (1.4) (2.1) (2.8) Medium Medium Medium (1.0) (1.5) (2.0) Low Medium Medium (0.6) (0.9) (1.2) Low Low Low (0.2) (0.3) (0.4) 2 3 4 Impact High (4.5) High (3.5) High (2.5) Medium (1.5) Low (0.5) 5

Red = Unacceptable. Major disruption is likely. Different approach required. Priority management decision required. Yellow = Moderate. Some disruption approach may be required. Additional management attention may be needed. Green = Low. Minimum impact. Minimum oversight needed to ensure risk remains low.

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Reliability Centered Maintenance (RCM)
RCM is a systematic approach to establish a good maintenance program for critical equipment to improve the system availability and reduce the maintenance cost, by focusing on the most important functions of the system, and avoiding or removing maintenance actions that are not strictly necessary.

RCM involves the establishment or improvement of a maintenance program in the most cost-effective and technically feasible manner. It utilizes a systematic, structured approach that is based on the consequences of failure. As such it represents a shift away from time-based maintenance tasks and emphasizes the functional importance of system components and their failure/maintenance history.

The concept of RCM finds its roots in the early 1960's, with RCM strategies for commercial aircraft developed in the late 1960s, when wide-body jets were introduced to commercial

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airline service. A major concern of airlines was that existing time-based preventive maintenance programs would threaten the economic viability of larger, more complex aircraft. The experience of airlines with the RCM approach was that maintenance costs remained roughly constant but that the availability and reliability of their planes improved. RCM is now standard practice for most of the world's airlines.

There are four features that define & characterize RCM, which are as follows: • • • • Preserve function, by addressing system Identify failure modes that can defeat the Prioritize function need (via the function Select only applicable & effective PM tasks function, inputs & outputs. function. mode).

RCM concept was developed in the early 1970s by the Commercial Airline Industry Maintenance Steering Group.

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RCM is a process used to determine the maintenance requirements of any physical asset in its operating context. In many RCM applications the plant already has effective maintenance programs. The RCM projects therefore be an upgrade projects, identify and select the most effective PM ineffective tasks, to recommend new tasks or revisions , and to eliminate tasks then apply this changes within the existing programs in a way that will allow the most efficient allocation of resources. Benefits of R.C.M • • • • • • Improve operating performance. Improve quality Greater maintenance cost effectiveness Increase equipment life Better teamwork Increase moral

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RCM is based upon two criteria: 1- Non-safety-critical components: Scheduled Maintenance (SM) tasks should be carried out only when performance of the scheduled task will reduce the life-cycle cost of ownership. 2- Safety-critical components: SM tasks must be performed only when such tasks will prevent a decrease in reliability and/or deterioration of safety to unacceptable levels or when the tasks will reduce the life-cycle cost of ownership. RCM Steps: 1. 2. 3. 4. 5. 6. 7. System selection and information analysis. System boundary definition. System description and functional block diagram. System function and functional failures. Failure mode and effects analysis. Logic (decision) tree analysis. Task selection.

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RCM Implementation Steps 1. RCM Feasibility Study 2. RCM Team Building & Training 3. RCM Master Plan (1-3 years) 4. Design of Maintenance Performance Evaluation System 5. Design of Maintenance Criticality System 6. System Selection & Information Analysis 7. System Description & Process Analysis 8. Equipment Classification (critical & non-critical) 9. Maintenance Information Analysis 10. Failure Mode & Effect Analysis (FMEA) 11. Risk Analysis 12. Logic (Decision) Tree Analysis 13. Task Selection and Job Plan 14. Maintenance Program & Planning 15. Implementation 16. RCM Performance Evaluation 17. Corrective Actions

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Failure Modes and Effects Analysis (FMEA)
• • A “Hazard Identification” method Involves breaking a system down into sub-systems

and component parts The systematic discipline involves scrutinizing each component – – – How might a component fail (failure modes)? What are the consequences of each failure mode and What environmental factors affect failure modes?

combinations of failure modes? Interventions are developed to improve total system reliability
Equipment ID # Description Failure Failure mode Cause Failure Effects Local System Unit

Failure Modes: the manner in which a fault occur, the way in which the element fail. Failure Effects: what would happen if the failure mode occurs (efficiency, cost and time).
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(Risk

Based Inspection (RBI

RBI is a planning tool used to develop the optimum

inspection plans for critical equipment. Inspection is a crucial role in RBI. Components are essentially inspected for corrosion and other damage at planned intervals, in order to identify corrective action before failures actually occur.

RBI refers to the application of risk analysis principles to

manage inspection programs for plant equipment.

RBI refers to risk mitigation through inspection programs, using risk analysis methodologies. RBI is a method using risk as a basis for prioritizing and managing the efforts of an inspection program. RBI is an established technology for intelligently assigning inspection activities to equipment which represents the highest risk to a plant owner/operator. The result is an inspection plan based on risk which satisfies both the regulatory and business requirements of the client. RBI is a systematic tool that helps users make informed business decisions regarding inspection and maintenance spending.

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RBI focuses on providing sufficient and appropriate inspection resources for the high risk items, rather than over-inspecting low-risk items "at the expense" of the higher risk areas. RBI studies define inspection programs. Information is generated on the types of damage that may be expected, appropriate inspection techniques to be used, where to look for the potential damage, and how often inspections should take place. RBI is regarded as a cost effective alternative to traditional inspection. RBI is used for planning and implementation of inspection and maintenance programs. RBI studies define inspection programs. Information is generated on the types of damage that may be expected, appropriate inspection techniques to be used, where to look for the potential damage, and how often inspections should take place. The highest risk is mostly associated with a small percentage of plant items. History tells us that 80% of the risk in industrial plants in general is related to 20% of the pressure equipment. To be more efficient with inspections

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and maintenance, it is useful to identify this 20% higher risk assets.

RBI has been used in the nuclear power generation industry for some time and is also employed in refineries and petrochemical plant. RBI has been applied in industries such as power generation, refineries, petrochemical plants and pipelines.

RBI Targets • To develop a cost-effective inspection and maintenance program that provides assurance of acceptable mechanical integrity and reliability. • To improve plant HSE (Health, Safety and Environment) • To improve plant reliability, availability and maintainability (RAM) • To reduce maintenance down time cost

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