Business Report: Bespoke Risk Management Plan for BAA Heathrow Terminal 5

Executive Summary:
BAA Heathrow Terminal 5 is one of the busiest and most important airport terminals in the world,
serving millions of passengers annually. Effective risk management is crucial to ensure smooth
operations and prevent any potential harm to passengers, staff, or the environment. This report aims
to develop a bespoke risk management plan for BAA Heathrow Terminal 5 by engaging with the
literature and identifying and justifying key performance indicators (KPIs) to rate the effectiveness of
the process developed.

Introduction:
BAA Heathrow Terminal 5 is a world-renowned airport terminal serving millions of passengers every
year. The opening of Terminal 5 in 2008 faced a lot of difficulties and challenges due to poor risk
management. Therefore, it is essential to develop a bespoke risk management plan for Terminal 5 to
ensure smooth operations, prevent any potential harm to passengers, staff, or the environment, and
protect the reputation of BAA.

Risk Management Plan:

The bespoke risk management plan for BAA Heathrow Terminal 5 is based on the following steps:

Step 1: Identify the Risks

The first step in the risk management process is to identify the risks. The risks associated with
Terminal 5 can be classified into several categories such as safety risks, operational risks, security
risks, financial risks, and reputational risks. The risks can be further broken down into subcategories
such as baggage handling, airside operations, landside operations, security breaches, etc.

Step 2: Assess the Risks

The second step is to assess the identified risks. This involves determining the likelihood and impact
of each risk. The assessment will provide an understanding of which risks are critical and need
immediate attention.

Step 3: Develop a Risk Management Strategy

The third step is to develop a risk management strategy. The strategy should include the measures
that will be implemented to mitigate the risks. The strategy should be aligned with the business
objectives of BAA, and the measures should be practical, cost-effective, and sustainable.

Step 4: Implement the Strategy

The fourth step is to implement the risk management strategy. The implementation should be done
in a phased manner, with clear timelines and milestones. The implementation should involve all
stakeholders, including the management, staff, and suppliers.

Step 5: Monitor and Review

The final step is to monitor and review the effectiveness of the risk management plan. The
monitoring should be done regularly, and any changes or modifications should be made as necessary.

Key Performance Indicators (KPIs):

The effectiveness of the bespoke risk management plan can be measured using the following KPIs:

1. Safety Incidents: The number of safety incidents reported over a period.

2. Financial Losses: The cost of financial losses due to risk incidents.

3. Operational Disruptions: The number of disruptions to operations due to risk incidents.

4. Customer Complaints: The number of complaints received from customers due to risk incidents.

5. Compliance: The level of compliance with regulatory and legal requirements.

Justification of KPIs:
The selected KPIs are critical to measuring the effectiveness of the bespoke risk management plan.
Safety incidents and operational disruptions are key indicators of risk incidents, and the reduction in
their numbers indicates the effectiveness of the risk management plan. Financial losses are a
measure of the cost of risk incidents, and their reduction indicates the cost-effectiveness of the risk
management plan. Customer complaints are an indicator of customer satisfaction, and their
reduction indicates the effectiveness of the risk management plan. Compliance with regulatory and
legal requirements is crucial for the reputation of BAA and its compliance with the law.

Conclusion:
Effective risk management is crucial for the smooth operations of BAA Heathrow Terminal 5. The
bespoke risk management plan developed in this

As per the case study BAA Heathrow Terminal 5, the following risks can be identified:

1. Construction Risk: The construction process of Terminal 5 involves complex engineering, design,
and construction. The construction phase poses risks such as accidents, material delays, labour
issues, technical failures, and other issues that can lead to cost overruns and delays.

2. Technical Risk: The technical risk involves issues related to the integration of different technical
systems, such as baggage handling, air conditioning, and IT systems. These systems need to be
integrated seamlessly to ensure that Terminal 5 operates effectively.

3. Operational Risk: Terminal 5 was designed to handle a significant increase in passenger traffic,
which increases operational risk. Any issues related to safety, security, or air traffic control can cause
significant delays and negatively affect customer satisfaction.

4. Supply Chain Risk: The supply chain is a critical part of Terminal 5's operation, and any disruptions
can have a significant impact on its performance. Risks such as delayed deliveries, quality issues, and
supplier bankruptcy can affect the delivery of goods and services, leading to delays and cost
overruns.

Risk Criteria:

To assess and analyze the identified risks, the following probability impact model can be used:

Probability - The likelihood of a risk occurring can be rated on a scale of 1 to 5, with 1 indicating the
least likely and 5 indicating the most likely.

Impact - The impact of a risk can be rated on a scale of 1 to 5, with 1 indicating the least impact and 5
indicating the most impact.
Risk Register:

The following risk register can be developed for the identified risks:

| Risk | Probability | Impact | Rating | Mitigation |

|------|-------------|--------|--------|------------|
| Construction Risk | 4 | 4 | 16 | Regular safety audits, detailed planning, and contingency plans |
| Technical Risk | 3 | 4 | 12 | Rigorous testing, regular maintenance, and contingency plans |
| Operational Risk | 3 | 5 | 15 | Regular safety and security checks, effective communication with air
traffic control, and contingency plans |
| Supply Chain Risk | 2 | 4 | 8 | Diversification of suppliers, regular supplier assessment, and
contingency plans |

Mitigation:

To mitigate the identified risks, the following measures can be included in the risk register:

1. Construction Risk: Regular safety audits should be conducted to ensure that safety standards are
met. Detailed planning and contingency plans should be put in place to mitigate the risk of material
delays, labour issues, technical failures, and other issues that can lead to cost overruns and delays.

2. Technical Risk: Rigorous testing should be conducted to ensure that different technical systems,
such as baggage handling, air conditioning, and IT systems, are integrated seamlessly. Regular
maintenance and contingency plans should be put in place to mitigate any technical failures.

3. Operational Risk: Regular safety and security checks should be conducted to mitigate the risk of
safety and security issues. Effective communication with air traffic control and contingency plans
should be put in place to mitigate any issues related to air traffic control.

4. Supply Chain Risk: Diversification of suppliers should be considered to mitigate the risk of supplier
bankruptcy. Regular supplier assessment and contingency plans should be put in place to mitigate
any quality issues or delayed deliveries.