Risk Management

1

• Risk Management
• from the Perspective of System Safety
• Presented by Kenneth S. Tam
• The information contained within is for general
  reference only,
• and is not to be construed as recommendations or
  suggestions,
• nor as description or depiction of any real
  events, facts or data - past, present and future.

2
Introduction

• The System Safety concept is the application of
  systems engineering and systems management
  principles to analyze and control hazards and
  risks.
• This encompasses the identification, assessment
  and control of hazards during the design,
  construction, modification and operation phases
  of various types of engineered systems, works,
  processes, services and products.
• The ultimate objective is to minimize risks
  through intelligent design, best practices, as
  well as preventive and mitigation measures.

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Introduction

• Closely associated with the System Safety concept
  is the study of Reliability, Availability,
  Maintainability and Safety (RAMS).
• These four elements are intimately related as
  failures of systems or products often pose a
  direct threat to safety.
• Much of this approach is to ensure safety by
  placing strict demand on reliability.
• On the other hand, although safety usually
  depends on the high availability of systems and
  their components, in certain instances, in order
  to uphold safety, operating systems are
  automatically or manually shutdown, or prevented
  to function by interlock or human intervention.

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Introduction

• In this presentation, the speaker will discuss
  the above topics, and will explore the use of
  specific management and analysis techniques as
  follows
• Risk Classification Hazard Log Fault Tree
  Analysis Failure Modes, Effects and Criticality
  Analysis (FMECA) Hazard and Operability Study
  (HAZOP) Quantitative and Quality Consequence
  Analyses, Cost Benefit Analysis, as well as the
  risk reduction benchmark of As Low As Reasonably
  Practicable (ALARP).

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Risk Management

• Degree of risk is usually judged by
• The probability of an event taking into account
  the likely
• severity of the consequence.
• Risk Management involves
• Setting Acceptance Targets
• Hazards Identification Tracking
• Assessments (e.g. RAMS approach)
• Implementing Preventive, Control Mitigation
  Measures
• Checking / Auditing / Improving Systems
  Performance

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Setting Targets

• Driving Force
• Legal, insurance, contractual requirements
• Organizations Policy
• Conventional Wisdom Lifetime risk of
• 1 in a million is often considered
• acceptable in much of the industrialized
• world.

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Target Examples

• Risk (expressed in E.I.) per Person Per Year
  from all Hazards

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Target Examples

• The above risk targets are expressed in terms of
• Equivalent Injuries (E.I.).
• 1 E.I. 1 Fatality,
• or 10 Major Injury Consequences,
• or 200 Minor Injury Consequences
• Major Injury Consequences require
• more than 7 days off work
• Minor Injury Consequences require
• first aid treatment

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Risk Classification

• Frequency Classification

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Risk Classification

• Severity Classification

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Risk Classification

• Criticality Classification

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Risk Classification
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ALARP

• As Low As Reasonably Practicable ALARP
• Incorporates consideration of available
  technologies, practicality, and cost-benefit
  analysis.
• Similar concepts -
• As Low As Practicable (ALAP)
• As Low As Reasonably Achievable (ALARA)
• These however may tend to be more stringent

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RAMS Assessments

• Fault Tree Analysis to illustrate system setup,
• possible failure events and probabilities

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RAMS Assessments Hazard Identification
Qualitative Evaluation

• HAZOP Study
• Structured brainstorming by a team of experienced
  professionals including safety experts,
  engineers, designers and operators to identify
  and resolve hazards and operation issues.
• Need to thoroughly understand systems or
  processes.
• Basic requirements in conducting study
• System or process diagram
• Design specifications
• Operation control procedures

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HAZOP Study PID
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HAZOP Study - PID
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HAZOP Study

• HAZOP Record Table
• Use of Guide Words (in Deviation consideration)
• Examples for Process Industries
• No Flow More Level
  Higher Temp
• Reverse Flow Less Level
  Lower Temp
• More Flow More Pressure
  Corrosion/Erosion
• Less Flow Less Pressure
  Maintenance

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RAMS Assessments FMECA Hazard Identification
Qualitative Evaluation
Failure Mode, Effects, and Criticality Analysis
additional information may be found in
US Military Standards Procedures for Performing
a Failure Mode, Effects, and Criticality Analysis
(1980)
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Hazard Identification

• Other techniques are also used in identifying
  hazards,
• e.g. Interface Hazard Analysis
• Physical Inspection
• Checklists

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Quantitative Risk Assessment

• In addition to hazard identification, and
• consideration of probability / frequency,
• QRA also focuses on
• Scenarios Development and Modeling
• Consequence / Effect Assessment ( to develop
• risk profile that shows extent of damage,
  injuries, and no. of fatalities)

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Cost-Benefit Analysis

• CBA is primarily an extension to QRA, for
  determining the practicality of further risk
  reduction, after the risk is quantified by QRA
  i.e. to demonstrate ALARP.
• Cost of Expected Value
  System
• Implementing Compared Reduction x
  per E.I. x Life
• Further Risk with in
  avoided
• Reduction Measure Risk
• Values of E.I. Avoided (Examples)
• HKxxx where Facility Owner has a prime duty of
  care
• HKxx where the victim has significant control of
  the event
• HKx for illegal acts by the victim

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Cost-Benefit Analysis

• If the implementation of further risk reduction
  measures would cost more than the aggregate value
  of E.I. avoided, ALARP may be concluded.
• On the other hand, if the benefit is higher than
  the cost of further risk reduction, the
  additional measures should be implemented.

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Hazard Management

• Record all hazards identified and related risk
  information as well as necessary mitigation
  measures and implementation schedule into a
  Hazard Log for tracking.
• Status is assigned to each hazard in accordance
  with progress throughout the life cycle of the
  system or project.

Etc.
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Source of Further Information

• Railway applications The specification and
  demonstration of Reliability, Availability,
  Maintainability and Safety (RAMS)
• British Standard
• BS EN 501261999
• British Standards Institution