Schedule Risk Management - Construction Project Scheduling and Control - page 377

IMPORTANCE OF GOOD PLANNING FOR RISK MANAGEMENT
The quality of the risk management plan will control the usefulness of the risk analysis.
Quality is achieved through developing a good and encompassing master risk register
in a brainstorming workshop with experienced attendees, and following that process
with analysis and risk allocation. This is combined with a process of continuing risk
monitoring during updates as well as continuous cycles of risk management.
Participants in the workshop often comment that they cannot take certain risks
into account because they do not have control of the risks or they have no idea if that
risk will actually happen. One of the typical issues is repeated cycles of shop drawings,
where experience tells us that a complicated design may cause structural steel shop
drawings to be rejected, requiring revision and resubmission. Some stakeholders feel
that this is beyond their ability to plan for and, therefore, that the schedule should not
include it and they should assume that the risk will not happen. Accepting this assump-
tion minimizes the risk identification and analysis process. This type of risk should be
identified, and then during the qualitative analysis, either it should be identified and
ignored as a low priority or incorporated as a high priority. However, if the risk is has
not been included on the risk register, the opportunity to analyze it is lost.
By means of a thorough and organized risk workshop, based on a good master risk
register, and participation by the major stakeholders as well as the project management
team, the output of the risk analysis will be very useful. The most likely risks will be
identified and analyzed, and with the rest of the risk management steps, the schedule
will evolve into a risk-adjusted schedule, capable of reasonable analysis and realistic
completion predictions.
IMPORTANCE OF GOOD CPM SCHEDULING PRACTICES FOR RISK
ASSESSMENT
Although there are significant benefits in brainstorming and identifying potential risks
on a construction project through raising the awareness of those issues, the efficient
way to evaluate and analyze those risks is through some computerized risk manage-
ment approaches. Whether it is modeling specific risk events or running Monte Carlo
simulations for duration uncertainties, these approaches depend on the quality of the
CPM schedule. If the schedule model does not reflect the complete scope of work,
does not utilize a good network that produces accurate calculations, and contains
scheduling components used inappropriately, then the results from the risk analysis
will not be useful. With risk assessment based on a well-developed CPM schedule, the
results will reflect a more probable accounting of those risks.
Good CPM scheduling practices include capturing the full and complete scope of
the work in the schedule. This can be achieved by using a work breakdown structure
(WBS), which then is reconciled with the chart of accounts or estimate to ensure that
all activities carrying cost are included on the lowest level of each column of the WBS.
Including the full scope of work also requires some level of consistency in the amount
of detail in each trade so that no single trade can control the network calculations
because of the number of activities in that trade.