Initiating an RMP in a projects design stage

Initiating an RMP in the design stage involves a significant change in emphasis, but not a totally new process. Initiating a RMP such as the SHAMPU process in a project's plan stage can start with a define phase based on a reasonably complete project design. Shifting initiation from the plan stage back to the design stage of the project necessarily involves more attention to the project what and less attention to the project whichway, but it still needs to consider the implications of all later stages of the PLC.

The SHAMPU define phase during project design

When addressing the six Ws in the SHAMPU define phase, the emphasis will switch from the whichway and when to the what (design), but all six Ws will still require co-ordinated treatment.

The process will be more demanding because the design itself will be more fluid, perhaps with a range of quite different concepts requiring comparison and choices. It will also be more demanding because the six W issues associated with later stages in the PLC will usually require more effort. For example, life cycle cost and revenue issues, up to and including final disposal of the product of the project in some cases, are likely to be subject to much greater uncertainty due to more limited clarification to date.

However, this additional effort invested in developing an understanding of whole project life cycle issues will have ongoing benefits in the later stages of the project, as well as direct immediate benefits to the project as a whole. Because there is much more scope to change the project design to reflect whole life issues, it is much more important to understand them properly in order to seize the opportunities provided by the earlier initiation of risk management.

The SHAMPU focus phase during project design

When addressing how best to plan risk management effort, the shift in emphasis to project design choice issues is critical. A very similar process to the generic SHAMPU process may be appropriate, but at the very least significant cosmetic changes may be essential and more fundamental structural changes may be necessary.

Example 14.1 Assessing a project design choice

A client wanted a risk analysis undertaken to confirm (or otherwise) a design decision. The decision was the sizing of storage for Liquefied Natural Gas (LNG) as a buffer between LNG production and shipping. The production and storage facilities being considered were proposed for Melville Island, in the Canadian High Arctic (North West Territories). The proposed shipping involved ice-breaking tankers, taking the LNG to East Coast USA.

One team of consultants addressed variable shipping patterns. Another addressed LNG plant reliability issues. As discussed elsewhere (Chapman et al., 1984), analysis indicated a need for a second compression chain in the LNG production facility, as well as confirming the storage sizing.

Cosmetic changes to the generic RMP were important. For example, 'activities' were replaced by 'components' and 'subsystems', sources of 'activity duration uncertainty' became reasons for 'outages', the probability of a source occurring was couched in terms of 'mean time between failures', and so on (i.e., the activity-source-response-impact structure became a component-outage-response-impact structure). But the change in labels did not affect the models or the computer software used.

The cited paper discussing this example specifically addresses what cosmetic changes were necessary in this case and what aspects of the generic RMP were portable to the different context. For a more general discussion of these issues and other references see Chapman (1992b).

The SHAMPU identify phase during project design

In terms of the identify phase of the SHAMPU process, a shift in emphasis from activity based plans to underlying project design involves a shift in the scope of issues of interest that can be very important. If some of the time typically spent on issue identification in the PLC plan stage is devoted to issue identification in the PLC design stage, considerable benefit can be gained. The operating state of a building or piece of plant may be much more important than its construction and deserving of much more attention. For example, even for comparatively straightforward and routine projects like a speculative office block, making sure there are no design features that will threaten future net rental income (and hence capital value) because of concerns driven by tenants, owners, local authorities, and others may be much more important than construction cost issues that often receive much more attention.

Example 14.2 Pipeline operating risk influences design of a river crossing

A client wanted a risk analysis undertaken to make a design decision in a manner that could be justified with respect to a number of interested parties. The decision was how to get a proposed, very large gas pipeline (1.2 m) across the Yukon River in Alaska. The gas pipeline was following the route of a very large oil pipeline. The obvious choice was putting the gas pipeline in an empty, spare pipe rack on a road bridge built to carry the oil pipeline. Concerned parties included the owners of the oil line, the State of Alaska Transport Department as owners of the bridge (which had generated considerable road traffic), the local indigenous people (who were particularly concerned about the possible pollution impacts of any oil spills caused by bridge failure), and the US Federal Government Department of Energy (who were concerned about a significant portion of the US energy supply being exposed to potential sabotage on a single bridge).

An early issue of concern was which parts of the pipeline's life cycle should be the focus for the risk analysis. Construction, operation, and maintenance were addressed, but the emphasis was on the operation of the pipeline. 'Sources' in the project construction plan sense were replaced by 'failure' sources. In this case catastrophic failures were the concern, not minor operating difficulties.

The RMP had to reflect more significant changes in this case than in the Example 14.1 case, including the need to explicitly demonstrate the relative merits of alternative structures to different groups of people with quite different concerns, as discussed elsewhere (Chapman et al., 1985a). For example, the project manager (Debelius) was a very experienced and pragmatic former senior officer in the US Army Corps of Engineers. He made it clear at the outset that the insights gained during the course of the study must be summarized by a clear defence of a recommended choice on one side of a single sheet of A4 paper. The study was a large and complex one, involving about 30 people working full-time for about three months at its peak. The challenge of summarizing its results on one page in this way was formidable, but its value has been remembered for all subsequent studies, a lesson worth learning well. The purpose of the analysis was gaining the insight required to write very simple stories. The main story in this case was a surprising story for many. The recommended approach, a separate aerial crossing, was the least likely option as perceived by all parties involved at the outset. Moreover, it was not difficult to explain the rationale for the preferred approach, in terms of effective rapid recovery from loss of the separate aerial crossing by temporary use of the bridge pipe rack if the bridge survived and a reasonable degree of independence between threats to the aerial crossing and threats to the bridge. Complex source-response dependencies that were not anticipated could be reduced to a simple story once their impact was understood.

The SHAMPU structure phase during project design

The design of the SHAMPU structure phase requires an understanding of those aspects of project uncertainty that need explicit attention and those that do not. All the concerns addressed in Chapter 8 are relevant, but the extent to which structural issues can be anticipated in the focus phase may be significantly reduced. This makes the structure phase more important and more demanding. Chapman et al. (1985a) develop this issue.

The SHAMPU ownership phase during project design

Ownership issues of special interest as a consequence of the shift in emphasis from project plans to project design include the impact of design-build-operate concepts. Source and response ownership discussions develop a distinctive new flavour when project whole life issues involve designers directly. More generally, ownership issues can become much more complex in the project design stage, because all the other PLC stages require clear recognition and attention.

The SHAMPU estimate, evaluate, harness, and manage phases during project design

Subsequent estimate, evaluate, harness and manage phases of the SHAMPU process implemented in the project design stage follow on in a way largely determined by earlier SHAMPU phases and the general principles discussed in Chapters 10 to 13. However, it is worth emphasizing that if the SHAMPU process embraces the design stage from the outset, project change control issues right back to design become part of an integrated and ongoing evaluate, harness, and manage process. For example, the distinction between 'target', 'expected' and 'commitment' values becomes an essential part of the language of design, with the management of expectations about design achievement linked to the management of expectations about time, cost and performance achievement. One obvious and important benefit of this is ensuring a reasonable chance of regular delivery of good news. If a messenger always brings bad news, it could be argued he or she may not deserve to be shot, but this is the likely outcome!

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