Riordan Manufacturing Project Management Plan - Final Submission

RISK MANAGEMENT 12

Under the internal risks, such clear categories as suppliers, sub-contractors, contractors, designers and owners are borne in most of the past research methodologies. Under the external risks, the past studies consider natural factors, economic factors, social and cultural factors and political factors as the major categories. The studies have associated each of the above-mentioned categories with a number of risk events. The owner of the Riordan Manufacturing Company can be the source of risk through a number of events, which have been identified in the past methodologies. Among these events are the delaying of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract (Frenkel, et al., 2005).

Past studies also claim that designers can be the sources of risks due to deficiency in drawing, defective design, failure to issue documents on time and changes in design. The studies claim that contractors can cause risks because of poor quality work, low productivity, construction accidents, their incompetence, technical problems and departure of or lack of qualified staff. On the other hand, subcontractors can cause risks in the project because of breach of contract and because of poor performance, according to past methodologies. Suppliers, the last category under the internal risks, can lead to risks in fast track projects if there is a delay of material supply or if there are problems in the quality of materials (Crouhy, et al., 2000).

Under the political category of external factors, past methodologies identify such events as delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats as the possible sources of risks. The social and cultural factors that have been identified by the past methodologies include conflicts due to cultural difference, substance abuse and criminal acts.

On the other hand, the examples of economic factors, which are sources of risks in fast track projects, are shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation. The past studies have also identified unforeseen site conditions and unexpected inclement weather as the natural factors that can cause risks in fast track projects. Last, past methodologies have another category of external risks called others, in which such events as difficulty in claiming insurance, local protectionism, unfairness in tendering, delays in resolving litigation and delays in contractual issue resolution are the sources of risks (Frenkel, et al., 2005).

Risk Matrix Structure

	Impact Score

Domains	Negligible	Minor	Moderate	Major	Catastrophic
Owner	No delay of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract	Slight delay of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract	Reasonable delay of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract	Long delay of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract	Total delay of payments to contractors, imposition of unreasonably tight schedule, change of design, improper intervention, and delays in getting access to the site, lack of scope definition, sudden bankruptcy, and breach of contract
Designer	No deficiency in drawing, defective design, failure to issue documents on time and changes in design	Small deficiency in drawing, defective design, failure to issue documents on time and changes in design	reasonable deficiency in drawing, defective design, failure to issue documents on time and changes in design	Considerable deficiency in drawing, defective design, failure to issue documents on time and changes in design	Complete deficiency in drawing, defective design, failure to issue documents on time and changes in design
Subcontractors	Good performance	Slightly poor performance	Moderately poor performance	Considerably poor performance	Very poor performance
Suppliers	No delay of material supply or if there are no problems in the quality of materials	Slight delay of material supply or if there are few problems in the quality of materials	Reasonable delay of material supply or if there are reasonable problems in the quality of materials	Considerable delay of material supply or if there are considerable problems in the quality of materials	Complete delay of material supply or if there are many problems in the quality of materials
Political Factors	No delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats	Slight delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats	Reasonable delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats	Considerable delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats	Complete delays in approvals, bribes and corruption, changes in Laws, labor strikes and war threats
Economic factors	No shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation	Small shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation	Reasonable shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation	Considerable shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation	Total shortage in the availability of equipment, shortage in availability of manpower, shortage in availability of material, currency fluctuation and inflation

RISK RATING MATRIX

	CONSEQUENCE
	Insignificant	Minor	Moderate	Major	Catastrophic
Almost Certain	Low	Significant	High	High	High
Likely	Low	Significant	Significant	High	High
Possible	Low	Low	Significant	High	High
Unlikely	Very Low	Low	Significant	Significant	Significant
Rare	Very Low	Very Low	Low	Low	Significant

The identification of risks is seen as a recurring event. It cannot be done once and then set aside. It starts in the in the initial stage of a project in which the identification of initial risk is done. Identification and documentation of risks and mitigation measures are identified during the planning stage. The identification, resolution and management of risk go on after the initiation of the project throughout the project life cycle. New risks are identified as the project matures causing internal and external situations to change. As the probability of risk occurrence rises or as a risk turns into a reality, and the project manager addresses the real problem, there is need for re-planning to take place (Crouhy, et al., 2000).

The next step is to list all the potential risk factors identified in the above steps in a register. Analysis of the listed risk factors is then done through the determination of their severity or the likely impact on the outcome of the project (quality achievement, cost and time) and the probability of their occurrences. The next step is to map the risk with respect to severity and probability. After this, actions are taken to mitigate the effect of the particular risk. The preparation of contingency plan for high impact and low probability risk is done. Therefore, the risk management group in the fast track project has to work very closely with the project controlling and monitoring group (Crouhy, et al., 2000).

The changes to the budget, timeline and scope of the Riordan project has to be requested, reviewed, approved, reported and communicated. This means that there is need for the project management team to take time and analyze the consequences of making these changes. In case the consequences are going to cost the company, then the changes will not be approved. However, if the consequences are going to facilitate cost efficiency and meeting of objectives, then it is important to embrace the changes (Aven & Vinnem, 2007).

The role of the change control management is mainly to ensure that changes are approved and in tandem with the objectives of the project. If the changes will make the project take more time or use more money, then the change control management is there to disapprove such changes (Aven & Vinnem, 2007).

For each change the following process will be applicable. Logging will occur at various points in the process, e.g. after evaluation and after the decision, not detailed in the diagram below.

SUBMIT CHANGE REQUEST

RECORD CHANGE

REVIEW CHANGE/
SUGGEST ACTION

INITIATE CHANGE?

INCORPORATE CHANGE IN PROJECT DOCUMENTS

COMMUNICATE CHANGE TO PROJECT TEAM

References:

Aven, T., & Vinnem, J. E. (2007). Risk management with applications from the offshore petroleum industry. Berlin: Springer.

Crouhy, M., Galai, D., Mark, R., & Ebrary, Inc. (2000). Risk management. New York: McGraw Hill.

Frenkel, M., Hommel, U., Rudolf, M., & Dufey, G. (2005). Risk management: Challenge and opportunity. Berlin: Springer.

Grading Guide

Riordan Manufacturing Project Management Plan Grading Guide

Content 60 Percent	Points Available 2	Points Earned	Additional Comments:
All key elements of the assignment are covered in a substantive way and includes the following: Week Four Develop the risk management plan. Identify at least five specific risks that are applicable to the Riordan project. Create a risk assessment matrix table in Microsoft® Word. For each risk identified quantify the likelihood and probability of the risk occurring. identify the effect of the risk. provide an overall risk assessment score. estimate when the risk could occur. explain how you would mitigate each risk. Develop the change control management plan. Describe how changes to the project scope, timeline, and budget for the Riordan project will be requested, reviewed, approved, reported, and communicated. Identify who will be responsible for managing the change control process, reviewing and approving the change requests, and communicating the approved changes to project stakeholders. Explain the role of change control management and discuss how changes to the project schedule and project budget will be managed		1.25	1) You discussed risk management on a high level. I am confused by your Risk Matrix structure. What you need to do is to identify 5 specific risks. You should then determine a probability of the risk occurring, what it’s impact on the project would be, you should estimate when each risk would occur within the project, and finally present your mitigation strategy. 2) You explained the estimation methods and chose one providing an explanation. -- GOOD Change Management process covered.
	Total Available	Total Earned
	2	1.25