Site Construction Risk Management - Article Example

Site Construction risk management Risk Management is the technique of reviewing a construction project with the aim of determining the risks it poses on its workers and the success of the project, projecting the probability of risks occurrences, its effects and what can be done to prevent these risks (Cote, 2003). Risk management is vital to all contractors and must be implemented to prevent lawsuits from clients or workers or even the risk of losing the contract altogether. Risk management therefore requires a strong working program of safety rules, which are strictly followed by all employees on site of the construction. In some companies, before any construction begins, employees undergo intense training on site to ensure that they are following the company’s safety rules and regulations and also, to keep them on the lookout for any potential dangers on site. Not all projects are same, hence each project is required to have its own special program on safety and regulations of the construction site and ensure employees adhere to it. By law, all contractual companies are supposed to document their reported on site incidents both serious and of the lost time variety. Clients wishing to employ a company’s services will always ask for a record of reported incident rate to evaluate the contractor’s potential for hiring. If a company has a bad reputation or if the reported incident rate is high, then the possibilities of winning that contract are less. Risk management is therefore important in defining the success or failure of a company. A risk manager is able to develop an effective risk management plan through exposure and identification of risks that balances the needs of the client with the company’s financial records as well as the contingencies that comes with t he risks. There are several major steps that must be taken in a company’s risk management plan: The risks must first be identified and then the project plan is laid out to minimize the risks. The projects objectives are then planned and risks evaluated to meet those objectives. A framework for recognizing and reporting risk is then defined. A plan for analyzing the risks involved with each particular project is then developed (Cote, 2003). Site construction risk and uncertainty Uncertainty management in construction can be described as a process of managing the perceived dangers, opportunities and their risk implications but also managing the various sources of uncertainty, which give rise and shape risk threat and opportunities. Risks and uncertainty are two different terms. In uncertainty, it is not easy to predict the dangers involved in a project, but in risks, it is possible to predict the dangers that could happen in a project. However, the two terms can be used interchangeably because they are both used to describe uncertainties in a project. An uncertainty in a construction project comes from many sources and often involves many people. Lack of proper project documentation or the use of unreciprocated terms or definitions can cause uncertainties in a project and often results in misunderstanding between workers or its managers, waste of time and quality of work. If a company’s’ procedures are not followed and the project is implemented without any proper procedure may lead to waste of time, duplication of work and uncoordinated team work and may eventually result to the ruin of the project. Uncertainty can also occur due to under estimation of work and also unacceptable planning of works. The result of this is delay due to underestimation of work and the lack of resources for instance less or more workforce, unrented machinery or unordered materials. This may also result in the choice of low-level quality of work since there is no time to complete the work in time. Additionally, prices may also increase for fast design and the execution of work usually associated with changes by the client or even due to delayed project implementation on site. Lack of trained or qualified workforce could also lead to uncertainties. Lack of professional knowledge, inexperienced contractor or even unqualified personnel can ruin even a well planned project. The quality of work is poor, time is wasted and can cause a contractors reputation to be tarnished. Uncertainties could also be due to lack of management tools and ineffective organizational work schedule (HM Fire Service Inspectorate. 2007). Risk Categorization Risks are categorized to help to identify the organizations risk in the hope of understanding and monitoring potential threats to the company. They are measured in terms of impact and the likelihood of happening. There are six main categories, which include: Project Management risks These are risks such as poor allocation of time and resources e.g. workforce, machinery or materials, inadequate quality of the project plan or even poor implementation of management disciplines. Technology risks These are risks concerned with technology to be used in the methods and such as unrealistic performance goals and/or objectives or the use of technology that has not been proven or used before. Organizational risks These are risks normally associated with the organization like interruption of funding or lack of it, resource conflicts with other projects and lack of prioritization of projects. External risks All risks associated with external forces for instance weather changes, earthquakes, civil unrests, labor issues or issues related with environmental regulatory bodies. Financial risks This involves the issues related with financing of the project, the time it takes to completion and the operation financing. Risk Identification Risk identification involves identifying the potential risk that are likely to happen and then documenting the characteristics of each risk. This is done on a regular basis through out the project and should involve both internal and external risks. Internal risks are those that can be controlled or influenced by the project e.g. cost, time while external risks are those that the project team cannot influence e.g. market shifts or government action. Risk identification also involves identifying opportunities and threats. The methods used in risk identification include brainstorming, experts, interviews, experience, workshops, questionnaire and feedback from previous projects. Risk Estimation Risk estimation involves the evaluation of risks and risks interactions to access the possibility of the risk happening and therefore determine the event that will warrant a response. Risk estimation is however not reliable can be complicated. The mathematical technique used is unreliable and not precise. Opportunities and threats interact in unpredictable ways where opportunities for one project could be a threat to another. The tools and technique used in risk estimation are expert judgment, decision trees, simulation, statistical sums and expected monetary value (Health and Safety Executive, 2010). Risk Response planning and Execution Risk response involves the process of defining steps to be taken in enhancing opportunities and the ones to be taken to minimize threats. There are five ways of responding to risks (House of Commons Defence Committee. 2009). Accepting the risks This involves understanding the risk, its consequences and then choosing to do nothing about it. Usually the probability of the risk occurring are minimal and the project team chooses to react if and when the problem occurs. Avoid the risk This involves skipping or doing away with part of a project. This however may mean smaller revenues for the business or an opportunity to save costs. Monitoring the risks and preparing plan to counter the risks This involves monitoring the risk by keeping watch as the project nears the risk point and then using the action plans to counter the risks. For instance money kept aside in form of a fund to be drawn incase of a cost overrun (Kemshall, & Pritchard, 1996). Transfer the risks Purchasing insurance is one way of transferring the risk. By doing so, incase of a risk happens the risk is transferred to the insurance company for payment. This method could also pose as an avenue to other risks occurring (Watts, 2003). Mitigating the risks This is the process of responding to the risk once it has occurred. It involves taking all the necessary steps already laid out as contingencies plans. Literature review Risk assessment involves determination of the value of what may facilitate the occurrence of injury or harm to persons in a specified work place or grouping place. This is done in order to evaluate whether enough measures have been put in place to alleviate the occurrence of the harm or whether more precautions are required to prevent the occurrence of an injury (Kemshall & Pritchard, 1996). Risk assessment ensures that nobody gets injured or ill. It is the requirement of the law for risk assessment to be undertaken in any workplace. This ensures that ill health and accidents resulting from workplace poor conditions do not occur. Risk assessment involves five steps. The first step is the identification of the hazard. This involves identification of anything at the workplace that has the potential of causing harm. During the identification process, one is expected to concentrate on hazards that are more significant which may cause pronounced harm (Kemshall & Pritchard, 1996). To be able to identify the hazards, which are more significant, all those involved at the work place should be consulted. For instance in school setting the students, teachers, the management and the support staff should be consulted in order to identify the cause of say fire outbreaks in the school (Health and Safety Executive, 2010). The second step is the identification of the person(s) who are at risk of being harmed. This may include say school community (students, teachers, management and support staff) or members of the public who may be involved in fire extinguishing in the school setting. The third step in risk assessment is evaluation of the risks and the measures that are in place to prevent the occurrence of the risk (HM Fire Service Inspectorate, 2007). It is important to consider the likelihood of each hazard causing harm. This helps in determining the necessity of additional risk reduction measure. During risk assessment, some risks may still remain and hence its significance should be assessed and decided upon. It is essential to ensure that you put in place all the measures required by the law and the standards of the industry. This step ensures that the risk is reduced as much as possible. The possibility of eliminating the risk should be considered and if not possible ways of controlling the risks so that the harm posed is as low as possible. Various principles may be applied to control the risks (Kemshall & Pritchard, 1996). First, options which are less hazardous should be tried. Second people should be guarded from accessing the hazard. Third, exposure of persons to the potential hazard should be reduced. Fourth, protective equipment should be issued to people involved. Finally, welfare facilities should be provided. This third step of risk assessment ensures that costs that may be incurred in case of accident occurrence are alleviated (Watts, 2003). The fourth step in the process of risk assessment is the recording of the findings. All significant hazards identified and the relevant conclusions made (in terms of existing controls and what need to be done) should be recorded in writing. The findings should be communicated to the persons concerned (Health and Safety Executive, 2010). This ensures that the assessment made is proper and the hazards which are significant have been dealt with appropriately and that the precautions put in place are reasonable and that the chance of a risk occurring are very low. The records taken can be presented to inspection team in case they are requested. They help to demonstrate that reasonable steps had been taken to prevent harm in case the firm is involved an accident (Kemshall & Pritchard, 1996). The final step in risk assessment is the reviewing and revision of the assessment. This ensures that new hazards that may arise as the firm grows and acquires new equipment are correctly assessed and necessary preventive measures undertaken to reduce risks (Lancashire Fire and Rescue Service. 2010). Past research on risk assessment and management There are various researches, which have been conducted on risk and management. The U.S. Bureau of Reclamation and the Bonneville Power Administration says that accidents are inevitable. However, the accidents occurrence may be reduced or eliminated, if the right strategies and approaches are in place (Watts et al, 2003). To reduce the vulnerability or accident exposure, advance risk assessment should be commenced to determine likely risky areas. According to the health and safety measures that are in the UK, risks should be reduced to a level that is reasonable practicable. This can be achieved through the understanding of the given risk exposure. Thus, a comprehensive risk assessment should be carried to determine the areas that may pose risk to the employees and equipments used (Office of Public Sector Information (OPSi). 2010). References Cote, A. (2003). Organizing for Fire and Rescue Services. London: Jones & Bartlett Learning. Health and Safety Executive. (2010). Health & safety legislation. Available at http://libweb.anglia.ac.uk/referencing/harvard.htm?harvard_id=63#63 [Accessed 3 June 2010] HM Fire Service Inspectorate. (2007). Fire and Rescue Service manual: Vol. 2: Fire service operations, Incidents involving rescue from road vehicles, Volume 2. London: The Stationery Office. House of Commons Defence Committee. (2009). Defence Contribution to UK National Security and Resilience. London: The Stationery Office. Kemshall, H. & Pritchard, J. (1996). Good Practice In Risk Assessment And Risk Management, Volume 1, 5th Ed. London: Jessica Kingsley Publishers. Lancashire Fire and Rescue Service. (2010). Risk Management Plan 2008/11. Available at http://www.lancsfire.gov.uk/IRMP/rmp2008-11.asp [Accessed 3 June 2010] Office of Public Sector Information (OPSi). (2010). Fire and Rescue Services Act 2004. Available at http://www.opsi.gov.uk/acts/acts2004/ukpga_20040021_en_1 [Accessed 3 June 2010] Watts, John M., Jr. and Marilyn E. Kaplan, (2003). Fire Safe Building Rehabilitation, NFPA International, Quincy, MA.  Watts, John M. Jr., (2003). “Fire Risk Indexing: A Systematic Approach to Building Code ‘Equivalency’ for Historic Buildings”, APT Bulletin, Vol. 34, No. 4, pp. 23-28.  Watts, John M., Jr., (2003). "Assessing Life Safety in Buildings", Section 13, Chapter 1, Fire Protection Handbook, 19th ed., Vol. II,  NFPA, Quincy MA, pp. 13-5 to 13-14. Read More