CNAM Risk Management for Utility Managers

Transcription

1 CNAM 2013 Heather McGinnity PEng. Region of Peel Project Manager Roop Lutchman, PEng. GHD Leader, Business Consulting May 07 th, 2013

2 Agenda 1. Introduction 2. Risk Management Framework 3. Case Study (Lake Based Water Supply System) Region of Peel 4. Summary

3 Introduction

4 Introduction Risk taking is part of everyday life both work and personal: When we make decisions we consider the possibility of what could happen and the potential consequences Sometimes we do robust evaluations of both, but Most of the time we just wing it!

5 Definition of Risk Management Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. ISO 31000:2009 Risk Management Framework Risk = Likelihood (or Probability) x Consequence or Risk = (Likelihood x Vulnerability) x (Consequence x Resilience)

6 Risk Profile Drives Decision Making

7 The Risk Management Framework

8 Increasing Business Impact Increasing Ability to Manage Risks Hierarchy of Risks

9 Business Risk Management Drives Effective Business Continuity Planning Develop Business Continuity Network Corporate Risk Model Define Potential Business Disruption Events Business risks includes: 1. Economic 2. Extreme Climate Change 3. Knowledge loss 4. Pandemic 5. Terrorism Develop Risk Index and Mitigation Plans Regular Drills

10 Project Risk Management Drives Effective Project Planning & Controls Establish Context of Project Project Strategy / Environment Define Risk Areas / assign Ownership Assign KPI s to area of risk within project List Project Controls Assess Risk (of not meeting KPI s) Document Causes and Consequences Assign Controls (Current & Potential) Evaluate Control Adequacy Perform Baseline Risk Assessment Identify potential Change Triggers Review Project Strategy? The right KPI s? Sufficient and adequate Project Controls? Treat, Communicate, Monitor Identify improvement or close out Actions Assign, Log and Track improvement Actions Periodic Residual RA s and Reporting Respond to Triggers

11 Health & Safety Risk Management Reduces loss of life, Injuries and loss time Establish Context of Safety Risk Work Environment (activities and conditions) Define areas of concern / assign Ownership Determine methods of RA / qualitative, quantitative Establish Risk tolerability criteria Assess Risk (of exceeding tolerability criteria) Document Hazards and Consequences Assign Controls (Current & Potential) Evaluate Control Effectiveness Perform Risk Assessment (Current & Residual) Identify potential Risk Reduction Measures Review Changed conditions? Risk tolerability? Sufficient and adequate Controls? Treat, Communicate, Monitor Identify improvement or close out Actions for RRMs Assign, Log and Track improvement Actions Conduct periodic Residual RA s and Reporting Respond to new hazards or changed work environments

12 Physical Asset Risk Management Drives Renewal Planning Analyze Effectiveness of Existing LOS Model Future Trends, Demographics, LOS Develop Master Plans by Asset Class Options Analysis Potential Projects Renewal & Replacement Planning Confidence Level Rating Analysis List of Projects for Funding, Scheduling Determine LOS Collect Data & Monitor Performance Update Risk Framework Options Analysis Commissioning Operations Maintenance Hand Over Procurement Design Construction O&M Ready Scheduling of Funded Projects: CIP Resourcing Analysis (Internal & External) Prioritized List of Projects Project Prioritization using MCA Analysis CIP Delivery Project Scheduling Project Prioritization

13 Physical Asset Risk Management Defines Asset Criticality and Maintenance Planning Maintenance Plans are Set up in the CMMS Condition and other Asset Data is Collected as part of the Work Management Process

14 Operational Risk Management Reduces process upsets, production and quality issues 1. Understand operational threat events 2. Evaluate likelihood of these events occurring 3. Analyze consequence of these events assuming that they do occur 4. Develop mitigation plans to address either likelihood or consequence (or both) 5. Implement plans 6. Update framework regularly (new threat events, revised risk scores etc.)

15 Lake Based Water Supply Risk Management Region of Peel Case Study

16 Corporate Asset Management Planning Initiative supported by CAO and Regional Council Goal: Improve planning and prioritization of infrastructure across the organization Conducted a risk assessment of all Regional assets and defined Level of Service to customers Provide recommendations for funding for asset management at a department level

17 Background: Lake-Based Water Supply System Peel s Infrastructure Challenges Service population growth Limited redundancy in transmission system Limited funding for rehabilitation/maintenance of large diameter watermains ( 600 mm)

18 AWWA J Risk Management Approach AWWA J Standard Risk Analysis and Management for Critical Asset Protection (RAMCAP) for Risk and Resilience Management of Water and Wastewater Systems Project Objectives: 1.Characterize risk associated with transmission and subtransmission watermains 2.Develop risk management plans for high risk/critical assets 3.Develop a long-term capital plan to reduce overall risk 4.Develop a risk tool to repeat and update risk assessment

19 Project Approach and Methodology: RAMCAP Process Asset Characterization Threat Characterization Consequence Analysis Vulnerability Analysis Threat Assessment Risk Assessment Risk Management Define & characterize critical assets (size, material, location, etc.) Define risk scenarios that are a threat to assets (corrosion, third party damage,, etc.) Define risk scenarios that are a threat to LOS objectives (breaks, pressure, demand, time, etc.) Carry out model simulations (2012 & 2031 Scenarios) Define vulnerability category rankings (discount factor) Define / assign likelihood (judgement, historical data, etc.) Determine the likelihood that a specific threat would occur Develop risk profile(s) Define risk categories and classifications Develop Mitigation Plans & Strategies Map to Corporate Asset Management & Planning Processes Define Residual Risk

20 Risk Tool

21 Probability of Failure Risk Assessment 2012 Risk Results Consequence of Failure

22 Team Approach for the Application of RAMCAP Benefits Endorsement from Senior Management Knowledge sharing between Program Planning, Operations and Capital Works Understanding and buy-in with the scope and the deliverables Clarity on what is out of scope Capital Works Program Planning Operations Challenges Different priorities needed to be focused to a common goal Understanding that high consequences does not necessarily mean high risk

23 Data Approach: Top Down and Bottom Up Benefits Calibrated hydraulic model to evaluate hydraulic consequences of failure GIS database with watermain characteristics to feed into vulnerability analysis Challenges Changing model settings to reflect minor modifications to how the system is operating Data gaps and inconsistencies

24 Next Steps 1. Risk mitigation planning 2. Incorporate outputs into the asset management planning and budget process 3. Ongoing QA/QC of watermain data in GIS 4. Regular updates of risk assessment using risk tool 5. Risk assessment of other asset classes

25 Summary

26 Summary 1. Managing risk is a normal business process for municipalities formalizing this process is what s needed 2. There are many different risks that can seriously impact our ability to meet service expectations 3. A formal risk management framework and a standard approach to risk management can yield significant benefits to municipalities

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