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evolutionwinter2012

PRODUCTIVITY R all togetherituttingpisk Neil Allan, University of Introduction concerns over the robustness of supply Bath, introduces recent The current focus on risk management chain partners trends in risk management, that given to quality assessment (QA) from increasing public and press scrutiny.company and personal profiles resultingin construction has strong parallels to and how organisations are and health and safety (H&S) in the 1980s combining appropriate and 1990s. Initially seen as a sub-set of Modern construction projects highlight tools and techniques management, risk has, like quality, become significant evolving uncertainties that a key philosophical approach to business. challenge existing management techniques Risk is currently seen as being crucial to and practices. Box 1 illustrates, graphically, competitive advantage, and requiring: the consequences for getting it wrong. a reframing of ideas ISO standards Box 1 Consequences of inadequate risk management integrating management (ERM) a major financial crisis that is a culture all of its own. still affecting global economies triggered by deep rooted control So, can anything be learnt from all the problems in mortgage lending in years of implementation and study of UK and USA financial institutions quality control (QC), QA and total quality management (TQM) to explain why, apart a catastrophic natural disaster from H&S risk management (which is in Japan that initiated a nuclear largely legislation-driven) risk management emergency. This has questioned is still given secondary consideration by engineering assumptions about many managers in construction. CIRIA’s safety factors and why impacts publication on risk control (Godfrey, 1996) from interrelated risks were helped raise awareness across the industry. not considered in combination. However, given changes in the industry over The tragedy also highlighted the the last 20 years, a new updated guide on important role culture plays in risk is now being developed. the control and management of risk The importance of an effective risk strategy a cascade of events led to the has grown as projects and programmes Deepwater Horizon oil spill in get more complex and more ambitious. the Gulf of Mexico. A blowout This extends beyond the risks of delivering on an oil-rig that should have the project to time and budget to include been contained sparked one of how the project relates to the sponsoring the world’s worst environmental organisation’s overall business and disasters and resulting in severe reputation – whether as client or as part financial and reputational of the supply chain. consequences for BP. The current economic climate accentuates this. Factors include: Several International Standards have been the regulatory and contractual burdens published that aim to standardise risk placed on parties in the construction management processes and principles process (for example, ISO 31000:2009, 73:2009 and BS 31100:2011). They do provide a the increased uncertainty of the business useful unifying risk language and approach climate for practitioners, with detailed guidance the fragility of plans for construction on how to adopt these concepts into projects, particularly those requiring government approvals or funding 24


evolutionwinter2012
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