Question: You are hired as a project manager by Fuel System Plc, the company is moving the entire existing plant to new premises so that to provide the social relaxation to the local community around the existing premises and to increase the productivity and profitability of the company. You have to present a project plan to the stakeholders of how can be achieved.
In this page we will present the Risk Analysis Coursework
Risk Analysis
Purpose
The company needs to identify the main risks in advance, their likelihood of occurrence, and their impact. The main purpose is to develop the strategies to overcome these risks, so that project meets its scope, schedule, budget and benefits.
Roles and responsibilities:
Project manager: The project manager is the authorized person who will assign a risk officer. The risk officer should have good experience in handling the risks.
Risk officer: The risk officer will identify all the risks, maintain the risk list, analyse them clearly, have the ability to resolve those risks and keep regularly informing the project team about the probability of any coming new risk. The risk officer regularly updates his project manager about the risk.
Project member: He will regularly give the updates of results of risk analysis to the risk officer time to time.
Risk analysis and Risk Assessment Coursework
Risk 1: Take permission for constructing a commercial site and license for using a new technology from necessary authorities.
Source: Govt. and Licensing authorities.
Consequence: The regulatory authorities ban the site and ban the new machines for usage.
Risk Assessment:
Risk 2: The area chosen for construction is free of natural disasters like earthquake, storm etc. and the new site is easily accessed by any form of transportation and by multiple routes
Source: Environment /Nature /Human
Consequence: The natural disasters destroy the whole site and make the whole project futile. If there is only one route and it gets blocked by any cause then automatically the site gets blocked.
Risk Assessment:
The site will be checked properly by the meteorologists and based on their report, the project proceeds next. If the report is positive, the project proceeds. If the report is not positive, the project terminates at this point.
The project team makes sure that the site can be accessed by more than one route and the routes are publicly available for any body. It makes sure that big lorries can pass through those routes.
Risk 3: The company has genuine property rights of the site.
Source: External bodies or competitors.
Consequence: Some external body can come at any time and legally declares its ownership on the site.
Risk Assessment:
The project manager makes sure that the owner of the site is registered owner and the site legally belongs to him.
Risk 4: Stakeholders give their permission to start the project and the major stakeholders are not having any point of conflict with each other
Source: Stakeholders.
Consequence: Any stakeholder if quits can stop the working of project and a major stakeholder can quit from sponsoring the project.
Any conflict between major stakeholders who are the sponsors of the project may lead the project to premature termination.
Risk Assessment: There is regular meeting of stakeholders after a period of time. Every stakeholder is informed with a regular update and a updated report is produced for each stakeholder.
Risk 5: Customers of the company agree with the project plan and the supply to them is not to be affected by movement.
Source: Customers
Consequence: The company may increase the product value because of new site location or other reasons like toll tax, thus company can lost the customer.
The supply may get delay to customers resulting again in loss of customers.
Risk Assessment: Satisfying all the customers of the company is difficult task., however it is very good for the company that its major customer (Fuel sys) is already satisfied, remaining customers may loose, but it is not a point of worry because the company may gain new customers at a new location because that location is trading estate and there are many companies there. So there is a chance of gaining more customers over there.
The existing customers can be convinced with the following points:
The supply to them will not be stopped at any time.
If there occurs any additional cost over the product after the movement, then the company shares that additional cost with its customers and always try to impose a less additional cost on its customer
Risk 6: Suppliers of the company agree with the project plan and they agree to provide the raw material at the new site.
Source: Suppliers
Consequence: The supplier may not supply the raw material to the company or they may increase the cost of raw material by adding the additional costs (toll tax …) for a new site thus affecting the productivity and profitability of the company.
Risk Assessment: There is fear of loosing the supplier, however to retain the existing supplier, the company needs to take initiative and informs his supplier clearly about the plans. Company is ready to share the additional costs if any applicable. Sidewise the company will search for a new supplier around the new site which suits the company budget.
Risk 7: The company has enough capital to sponsor the project and the secondary sponsors like banks and other private financial bodies are available for sponsoring the project if required
Source: Sponsors
Consequence: At any stage of the project, the necessary capital seems to be insufficient, results in delay or termination of project.
Secondary sponsors may not provide the finance when there is an urgent need of finance resulting in project delay.
Risk Assessment: The company updates regularly to its sponsors with the working of the project and takes response from them regularly. If it seems at any time, particular sponsor is not responding well, then precautionary measures will be taken by project team to avoid any type of hindrance in the finance.
The company informs in advance to the secondary forms of finance like banks, private financial bodies. Project manager makes sure that the secondary sources are reliable, trustworthy professional and they are regular dealers of the company.
Risk 8: The contractors are highly professional, having reputable image in the market; complete their contract within the scheduled budget and time.
All the material and inventory that is being transferred reaches to the destination in safe and proper condition
Source: Contractors
Consequence:Any contractor unable to meet the deadlines or may quit in the middle of the project causes the project to delay, increases budget and lot of overhead.
Any inventory damaged during the project gives the financial loss and overhead to the company
Risk Assessment:The company passes the tenders for contractors; based on the market image of contractor, working history, the proposed budget, reliability, the working culture, the technology they are having, the best contractors are chosen.
In any case if one contractor quits or fails to complete the project, the company will have in his list the substitute for that contractor. It is clearly mentioned that if any loss occurs during the construction phase of project, then contractor is responsible for that loss and he will pay for it.
Risk 9: The project manager is well experienced, able to manage the project and project team members know very well their respective responsibilities.
Source: Project Team
Consequence: Any role that is quite not skilled in his job or may quit in the middle of the project results the delay, overhead, budget may get overflow in the project.
Risk Assessment: The project manager is selected on the criteria already mentioned and he is selected with a written contract that up till the project is not completed, he cannot break the contract.
The project manager is regularly updating the working of project to the managing director, so that if in any case he quits, the M.D. of the company comes into his position. The team members are clearly allotted with their responsibilities and their worked is being regularly tracked by project manager
Risk 10: The current staff of company agrees with the project plan.
Source: Project Team Current staff
Consequence: Staffs who do not agree to move to new site or the staffs who are going redundant like Shop Steward may go to strike; staff may go against the company creating the hindrances (like court cases against the company ) for the project resulting in project delay or even project premature termination.
Staffs who agree to move may demand for more money, incentives like new houses, additional transportation costs results in increase in budget.
Risk Assessment: The company devised a clear cut policy of redundancy of administrative staff. It is HR department of the company which defines the clear point systems on the basis of which employees are redundant. The staffs who do not intend to move because of their personnel problems, it is the responsibility of the company to give them incentives, additional benefits if they quit. The company devises a special policy for these kinds of employees. Policy is based on which either the employee chooses to shift to new site or he may be quit. Company should include new packages and incentives in option one so to attract the employees to move
There is a kind of staff which is very important for company like the experienced production staff or there is a kind of staff which is fairly militant like Shop Steward, in order to take this kind of staff unto the company’s side and to retain the experienced staff, company needs to provide them with incentives, more salary and even new houses to those employees who are very important for the company.
Risk 11: The local community is prepared for the movement of the company.
Source: Local Community
Consequence: Local Community may go against the project plan resulting in delay of the project.
Risk Assessment: Informed the local community around the company about the movement so that they can cooperate with the company during the movement because we need to produce more products, so there be more noise, more pollution and also during the movement there will be large noise of vehicles moving through residential areas. It’s good to inform them that the company is trying its best to get rid of the problem and for sometime they are to bear more disturbances in terms of air and noise pollution.
Risk 12: The share value of the company in the market is not affected.
Source: Competitors
Consequence: Project may lower the values of shares in the market.
Risk Assessment: Company needs to secure their current shareholders by providing all the necessary information to them and convincing them by telling the long term financial benefits of the project. Company will devise certain criteria based on the experience of financial experts and the criteria are reviewed periodically or at major milestones so that to save that market share value.
Risk 13: The project completes within the scheduled time and budget.
Source: Management/Project team/others
Consequence: Unable to meet the time and cost factors results in delay or premature termination.
Risk Assessment: Accounts Officer is the authorized person for managing of all the funds that are spent and he manages these funds within the budget and schedule.
1.Joan Knutson, Project Management For Business Professionals, John Wiley & Sons, 2001.
2.Dennis Lock, Project Management, Gower Publishing Limited, 1998.
3.J Rodney Turner, Eric Gabriel, The Handbook of Project-Based Management, McGraw-Hill Book Company,
4.http://www.projectmanagement.tas.gov.au/guidelines.htm
5.www.projectmagazine.com/template.html
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