A wide-ranging look at
risk management
Five proven steps to develop a risk management strategy for construction scheduling The engineering and construction industry has historically taken an informal and improvisational approach to risk management, often leading to risks being identified too late in the project lifecycle. Results from the June 2020 quarter survey depicted that building projects throughout New Zealand were expected to see delays in completion times lasting between 20 and 60 working days, with the impact of COVID-19 regulations yet to be accounted for.
categories in diminishing significance levels: site conditions, main contractor, pricing, subcontractor, external and client related risk. It’s important to expand that focus, elevating that visibility to the program level. This will allow teams across projects to better synchronise resources and adjust plans to realise successful outcomes. Organisations managing construction projects (or portfolios) are increasingly looking for ways to incorporate more comprehensive risk management practices, but many in the industry are not sure where to begin.
Proper risk management will help project teams identify potential risks before they are encountered and give the teams time to develop strategies to reduce the issue’s impact. Some firms mistakenly only manage risks at the project level, which leads to an incomplete picture of exposure and performance. Results from a NZ questionnaire survey of consultants and contractors in the construction industry showed 21 risk factors which were segregated into six broad
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Here are five proven steps to help develop a thorough risk management strategy in construction scheduling:
1) Recognise the risks The management team, at the beginning of a program or project, should try to identify potential risks. Could poor weather or uncertain site conditions potentially delay construction? Is there a risk that material costs could significantly rise unexpectedly? It is impossible to identify and manage every possible risk, but the team should agree on
any events that are most likely to occur and have the greatest impact. These are the factors that they will monitor and manage.
2) Evaluate your exposure After identifying potential risks, the team should determine the likelihood of each risk occurring, as well as impacts to costs and schedules. Risks should then be ranked on the probability that they are to occur, and the impact they may have. Teams should prioritise how they will manage specific
