Turnarounds characteristically have such immensity and complexity that it can be difficult to see the forest for the trees. The Nobel Prize-winning author José Saramago perceptively asserted, “Chaos is merely order waiting to be deciphered.” A key component to understanding and managing turnarounds is the ability to understand and manage risk. The time for one-dimensional risk management hopefully has run its course. The rudimentary practice of processing the entire project through a risk assessment tool actually may introduce unnecessary ambiguity. A much better approach for pinpoint clarity may be to perform a 3-D risk assessment by targeting the three most important aspects of a project:
- Deterministic critical/near-critical paths. Depending on the values of bestcase scenario, worst-case scenario and risk mitigation adjustments, the deterministic critical path in the baselined schedule may not be the critical path that materializes most often in Monte Carlo simulations. Apart from properly executed Monte Carlo simulations, not only has the impact of risk not been quantified, but the most likely critical path may very well be overlooked. Whether the project finishes earlier or later than expected, it can produce cascading consequences. The phrase “critical path management” has become greatly popularized but is altogether insufficient since project managers must equally manage at least two other components (below).
- Most-likely-to-occur risk items. When assigning risk values to activities, one factor considered is how likely the potential risk is to be realized. With the relatively fewer activities that fall into this category, it becomes much easier to discern which activities need the most focus and contingency. It would be a mistake for project managers to assume there is no such thing as too much detail. Too much detail may be precisely what is blocking focus and clouding the issues.
- High-impact risk items. Another factor considered is the severity of the impact should the potential risk be realized. These are activities that can result in personal injury, environmental impact, equipment damage, loss of reputation or significant financial loss. Almost any risk can be mitigated, but the question is, “How much is feasible to spend for risk mitigation, and which risks does it make the most sense to mitigate?”
Maximizing the workshop
Team workshops can be very fatiguing if not organized properly. Assigning and negotiating risk likelihood, severity, activity duration ranges and activity cost ranges can be very time consuming when the team has to work through literally thousands of activities. Workshop time can be minimized by providing the team with a pre-read list of activities to evaluate in advance of the workshop. Accuracy in scoring can be increased by instructing the team to only evaluate activities with which they have good familiarity. There is no benefit in teams participating in traditional guessing games — only added mayhem. Participants must be required to clearly justify and articulate their reasons for assigning duration or cost range values to activities. It may be helpful to break workshops into general work types and related disciplines. The team must not overlook the risks associated with non-maintenance activities such as shop activities, delivery activities and support activities. Generally, workshops are more focused and effective when facilitated by an objective outsider with a wealth of experience in risk management.
While it is vitally important to perform a Monte Carlo risk assessment on every substantial project, value and clarity are only realized when the project schedule quality is validated, risk ranges are correctly assigned, and focus is placed on quantifying and mitigating the right risks. Moving from confusion to clarity is often a matter of focus and perspective. There is always more than one way to look at a project. In the insightful words of the notable critic Edmund Wilson, “No two persons ever read the same book.”
For more information, contact Onpoint at (281) 461-9340, email sales@onpoint-us.com or visit www.Onpoint-us.com.
