Contact

ORE use for Risk Informed Decision Making (RIDM)

ORE use for Risk Informed Decision Making (RIDM)

Aug 30th, 2017

ORE use for Risk Informed Decision Making (RIDM) explores the possible deployment of ORE within RIDM. We will teach this in Banff using well documented case histories.

ORE use for Risk Informed Decision Making (RIDM)

Here are some examples:

  • Mining (operations and environmental rehabilitation)
  • Transportation (RR and highways)
  • Wharves (including multi-modal logistics)
  • Automotive (specialty vehicles)
  • M&A, startups

ORE use for Risk Informed Decision Making (RIDM) : does it fit?

We highlight below some aspects of RIDM and compare them to ORE features to show how ORE use for Risk Informed Decision Making (RIDM) is feasible and beneficial.

Modern RIDM requires to acknowledge uncertainties, multiple hazards, multiple stakeholders and compliance needs, integrating stakeholders’ concerns and perceptions.

ORE:

  • includes the uncertainties by working with ranges. Each step of the risk assessment has to explicitly consider uncertainties. Uncertainties should be:
    • systematically identified and classified;
    • represented and described by rigorous mathematical approaches;
    • propagated through the steps of the risk assessment procedure onto the risk measures until the decisions.
  • allows to integrate
    • multiple concerns (multiple stakeholder expectations) and
    • information sources as well as
    • multiple hazard types (natural, man-made, technological, etc.).

This leads to greater stakeholder participation in decision-making. Concerns and perceptions of stakeholders should allow to modify purely rational technical considerations which generally drive technocratic decision processes.

The match between ORE and modern RIDM requirements is perfect.

Modern RIDM requires the classic engineering/technical approach to risk assessment which includes:

  • safety margins (Factor of Safety),
  • engineered redundancy and diversity to prevent and reduce the impact of failures

and stochastic analysis based analyses such as:

  • Inter-dependencies
  • Common Cause Failure
  • Scenario building and
  • Extreme event analysis

to be integrated in the decision making process. This allows to recognize that all the aspects of a given system under consideration may not be known or ready for analysis simultaneously at different stages of a project/operation development/life..

ORE builds a convergent hazard and risk register that will accompany the project/operation thought its existence. The register is:

  • Scalable, i.e. built in such a way that different levels of knowledge can co-exhist in different areas.
  • Drillable, i.e. allows to perform queries on the threats-from, threats-to, per process thread, etc.
  • Concise, meaning it avoids double counting and fuzzy statements.
  • Economical, meaning information is never wasted, there is never the need to „start over“, even if considerable amount of new information becomes available.
  • Updatable, if necessary and if data available, up to real-time.

All the argumentation behind the analysis itself, including the assumptions, hypotheses, parameters and their uncertainties can be transparently laid out for disclosure points (however ORE register structure and numerical techniques remain proprietary).

Thus ORE is again fulfilling RIDM requirements and provides decision-makers with a clearly informed picture of the problem upon which they can confidently reason and deliberate.

We could make many more considerations, but this is a blogpost, not a book, so we will be delighted to answer your questions if you send them through the contact form or as a comment.

Discussion

Opposing stakeholders, not satisfied with a probability assessment based on subjective, modeled or even statistical approaches are of course likely to challenge risk and uncertainty analyses. Under the excuse of limited or poor knowledge of the problem at stake some stakeholder may invoke the „impossibility“ to perform an analysis, „mistrust“ in the results (their gut feeling is necessarily better than a science based approach) to avoid making a sensible decision.

The advantage of using ORE is that it allows transparent discussions by including those stakeholders ideas of ranges, variability of parameters and uncertainties, allowing a healthier debate.

During the implementation of the decision it is common for decision-makers to seek for further protection by adding conservatisms and performing traditional engineering frameworks of “defense-in-depth.”  This is typical of a deterministic approach to risk assessment. Adding layers of protection without evaluating their effectiveness to supposedly reduce the uncertainties (for example to „credible thresholds“) and in particular the “unknown unknowns” (completeness uncertainty) is inefficient and misleading. In particular, this approach may lead to:

  • identify a group of failure event sequences leading to credible worst-case accident scenarios called design-basis accidents;
  • predict their consequences;
  • design appropriate safety barriers which prevent such scenarios and protect from, and mitigate, their associated consequences

Accidents in all sorts of industries have shown that the „credible“ scenario established in this way oftentimes represent a strong censure of the possible and actually credible ones. Furthermore codes are generally not covering what they should cover. The above inevitably leads to significant under-estimation of mitigation.

The underlying principle has been that systems’  design should allow them to withstand all the worst-case credible accidents. In that case the considered systems are “by definition” protected against any credible accident. However, that does not cover for uncertainties, inter-dependencies and common cause failures.

Closing remarks

ORE Risk-Informed Decision-Making (RIDM) is a deliberative process that uses a set of performance measures (we call them success criteria), together with other considerations, to “inform” decision-making. The ORE RIDM process acknowledges that human judgment has a relevant role in decisions. Technical information cannot be the unique basis for decision-making.

ORE RIDM can be applied to decisions that typically have one or more of the following characteristics, independently from the financial stakes significance:

  • ramifications of alternatives which are difficult to understand without detailed analysis;
  • uncertainties in key inputs generates substantial uncertainty in the outcome of the decision alternatives;
  • large numbers of objectives requiring detailed formal analyses;
  • need to define objectives and derive the corresponding performance measures when facing a variety of stakeholders.

ORE use for Risk Informed Decision Making (RIDM) helps achieving success by:

  • supporting the selection of decision alternatives,
  • ensuring that decisions between competing alternatives include proper awareness of associated risks.

When applied to projects ORE RIDM helps avoiding:

  • late design changes, which can be relevant sources of risk,
  • cost overshoot,
  • schedule delays, and
  • cancellation.

Contact us to learn more.

Tagged with: , , , , , , ,

Category: Optimum Risk Estimates, Risk analysis, Risk management

Leave a Reply

Your email address will not be published. Required fields are marked *

Riskope Blog

  • LATEST BLOG POST
  • Integrated and convergent risk approaches need some discussion. Are they so different? And what about the good old Enterprise Risk…
  • Read More

More Info

  • Get in Touch
  • Learn more about our services by contacting us today
  • t +1 604-341-4485
  • +39 347-700-7420

Vancouver Digital Creative Agency Ballistic Arts Media Studios.