Risk Management In Engineering Project Management

This article discusses risk management and emergency disposal in current engineering construction management system by elaborating on the basic theories of project management, the characteristics of engineering construction project management, the definition of risk, risk management theories and risks in engineering project construction, especially the risks in hydropower engineering project construction, and by studying managing practice of Sichuan Jialing River Shaxi avionics engineering construction.Engineering project management is a one-time activity, which manages the process from the establishment of the project until the project is finished. Meanwhile, it is full of risks and challenges because of many uncertainties.The process is difficult to manage because that the project usually lasts for a long time, a lot of departments and companies are involved and there are many unpredictable factors.Shaxi avionics project had suffered from natural disasters both at home and abroad during its three years’construction from September2007to October2010, for example:the extremely long disaster of snow and ice from the year of2007to the early year of2008, the earthquake in Wenchuan on May122008, earthquake in Chile on February272010, flood in Jialing River in July2010, and so on. These are all unpredictable, uncontrollable and unavoidable huge risks in project construction. But through organization and coordination of the owners of the project, through the joint efforts, cooperation and support of all parties involved, harmful impact of natural disasters on Shaxi avionics engineering construction has been finally lessened and a normal, well-planned and controllable construction track has been restored, leading to the fulfillment of the adjusted anticipatory project construction goal.After an analysis of the risk management during Shaxi avionics engineering construction, of the analytical method for risky factors and of the management mechanism, management method and management measures, some experience and lessons can be summarized as follows:1. Basic Concepts of Risk ManagementProject management is an activity filled with complications and arduousness, while risk management in project construction is full of uncertainties, which means you don’t know when and what would happen.Risky incidents can be triggered off by force majeure, such as natural disasters and so on, and they can be aroused by controllable factors as well, such as improper technique and management.Therefore, a risk manager has to absorb the concept of holistic goal-setting and systematic management, to monitor risks according to stratification and categorization, to prevent from and avoid risky incidents aroused by controllable factors as much as possible and to reduce effectively the harmful impact of risky incidents aroused by uncontrollable factors.2. Emergency Disposal Is a Kind of Special and Urgent Risk ManagementEmergency disposal is a kind of special and urgent management method dealing with sudden risky incidents. Fundamental rules for emergency disposal include deciding quickly, putting measures into practice and not relying too much on the normal procedure or optimal measures. As a result, the effects of emergency disposal depend more on contingency response plans, daily preparation, experience and ability of the manager to handle contingencies and to make decisions.3. Core Leadership in Risk Management Is a MustEngineering project construction management is a complex and strenuous work in which the manager shoulders great pressure and responsibility. It also applies to risk management, especially to emergency disposal. Pressure on the owner of the project can be sharply reduced if major managers of every party involved in the project management can constitute a core leadership. However, how to constitute a core leadership of the project management is a problem the owner has to face for the major managers represent the profits of their own companies.The core leadership has to be formed on naturally built acquaintance, mutual recognition and mutual trust of the major managers, instead of on appointment or contractual bond. So it has to go through a series of specific jobs.4. Risk Management Is a Systematic WorkRisk management in project construction is a systematic work, involving security management, quality control, progress management, investment management, and work coordination, basic management of labor, equipment and material, level of engineering construction expertise and business managementHence, analysis of risky factors should be organized in a systematic way. Through a thorough and integral analysis and inspection, relevant management system and coping measures shall be formulated and applied to practical engineering construction.The first step of risk management is to decompose the engineering project, to choose feasible construction measure and technology according to the decomposed work type and risk, to make every worker responsible and to adjust and improve those measures according to practical situation during the process.Secondly, the basic management should be enhanced. An effective basic management can reduce the possibility of risky incidents, thus contributing to easy disposal of risky contingencies.Thirdly, contingency response plan, manpower and material reserve should be well prepared to handle big risks such as flood.Fourthly, harmful influence on domestic economic activities from international affairs, economic condition and natural disaster should be considered as a risky factor.5. A Complete Basic Management System is Essential to Risk ManagementAs a part of project management, risk management depends on a complete and effective basic management system.So risk management would go nowhere without a good basic management.6. Risk Management Requires Right Decision and Effective ExecutionManagement needs right decision and effective execution, which is extremely important to risk management concerning its special characteristic, especially when dealing with emergencies.But effective execution is based on good cooperative relations among all the parties. 7. Risk Management Should be ThoroughEffective risk management relies on good basic management, which includes improvement of the management regarding security of all parties, quality, progress, business, coordination, operation of the management system, management of manpower, equipment, material and includes operational strategies of all parties.Therefore, risk management should be thorough. It requires awareness of risk management of all the staff and of the major managers in particular.