A model for selecting risk assessment tools at industrial plants

An ever increasing amount of resources are devoted to managing risks in industrial plants to deal with uncertainties. This is because of the continuous advances in technology that is being implemented in industries now-a-days. The objective of the study was to develop a model for selecting suitable risk assessment tools that would be appropriate in a particular industrial situation. An extensive survey was conducted covering 135 successful applications of risk management cases in industry. In-depth analysis of these cases was conducted to identify the factors that lead to success of the risk management programs. It was found that selection of risk assessment tools depends on the project characteristics, nature of risks, and resources involved. The plants were then categorized into seven different classes as per the Standard Industrial Classification (SIC) code. The major project characteristics were found to be: industry type, location, project size, type of financing, and whether new or renovation work. The major risks were found to be: financial risk, structural risk, and environmental risk. Risk assessment tools that were successful were identified from the historical data. A computer based model was developed to identify the appropriate tools likely to succeed for a given set of conditions. All input and output screens were developed in Visual Basic to develop a graphical interface for user interaction. The validity of the model was tested for a few selected cases, and then comparing the output of the model for the risk assessment tools, with those used in the actual successful cases. The model output matched with the actual tools used in these cases.