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Risk Mitigation from a Lean Perspective

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marina cholakova

on 14 March 2015

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Transcript of Risk Mitigation from a Lean Perspective

Case Model
Cecilia Fernandez Marina Cholakova
Thank You For Your Attention!
Open Discussion
Risk Management
Building Engineer UPM, Madrid
DTU Engineering Management
MSc in Civil Engineering UACG, Sofia
DTU Engineering Management
Friday, 20th March 2015
DTU Engineering Management
Hypothesis & Problem Statement
Case study
Risk Mitigation from a Lean Perspective
How can Risk Management tools be combined with Lean principles to mitigate schedule overruns in a proactive manner?

How can fuzzy modeling be transferred to the construction industry for proactive risk assessment?
How can risks innate to construction projects, with implications on scheduling, be assessed
and mitigated through linking Risk Management and Lean Philosophy?
Closing gap between theory and practice in Risk Management and Lean.

Direct translation of lean philosophy to the construction sector is not advised.

Uncertainty and complexity in construction projects requires a dynamic risk management model.

Probability and possibility tools should be employed depending on the information available.

Lean construction tools allow for the improvement of knowledge flow needed in risk management models.

Lean construction improves reliability, reducing uncertainty.
Risk management is not about predicting the future. It is about understanding your project and making better decisions with regard to the management of your project, tomorrow
" Smith et al. (2006)

Problem Statement
"The whole raison d'etre of Project Management is to remove uncertainty about meeting specified objectives"
Atkinson et al. (2004)
Risk Management
1. Introduction
2. Hypothesis & Problem Statement
3. Case: Risk Analysis Simulation
4. Conclusion
5. Open Discussion
Construction industry has a poor reputation in risk analysis
" Taroun (2014)

There is a direct relationship between effective risk management and project success since risks are assessed by their potential effect on the objectives of the project
Baloi & Prince (2003)

Lean Construction is aimed towards increasing
reliability in all aspects and enabling better flow
Bertelsen (2014)
Case Findings & Conclusions
The model provides a tool for quantifying vague and unknown information.

The simulation model represents adequately the relation between rules, probability of occurrence and impact; and time overrun.

Proof a possible existing connection between lean tools and risk management.
10% probability reduction -> 15% overall time overrun reduction

Risk simulation model can be applied and has been well received in the industry.
Project Management & Organizational Theory
Risk Management approaches
Application of Fuzzy Logic to the Case
The application of fuzzy reasoning techniques provides an effective tool to handle the uncertainties and subjectivity arising in the construction process.
" Zeng et al. (2007)
Model limitations:
Few existent risk record -> difficulties in data collection

Choosing the right level of detail

Application of the model at early stages of the life cycle

The model should be constantly upgraded with the most current data available

Subjectivity of the input data and result interpretation
Traditional methods do not take into account the nature of construction projects

Widely used in problem solving characterized by vaguely defined criteria or random variables

Better performance in comparison to probability tools under uncertain circumstances or lack of information
All Organizational Levels
Entire Life Cycle
Membership Functions and Linguistic Variables for the Case
Degree of truth
Additional Perspectives
Lean Critique

Bottleneck Theory: Risk Drivers

Organizational Models for Risk Procedures

Knowledge and Risk as the 8th Flow
Risk Factor Impact for ex. Design error
Scheduling & Optimization
Lean Construction
Construction Project Management
Risk Management
Supervised by Sten Bonke; In collaboration with MT Højgaard
Risk Management model
Risk Taxonomies
Full transcript