Introduction to Risk Management

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Introduction to Risk Management

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  • I need help with this too! Thank you. BTW, if anyone needs to fill out a “GA Carrollton Personal Report of Accident”, I found a blank form here: Personal Report Accident
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  • Number 2013/05X/03-039 (l) PP. Original Author, Jim Hein, FAASTeam Program Manager; POC : Kevin Clover, AFS-850 Operations, Long Beach FSDO Phone 562-888-2020 or Phil Randall, AFS-850 Airworthiness, Greensboro FSDO Office Phone 336-369-3948. Reviewed/Revision 1, 05/03/2013, by Pete Wilhelmson, AFS-850.
  • Welcome to the FAASTeam Hazard Awareness and Risk Management Fundamentals training module. Risk Management has been used for years by people at all levels and in all occupations and environments to anticipate hazards and to be safe. In its most simple terms, Hazards Awareness and Risk Management Fundamentals is a way of approaching your aviation tasks with a better awareness of the obstacles, conditions, and events that may harm you or prevent you from achieving your objectives, whether performing routine maintenance, running a flight school, running an air taxi/flight seeing operation, or simply going to get that $5.00 hamburger. The beauty of these tools and processes is that they can be applied to almost all activities, even non-aviation ones.  This introductory module will provide a sound foundation for your participation in the System Safety program and will show you how to integrate risk management into your normal GA activities. It is intended for all involved in any aspect of general aviation and with an interest in how to think and act in a smarter …. safer manner.
  • Read Slide
  • Read Slide
  • General Aviation is an important part of our lives and a critical part of our nation's economy and infrastructure. Safety is obviously a high priority, if not the highest, for those involved in general aviation. That is why you are taking this training. After completing this module on Hazards Awareness and Risk Management Fundamentals , you will be able to: Recognize the importance of hazards awareness and risk management Describe what a hazard is, what Risk Management is, and what the    benefits are of using risk management. Describe the three levels of Risk Management Use the risk management process to make decisions. We will discuss why the FAA has identified hazards awareness and risk management as a means of making general aviation safer and the benefits of using better risk management.
  • Freedom from risk would be safe, but that's not a very practical definition. Everything we do involves some level of risk, and it's impossible to eliminate all of it. Trustworthy and reliable has a definite effect on safety. But safety has to be more than reliable. After all, something can work like it is supposed to, but it can still hurt you--a propeller for example. Being in compliance is, of course, important, but you can be legal and still unsafe. Safety is really a quality of a "system" that allows the system to function under predetermined conditions with an acceptable level of risk. Think of the system as the bigger picture, like looking down on your job or task from 10,000 ft AGL. It's that interrelated group of people, procedures, materials, tools, equipment, facilities and software that exists and operates within some environment. So our goal is not to eliminate risk, but to manage the risk so that we can do our job or task with a level of risk that we accept. In order to mange the risk to an acceptable level, we have to know three things: What is the risk? What will it be? What is acceptable? You can see that safety is the flip side of risk. Is it safe? It is if the risk is known, predictable, and acceptable.
  • Most accidents are the end result of a chain of events and conditions. The links or factors in this accident chain often have many connections to many other links or factors, making it more web-like than chain-like.  They are often difficult to see or detect. The human factor is often a dominant factor with many connections to other parts of the system. Think about the following leading categories of accidents in terms of the parts of the system that are involved and the many connections among those parts: Controlled flight into terrain (CFIT) Weather Pilot decision-making Loss of control Runway incursions Survivability Now think about all the categories as a group. What are the common factors? What threads run through most every category? Why do most accidents fall into these categories? General Aviation Accidents Why do smart, well-trained, intelligent people like ourselves, our friends, and our colleagues continue to have accidents? And why in these known, very distinct categories? We do our best to be safe. We use checklists and follow procedures, we're trained and experienced. Yet these accidents continue to occur and the GA accident rate is higher than we can accept. What's missing? What can we do?
  • Read Slide. Add Notes
  • Risk Management is not a radical new way of "doing business" for general aviation. It's the way we do business everyday. We have been applying the risk management philosophy and methods intuitively and experientially for years. As you know, aviation has many terms that have very specific meaning and that must be understood in order for you to do your job or task effectively and safely. Similarly, risk management and system safety use terms that should be understood.
  • Let’s chat about some basic terms you should know. However, would any of you care to try define these terms or give an example of one? Hazard: A condition with potential to cause personal injury or death, property damage, or any other loss. Risk: An expression of possible loss in terms of severity and frequency/probability. Risk Assessment: The process of detecting hazards and determining risk.
  • What abut these terms? Anyone care to try to define? Risk Control: The steps taken to eliminate hazards or to mitigate their effects by reducing severity and/or likelihood of risk associated with those hazards. Risk Management: The application of a process which controls the risks associated with operations or tasks.
  • Risk is an expression of possible loss (consequences) in terms of severity and probability (likelihood). So it should be obvious that you have to first perceive the hazards before you can even start assessing the severity and likelihood of something bad happening (risk assessment). You might ask yourself in a given situation: 1. What can happen? 2. What are the consequences? 3. How likely is it? All GA operations in the United States, in fact, everything we do in our personal daily activities, involve risk and require decisions. Recall our definition of safety (pick one): a) Freedom from harm or risk b) Trustworthy and reliable c) Some risk but known, predictable, and acceptable d) In compliance with regulations and requirements
  • This is a simple Risk Assessment tool. Assessment of risk is made by combining the severity of consequence with the likelihood of occurrence. We can get a feel for the level of risk by visualizing a matrix with the severity on one side and the consequence on the other. We will assume that exposure is constant over the time of interest. This risk matrix does more than show us the relationship between probability and severity. You can use the risk matrix to help you decide if a risk is acceptable or at what level the decision should be made. Codes or categories can be assigned to probabilities and likelihoods in order to compare the risks of various hazards.
  • No Safety Impact - The hazard exist but may be more of a nuisance than having a real impact on safety. Minor - The hazard presents a minimal threat to peoples' safety or health, property, financial interests or efficient use of assets. Major - The hazard may cause minor injury, illness, property damage, and degrade the efficient use of assets. Hazardous - The hazard may cause severe injury, illness, property damage, and degrade the efficient use of assets. Catastrophic - The hazard may cause death, loss of facility/assets.
  • Read Likelihood Definitions
  • Engage the audience. Encourage discussing and sharing. Ask them to share a know hazard they are aware of and apply the matrix.
  • Discuss the changing of colors (i.e. severity) in each column is affected by likelihood.
  • The risk matrix does more than show us the relationship between probability and severity. You can use the risk matrix to help you decide if a risk is acceptable or at what level the decision should be made. Codes or categories can be assigned to probabilities and likelihoods in order to compare the risks of various hazards.
  • Read Slide…………emphasize rule
  • This answer applies if we are a large organizations Risk Management program. However, if you an independent, self-employed AMT, then the acceptability decision rests with you. The pitfall here is you must assess honestly to make the right decision. This is where you challenge you integrity and discipline.
  • Here is a question for you. Recall the answer is in Rule 1 we discussed earlier. ANSWER: is “worst”. Discuss if necessary.
  • Risk Management is a proactive approach and decision aide to systematically help identify risk in the normal course of activities and determine the best course of action. This type of risk management is often called Operational Risk Management (ORM) to differentiate it from other similar approaches, for example, those used during design and development. However, once you have` identified the risk you got to do something with it. You have four options to manage it. Read each option and ask if anyone give an example of each.
  • Although risk management is not a radical new way of "doing business" for general aviation, individual experience was often relied upon to achieve safe results. That experience was far too often acquired the hard way and sometimes with tragic results that could have been avoided. Risk management teaches us that careful analysis and control of hazards will give us the optimum results in most any situation. Consider these underlying principles before, during, and after every safety-related decision and risk management process. 1. Accept risk when benefits outweigh the cost. Risk management is about controlling risk, not avoiding all risk. Recognize as a "fact of life" that some degree of risk is associated with all tasks, actions, and operations, and therefore it's up to you to minimize and manage the risk of what you are doing. 2. Accept no unnecessary risk. You must accept the necessary risk required to successfully complete your activity or task, but unnecessary risk has no real return in terms of benefits or available opportunities. This is especially relevant for common repetitive tasks such as refueling or preflighting. 3. Anticipate and manage risk by planning. Risks are more easily controlled when they are identified early, so use Risk Management in all planning processes. The best time to start risk management is early, when the paper is "blank." But don't think risk management is only a planning tool. Use it at the planning stage, during execution, and upon completion of a task. 4. Make risk decisions at the right level. Make decisions at the lowest level where the decision maker has the necessary information, experience, and authority to make a good decision. The level of approval authority should be commensurate with the level of risk accepted. The right person is the decision maker that can allocate resources to mitigate the risk and has the appropriate level of responsibility and authority. 5. Document the decisions. For follow up and future evaluation
  • The philosophy of risk management is that it is wasteful, irresponsible, and not cost-effective to wait for an accident and then try to figure out what happened in the hopes of not letting it happen again. So far, we have defined and discussed what unnecessary risk is, what acceptable risk is, when to use risk management, and at what levels to use risk management. Now we will introduce a simple and common sense process that will help you weigh the risks against the benefits and reduce your reliance on intuition and hard experience.
  • We will explore the risk management process from the perspective of making decisions. If we look at all accidents, the majority are attributable to human error. Humans, of course, are only one link in the chain of events or factors that contributed to the accident. If any one of these events in the chain had been broken or stopped, it is possible that the accident could have been avoided. Making better decisions using risk management can help us break the accident chain by preventing the accident. There are three levels of risk management decisions. (Next slide)
  • Risk management decision making is a process that remains the same no matter which of the levels you are applying. You may, however, take an abbreviated approach in the case of Time Critical. Time Critical —An “on-the-run” mental or oral review without recording information on paper. This approach is used when there is little time, little complexity, or low risk. This is the most commonly used level of Risk Management for routine situations. It may take an abbreviated format; Deliberate— Application of the complete five-step process primarily using personal experience and brainstorming to identify hazards and controls. Normally involves documentation. Examples: planning an upcoming operation, review of an SOP, maintenance or training procedures and damage control/disaster response training, or the proverbial family vacation. In Depth— A through approach to an event involving research of available data, formal testing, or long-term tracking of information to ascertain hazards. Examples include long range planning, strategic planning, development of training curricula, and major systems overhaul or repair. An in depth approach can also include major/important evolutions at the local level such as organizing an air show.
  • We've accepted the known risk, but what about the unknown risk? Ask yourself a few questions. For example . . . What if there's a hazard out there that we haven't considered? What if there's a hazard we missed or forgot? What if a new hazard appeared after our analysis was performed? What if the hazards interact in a way to multiply the risk? What if there was an unknown hazard we had no way of knowing? What can we do to better manage unidentified risk? Probably the best way is to include in our planning and decision making a safety factor or a margin of safety.
  • By taking proactive, thoughtful actions that give us a comfortable safety margin, we can better plan for unplanned risk. Here are some examples of how this can be achieved: Watch out for things that erode your safety margin. Things like: Being rushed and subjected to the stress of other time pressures Level of skill, training, or experience. Is your level of skill, or those around you, up to the task? Complacency Workload This is not just motherhood. Think about making a personal checklist next time.
  • Read and discuss bullets on slide. Solicit group discussion. Ask questions
  • Risk management is a five-step process. It is most effective when you think of each step as a building block for the next step. Remember, risk management is also a cycle that is continuously seeking new hazards and reevaluating the risk.   We will go through the five steps and talk about a few simple approaches for achieving the purpose of each step to better manage the risk.
  • Identifying hazards is the most important part of our risk management process. If hazards aren't identified, they aren't going to receive attention in the form of controls. And that means that you are unknowingly accepting that risk associated with the unidentified hazard. Here are three basic ways to help you identify hazards: 1. Task Analysis Also known as an operations analysis, this is where you simply list the steps of a task and then develop a list of hazards for each step. 2. "What if?" Tool We're all familiar with Murphy’s Law: “If it can go wrong, it will.” In the case of the “what if” tool, we are simply asking the question “what could go wrong?” - Murphy was an optimist. 3. Change Analysis Many accidents involve change as a factor. In fact, change is sometimes referred to as the "Mother of all Risks." You simply look at an operation/evolution and ask "what is different?" The differences are what constitute hazards.
  • Hazard severity can be expressed in qualitative terms.  Consider the following standard categories: Category I - Death, loss of asset, or grave damage. Category II - Severe injury or property damage. Category III - Minor injury, property damage. Category IV - Minimal threat to personnel safety or property. Estimate the probability of the hazard resulting in loss based on location, exposure time, statistical data, etc. The likelihood or probability of the hazard can be categorized using the following criteria: Probable - Likely to occur immediately or within a short period of time. Remote - Probably will occur in time. Expected to occur several times to an individual item or person or frequently to a fleet, inventory, or group. Extremely Remote - May occur in time. Can reasonably be expected to occur some time to an individual item or person or several times to a fleet, inventory, or group. Extremely Improbable - Unlikely to occur. These categories can be modified or renamed to better suit an organization or task. Just be sure everybody understands what they are and what they mean. Finally, use a risk assessment matrix to determine the level of risk.  
  • Now that we have determined what risks are present, we have to deal with them by coming up with potential risk control options. Risk controls are meant to change risk by lowering the likelihood of occurrence and/or decreasing the severity of a risk. You can devise control measures using your experience and a little imagination. Control Options fall into three categories: Engineering, Administrative, and Personal Protective Equipment, in order of preference. Use common sense when determining appropriate control measures. For example, it's usually preferred to engineer out a hazard than to add a new procedure, but this option may not be affordable. Start with the most serious risk first and use controls that will reduce the risk to a minimum consistent with the benefits of completing the task or operation. Use the categories as a memory jogger that may trigger another option. Once you have chosen the best mix of control measures, it is time to decide if the risk is acceptable. Oftentimes, the first action is determining who should make the decision. If you are making the decision, you must decide if the overall risk is acceptable with the controls already in place.
  • Use common sense when determining appropriate control measures. For example, it's usually preferred to engineer out a hazard than to add a new procedure, but this option may not be affordable. Start with the most serious risk first and use controls that will reduce the risk to a minimum consistent with the benefits of completing the task or operation. Use the categories as a memory jogger that may trigger another option. Once you have chosen the best mix of control measures, it is time to decide if the risk is acceptable. Oftentimes, the first action is determining who should make the decision. If you are making the decision, you must decide if the overall risk is acceptable with the controls already in place.
  • Act to control the risk. Once you decide how to control the risk, the next obvious step is to make it happen. This may involve several factors, depending on the situation. For example: Assets may have to be acquired or made available. Documentation may be necessary--things like a plan or a policy. A log book entry may be appropriate—or even required. People may have to be notified or responsibilities assigned. Be realistic in the selection and implementation of controls. Communication is key. And to be fully effective, the controls must be sustained and checked throughout the operation.
  • In this last step, you monitor the controls you implemented and the entire big picture. Good supervision may reveal additional hazards, thereby requiring additional controls. You are looking for three things: Are the risk controls effective? Is there a need for further assessment? Maybe something changed or an unanticipated hazard appeared. What can I learn from this? This is important and has to do with learning lessons the smart way. Ask yourself what worked and what didn't and why. Share your knowledge and experience and make the system better. Consider a debrief. That's the last step but not the end of the risk management process. Remember, this is a cyclic process so always be looking for hazards and be ready to go through the following four steps. With a little practice, it'll become second nature.
  • Risk management is a five-step process. It is most effective when you think of each step as a building block for the next step. Risk management is also a cycle that is continuously seeking new hazards, reevaluating the risk, and managing it through controls and monitoring.  The five steps are Step 1: Identify Hazards - Considering the major steps in an operation, identify any real or potential condition that can cause mission degradation, injury, illness, death to personnel or damage or loss of equipment or property. Step 2: Assess Risk - For each Hazard, determine the degree of Risk in terms of probability and severity of loss from exposure to the hazard. Step 3: Make Risk Decisions - Develop possible risk control options and evaluate their cost and benefit. The appropriate decision maker uses cost versus benefit analysis to choose the best controls. Step 4: Decide and Act - Plan and implement risk controls to eliminate the hazard or reduce the risk. Step 5: Monitor - Be proactive and perform personal follow-up on effectiveness of control(s). You may want to use a work sheet to help. This process can be understood and used by anybody in any situation. Properly done, it will enhance the safety and efficiency of virtually any task or operation. Let's walk through a quick example.
  • Answer is B. Frequency and severity. Discuss if necessary.
  • Answer is A. frequent, probable, occasional, remote. Discuss if necessary
  • Discuss further if necessary
  • Read slide. Discuss if necessary. Emphasize that fourth bullet applies to an organization. However, if individual is adopting risk management process than the “acceptance” is made by the affected individual…………as well as accepting the responsibility and consequences.
  • Engage audience in this exercise. Discuss the various responses given by members of audience.
  • Read the slide to audience. The answer should be discussed emphasizing that embracing risk management by organizations or individuals will reap the benefits of increased safety.
  • General Aviation is an important part of our lives and a critical part of our nation's economy and infrastructure. Safety is obviously a high priority, if not the highest, for those of us involved in general aviation. That is why this training is important. You should now be able to: Recognize the importance of hazards awareness and risk management Describe what a hazard is, what Risk Management is, and what the    benefits are of using risk management. Describe the three levels of Risk Management Use the risk management process to make decisions.
  • Solicit and encourage audience feedback on FAASTeam Feedback web link: http://www.faa.gov/about/office_org/headquarters_offices/avs/stakeholder_feedback/afs/field/sf_faasteam/ Discuss faasafety.gov: registration, AMT Awards Program, Available resources and training courses and other features. Consider briefing WINGS if pilots are in audience.
  • Introduction to Risk Management

    1. 1. Presented to:By:Date:Federal AviationAdministrationAirworthiness orOperationsPositive Safety CultureR1Introduction to RiskManagementFundamentals
    2. 2. Federal AviationAdministration2•Risk Management– Used for years– Used in many industries environments– Used to anticipate the effects of hazards becoming events.– Used to approach aviation tasks with increased awareness– It can be applied to almost all activities, even non-aviation.Risk Management Fundamentals
    3. 3. Federal AviationAdministration3• This briefing of hazards and risk will include:– Is it safe? The need for better risk management– Definitions, terms, and basic concepts– Making better decisions– Applying Risk ManagementRisk Management Fundamentals
    4. 4. Federal AviationAdministration4• Purpose of this briefing:– Provide a common foundation of riskmanagement fundamentals– Suggest how to integrate risk managementinto your organizationRisk Management Fundamentals
    5. 5. Federal AviationAdministration5Briefing Objectives• After this briefing, you will be able to:– Recognize the importance of hazards awareness and riskmanagement– Describe what a hazard is, what Risk Management is, andwhat the benefits are of using risk management– Describe the three levels of Risk Management– Use the risk management process to make informeddecisions
    6. 6. Federal AviationAdministration6ANY QUESTIONS BEFORE WE BEGIN?Risk Management Fundamentals
    7. 7. Federal AviationAdministration7Question: What is safe?a) Freedom from harm or riskb) Trustworthy and reliablec) Some risk but acceptabled) In compliance with regulations andrequirements
    8. 8. Federal AviationAdministration8Question:Why do smart, well-trained, intelligent people likeourselves, our friends, and our colleaguescontinue to have maintenance accidents?Whats missing?What can we do?
    9. 9. Federal AviationAdministration9What Are We Missing?Systematic and standardized way to identifyand manage risk.– Not everyone has learned to actively seek out the hazards thatcan hurt and to determine what level of risk the hazardsrealistically represent.– Need to make better decisions –• easier• more comprehensive• more justifiable.
    10. 10. Federal AviationAdministration11Definitions & Basic Concepts• Hazard• Risk• Risk Assessment
    11. 11. Federal AviationAdministration12Definitions & Basic Concepts• Risk Control• Risk Management
    12. 12. Federal AviationAdministration13Risk & Risk AssessmentRisk is an expression of possible loss (consequences)in terms of severity and probability (likelihood).To first perceive the hazards in a given situation,ask yourself:1.What can happen? What if ?2. What are the consequences?3. How likely is it?All aviation operations involve risk and requiresdecisions to be based on common sense, bestpractices, and well managed risk.
    13. 13. Federal AviationAdministration14ImprobableRemoteOccasionalProbableFrequentNegligibleMarginalCriticalCatastrophicLikelihoodSeverityRISK ASSESSMENT MATRIX123456 10781211 159131614181917 20
    14. 14. Federal AviationAdministration15Severity Scale DefinitionsCatastrophicResults in fatalities and/or loss of the system.CriticalSevere injury and/or major system damage.MarginalMinor injury and/or minor system damage.NegligibleLess than minor injury and/or less than minor system damage.
    15. 15. Federal AviationAdministration16Likelihood Scale DefinitionsFrequentLikely to occur often.ProbableWill occur several times.OccasionalLikely to occur sometime.RemoteUnlikely to occur; but possible.ImprobableSo unlikely, it is presumed that it will never occur.
    16. 16. Federal AviationAdministration17QUESTIONQUESTION• Based on this Risk Matrix, what would beBased on this Risk Matrix, what would bethe level of risk if the likelihood wasthe level of risk if the likelihood wasprobable and the severity was marginal?probable and the severity was marginal?Risk level 6.Risk level 6.ImprobableRemoteOccasionalProbableFrequentNegligibleMarginalCriticalCatastrophicLikelihoodSeverityRISK ASSESSMENT MATRIX123456 10781211 159131614181917 20
    17. 17. Federal AviationAdministration18AnswerAnswer• Assessment Results = 9Assessment Results = 9Risk level 6.Risk level 6.ImprobableRemoteOccasionalProbableFrequentNegligibleMarginalCriticalCatastrophicLikelihoodSeverityRISK ASSESSMENT MATRIX123456 10781211 159131614181917 20
    18. 18. Federal AviationAdministration19USING THE RISK MATRIX• Provides a relationship of probability and severity• Risk levels are determined so that educated decisioncan be made about acceptability of the hazard/risk• Level of risk determines who in the organizationshould make the “accept” decision
    19. 19. Federal AviationAdministration20Rule #1When selecting the severity level, you mustalways consider the worst that can happen …regardless of the likelihood.
    20. 20. Federal AviationAdministration21If the risk level is determined to be high, whoshould make the acceptability decision?A. The person currently manning the front linemanager position.B. Top level management.C. You can make the decision as long as itdoesn’t interrupt any traffic.RESPONSE ITEMRESPONSE ITEM
    21. 21. Federal AviationAdministration22QUESTIONQUESTION• When choosing a severity category, whatWhen choosing a severity category, whatmust you consider?must you consider?ANSWERANSWER• You must always consider the ______ thatcan happen if the hazard becomes anoccurrence
    22. 22. Federal AviationAdministration23Manage the RiskYouve assessed the risk!Congratulations!! Now what?There are only four things you CAN dowith risk:TransferEliminateAcceptMitigate
    23. 23. Federal AviationAdministration24Risk PrinciplesRisk management has five governing principles.1. Accept risk only when benefits outweigh the cost2. Accept no unnecessary risk3. Anticipate and manage risk by planning4. Make risk decisions at the right level5. Document all risk decisions
    24. 24. Federal AviationAdministration25Making the ‘accept’ decisionAccepting risk may not be a simple matter and can bea difficult concept.Several points to keep in mind:(1)Risk is a fundamental reality(2) Risk management is a process(3) Quantifying risk doesnt guarantee safety(4) Risk is a matter of perspective
    25. 25. Federal AviationAdministration26Making Better Risk Decisions• Risk management is an aid to making betterdecisions and to plan better.• The three levels of risk management decisions:1. Time-Critical2. Deliberate3. In-Depth
    26. 26. Federal AviationAdministration27Three Levels of Decisions• Time Critical—An “on-the-run” mental or oralreview; e.g.,– What can cause me to fail the mission (hazard)?– What can I do about it (control measure)?– How am I going to make the control measure work(implementation and supervision)?• Deliberate—Application of the complete five-stepprocess primarily using past experience andbrainstorming. Documentation is paramount.• In Depth—A thorough approach to an eventinvolving research of available data, formal testing,or long-term tracking of information.
    27. 27. Federal AviationAdministration28Residual RiskResidual risk is risk that we accept.– It is the risk remaining after we do risk management– It consists of the acceptable risk and the unidentified riskUnidentified
    28. 28. Federal AviationAdministration29Factors For Safety• Develop personal and/or organizational minimums forcommon tasks and operations• Minimums are by definition "minimums"• Plan for what is safe, not for the minimums
    29. 29. Federal AviationAdministration30Factors For Safety• Be prepared to:– stop– reevaluate– reprioritize• Always have a back up plan or a way out.• Understand the "why" of a rule, regulation, orpolicy, not just what it is.
    30. 30. Federal AviationAdministration31Putting It All TogetherRisk management is a five-step process
    31. 31. Federal AviationAdministration32Step 1: Identify The Hazards• Identifying hazards is the most importantpart of our risk management process• Possible ways to help you identify hazards:1. Task Analysis2. "What if?" Tool3. Change Analysis
    32. 32. Federal AviationAdministration33Step 2: Assess The Risk• For each hazard identified in Step 1, assess the risk• Risk accounts for the likelihood of an eventoccurring and the severity of the outcome• Use a risk assessment matrix to determine the levelof risk
    33. 33. Federal AviationAdministration34Step 3: Make Risk Decisions• Risk controls are meant to change risk by loweringthe likelihood of occurrence and/or decreasing theseverity of a risk.• Control Options fall into three categories:1. Engineering2. Administrative3. Personal Protective Equipment
    34. 34. Federal AviationAdministration35Step 3: Make Risk Decisions• Use common sense when determining appropriatecontrol measure• Its usually preferred to engineer out a hazard than toadd a new procedure• Start with the most serious risk first• Reduce the risk to a minimum consistent with thebenefits
    35. 35. Federal AviationAdministration36Step 4. Implement Controls• Act to control the risk• May involve several factors, depending on the situation.– Assets may have to be acquired or made available.– Documentation is always required.– People may have to be notified and responsibilities assigned.– Communication throughout the organization is a must.• Be realistic in the selection and implementation of controls.• To be fully effective, the controls must be documented,sustained and periodically reevaluated.
    36. 36. Federal AviationAdministration37Step 5: Monitor• Well developed metrics might reveal additionalhazards that will require additional controls.• Three things to look for:– Are the risk controls effective?– Is there a need for further assessment?– What additional information can be learned?• Last step of the risk management process– this is a cyclic process– Review old hazards, risks, and controls regularly
    37. 37. Federal AviationAdministration38Risk Management Process ReviewFive-step process– Each step as a building block for the next step.– A cycle that is continuously seeking new hazards.Step 1: Identify HazardsStep 2: Assess RiskStep 3: Make Risk DecisionsStep 4: Implement ControlsStep 5: Monitor
    38. 38. Federal AviationAdministration39What are the two elements of a “risk”A. The pilot and the mechanicB. The hazard frequency and severityC. Good and BadRESPONSE ITEMRESPONSE ITEM
    39. 39. Federal AviationAdministration41QUESTIONQUESTION• What are the five steps for Risk Management?What are the five steps for Risk Management?ANSWERANSWER
    40. 40. Federal AviationAdministration42BRIEFING SUMMARY• After identifying a hazard, the next step is toanalyze it for risk level• Risk level has two components– Likelihood– Severity• You must always consider the worstseverity• If the residual risk is high, the acceptdecision must be made by top management
    41. 41. Federal AviationAdministration43QUESTIONQUESTION• You have found an electric cord that crosses theYou have found an electric cord that crosses thepilot lounge. There is nothing to keep someonepilot lounge. There is nothing to keep someonefrom tripping on it. Based on this risk matrix, whatfrom tripping on it. Based on this risk matrix, whatrisk level would you assign this hazard ? Why.risk level would you assign this hazard ? Why.ImprobableRemoteOccasionalProbableFrequentNegligibleMarginalCriticalCatastrophicLikelihoodSeverityRISK ASSESSMENT MATRIX123456 10781211 159131614181917 20
    42. 42. Federal AviationAdministration45ANY QUESTIONS BEFORE WE END?
    43. 43. Federal AviationAdministration46Did we meet the Objectives ?• You should now be able to:– Recognize the importance of hazards awareness and riskmanagement– Describe what a hazard is, what Risk Management is, andwhat the benefits are of using risk management.– Describe the three levels of Risk Management– Use the risk management process to make informeddecisions.
    44. 44. Federal AviationAdministration47Conclusion• Comments or Questions?• FAA Safety Team• www.faasafety.gov• AMT Awards Program• GA Award Program• WINGS• Feedback Wanted:• http://www.faa.gov/about/office_org/headquarters_offices/avs/stakeholder_feedback/afs/field/sf_faasteam/

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