2. OutlineOutline
• Basic Principles, Concepts and DefinitionBasic Principles, Concepts and Definition
• European Union Environmental Legislation and Impact onEuropean Union Environmental Legislation and Impact on
Automobile IndustryAutomobile Industry
• Who is Tata Steel UK Ltd?Who is Tata Steel UK Ltd?
• Product OptionsProduct Options
• How Tata Steel UK Ltd Manages RiskHow Tata Steel UK Ltd Manages Risk
• Evaluating the OpportunityEvaluating the Opportunity
• OutcomeOutcome
• ConclusionConclusion
• ReferencesReferences
22
3. What is RiskWhat is Risk??
•Risk can be defined as an uncertain event or set of events that, should it
occur, will have an effect on the achievement of objectives or goal. Or
•A likelihood that a loss will occur.
Risk StrategiesRisk Strategies
Negative Risks (or Threats)
Avoid
Transfer
Mitigate
Acceptance
Positive Risks (or Opportunities)
Exploit
Share
Enhance
Acceptance
Basic Principles, Concepts and DefinitionBasic Principles, Concepts and Definition
33
4. Risk ManagementRisk Management
It is referred to as systematic application of procedure toIt is referred to as systematic application of procedure to
the task of identifying risk, assessing, planning and thethe task of identifying risk, assessing, planning and the
implementation of the risk responses.implementation of the risk responses.
This provides a disciplined environment for proactiveThis provides a disciplined environment for proactive
decision making.decision making.
44
5. Effective Risk ManagementEffective Risk Management
Risks need to be:
Identified – This includes risks being considered that could affect the
achievement of the project’s or organization’s objectives.
Assessed – This includes ensuring that each risk can be ranked in
terms of estimated likelihood, impact and immediacy.
Evaluated - Risk evaluation attempts to define what the estimated
risk actually means to people concerned with or affected by the risk.
Controlled – This includes identifying appropriate responses to risks,
assigning risk owners, and then executing, monitoring and controlling
these responses.
55
7. ..
European Union Environmental Regulations and Impact onEuropean Union Environmental Regulations and Impact on
Automobile IndustryAutomobile Industry
Transport exhaust fumes contribute roughly a third of the continent's greenhouse gas
emissions and rose by 26% between 1990 and 2008. Measures to cut carbon dioxide
from transport are essential if Europe is to meet its targets for tackling climate
change.
The European Commission (EC) wants to limit the average emissions of vehicles
sold in 2020 by a manufacturer to 95 grams of CO2 per kilometre travelled. It was
about 140g CO2/km (2011) and a binding limit of 130g CO2/km was set for 2015.
Greg Archer, of campaign group Transport & Environment said, "Tighter CO2
standards for cars will be welcomed by drivers across Europe who will save €500 per
year at the petrol pump on average if this proposal is adopted.“
Manufacturers failing to comply would face fines of €95 (£76) for every gram over
target per vehicle. The commission's impact assessment states the 95g CO2/km limit
would save European drivers approximately €25 billion a year in fuel costs.
77
8. Who is Tata Steel Ltd?Who is Tata Steel Ltd?
Tata Steel UK Ltd. is part of Tata Steel Europe.
One of the world’s most geographically diversified steel producers with
operations in 26 countries and commercial offices in over 35 countries.
They are the second largest steel producer in Europe, serving many
markets including automotive, construction, energy and power, rail, building,
etc.
88
9. Product OptionsProduct Options
Advanced High Strength Steel (AHSS) – Dual Phase Steel DP 800 /DP1000.Advanced High Strength Steel (AHSS) – Dual Phase Steel DP 800 /DP1000.
AHSSs offer enhanced formability and allows for greater part complexity,
which leads to fewer individual parts (cost savings) and more manufacturing
flexibility.
The higher strength translates into better fatigue and crash performance,
while maintaining or even reducing thickness.
99
10. How Tata Steel UK Ltd Manages RiskHow Tata Steel UK Ltd Manages Risk
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1010
11. Plan Risk ManagementPlan Risk Management
Project Scope
Statement/Methodology
Cost Management
Plan/Budgeting
Schedule Management
Plan
Enterprise
Environmental Factors
Roles & responsibility
Risk
Management
Plan
Planning Meetings and
Analysis
Input Output
Tools & Techniques
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1111
13. Perform Qualitative RiskPerform Qualitative Risk
AnalysisAnalysis
Risk Register
Risk Management
Plan
Project Scope
Statement
Organizational
Process Assets
Risk Register
Updates
Risk probability and impact
statement
Probability and impact matrix
Risk data quality
assessment
Risk categorization
Risk urgency assessment
Expert Judgement
Input Output
Tools & Techniques
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1313
14. Probability and Impact MatrixProbability and Impact Matrix
Likelihood Class
Likelihood of Occurrence
(events/year)
Not Likely (NL)
<0.01% chance of
occurrence
Low (L)
0.01 - 0.1% chance of
occurrence
Moderate (M)
0.1 - 1% chance of
occurrence
High (H)
1 - 10% chance of
occurrence
Expected (E) >10% chance of occurrence
Probability Scale
Consequence Health and Safety
Extreme
Fatality or multiple fatalities
expected
High
Severe injury or disability likely; or
some potential for fatality
Moderate
Lost time or injury likely; or some
potential for serious injuries; or
small risk of fatality
Low
First aid required; or small risk of
serious injury
Negligible No concern
Impact Scale
1414
15. Probability and Impact PlotsProbability and Impact Plots
Rate eachRate each
risk onrisk on
scalesscales
then plotthen plot
on matrixon matrix
DevelopDevelop
mitigationmitigation
techniquetechnique
for risksfor risks
aboveabove
tolerancetolerance
1515
16. Perform Quantitative RiskPerform Quantitative Risk
AnalysisAnalysis
Risk Register
Risk Management
Plan
Cost Management
Plan
Schedule
Management Plan
Organizational
Process Assets
Risk Register
Updates
Data gathering and
representation techniques
Quantitative risk analysis
and modeling
Expert Judgment
Input Output
Tools & Techniques
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1616
17. Plan Risk ResponsesPlan Risk Responses
Risk Management
Plan
Risk Register Risk Register
Updates
Strategies for negative risks
or threats
Strategies for positive risks
or opportunities
Contingent response
strategy
Expert Judgment
Input Output
Tools & Techniques
Project Management
Plan Updates
Risk-related
Contract
Decisions
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1717
18. Monitor and Control RisksMonitor and Control Risks
Risk Register
Project Management
Plan
Work Performance
Information
Performance Reports
Risk Register
Updates
Risk reassessment
Risk audits
Variance and trend analysis
Technical performance
measurement
Reserve analysis
Status meetings
Input
OutputTools & Techniques
Organizational
Process Assets
Change Requests
Project Management
Plan Updates
Project Document
Updates
Plan Risk
Management
Identify
Risks
Perform
Qualitative
Risk Analysis
Perform
Quantitative
Risk Analysis
Plan Risk
Responses
Monitor and
Control Risks
1818
19. Evaluating the OpportunityEvaluating the Opportunity
Analyze numerically the probability andAnalyze numerically the probability and
consequence of each riskconsequence of each risk
Decision Tree analysis on testDecision Tree analysis on test
Diagram that describes a decision andDiagram that describes a decision and
probabilities associated with the choicesprobabilities associated with the choices
Expected Monetary Value Analysis (EMV)Expected Monetary Value Analysis (EMV)
1919
20. Decision Tree AnalysisDecision Tree Analysis
Develop
AHSS
DP 1000
DP 800
High
Demand
Low
Demand
High
Demand
Low
Demand
Decision
Definition
Decision
Node
Chance
Node
Net Path
Value
Cost: £5M
Cost:£3M
60%
60%
40%
40%
Weld-ability
failure
Low
Weld-ability
failure
High
Exp =20M
Exp =4M
Exp =15M
Exp =8M
-5+20=15M
-5+4=-1M
-3+15=12M
-3+8=5M
EMV
0.6x15+0.4x-1
=8.6M
0.6x12+0.4x5
=9.2M
Max EMV
=9.2M
2020
22. OutcomeOutcome
In Nov 2013,In Nov 2013, according to a press release -
““Tata Steel is now offering its high-strength, zinc-coated DP800 steel grade
(DP800GI) in South Wales.”
2222
24. ConclusionConclusion
UK environmental regulations on COUK environmental regulations on CO22 emissions createdemissions created
an opportunity for Tata Steel to create Advanced Highan opportunity for Tata Steel to create Advanced High
Strength Steel (AHSS)Strength Steel (AHSS)
Challenge. Increasing ferrite increases tensile strengthChallenge. Increasing ferrite increases tensile strength
but decreases weld-ability.but decreases weld-ability.
Options: DP-800 or DP-1000?Options: DP-800 or DP-1000?
Reviewed tools and techniques of risk management atReviewed tools and techniques of risk management at
Tata Steel.Tata Steel.
Used decision tree to determine DP-800 was a betterUsed decision tree to determine DP-800 was a better
option.option.
2424
