Project Risk Management
Project Risk Management
I am the Project Manager developing the Boeing 787 Dreamliner. The development of this state-of-the-art airplane will include an international team of aerospace companies led by Boeing. The advances in this airplane will reduce the use of fuel by 20%, increase cargo capacity, increase nautical miles in a mid-range airplane, and improve passenger comfort. Boeing expects sales of 3,500 units over the next 20 years. (Norris & Wagner, 2009)
To really understand the impact of multiple providers, along with the logistics to coordinate assembly, I will illustrate, discuss, and provide a conclusion using two decision tree analyses. The first fault tree will detail the delivery system and identify the failure that could result in delivery failure. The second fault tree details the lack of labor to assemble the airplane. Both pose results that have the potential to financially impact the project. The fault tree diagram will provide a visual representation of the risk and help analyze the cause by looking backwards to identify the root cause. II.Fault Tree One
III.Discussion of Fault Tree One
There are over 40 Companies/Business Units contributing to the success of developing the 787 Dreamliner. Nine of the Companies/Business Units are located outside of the United States. Given these two elements alone there are a number of faults that could cause the final assembly and completion date to be impacted. The first probable cause for missing the completion date is the supply chain. The supply chain flow ensures the material is available according to the inventory levels to continue building. Supply chain push systems help keep inventory levels set according to contractual agreements. When the quality throughput of the component is less than 95%, the demand is increased.
Quality measures are in place to alert the supplier when the throughput is less than 95% as desired but additional demands with reduced quality requirements keep the supplier from delivering. Original plans called for specific manufactured items for each component yet the supplier elected to use a less expensive alternative which isn’t meeting quality requirements. To help mitigate the supplier risks, determine the supplier’s attitude to safety, quality, and environmental aspects to delivering components. Another treatment would be to appoint an onsite supplier liaison manager responsible for signing off on any supplier and/or design changes. It would also be helpful to have back to back contracts with sub-contractors.
IV.Fault Tree Two
V.Discussion of Fault Tree Two
In the second fault tree I illustrated the impact of labor on the delivery of the 787 Dreamliner. The labor to assemble the airplane components at the Boeing facility in Everett is critical to ensure the on-time delivery of the airplane. The union labor to assemble the Dreamliner is under contract review, the contract will expire two months prior to the first assembly. The expiration of the machinist contract and failure to arrive at a new mutually acceptable contract would lead to a possible strike. Discussion between the labor union and the company would be required to mediate the dispute. The lack of a compromise would cause a significant impact on the scheduled completion date. However, negotiations to resolve this dispute are required to ensure employees feel fairly compensated and do not walk out during assembly.
The use of risk treatment should provide a minimum of efficient operation of the organization, internal controls, and compliance with the laws and regulations. To assist with labor treatment risk, re-allocate internal staff and cross train non-union members to complete the assembly of the airplane. Assess the technical skills required, develop a skill requirement profile for assembly, and identify other critical skills required for replacement. Treatment could also include the establishment and maintenance of an internal/external skill profile of current, previous, and potential employees to assist should a labor strike occur.
Above I only identified one risk analysis technique however there are many others available. Many are qualitative and don’t show the dependencies between events. The tree technique I used above takes into consideration the logical combination of causes that contribute to the identified failed event. The fault tree technique brings sufficient understanding to the nature of the failure and how to manage the failed event(s).
Fault tree one helped me identify that an onsite supplier liaison manager would have eliminated the failure along with standard work, forms and signatures to authorize such changes to the bill of material for the component. Similarly, fault tree two identified adequate compensation as the root cause of the delivery/labor failure. Treatment of the risk could have included managing the risk earlier in the contract and/or establishing a contract bridge or extension to avoid a strike.
Cortez, A. (2010). The complete idiot’s guide to risk management. New York, NY: Penguin Group. Fraser, J., & Simkins, B. (2010). Enterprise risk management. Hoboken, NJ: John Wiley & Sons, Inc. Kerzer, H. (2011). Project management metrics, kpis, and dashboards. Hoboken, NJ: John Wiley & Sons, Inc.
Norris, G., & Wagner, M. (2009). Boeing 787 dreamliner. Minneapolis, MN:
Zenith Press. Schuyler, J. (2010). Risk and decision analysis in projects. (2 ed.). Newtown Square, PA: Project Management Institute, Inc.
Turner, A. (2011). The birth of the 787 dreamliner. Kansas City: Andrews McMeel Publishing.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 16 November 2016
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