11 se core applied to risk

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ERIK JONSSON SCHOOL OF ENGINEERING AND COMPUTER SCIENCENAVEEN JINDAL SCHOOL OF MANAGEMENTThe University of Texas at Dallas

Copyright 2013, Lifecycle Management Innovations, LLC, All Rights Reserved



Key Element of Systems

Engineering Risk (and Uncertainty)[An Introduction]

ALIX MINDENSEPTEMBER 28, 2013


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013

SYSM 6301, Key Element of SystemsEngineering Risk (and Uncertainty)[An Introduction]

Agenda

Concept of Risk (and Uncertainty) Risk Management Process (Theoretical) Applying the Core Four to Risk Management Risk Management Process (Practical) Applicable Risk Tools Applicable Industries & Examples Summary


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


Concept of Risk (and Uncertainty) Overview

What is Uncertainty? Unpredictability; indeterminacy; indefiniteness. 1 What is Risk?

The likelihood of an event occurring coupled with a neconsequence of the event occurring. 2

Why is risk important to Systems Engineering? Risk means system requirements may not be achieved.

SE focuses on risk to help achieve system requirements.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


Risk Management Process Overview of the Theoretical Process

There are many different approaches. The primary difference is the terminology. Each approach utilizes the core four skills:

Definition / Planning

Synthesis / Design Implementation / Coordination / Communication

We will focus on the INCOSE approach. No popular approach is really better than the others.

Analysis


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


Concept of Risk (and Uncertainty) SE Risk Management Process Steps (1 of 2)

Plan the risks. Define and document (D&D) the risk strategy. Manage the risks.

D&D risk thresholds, and acceptable and unacceptableconditions. Communicate risks periodically.

Analyze the risks. Identify risks, their likelihoods and consequences, and

treatment plan for each.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


Concept of Risk (and Uncertainty) SE Risk Management Process Steps (2 of 2)

Treat the risks. Generate plan of action for each risk exceeding acceptlevels.

Monitor the risks. Maintain record of risk items, how they are treated, an

communicate status regularly. Evaluate the risks.

Define, analyze, and document measures indicating staof risk and the effectiveness of treatment alternatives.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013

SYSM 6301, Key Element of SystemsEngineering Risk (and Uncertainty)

[An Introduction]

Applying the Core Four, Definition Risk Planning

Two focus areas of Risk Planning? Identifying and understand the categories of risks. Cost Schedule Technical Plus, Programmatic (risks beyond the span of control of the

Establishing the Risk Management Plan. The documented strategy that will be used to manage the ris

Document the plan and communicate it with the te


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Risk Planning Risk Category Example 5

All risks fall into oneof these fourcategories.

The diagram depicts

how they interactionwith each other.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Applying the Core Four, Analysis Risk Analysis & Management

Two focus areas of Risk Analysis & Management? Categorizing and quantifying the risks. Identify the risk categories being track for the system. Identify thresholds for probability of occurrence (P O) an

consequence of failure (C f ).

Risk evaluation technique / identifying each risk. Identify each potential risk. Identify its category and priority levels (based on P O an Identify who will monitor the risk.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Risk Analysis & Management Categorization Example 6

Risk Level = P O * C P O & Cf are assigned

between 0 and 1. The consequences als

equate to an impact v Example:

PO = 0.8 & Cf = ~$1 Risk Level = 0.8 * 0.6 Therefore Risk Level

1.0 = $1M

0.8 = $500K

0.6 = $100K

0.4 = $10K

0.2 = $1K

0.0 0.2 0.4 0.6 0.8 1.0


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Applying the Core Four, Synthesis Treatment of Risks

Primary approaches to Treating Risks? Acceptance Accept and do nothing. (a.k.a. ignore it.)

Avoidance Change something (requirements or redesign) to eliminate it

Control Spend time or money to mitigate it.

Transfer Have someone else deal with it.


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Applying the Core Four, ImplementationMonitoring, Evaluation, & Tracking of Ris

Two focus areas of Monitoring & Tracking of Risk Establishing, monitoring and reporting risk metrics. Do this at all levels of the system.

Tracking and periodic reevaluation of risks. Feedback loops Regular meeting.

Details to keep in mind. If a risk is not identified, it will not be managed! Always identify and document the GR&As!!!


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Risk Management Process Overview of the Practical Process

There are always unknown risks. Keep this in m Not all risks will have impacts to all four categorie Risks should be identified using the approach: If (name the situation ) occurs, then ( name the

consequence ) happens. For example: If the part is delivered late, there wil

a day for day slip in the system delivery, costingcompany $15,000 each day.


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Fall 201309/28/2013


[An Introduction]

Applicable Tools 7

ARMs Risk Management Software. IBM Open Pages Risk Register EPRI Risk and Reliability Workstation, for nuclea

power plants. Systems Analysis Programs for Hands-On Integrat

Reliability Evaluations (SAPHIRE)

h f l ll h dh f l ll h d


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Applicable Industries / Examples

Finance and Banking Stock Markets Nuclear Power Transportation Homeland Security Aerospace

C i h 2013 Lif l M I i LLC All Ri h R dC i h 2013 Lif l M I i LLC All Ri h R d


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Which of the following is NOT a type of rissystems engineering?

Schedule. Product. Technical. Programmatic.

C i ht 2013 Lif l M t I ti LLC All Ri ht R dC i ht 2013 Lif l M t I ti LLC All Ri ht R d


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[An Introduction]

Final Thoughts about Risk 8

As both complexity and change continue toescalate in our products, services, and society,reducing the risk associated with new systems modifications to complex systems continues to be primary goal of the systems engineer .

C ight 2013 Lif l M g t I ti LLC All Right R dC ight 2013 Lif l M g t I ti LLC All Right R d


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Summary

What are the risk steps? Plan the risks. Manage the risks. Analyze the risks.

Primary approaches to Treating Risks? Acceptance Avoidance

SE focuses on risks to help achieve the requiremen

Treat the risks. Monitor the risks. Evaluate the risks.

Control Transfer

Copyright 2013 Lifecycle Management Innovations LLC All Rights ReservedCopyright 2013 Lifecycle Management Innovations LLC All Rights Reserved


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

SYSM 6303 (OPRE 6301) QuantitativeIntroduction to Risk and Uncertainty in Busin

Introduction to statistical and probabilistic methodsapplicable to situations faced by managers. Topics includdata presentation and summarization, regression anafundamental probability theory and random variablesintroductory decision analysis , estimation, confidencintervals , hypothesis testing, and One Way ANOVA (Somsections of this class may require a laptop computer). (3-

Prerequisites: none



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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

SYSM 6304 (OPRE 6335) Risk and Decis Analysis

This course provides an overview of the main concepts amethods of risk assessment , risk management andanalysis . The methods used in industry, such as prorisk assessment, Six Sigma and reliability , are discus

Advanced methods from economics and finance (deoptimization and portfolio analysis) are presented. (3-0)

Prerequisites: SYSM 6303 or OPRE 6301



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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

SOURCENOTES



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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Source Notes (1 of 2)1. Dictionary.com. (Retrieved 26 September 2013).

http://dictionar y.reference.com/browse/uncertainty?s=t2. INCOSE SE Working Group. Description. Chap. 5 In Systems Engineerin

Handbook , 216-217. Version 3.2.2. 2011.3. INCOSE SE Working Group. Process Activities. Chap. 5 In Systems En

Handbook , 218-220. Version 3.2.2. 2011.4. See note 3.

5. INCOSE SE Working Group. Figure 5-10, Typical Relationship among the RiCategories. Chap. 5 In Systems Engineering Handbook , 222. Version 3.6. INCOSE SE Working Group. Figure 5-9, Level of risk depends upon both like

and consequences. Chap. 5 In Systems Engineering Handbook , 221. V2011.

http://dictionary.reference.com/browse/uncertainty?s=thttp://dictionary.reference.com/browse/uncertainty?s=thttp://dictionary.reference.com/browse/uncertainty?s=t


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Fall 201310/12/2013 SYSM 6301,



Fall 201309/28/2013


[An Introduction]

Source Notes (2 of 2)7. Wikipedia.org. (Retrieved 26 September 2013).

http://en.wiki pedia.org/wiki/Risk_management_tools8. SE Working Group. Use of Systems Engineering. Chap. 2 In Systems E

Handbook , 14-17. Version 3.2.2. 2011.

Copyright 2013, Lifecycle Management Innovations, LLC, All Rights ReservedCopyright 2013, Lifecycle Management Innovations, LLC, All Rights Reserved
http://en.wikipedia.org/wiki/Risk_management_toolshttp://en.wikipedia.org/wiki/Risk_management_toolshttp://en.wikipedia.org/wiki/Risk_management_tools


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ERIK JONSSON SCHOOL OF ENGINEERING AND COMPUTER SCIENCENAVEEN JINDAL SCHOOL OF MANAGEMENT Fall 2013

10/12/2013 SYSM 6301,


ERIK JONSSON SCHOOL OF ENGINEERING AND COMPUTER SCIENCENAVEEN JINDAL SCHOOL OF MANAGEMENT Fall 2013

09/28/2013


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11 se core applied to risk

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