How Risk Reduction and AWP can Work in Tandem
February 11, 2022
Risk identification, mitigation and management are cornerstones for any project manager to increase project certainty. Risk management is intended to minimize threats, maximize opportunities, improve predictability and add value for all project stakeholders. Advance Work Packaging (AWP) is a rapidly emerging project execution methodology that enhances project planning. AWP is a completion-to-start project planning and execution process for defining, aligning, sequencing and pacing the execution of engineering, procurement and construction packages that allow users to design and build more predictably, continually producing value-added outcomes. So it is no surprise that these two strategies are working in tandem to increase the effectiveness of the iterative planning process throughout the project life cycle.
Engaging in an AWP-based execution with a risk management mindset lends itself to enhanced outcomes. Understanding risks associated with various scopes and actively utilizing this knowledge to influence the decision-making process throughout the project life cycle will lead to far better results during each phase. The key to this process is allowing for the changing nature of risks to validate previous decisions and influence all future decisions continually. Risk identification and mitigation should impact every aspect of the AWP implementation, and risk management should be built into all existing project processes.
How does AWP and Risk Management enhance your Path of Construction?
The end goal of an AWP implementation is to ensure crew task assignments are appropriately phased, that all materials are available and that all potential constraints, such as permitting and equipment availability, are cleared to proceed. Critical to this process is the project’s ability to define and refine the Path of Construction (PoC) over time.
A deliberate and well-thought-out, project-based plan needs to be developed early on in the project life cycle. Part of the development should understand the risks associated with the overall strategy and allow the mitigation steps to influence all stakeholders’ upstream and downstream decisions. Allowing for a construction led execution plan reduces common execution risk, and it enables engineering, procurement, constructions, and operations to agree upon the most optimal execution strategy for the project.
Forecast and Plan for the “What-Ifs”
Asking the “what if?” questions and understanding the positive and negative impacts of the answers, and also the trickle-down forces of the decisions made from those answers, is key to effective planning. The PoC development process should review the medley of “what if” scenarios and optimize various paths. Developing a PoC with a collective understanding of risk strategies will facilitate risk reduction. Considerations of the “what-ifs” identify activities that affect the overall plan. A continual review of the PoC is critical to ensuring that all work can be sequenced to support construction. Construction progress and planning can be limited by the sequence and timing of predecessor activities. Refinements to the overall PoC should happen as risks are understood.
Continual Risk Identification and Management throughout the Project Life Cycle
A robust risk management program systematically identifies, assesses and proactively responds to risk throughout the entire project life cycle from prospect through closeout. Underlying this principle is a cyclical process requiring all project stakeholders to identify and manage project risk continually. You will also need to understand that all risks don’t have the same impact. This means that creating a mitigation plan for high likelihood risk with minimal impact may not be required. But for low likelihood risk with high impact, a risk-specific mitigation plan is probably necessary. Understanding your risks and the potential impact on the budget, timeline, design, scope and implications to other trades and disciplines needs to be consistently reevaluated. Being proactive is a must in preventing risks from happening to begin with, and should be done at every opportunity.
Collective Ownership of AWP and Risk
Understanding and planning for your risk early in your project’s life cycle helps reduce your risk exposure throughout the project. Helping to identify all risks is a collective job for the project. Therefore, you’ll want to enlist the help of various project team members to identify risk. Bringing in logistics, procurement, safety, quality, human resources, etc., i.e., team members who are more familiar with the unknowns specific to their disciplines, is a must. This same thinking is a cornerstone in AWP; cross-team collaboration to gain insights from the various stakeholders ensures the project proceeds with optimal information to make the best decisions. Collectively engaging in risk management and AWP, all project members will be empowered to take ownership of these processes to ensure better collective outcomes. Developing a culture of risk awareness transforms uncertainty into opportunity.
These collective discussions get all project stakeholders to address the so-called elephants in the room. The problematic issues or risks most people might be reluctant to acknowledge as ever possibly happening are items that all parties must nonetheless work together to solve. In this way, everyone becomes vested in the desired outcome.
While the best-laid risk management strategies and AWP process cannot predict or prevent everything, the likelihood of a truly predictable outcome with increased safety, quality, and productivity can most closely be guaranteed. Over time, refining both of these processes with help further fine-tune your execution strategies for optimal results.