Mechanical projects can be tricky at times. situation gets worst when there is risk involved. OEM's/contractors wants to win business and often forget to evaluate risk and the much deserved returns . Risk is worth taking if returns/rewards are higher.

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Risk & Reward
Mechanical Projects Segment

2. • Risk Matrix
• Risk Reward
• Why to take risk
• Curtailing Risk
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Agenda

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Risk
DEVIATION- Good or Bad from expected
Uncertainty
Probability
Business
Impact
Risk

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Risk Matrix
Performance
Probability
Impact on End User (EU)
Low Medium High Extreme
Medium Low Medium High
High Low Low Medium
Minor Moderate Major

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Risk- Reward
High Intellegent Gamble
Low Safe Avoid
Low High
Reward
Risk

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Why to take risk..
Strategic
Monetary
benefitEntry to
Account (New
markets)
Healthy business
relationship
Differentiation
Various other (similar)
opportunities in same or other
accounts

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Curtailing Risk
Application review
Calculation review
Joint ownership with EU
Back up Plan B

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Curtailing Risk (Application review)
- Detail application review
Capturing all the necessary data and double confirm with
EU
Discuss application with experts
Highlight red flags
Highlight probable impact
Documentation-
Ensure stake holders have been informed and minutes
have been documented.

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Curtailing Risk (Calculation check)
- Detail calculation check
 Double check calculations
 Avoid Factor of safety (FOS)
on top of FOS
I told you that you are
missing a decimal point
in your calculation

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Curtailing Risk (Joint Ownership)
- Joint Ownership
 All concern members at End User
(EU) should be updated
 Update EU about RISK involved
 Involve EU at every stage of project
progress
Documentation-
Ensure stake holders have been
informed and minutes have been
documented.

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Curtailing Risk (Plan B)
- Backup Plan
 Factory Acceptance Tests
 Necessary modifications
 Put solution to production once accepted by all stake holders