Question 1 of 7: Risk Analysis — Fishbone, Influence Diagrams and Risk Plans

Question 1: Risk Analysis — Fishbone, Influence Diagrams and Risk Plans (20 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

(i) The Fishbone (Cause-and-Effect) Diagram in Risk Analysis

The Fishbone diagram—also called the Ishikawa or cause-and-effect diagram—is a structured tool for identifying, exploring, and organizing the possible causes of a problem or risk. In risk analysis it is used to systematically brainstorm why an undesired effect (the risk) might occur, so that root causes rather than symptoms are addressed. The effect or risk is written in a box at the "head" of the fish on the right; a horizontal "spine" runs to it, and major cause categories branch off as large "bones," each with sub-causes as smaller bones. The visual structure ensures the team considers all categories of cause rather than fixating on the obvious ones. A typical diagram looks like this:

   People        Methods        Machines
      \             |             /
       \            |            /
        \-----------+-----------/
                    |------------------------> [ RISK / EFFECT ]
        /-----------+-----------\
       /            |            \
      /             |             \
  Materials    Measurement     Environment

The categories typically used to identify risk causes are the classic "6 Ms" of manufacturing: People (Manpower), Methods, Machines, Materials, Measurement, and Environment (Mother Nature). For service or project contexts the categories may be adapted (for example the "4 Ps": Policies, Procedures, People, Plant). By populating each category with candidate causes, the team produces a comprehensive map of the sources of risk, which then guides deeper investigation and the setting of mitigation priorities.

(ii) Purpose of the Influence Diagram

An Influence Diagram is a compact graphical representation of a decision problem that shows the elements of the decision and the dependencies among them, providing a higher-level view than a detailed decision tree. Its purpose in risk analysis is to map how uncertainties, decisions, and outcomes influence one another, so that the structure of a risky decision can be understood and communicated before it is quantified. It uses three kinds of node connected by arrows that denote influence or relevance:

   ( Uncertainty )------>[ Decision ]------>< Value / Outcome >
        chance node        decision node        objective node
   (oval)                 (rectangle)          (diamond/hexagon)

An oval (chance) node represents an uncertain variable or risk; a rectangle (decision) node represents a choice the decision-maker controls; and a diamond or rounded (value) node represents the outcome or objective to be optimized. Arrows show which factors influence which—an arrow into a chance node shows probabilistic dependence, and an arrow into a decision node shows information available when the decision is made. The Influence Diagram's purpose is thus to clarify and communicate the qualitative structure of a risky decision—what depends on what, and what is known when—giving a clear overview that complements the numerical detail of decision trees and simulation, and helping ensure no significant uncertainty or dependency is overlooked.

(iii) Key Elements of a Risk Management Plan

A risk management plan is the document that sets out how risk will be identified, analyzed, and controlled throughout a project or operation, and it contains several key elements. It begins with the methodology and scope—the approach, tools, and data sources to be used, and the boundaries of what is covered. It defines roles and responsibilities, assigning ownership for risk activities and for each identified risk. It establishes risk identification processes and their results, and a risk assessment framework—the criteria and scales for rating probability and impact, often as a probability–impact matrix. It records the risks in a risk register, the central element, listing each risk, its causes, its assessed likelihood and consequence, its priority, its assigned owner, and its planned response. It specifies the risk responses—avoid, reduce (mitigate), transfer, or accept—for each significant risk, with the actions and resources required. It provides for contingency and reserves (budget and schedule) to cover accepted and residual risks. Finally, it defines monitoring, review, and communication arrangements—how risks will be tracked, how the register will be updated, and how status will be reported—so that risk management remains an active, ongoing process rather than a one-time exercise.

Practical Application

A project team assessing the risk of a delayed plant commissioning would build a fishbone diagram, organizing candidate causes across people, methods, machines, materials, measurement, and environment, and quickly see that supplier reliability (Materials) and crew training (People) dominate. An influence diagram would show how the uncertain equipment-delivery date influences the commissioning decision and the project's value. All of this would feed a risk management plan whose register rates each risk, assigns owners, and specifies mitigation and schedule contingency, reviewed at each project gate.