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.

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 risk or effect 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 carrying smaller bones for sub-causes. The structure forces the team to consider every category of cause rather than fixating on the obvious. A typical diagram is:

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

The categories typically used to identify risk causes are the classic "6 Ms": People (Manpower), Methods, Machines, Materials, Measurement, and Environment (Mother Nature). Service or project settings may substitute adapted categories (such as Policies, Procedures, People, Plant). By populating each category, the team builds a comprehensive map of the sources of risk, which then directs deeper investigation and the setting of mitigation priorities.

Purpose of the Influence Diagram

An Influence Diagram is a compact graphical representation of a decision problem that shows its elements and the dependencies among them, giving 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 the structure of a risky decision can be understood and communicated before it is quantified. It uses three kinds of node joined by arrows denoting influence or relevance:

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

An oval (chance) node represents an uncertain variable or risk; a rectangle (decision) node represents a choice under the decision-maker's control; and a diamond (value) node represents the outcome or objective to be optimized. Arrows show what influences what—an arrow into a chance node indicates probabilistic dependence, and an arrow into a decision node indicates 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—providing a clear overview that complements the numerical detail of decision trees and simulation and helps ensure no significant uncertainty is overlooked.

Key Elements of a Risk Management Plan

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

Practical Application

A 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 and crew training 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.