Project risk management and its application into the automotive manufacturing industry: executive summary

Abstract

In today's competitive environment, there is a continual need for organisations to invest substantial amounts of resource into the development and manufacture of products and processes, and Automotive Manufacturing Organisations are no exception to this. However, if the success rate of the projects undertaken by these organisations could be increased, then the level of resources invested in these projects could potentially be reduced. The management of risk offers a method through which the success rate of projects can be increased. However, as yet, many organisations within the Automotive Manufacturing Sector have not undertaken to integrate a rigorous method of managing the risks to their projects. This work focuses on the development and implementation of a project Risk Management Methodology into the Automotive Manufacturing Industry. The methodology was developed from a rigorous examination into the use of project and risk management into the Automotive Manufacturing Industry, as well as an investigation of risk management and project risk management processes within both the industrial and academic domains. Therefore, the Risk Management Methodology was designed to fit the needs of the users within the Automotive Manufacturing Industry, and as such, is compatible with the project management methods used within this industrial sector. The deliverables of the Risk Management Methodology were compared to 9 risk management processes and were found to give additional benefits to these processes. These were identified as the realisation of quality benefits, improvements to the technology and changes to working practices from reactive to pro-active management, which indicate that the Risk Management Methodology is more suited to Automotive Manufacturing Organisations than the other risk management processes. The Risk Management Methodology is a cyclic process, consisting of 5 stages; identification, assessment, analysis, reduction and/or mitigation and monitoring of the risks. Various tools have been developed as part of the Risk Management Methodology. They are the Front-End Assessment Tool to determine if there is a potential need to use the Risk Management Methodology, a Risk Register Database System to document the identified risks irrespective of geographical location, and the Risk Assessment Tool to enable the level of risk within the project to be reported. In addition to this, a Tracking Tool for Research and Technology Projects, based on the requirements of Rover's Technology Strategy Team, was developed to enable the probability of success of technology projects to be determined and tracked throughout their lifespan. The application of the Risk Management Methodology into 7 projects within the Rover/BMW group enabled the methods through which the assessment of the risks as well as the use of numbers within the tools themselves to be critiqued, as well as benefits of the use of the methodology and the tools to be ascertained. What was determined from its implementation was that it enabled the risks to be made visible through their identification, assessment, analysis and management. Deviations from the proposed plan could be identified, and an effort made to reduce and/or mitigate against the effects of the risks. In addition, the decision making process was improved, through increasing the amount of relevant information within the project and that there was identified a change in the working practices of the individuals and teams, from reactive, firefighting to pro-active management of the project. In conclusion, the Risk Management Methodology and its associated tools and techniques provides the means by which the risks and potential problems within projects in the Automotive Manufacturing Sector can be actively managed and as such, enables the projects to be completed successfully