Air Carrier Continuing Analysis and Surveillance System (CASS) Risk Management

Objectives Describe: the risk management process the goals of risk management the risk assessment process risk and the principles of risk analysis the six-step risk management process

Overview What is risk management? What does risk management do? What does risk management look like?

What Is Risk Management? Risk Management is preemptive. Risk Management is a decision making tool that: Helps identify hazards, risks, and benefits Helps determine the best course of action for a given situation Is designed to minimize risks to reduce accidents, preserve assets, and safeguard health and welfare Applies various methods to identify, evaluate, eliminate, and control all forms of risk

Principles of Risk Management All human activity involving a device or process entails some element of risk. Most hazards can be neutralized or controlled. Hazards should be kept in proper perspective. Risk management does this through the knowledge gained through analysis and experience. Any operations represent a gamble to some degree; good risk management assists in controlling the risk.

Principles of Risk Management Risk management does not eliminate the need for good judgment; it improves it. Establishing clear objectives and parameters for risk assessment is more important than using a cookbook approach. There is no "best solution" to a safety problem. There are a variety of directions to go, each of which may produce a different degree of risk reduction.

Objectives of Risk Management To protect people, equipment, and other resources. To prevent accidents and reduce losses. To enhance the effectiveness of people and equipment, and other resources, by determining how they are most efficiently used.

What Is a Hazard? A hazard is the potential for harm. A hazard could be anything, real or potential, that could make possible, or contribute to making possible, an accident. A hazard is a condition that is prerequisite to an accident. A hazard is not an accident.

What Is Safety? Freedom from those conditions that can cause death, injury, illness, or damage to or loss of property, or damage to the environment. Absolute safety is not possible. Complete freedom from all hazards is not possible; Therefore safety, a relative term, implies a level of risk that is both perceived and accepted. Risk management helps us to get to an optimized level of safety for a given situation.

What Is Risk? Risk means: the degree of probability that hurt, injury, or loss will occur over a specific period of time or number of operational cycles. Risk has two elements: Severity is the degree of harm that would occur if an unsafe event happens. Likelihood is an expression of the probability that a specific unsafe event will occur.

What Is Risk Analysis? Risk analysis measures risk. Risk analysis is the development of a qualitative and/or quantitative estimate of risk based on an evaluation and/or mathematical techniques. Risk analysis has two basic questions What is the severity? (level of harm) What is the likelihood? (when it will happen)

Levels of Severity

Levels of Likelihood ICAO Doc. 9859

Risk Matrix ICAO Doc. 9859

Estimating Likelihood of an Event The likelihood is always an approximation. It is never exact. Is there a history of similar occurrences or is this an isolated occurrence? What other equipment or components of the same type might have similar defects? How many operating or maintenance personnel are following, or are subject to, the procedures involved? What percentage of the time is the equipment or the procedure in use?

Estimating Severity of an Event Severity is usually measured according to standard failure condition severity classifications: Minor – slight decrease in safety margins Major – large reduction in safety margins; reduced capability of crew to cope with adverse conditions; occupant injuries Hazardous – serious or fatal injury to small number of occupants Catastrophic – continued safe flight and landing is compromised; multiple deaths with loss of aircraft See Table 3-6 in Desk Reference

Risk Management Process Identify the hazards. Assess the risks. Analyze risk control measures. Make risk control decisions. Implement risk controls. Follow-up and review.

Step 1: Identify the Hazard Accident/incident reports Operating crew/personnel Outside experts/consultants Current guidance Surveys Inspections

Typical Hazards Natural hazards Technical hazards Insufficient training Significant changes in the company’s organization New policy, procedures, or laws Financial problems

Step 2: Assess the Risk The risk assessment process uses the results of risk analysis (the estimate) to make decisions about the course of action, if any.

How Does Risk Assessment Work? Combines the impacts of the two risk elements discovered in risk analysis and comparing them against some acceptability criteria. Consolidates the risks into risk sets that can be jointly mitigated, combined, and then used in decision making.

Step 3: Analyze Risk Control Measures Risk control measures have to address three components: Likelihood of an occurrence Severity of the occurrence Exposure of people and equipment to the occurrence Control Measures Reduce or eliminate at least one of the above elements Should account for the cost of the control measure along with the benefits, providing alternative choices, if possible.

Risk Control Process Substep #1: Identify risk control options Substep #2: Determine effects of risk controls Substep #3: Prioritize risk controls

Step 4: Make Risk Control Decisions Based on the analysis in Step 3, the decision-maker chooses the best risk control or combination of risk controls to address the risk.

Step 5: Implement Risk Control Measures Management must formulate a plan for applying the controls that have been selected, then provide the time, materials, and personnel needed to put these measures in place.

Implement Risk Control Measures Substep 1: Make implementation clear Substep 2: Establish accountability Substep 3: Provide support

Step 6: Follow-up and Review Once risk controls are in place, those controls must be periodically reevaluated to ensure their effectiveness. Everyone must ensure that the controls are maintained over time. The risk management process must continue throughout the life cycle of the system, mission, or activity.

Feedback Feedback informs all involved as to how the implementation process is working, and whether the risk controls were effective. Feedback can be in the form of briefings, lessons learned, cross-tell reports, benchmarking, database reports, etc. Without this feedback loop, we lack the benefit of knowing if the analysis was accurate, contained minor errors, or was completely incorrect.

Resources FAA’s Risk Management Process: http://www.faa.gov/regulations_policies/handbooks_manuals/aviation/risk_management/

Practice Exercise

Summary What is risk management? What does risk management do? What does risk management look like?

Objectives Describe: the risk management process the goals of risk management the risk assessment process risk and describe principles of risk analysis the six-step risk management process

QUESTIONS?