MEM602 Engineering Risk Management Report 1 Sample
Assignment Details
For assessment 1 you are required to develop a risk strategy for Road Transit Systems (RTS) Preventative Maintenance Program (PMP). The Managing Director has assigned the Project Engineer (you) to develop a risk strategy for the organisation. It has become apparent to RTS senior management that whilst key personnel across the organisation have independently managed their work units and processes and the risks associated with these, an in-depth review at a strategic level has yet to take place. As Project Engineer, you will be required to provide a formal report in 2000 words (+/- 10%) that outlines a risk strategy for RTS. Your report will be broken into 4 main categories: people, reputation, business process and systems and financial.
Case Study: Road Transit Systems (RTS) Preventative Maintenance Program (PMP)
Mission Statement
The Maintenance Department’s mission is to provide safe, clean, reliable, and comfortable vehicles effectively and efficiently for use by its customers and operators.
Preventative Maintenance Program (PMP)
The emphasis of Road Transit Systems (RTS) vehicle maintenance program is preventive rather than reactive maintenance. A strong preventive maintenance program effectively reduces overall maintenance costs by decreasing the number of road calls and the high cost of unpredictable repairs caused by reactive maintenance. RTS program uses a graduated preventative maintenance program (PMP) that is based on the manufacturer’s recommendations and modified based on experience and the local conditions they deal with in regional NSW, Australia. Solid PMP practices maximise useful life, are cost efficient over the life of the vehicle, and ensures that all vehicles remain in safe operating condition.
RTS staff continually review their maintenance practices to identify potential improvements to the program. This assures optimum benefits from the scheduled inspections. Engine oil analysis is an integral part of the inspection program. Oil analysis occurs differently for different fleet types. Some are based on mileage or hours operated. The purpose is for early identification of unusual engine wear thereby, acting to prevent catastrophic engine failures.
On-time inspection variance
The allowable variance with all preventive maintenance inspections is a minus 500 miles to a plus 500 miles. Any inspection completed within this parameter is considered on time. Each sub-fleet of vehicles has its own specific PMP schedule.
Task Instructions
To complete this assessment, you need to critically analyse the case, develop and map a convincing risk-based strategy and demonstrate your ability to assign risk related tools and techniques to aid an effective risk strategy:
Report criteria:
1. Refer to the Case Study. Take into account ALL of the case’s context;
2. Allocate the body of report into sections: people, reputation, business process and systems and financial;
3. Address the scope of risk by:
• developing and evaluating good governance principles;
• identifying any systemic external and internal risk-related issues;
• assessing stakeholder responsibility together with risk reporting across RTS and any affiliated entities.
4. Outline the role of compliance for RTS and its affiliated entities and;
5. Develop an outline for a compliance policy for RTS and any affiliated entities;
6. It is expected that your report will focus on these aspects and not just report on a risk management plan. However, risk management tools and guides such as the Hierarchy of Controls and reference to industry standards (and others if deemed necessary) can be used as a support to your argument only.
Report structure:
1. Executive Summary (what is the purpose and nature of the report);
2. Contents page;
3. Introduction - Background information;
4. Body (as outlined in report criteria);
5. Conclusion;
6. Recommendations;
7. List of References;
8. Appendices
Solution
Introduction
The aim of a risk management plan is to safeguard a firm from threats that can disrupt its operations and deteriorate its reputation. A comprehensive strategy may also help formulate the possible actions needed to address the internal and external risks. The discussion of this paper is to find out a risk management plan for the Preventive Maintenance Program (PMP) of Road Transit Systems( RTS). Based on the risks, a compliance policy will also be developed in the later parts of the undertaken
study
Scope of Risk
People
Governance principles
Good governance relates to the regulation of activities to protect and fulfil the interests of the wider public (Keping, 2018). The six governance principles that can be followed by RTS are as follows for university assignment help.
? Legitimacy: The company can perform extensive audits, which Serrano & Kazda (2020) state can help preserve the safety of occupants. This will allow identifying the potential threats and allow taking the necessary corrective actions. It can also carry out regular oil analysis which will help in increasing the uptime of vehicles and detecting issues before they majorly impact the parts of the systems.
? Transparency: The key principles and practices carried out within the PMP can be made public by stating them on the official website of RTS. This will allow stakeholders to stay aware of the internal happenings and gain confidence in its ability to protect passenger safety.
? Accountability: RTS, instead of depending on any third party, can carry out independent audits of the PMP. This will ensure that all the aspects of the program have been refined to meet the current needs. Tracking the progress of the program towards Key Performance Indicators, like decreased breakdowns and weekly inspection rates, can also help demonstrate accountability within the program.
? Rule of law: According to Keping (2018) rule of law is the basic requirement of good governance. However, concerning PMP, the rule of law may not relate to any specific regulation. It may act as a framework that guides the program. RTS can consistently apply the program to all vehicles irrespective of the size, route and function. It can also balance the investments with the benefits for optimising the maintenance expenditure.
? Responsiveness: With the rapid evolution in revenue models, the on-demand transportation market is also prone to changes (Liyanage et al. 2019). Due to this, the reports submitted by supervisors must be regularly reviewed. This will allow for authorising repairs on time and remaining responsive in its efforts.
? Effectiveness: Data analysis tools, such as Microsoft Power BI can be used for evaluating the data gathered through repair reports, oil analysis reports, inspection forms, and so on. This will help recognise the early warnings and accordingly adjust the inspection intervals. Additionally, it will allow for efficiently allocating resources such as mechanics for providing timely maintenance of the vehicles.
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Figure 1: Six governance principles
(Source: Created by author)
Reputation
The different systemic risks that can trigger severe instability within RTS and impact its reputation have been given below.
External risk-related issues
? Weather events like storms can have minimal impacts by causing delays and route diversions. However, extreme weather events can severely affect the transportation infrastructure of RTS. For example, when roads are flooded, the RTS buses will be compelled to take a different route or completely halt operations. This can reduce the number of passengers, resulting in a loss in revenue. Moreover, after the vehicles come in contact with water, the cost of repairing them can be high. Thus, putting an additional financial burden on the company (Rebally et al. 2021).
? Fuel costs are one of the biggest expenses of RTS. Additionally, the constant fluctuations can make it difficult to efficiently manage the budget and gain a substantial profit. Statista (2024) reports that the average market price of gas in Australia stood at $15.08 billion in 2022. This rose to $17.93 in the following year and then again dropped to 10.96 in 2024. Such constant changes may force RTS to make adjustments in its fares, which may demotivate many passengers, leading to a decrease in overall sales and revenue.
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Figure 2: Market price of gas in Australia
(Source: Statista, 2024)
Internal risk-related issues
? Internal communication, as asserted by Heath (2020) is a key to success in business operations. However, communication gaps can lead to conflicts and lower the morale of the work environment. This may happen when leaders or managers of the maintenance department of RTS gatekeep information to themselves. Due to this, employees, such as the bus drivers will be unaware of the new updates and may rely on outdated strategies. As a result, this will reduce productivity and increase feelings of frustration and confusion within the company.
? A lack of strong skills in the workforce also stands as a potential internal threat. Employees may underperform, which can lengthen the time needed to reach the goals of the program. For instance, the technicians are not well aware of the specific components of the new HVAC systems. As a result, they may fail to carry out the necessary repairs which will instantly endanger the lives of the passengers, along with the image of the company.
Business Process and Systems
Stakeholder responsibility
? Maintenance management department: Overseeing the execution of the PMP is the main responsibility of this division. Leaders ensure that the everyday tasks are completed within the created schedule. This may include regular inspection of vehicles to check whether all the seats are covered with cloth for hygiene purposes. They must also monitor the garage by keeping them free of debris to provide a safe place for parking the vehicles. Further, looking into the repair of the damaged bus seats and preparing reports of vehicle malfunctions also fall under their duty list.
? Senior management: They may analyse the money and time spent on the repairing processes. The management may also make sure that the program is following all the regulations, which is essential for safeguarding the reputation of RTS.
? Suppliers: As propounded by Johnson, Leenders & Flynn (2021) suppliers are responsible for ensuring that the goods are delivered on the time that has been agreed upon. All the external parts and systems required by the maintenance department are delivered by them. They have to ensure that the documents needed as per the contract, such as invoices are provided to the company. They must also conduct regular meetings for negotiation purposes. Most importantly, they must provide high-quality raw materials that may contribute to reduced repairs, helping RTS save on unnecessary expenditure
? Government: Regulatory bodies will have the core responsibility of certifying that all the public transportation systems meet the necessary standards. At the national level, the Australian Transport Safety Bureau will look into any serious accidents where the RTS buses are involved. They may perform routine inspections to identify any risks for recommending the necessary changes. Further, at the state level, it can be the Transport for NSW that, Nsw.gov.au (2024) state works hand-in-hand with operators to deliver customer-centric services to make NSW a better place to work and live.
Financial
Risk Reporting
Reduced passengers: The main source of income for RTS is the passengers. However, for several reasons, the flow of passengers may be reduced. For example, the inflation rate in the country is on the rise. In such a scenario, to cut down on costs and prioritise basic necessities, individuals may avoid riding in vehicles. Cases of accidents may also give rise to hesitation among passengers who may opt for alternative transportation services
Labour disputes: Workers may go on a strike for issues like lack of job security, overburdened work and political issues (Dragano et al. 2018). However, this will instantly disturb the financial status of the operator. If the bus drivers go on strike, it will not be able to run to deliver its services which can leave a negative impression on the everyday passengers. This, in turn, can lead to financial losses which can be highly dangerous for the stability of the firm.
Data breach: The electric buses used by RTS may act as a source of data breaches. The information stored within the ticketing systems, such as the travel journey and payment details can be accessed by cyber criminals. Moreover, the buses are run through battery packs, which when not monitored efficiently can also become vulnerable to data leakages.
Role of compliance for RTS
Chooi (2020) claims compliance is a core aspect of achieving customer confidence. With a good compliance program, RTS will be able to avoid unnecessary legal consequences and maintain consistency in its service portfolio. Additionally, it may aid in fostering a positive company culture and integrating the values into the everyday work processes of the workers. Abiding by established procedures related to labour and equipment can also allow for avoiding unwanted repairs and protect the profit margin of the company.
Compliance Policy
The main three components of the policy can be:
? Firstly, RTS must follow all the maintenance schedules outlined by the producers of the vehicles. This may range from filter replacements to oil changes, where each stands to be a critical task concerning the safety of the passengers.
? Secondly, it must comply with all the regulations put forward by the state and federal agencies. This will include all maintenance activities and the environmental standards that must be maintained for operating in an eco-friendly manner.
? All the maintenance personnel must be trained to expand their knowledge of internal procedures and the suggestions given by the manufacturer.
? Records of each bus that may include time of service, replaced parts and involved employees must be tracked by carrying out internal audits. This will help identify areas that require attention and be more responsive to the changes in the external environment.
Conclusion
In conclusion, the present operations of RTS are vulnerable to an ample amount of risks. From extreme weather conditions to a communication gap within the maintenance department, each can cause major delays in its daily schedule. Such disadvantages lower the firm's capability of meeting the public needs which even leads to a loss of confidence. Based on the analysis, a compliance policy has been developed. Strictly abiding by it will ensure the effective execution of the preventive maintenance program. It will also help in avoiding unnecessary repairs and legal costs that can have a drastic impact on the image and bottom line of the company.
Recommendations
RTS can follow the below suggestions for further enhancing the effectiveness of the PMP
? Upon identifying any noncompliance, immediate actions must be taken. Additionally, disciplinary measurements must also be used based on the nature of the violation. This will ensure that employees hesitate to commit the same mistakes in future operations.
? Continuously updating and reviewing the policy is essential for reflecting the changes taking place in the wider industry
? All the employees, regardless of their position must be motivated to report any suspected violations directly to the senior management. They may do so either directly or anonymously, as both will help in upholding the commitment within all layers of the transportation services.
List of References
Atsb.gov.au (2024) Australia's national transport safety investigator Available at: https://www.atsb.gov.au/ (Accessed on 26 June 2024)
Chooi, A. (2020). Improving tax compliance: Establishing a risk management framework. https://www.adb.org/sites/default/files/publication/562431/governance-brief-039-improving-tax-compliance.pdf
Dragano, N., Barbaranelli, C., Reuter, M., Wahrendorf, M., Wright, B., Ronchetti, M., ... & Iavicoli, S. (2018). Young workers’ access to and awareness of occupational safety and health services: Age-differences and possible drivers in a large survey of employees in Italy. International journal of environmental research and public health, 15(7), 1511. https://doi.org/10.3390/ijerph15071511
Heath, R. L. (2020). Management of corporate communication: From interpersonal contacts to external affairs. Routledge. https://doi.org/10.4324/9781003064046
Johnson, F., Leenders, M. R., & Flynn, A. E. (2021). Purchasing and supply management. McGraw-Hill Companies, Inc. http://dspace.vnbrims.org:13000/jspui/bitstream/123456789/4199/1/Purchasing%20%26%20Supply%20Chain%
20Management.pdf
Keping, Y. (2018). Governance and good governance: A new framework for political analysis. Fudan Journal of the Humanities and Social Sciences, 11, 1-8. https://doi.org/10.1007/s40647-017-0197-4
Liyanage, S., Dia, H., Abduljabbar, R., & Bagloee, S. A. (2019). Flexible mobility on-demand: An environmental scan. Sustainability, 11(5), 1262. https://doi.org/10.3390/su11051262
Nsw.gov.au (2024) About us Available at: https://www.transport.nsw.gov.au/about-us (Accessed on 26 June 2024)
Rebally, A., Valeo, C., He, J., & Saidi, S. (2021). Flood impact assessments on transportation networks: a review of methods and associated temporal and spatial scales. Frontiers in Sustainable Cities, 3, 732181. https://doi.org/10.3389/frsc.2021.732181
Serrano, F., & Kazda, A. (2020). Business continuity during pandemics–lessons learned about airport personnel. Transportation Research Procedia, 51, 56-66. https://doi.org/10.1016/j.trpro.2020.11.008
Statista (2024) Average market price of gas in Sydney, Australia from financial year 2012 to 2024 Available at: https://www.statista.com/statistics/1299069/australia-gas-market-price-sydney/ (Accessed on 26 June 2024
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