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307. Framework for Risk Management Software System for SMEs in the Engineering Construction Sector
Chike F Oduoza, Nengi Odimabo, Alexios Tamparopoulos
UNIVERSITY OF WOLVERHAMPTON, United Kingdom
Small and medium-sized enterprises (SMEs) especially in the construction sector are vulnerable, and face daily exposure to a wide variety of business risks whilst they operate without a risk management system in place. There is abundant evidence both from informal market research and industry surveys to confirm that SMEs are continuously handicapped and therefore underperforming due to their inability to manage operational risk challenges facing them on a daily basis. The objective of this study is to develop a risk management software system which will enable SMEs in the construction sector to proactively identify, analyse and manage the large variety of risks facing them to enhance business performance. In the construction sector performance is assessed mainly in terms of time of completion, cost of project execution and overall quality of delivery.
The research methodology adopted in this study is underpinned by a framework based on the balanced score card which identifies a wide array of key risk indicators affecting performance in the construction sector. The user friendly risk management software system which is designed to accommodate various user levels guides the operator to avoid, minimise, mitigate or manage the relevant risks to enable successful performance outcome. The system designed and developed here will enable systematic risk management to achieve minimum cost and time overrun while optimising on quality of delivery in a project management environment.
304. Aspects of Risk Management Implementation for Industry 4.0
Jiri Tupa, Jan Simota, Frantisek Steiner
University of West Bohemia in Pilsen, Czech Republic
Industry 4.0 ordinarily called as “Digital Factory”, “Industrial Internet” or “Fourth Industrial Revolution” is comparatively new method of production processes management. In comparison to Industry 3.0, focused on the automation of single machines and processes, Industry 4.0 is focused on the introduction of Internet technologies into industry which is the main technical background. It is often understood as the application of the generic concept of cyber-physical systems to industrial production systems. Due to recently and higher interest of this topic, there are various definitions of Industry 4.0 which caused confusion rather than increasing transparency nowadays. In relation to risk management, resulting from new approaches, modified frameworks, more complex IT infrastructure and so on, new types of risks may occur. In many cases, the implementation of Industry 4.0 shown that connections of humans, systems and objects became more completive, dynamic and real-time optimized network. Through the use of technical approaches (for example cloud computing, cyber physical systems) as a key technology, all processes became more transparent and flexible. On the other hand there is a fact of data volume and availability enhancement in real time which causes new requests in infrastructure, management, technologies and so on. There are lot of smart and useful tools for risk management which were developed during previous Industry areas expansions. Therefore, the aim of this paper is to present result of research focus on related to key aspects and possibilities of risk management implementation to that Industry area.
5. Operational Hedging and Coordination in Prefabrication Construction Industry
Yue Zhai, George Huang
The University of Hong Kong, Hong Kong S.A.R. (China)
This paper explores a trade-off and coordination problem between two operational hedging methods in the prefabrication supply chain risk management. Operational hedging methods are adopted for mitigating the heavy impacts caused by potential risk in the prefabrication supply chain. Effects of two commonly used hedging strategies i.e. lead-time hedging and buffer space hedging are investigated in this prefabrication construction domain. These hedging methods though effective in improving system performance, however, add much pressure to the execution department, for extra investment would occur. In this way, under a decentralized system individual departments are not willing to take part in the hedging methods unless they could get better off. In this work, coordination mechanism that integrates these two hedging methods is investigated. This work focuses on the interface between a building company and a general contractor within a prefabrication construction industry. Specifically, the lead-time hedging which refers to reducing building lead-time uncertainties is adopted by the building company; and the buffer space hedging which refers to reserving more empty space than normal operation for flexible operation is conducted by the general contractor. We find that trading-off two hedging methods in a decentralized system outperformances the traditional model where only a single hedging methods is adopted , for the system profit get improved and each party gets better-off in the coordination mechanism. Besides, the hedging pressure is mitigated though the proposed mechanism. Later on, numerical studies are carried out to demonstrate the performance of the proposed model. We found that high building process uncertainty, high space congestion probability; and low unit hedging cost can be viewed as opportunities for both building company and general contractor to protect their profit by adopting the proposed coordination mechanisms. Furthermore, some more interesting managerial implications are obtained and summarized.