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Performance Plastics Incorporation: Expansion Project Essay

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Project Risk Management Plan

Since all projects have risks, experts in project management have adopted proactive approaches designed to manage these risks. Risk management success determines the success of a project. However, risk management responses depend on the nature of the project. In the practical project management evaluation, risk analysis methods such as failure mode, risk matrix, analytical hierarchy, effects analysis, and fault tree analyses may be applied either independently or as a complement of another (Gray & Larson, 2011; Solomon, 2010). This part of the paper will present a risk management plan for the proposed expansion of production and storage space for the Performance Plastics Incorporation (PPI). The broad spectrum of risk matrix will revolve around social risks, safety risk, legal risk, delay risk, operational risk, procurement, and financial risks.

Risks applicable to the project

Identification of the Risks in the PPI Expansion Project

The following risks have been identified in the PPI Expansion Project in line with the discussed risk classifications.

Operational and Technological Risk

From the definite time frame for implementation, it is apparent that this project has a clear specific and period of performance. However, the third stage may prove to be a challenge since there is no local company within the project country that has the capacity to carry out construction within the allocated time. Besides, the inflexible time allocation for completion of the project may be faced with challenges in channels of reporting progress that is critical in ensuring clear communication from one stage to another. The risk level in this category is high.

Contractual and Procurement Risk

This risk falls in the low-risk category since the project has a very clear procurement and contractual arrangement for the completion of the project, as indicated in the project arrangement.

Economic and Financial Risk

The leading financier of the project, which is the Performance Plastics Incorporation has precise demands for the economic viability of the whole project. This risk in this classification is medium.

Environmental Risk

The aspects of sustainability, pollution, environmental degradation, and other ecological concerns must be reviewed in the course of this project. However, the risk is low since the project will have a minimal negative impact on the environment.

Delay Risks

Just like any other project, this project may experience a delay due to different dynamics during implementation. However, the risk is very minimal.

Classification of the Risks

After identification, these risks were classified in terms of their overall impact on the project and the probability of their occurrence. The basis for classification was in terms of the magnitude of effects such as (LI) low impact, (MI) medium impact, and (HI) high impact (Murray, Grantham, & Damle, 2011). In terms of probability of occurrence, the risks were broadly classified as (LP) low probability, (MP) medium probability, and (HP) high probability of a possible event.

Risk Impact Probability
Contractual and Procurement Risk Low
The case study is silent on this hence we assume a low risk
Low
The case study is silent on this hence we assume a low risk
Economic and Financial Risk High
The PP1 finances the project and disapproval will seriously cripple the project
Low
Since the financier is reliable, there is an assumption that project will run smoothly upon approval
Operational and Technological Risk High
The overruns on cost is likely to create a ripple effect in other project implementation categories
Medium
Since the project is tightly controlled, the probability will not be high or low
Environment Risk Low
The case study is silent on this hence we assume a low risk
Low
The case study is silent on this hence we assume a low risk
Delay Risk High
Any overrun of the schedule will increase the cost of the project by a big margin
Low
The project is tightly controlled hence the occurrence is likely to be low

(Source: Self Generated).

From the above classification table, probability/impact matrix was developed as indicated in the table below.

Probability

Low Medium High
High Economic and Financial Risk Operational Risk Delay Risk
Medium
Low Environmental Risk, Contractual Risk

Explanation of the Project Probability/Impact Matrix

BLUE The risks here are classified as ‘occurred’ and the ideal approach would be avoidance of the risks.
GREEN The ideal approach would be either risk transfer or mitigation with those in the LP-HI addressed through contingency budgeting. The MP-MI category should be addressed through a critical contingency plan.
ORANGE The risks in these categories should be addressed through simple risk acceptance and dealt with through risk managements approaches as they arise.

(Source: Self generated).

Appropriate options for treating the risks

The primary risk responses include avoidance of risk, transfer of risk, mitigation of risk, and acceptance of chance as to the underlying ways of organizing appropriate responses in project implementation. This broad-spectrum classification of risks is critical in the identification of the various dangers, reviewing their impacts on the project, and offering mitigation to the risks to make the project viable and successful. Specifically, the chances are rank in terms of their magnitude, that is, low risk, medium risk, and high risk, in order to make the responsive strategies specific in addressing the risk concerns (Snyder, 2009). The appropriate actions are summarized in the table below.

Risks Appropriate actions
Economic and Financial Risk The ideal approach would be either risk transfer or mitigation. Specifically, the PP1 project may address the risk of through contingency budgeting to protect the project from inflation and financial market swings as a result of taxes.
Contractual and Procurement Risk Since the frequency of possible occurrence is very low, the PPI project should address this risk through simple risk acceptance and dealt with through risk managements approaches as they arise such as taking insurance.
Operational and Technological Risk This risk can be deal with through outsourcing some demanding stages of the project. Besides, the project team will ensure that the best contractor is awarded the construction tender.
Delay Risk This risk should be address through a critical contingency plan since chances of occurrence is very high. The project should adopt a closed contract with the contractor to protect itself from additional costs as a result of delay.
Environment Risk Environmental risk will be avoided through partnership with local environmental organization to carry out impact assessment before the project commences.

(Source: Self generated).

Project Human Resource Plan

Project Manager Design Architecture Implementation Engineer Training Leader Functional Coordinators Construction personnel
Requirement Gathering A R R C C I
Design A R C C I
Construction A R
Progress Monitoring A R C I I
Implementation A C R C C C

Key:

R – Responsibly of completion

A – Accountable for task end

C – Consulted before commencement of each duty

I –Alerted after every decision is made

Human Resource Required and Associated Costs

Resource type Supplier Duration (hrs) Rate $/hr Estimated costs($)
Architectural design External 216 220 47,520
Civil engineer External 237 120 28,440
Project management Internal 161 120 19,320
Project coordination Internal 152 120 18,240
Trainer Internal 200 120 24,000
Supplier Internal 237 100 23,700
Construction External contractor 1200 1000 1,200,000
Total costs 1,361,220

(Source: Self generated).

Training approach

The training approach will be done through series of meeting between the internal and external suppliers of project requirements. Training will be continuous depending on the needs and dynamics of the project. There will be reward to internal suppliers for a accomplishing each milestone within the set time. The reward will be in the form of monetary allowances and certificate of competency.

Project Communication Plan

The training approach will be made through a series of meeting between the internal and external suppliers of project requirements. Training will be continuous, depending on the needs and dynamics of the project. There will be a reward to internal suppliers for accomplishing each milestone within the set time. The prize will be in the form of monetary allowances and certificates of competency.

Project Communication Plan

The project directors hold the key to the future of the PPI construction project. They have a mental picture and a vision of how they want the company to become after a given period of time. The clients of the company should understand that the company policy is on security. Getting their approval is critical. Members of the project workforce are an integral aspect of the implementation of the proposed project (Quantum & Daley, 2011). They are the hands that carry out the actual duty. If properly trained, they are the strengths that ensure the success of the new procedures.

Communicating with stakeholder groups

Directors

Key messages: Risk mitigation and monitoring for sustainability of the proposed PPI project.

Delivery strategies: Open meetings and consultative forums.

How to encourage input/participation: Preplanning of the meetings and micromanaging each stage.

Level and type of support for the project plan: Technical support.

Members of the project taskforce

Key messages: Risk mitigation and monitoring for sustainability of the proposed project.

Delivery strategies: Open meetings and consultative forums.

How to encourage input/participation: Preplanning of the meetings and micromanaging each stage.

Communication Activity Target audience Ownership Duration Communication mode
Training All the project personnel Project trainer Weekly Live meeting
Progress reporting All the project personnel Project manager Weekly basis Live meetings
Communicating activities Project manager Project coordinator Every three days Email alerts
Stage reports Project

(Source: Self generated).

The plan will be communicated through face to face meetings and official emails. The progress will be displayed after every three days. The documentation needed is training pamphlets, risk monitoring books, and store files for each mitigation strategy proposed. The action plan will be monitored every day during the first month. Reports on its progress will be made after every two days.

References

Gray, C.F., & Larson, E.W. (2011). Project management: The managerial process. New York, NY: McGraw-Hill.

Murray, S. L., Grantham, K., & Damle, S. B. (2011). Development of a Generic Risk Matrix to Manage Project Risks. Journal of Industrial and Systems Engineering, 5(1), 35-51.

Quantum, P., & Daley, S. (2011). Microsoft Project 2010 in depth. Indianapolis: Que Publishing.

Snyder, C. (2009). A project manager’s book of forms: A companion to the PMBOK Guide, fourth edition. Hoboken, ST: Wiley.

Solomon, M. G. (2010). PMP Exam Cram: Project management professional. Upper Saddle River, NJ: Pearson.

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IvyPanda. 2021. "Performance Plastics Incorporation: Expansion Project." January 15, 2021. https://ivypanda.com/essays/performance-plastics-incorporation-expansion-project/.

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IvyPanda. (2021) 'Performance Plastics Incorporation: Expansion Project'. 15 January.

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