In managing disruptions, the majority of the respondents from the public organisations reported that risk management is adopted by their organisation (see Figure 4.5). This is reasonable, as risk management has been widely practised in the Malaysian construction industry. In this case, the public organisations have developed a standard guideline on risk management to be adopted by the project team and stakeholders in implementing public projects. This includes the general risk management process of identifying and analysing risks through workshops, prioritising
risk based on likelihood and impact, developing risk-mitigation plans, and monitoring and reviewing risks during implementation (PWD, 2008). However, Expert PO1 pointed out that, Although we have a risk management plan, things usually do not follow according to plan during implementation. We sort of rush things to be done and do not work according to plan. We have the risk workshops and seminars, to beautify the process. But once we receive a project, it is usually not the case.
Hence, although ideally the public organisations should follow the risk management plan throughout the project delivery, the actual response departs from the plan in various ways depending on the circumstances. Expert PO4 justified why it is hard for the organisations to contain the disruption impacts despite having good planning, a project management plan, risk management workshops and scheduling,
When disruption occurs, it has cascading effects and spreads. Until the reactive and recovery phase, there are still cascading effects that we have to deal with. So it is all firefighting after that. It is not like there was just one disruptive event and the impacts occur straight away, there were a series of preceding events that caused the project to suffer. Because in terms of planning, all the preparation was fine.
Indeed, the impacts of disruption are not always immediate. As discussed in Section 2.3.1, it may take time for the disruption to show its full impact on supply chain performance (Sheffi and Rice, 2005). On the other hand, it might also be that the segregation between the departments in the public organisations (discussed in Section 5.7) in delivering the planning, design, tender and construction phase makes it harder to implement the risk management plan effectively. The SO from the public organisation (PO2) stated that,
Although the people from Head of Project Team (HOPT) do the risk management at the planning phase, I can only consider risk management during the planning work as a guide, but I can not use it on-site, because they only mention risks during the planning work. HOPT does not deal with contractors, we are the ones who are in charge of the contractor. So when it comes to me, when we want to start the construction, we have to do this risk workshop again, but only dealing with the risks during construction.
All the project team members and stakeholders, including civil and structural engineers, architects, mechanical and electrical engineers and utilities departments, are involved in this three-day risk workshop to discuss any variation orders or any changes and contractual matters in the construction phase. The SO also appoints her own risk manager to assess the risks on a monthly basis during construction in an attempt to reduce the risks with the rest of the project team. However, the SO expressed her concern at the lack of involvement of professionals from the public organsiations’ planning team (HOPT) during the risk meeting on-site,
However, the planning team perceives that problems arise because the public organisations’ state representatives do not adhere to the initial risk management plan provided by the HOPT. Expert PO4 from the HOPT contended that,
Within the risk management that we did for the state representatives, we have stated that for instance, if the contractor’s appointment is late, a lot of problems will occur. All in the details. And then when the things we said happened, we also have some sort of mitigation plan, because we have done the risk management right. The state representatives however did their own thing as they go along despite knowing from the risk management plan that the disruption impacts will occur.
In this case, Expert PO4 felt that the risk mitigation measures set up by the planning team were not effectively carried out by the public organisations’ state representatives. This shows that despite having a comprehensive risk management system, the blame-game is still prevalent between the departments within the public organisations themselves. Consequently, poor coordination among these departments makes them vulnerable in responding efficiently to any potential risk of disruptions.
Apart from the conventional risk management approach, 16% of the public organisations also have disaster management plans in place to deal with disruptive events. Disaster management in Malaysia deals with natural disasters such as flood, which includes activities such as the ‘detection’ of flood through the collection of meteorological data, ‘forecasting’ flood through the interpretation of the data collected, and the dissemination of ‘warnings’ to the public (Billa et al., 2006). This differs considerably in the case of the contractors and consultants. Despite the fact that they have faced frequent serious disruptions due to natural disaster or severe weather conditions in their operations, compared to the public organisations (see Figure 4.1), only a small percentage (6%) of these private organisations employ disaster management in their operation. Instead, emergency management (21%) and crisis management (13%) are adopted by the contractors and consultants to handle disruptions, as highlighted by Consultant CS2,
…if there is an accident, we have an emergency response team. It depends on the type of incident as well, the type of damage. If it involves small damages, we will respond within two hours, some response is within one day, and there are some cases where the recovery takes months. So that such emergency does not occur, we make plans first before it happens. In this case, emergency management refers to the handling of incidents on-site such as accidents and the collapse of roadwork. On the other hand, crisis management refers to the handling of a disruption during construction that threatens the project team’s high priority goals
in the findings is that the majority of the contractors and consultants (28%) have no specific management in place to handle disruptions. Consultant CS3 found that, as a consultant, a formal risk management approach is not essential to their operations, unlike the contractor’s operations that involve more risks,
In terms of risk management, the contractor needs more risk management. Like for us consultants, we do not really practise risk management 100 percent, we just have it but do not really practise it.
On the other hand, the contractors seem to prefer to handle disruptions as they arise without engaging a specific risk manager, as explained by Contractor CO4,
If it is a big project, we will engage a risk manager, but most of the time we just handle the risks ourselves. And usually we do not call the risk manager from the start; only when the project is sick do we call them. That is usually the case for contractors in Malaysia based on my observation. Because contractors in Malaysia do not like to pay blindly if their (risk manager) service is not needed. Same goes to safety officer, we only called them when needed. Here, ‘sick projects’ are referred to as public projects that face a delay of more than three months, or are abandoned (Sambasivan and Soon, 2007). This ad-hoc approach to engaging the risk manager only when disruptions arise badly exposes the contractors to disruptive events. It was also clear from the interviews that the contractors are reluctant to invest in a risk manager because they want to save costs and maintain their profit. However, the lack of investment in proactive measures may result in costly recovery actions, as discussed in Section 6.2.2. On the other hand, it might also be the case that the contractors and consultants rely heavily on the public organisations’ risk management meetings in managing disruptions,
We do not have a specific risk manager. Usually we depend on the public organisations’ project manager to manage the risks. (Contractor CO1)
Every month we have a site meeting with the public organisations, contractor, supplier and sometimes, authority to discuss all the problems on-site. (Consultant CS3)
This is promising as it encourages collaboration among the public organisations and their supply chain members in handling disruptions collectively. However, during the risk meetings, the contractors do not share with the public organisations all their information on the risks they are currently facing in their operations,
…as contractors, we are not putting all the risks to public organisations’ risk team. We are not going to tell them all the risks, because sometimes it backfires on us. So we just tell them what is related to them only. For example like the poor supply of electricity, that is a risk, but that is
Like for risks, actually we do not encourage ourselves to create the risks that are already there, we will think whether it is worth for us to classify them as risks. Because in construction, everything is risk. So not everything is included in the risk meeting.(CO2)
In other words, the contractors seem to inform the public organisations’ risk management team only of the potential risks of disruption if the risks are considered crucial to them. The lack of information shared on potential risks could ultimately hinder the public organisations’ ability to detect any hidden problems that lie within their supply chain. Hence, it is not surprising that some of the contractors found that risk meetings were ineffective,
…but most of the time with public organisations risk management meetings, the risk meeting can be repetitive because the problems were not solved.(CO3)
…what we identify and list in risk meetings have already occurred, even though we tried to mitigate them, they still occur. And we do modify the plan slightly as there are new risks that we identify during construction that we did not foresee before this.(CO2)
This suggests that in some cases, the contractors adopt a firefighting approach to rectify the impacts of disruption, instead of during project delivery. Similarly, some of the respondents from the public organisations (15%) do not employ a risk management plan in their operations, as clarified by Expert PO4,
…sometimes our stakeholders or clients do not adhere to the mitigation measures we stated in the risk management plan, and keep on making design changes. In the end, it becomes like ad- hoc actions, as we go along we settle the problem.
This shows that in some cases, the public organisations have to take a more reactive approach in reducing the impacts of disruptions due to the external parties’ (stakeholders’) failure to consider potential risks.
6.2.5 Respondents’ Proposed Suggestions to Manage Disruptions
As shown in Figure 4.6, over half the total respondents find that planning is important in managing disruptions. Contractor CO3 believes that good planning can eliminate a lot of risks,
…if you manage the risk earlier, which is proactive, then the risk will not be there, so there are no such reactive actions. So we override and think about that risks ahead, that is considered as planning. Better to be proactive.
However, he added that certain risks, like fluctuations in currency, will not work in this case, as they are outside their control. Contractor CO4, on the other hand, found that planning could help contractors to control potential disruptions from lack of finance,