Risk-Based Decision Making

It is important to understand how the concept of risk can inform decision-making in terms of interventions during the asset’s life, including how to operate, maintain, repair, rehabilitate and replace the assets.

For those assets in the high-risk category, the consequence of failure might be so great that it is ill-advised to allow the asset to fail. Because high-risk assets are both likely to cause consequences and likely to fail, it is important for the system to take action to prevent failure. For each asset in this category, determining what action(s) can prevent failure is of utmost importance. Actions that can prevent failure include preventive maintenance, rehabilitation, and asset replacement. In these cases, it is better to forgo some of the asset’s life (by replacing it before the end of life) in favor of preventing negative consequences.

For those assets in the moderate risk category, there are three possibilities: assets that are likely to fail but have low consequences, assets that are unlikely to fail but would cause high consequences, and assets that have a moderate probability of failure and consequence of failure. The assets in the first group can run to failure. Only minimal routine maintenance needs to take place. The assets in the second group can be monitored to determine if the condition is deteriorating or the likelihood of failure is increasing. At that point, you can perform preventive maintenance or replace the asset. These assets should receive routine maintenance to ensure they remain in good condition. The assets in the third category should receive routine and preventive maintenance to try to prevent failure and to keep moderate consequences from occurring. In the case of the latter two categories, the goal is to reduce the risk of the asset or to at least have the asset remain at the same level of criticality.

Assets in the low-risk category are not likely to fail, and if they do, they are unlikely to cause significant consequences. These assets require the minimum maintenance necessary to prevent the asset from increasing its probability of failure. No extra work should be done, as work in this portion of the risk profile will not change the risk profile. Work in all other areas of the risk profile can change the risk profile, but not this portion. Therefore, expenditure in this area is kept to a minimum.

Risk-based decision making is about expending more of the resources, both personnel and finances, on the higher risk assets and fewer resources on the lower risk assets.