This is a paper I wrote for my engineering seminar class. It is a brief paper regarding the risk analysis and assessment for plant production.


In today’s modern world of industry, there is a common battle being waged between risk and reward. This battle is taking place on many fronts. Investments, product development, and company development are constantly being examined to determine the best opportunities for growth and profit. Another area that is beginning to gain attention is risk analysis for the maintenance of process plants such as non-nuclear power plants, chemical plants, and pharmaceutical plants. These specific industries have begun taking a scientific approach to identifying possible failures and correcting them before safety and production are harmed.

Two methods being examined to help prevent failures are risk analysis and post-construction inspection standards. There is currently no baseline method for risk analysis, nor are there any post-construction guidelines for non-nuclear industries. However, companies are quickly realizing the benefits of implementing a risk analysis system and ASME is in the process of developing post-construction standards.

Risk Analysis

Risk is an important consideration in process plants because of two main factors; safety and money. Currently, three agencies are responsible for promoting different types of safety in industry. The Safety Engineering and Risk Analysis Division (SERAD) of ASME is responsible for catastrophic loss outside a plant, workplace injuries and fatalities, and reliability. The Occupational Safety and Health Administration (OSHA) monitors workplace risks and the Environmental Protection Agency (EPA) watches outside plant risks.

Companies have realized that there are many safety benefits that can be derived from the implementation of risk analysis. Improved reliability that results in less injuries and equipment failure is being recognized because of focused inspection driven by reducing production loss from failure.

A major advantage of risk analysis is the contribution to the bottom line. In our capitalistic economy, money is typically the driving factor. By making use of risk ranking to schedule inspections and replacements companies are saving money and increasing safety.

An example from Mechanical Engineering magazine discusses a steam turbine. Every five or six years, the turbine will face a major outage for repair or inspection. During this time, no electricity is being produced, yet the inspection and repair costs are being incurred and can range up to millions of dollars. To help combat this issue, companies have begun to break the turbines into subsystems and components and then failure mode analysis is performed on each part. This allowed for the companies to determine when the parts would need to be inspected. Inspection and repair were thereby reduced.

Different methods of risk analysis are used in different areas of industry. Each has it’s positives and negatives. The two main divisions of risk analysis are qualitative and quantitative. In a qualitative analysis, a broad overview of possible failures is examined by relatively inexpensive means. This is a good way to get an overall feel for the plant and its current condition. In quantitative analysis, numeric values are assigned to probabilities and consequences. This analysis is very advantageous because it can completely study the possibility of failure and then provide numeric results. However, this analysis is extremely in-depth and can be overly complex and very expensive.

Because of the lack of clarity with purely qualitative analysis and the extreme expense of purely quantitative analysis, a combination of the two is typically used. Possibilities for failure are screened using qualitative and broad quantitative methods. After likely areas have been identified, fully quantitative analysis is employed. ASME has developed five guidelines for exercising risk analysis. They are system definition, qualitative risk assessment, system assessment ranking, inspection program development, and economic optimization. Over the years, this has been the most economical bet for optimizing performance and addressing a great deal of safety concerns.

Post-construction Standards

Post-construction standards are something that go hand-in-hand with risk assessment. There currently are no guidelines for non-nuclear process plants, which leads to speculation about what methods work best. Each industry uses it’s own methods and this can be confusing in the overall scope of things. Companies are constantly trying to overcome the decisions of planning inspections and what techniques should be employed to repair problems that may be found.

A good example of a typical problem that could be found in industry is a crack somewhere in a pipe. In the past, a crack was immediately considered to be bad and would need to be repaired. In today’s industry, the crack would be analyzed to determine the failure mode and then to determine if failure would result from the formation of that crack. This is an example of the risk analysis in action.

With the problem of the crack displayed above, the question still arises about how the method should be handled. What kind of analysis should be done? How high do the chances of failure need to be before it is repaired? Is failure going to be harmful and costly if the part does go bad? These are question that ASME is currently undertaking with the project of developing post-construction standards for non-nuclear process plants.

The post-construction standards are currently under research to standardize the process among various plants and production facilities. SERAD would like to provide guidelines for inspection planning based on risk analysis and risk assessment methods. Repair techniques are also an aspect to be researched for post-construction standards.

Risk Assessment Firms

There also has been a growth in firms and companies that focus on risk analysis. From these companies, improved developments have come in production. A good example of such improvements comes from FM Global. A semiconductor chip manufacturer was looking at implementing process alternatives that would make use of highly hazardous gases. The corporate guidelines prevented the manufacturers from initiating this new process. FM Global produced an analysis that identified the likelihood and consequences of potential gas releases, and the analysis showed that an upgrade to this alternative process would actually improve the overall safety.


There are tools available for companies that want to explore risk analysis. Qualitative and quantitative analysis, when used effectively, can both reduce cost and increase safety. Implementing this analysis makes good economic sense for all companies. It also extends to safety records that exceed both OSHA and EPA standards. Plants that have started taken an analytical approach to different types of risk have been running better. They have become more reliable and society is reaping the benefits of a safer and more productive society.


DeGaspari, John, “Risky Business” Mechanical Engineering. July 2002. pp 42-44.

Latcovich, John, Michalopoulos, Evangelos, and Selig, Bernie. “Risk-Based Analysis Tools.” Mechanical Engineering. Nov. 1998. Online. FM Global: Risk Engineering Methodologies / Industrial Risk Assessment.