Project Risk Management



  • Students are required to work in a group of 3 students to apply risk management process steps: risk management planning, risk identification, qualitative and quantitative analysis and come up with a risk response plan for the assigned case study.
  • The project provides an opportunity for ESM 670 students to apply the concepts and tools learned in class to engineering projects. It will also improve the students’ teamwork and communication skills both in report writing and oral presentation. The assignment involves teamwork and requires the participation of all team members.
  • Students must submit a technical report to illustrate their work and highlight the benefits of risk management plan.
  • Students are required to prepare a 15 min presentation to summarize what they did on the project.
  • Project grade will be distributed based on student’s knowledge [70%], written report [15%] and presentation skills [15%].
  • Following rubric will be used for assessment of final report & presentation:
Report format: Report is well written with appropriate format, proper technical writing skills, proper use of references and citations 15 %
Report Content: 70 %
1.       Develop risk management plan 10
2.       Risk identification 10
3.       Qualitative analysis 15
4.       Quantitative analysis 20
5.       Develop a risk response plan 10
6.       Discuss benefits of project risk management 5
Presentation skills: effective oral communication, confidence of ideas and professional handling of questions 15 %


Case study:


Founded in 1990, Plastics, Inc., owns and operates 10 injection-molding machines that produce

plastic drinkware. Plastics’s product line consists of travel mugs, thermal mugs, steins, and sports

tumblers. The travel mugs, thermal mugs, and steins come in two sizes: 14 and 22 ounces. The sports

tumblers are offered only in the 32-ounce size. All products except the steins have lids. The travel

and thermal mugs consist of a liner, body, and lid. The steins and sports tumblers have no lining.

There are 15 colors offered, and any combination of colors can be used. The travel and thermal mugs

have a liner that needs to be welded to the outer body; subcontractors and screen printers weld the

parts together. Plastics does no welding, but it attaches the lid to the mug. Plastics’s customer base

consists primarily of distributors and promotional organizations. Annual sales growth has remained

steady, averaging 2%–3% each year. Last year’s revenues from sales were $70 million.



Plastics’ current method for producing its product is as follows:

  1. Quote job
  2. Receive/process order
  3. Schedule order into production
  4. Mold parts
  5. Issue purchase order to screen printer with product specifications
  6. Ship parts to screen printer for welding and artwork
  7. Receive returned product from screen printer for final assembly and quality control
  8. Ship product to customer

At current processing levels, the entire process can take from two to four weeks, depending

on order size, complexity, and the nature of current production activity.



Because of numerous complaints and quality rejects from customers, Plastics has determined to

proactively resolve outstanding quality issues. The firm has determined that by bringing welding

and screen printing functions in-house, it will be able to address the current quality problems,

expand its market, maintain better control over delivery and order output, and be more responsive

to customers. The project consists of adding three new processes [welding, screen printing, and

improved quality control] to company operations.

Plastics has no experience in or equipment for welding and screen printing. The organization

needs to educate itself, investigate leasing or purchasing space and equipment, hire trained workers,

and create a transition from subcontractors to in-house operators. The project needs a specified date

of completion so that the transition from outsourcing to company production will be smooth and

products can be delivered to customers with as little disruption to shipping as possible.

Management’s strategy is to vertically integrate the organization to reduce costs, increase market

share, and improve product quality. Plastics is currently experiencing problems with its vendor

base, ranging from poor quality to ineffectual scheduling, causing Plastics to miss almost 20% of its

customers’ desired ship dates. Maintaining complete control over the product’s development cycle

should improve the quality and on-time delivery of Plastics’s product line.

General Approach

  1. Managerial approach. The equipment will be purchased from outside vendors; however,

Plastics’s internal employees will perform the assembly work. Given the type of equipment

that is required, outside contractors will not be needed because the company’s facility employs

the necessary maintenance staff to set up the equipment and troubleshoot as required, once

the initial training has been supplied by the vendor.

  1. Technical approach. The equipment manufacturers will utilize CAD to design the equipment.

Initially, the firm will require a bank of parts to be available once the equipment arrives in

order to fine-tune the machinery. Fixtures will be designed as required, but will be supplied

by the machine manufacturer.


  1. Budget constraints. This project must ultimately increase profitability for the company. In

addition, the project will have a constraining budget. It must be shown that any additional

expense for both the conversion and producing finished cups on-site will result in increased


  1. Limited plant space. Plastics is assuming this conversion does not involve building a new

plant or significantly increasing facility size. Space for new machinery, new employees, and

storage for dyes and inventory must be created through conversion of existing floor space. If

additional floor space is required, leasing or purchasing options will need to be investigated.

  1. Time. Since this project will require the company to break existing contracts with vendors, any

missed milestones or other delays will cause an unacceptable delay to customers. A backup

plan must be in place to avoid losing customers to competitors in case the time frame is not

strictly met. The conversion must be undertaken with a comprehensive project scheduling

system developed and adhered to.

  1. Safety regulations. The installation and conversion activities must be in accordance with

several agencies’ specifications, including but not limited to guidelines from the Occupational

Safety and Health Administration [OSHA], the insurance carrier, and the financing agency.

  1. Current orders must be filled on time. All activities must be designed to avoid any delay in

current orders. The transition should appear seamless to customers to avoid losing any part

of the extant customer base.

Apply a risk management process steps;  risk management planning, risk identification, qualitative and quantitative analysis and come up with a risk response plan for your project. An effective risk analysis will demonstrate clear understanding of relevant project risks, their potential impact [probability and consequences], and preliminary plans for minimizing the negative effects and capitalizing on opportunities.


Due Date:  Project report and presentation [hard and soft copies are due on Monday 29th of November 6:00 p.m. Presentations will take place in class. Late submissions will not be accepted.

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