PSAM 16 Conference Paper Overview
Welcome to the PSAM 16 Conference paper and speaker overview page.
Lead Author: Richard Kim Co-author(s): Tina Diao, tina.diao@aerospacetechnical.com
Madison Coots, madison.coots@aerospacetechnical.com
| Perspectives on Managing Risks in Energy Systems |
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| Modern enterprise risk management (ERM) for complex engineered systems is ultimately concerned with making high-quality resource allocation decisions at the organizational level with the goal of minimizing the risk of these systems. Effective ERM is challenging in several ways: 1) it necessitates the continuous assessment of a comprehensive set of risks; 2) it requires an intelligent measure of value and objectives; and 3) it requires a normative decision framework that is grounded in quantitative measures, rather than heuristics. In this paper, we propose a principled approach for ERM to address these pressing challenges in complex systems across numerous industries. We begin by outlining and explaining the methods comprising the Risk Management Toolkit: a set of rigorously tested quantitative methods with a proven track record for bolstering the efficacy of modern ERM programs. We then outline a set of organizational characteristics that we believe play instrumental roles in ensuring effective ERM across an organization. Finally, we use an illustrative example system from the energy sector to perform an economic analysis of the organizational value of an effective ERM team. Ultimately, our analysis underscores the significant value and importance of employing thoughtful and rigorous methods of risk management, and our results generalize naturally to other industries with similarly consequential systems. |