Case Study: Risk Management Analysis of the Tianjin Port Explosion

This case study delves into the catastrophic Tianjin port explosion, examining the financial, environmental, legal, and human resource risks that contributed to the disaster. It evaluates risk management tools and their applicability in preventing such incidents, emphasizing the importance of risk assessment as a decision-making tool. The study also explores risk perception and communication, proposing effective communication plans. The analysis incorporates the SMART objective framework and supply chain risk management strategies to highlight areas for improvement and mitigation. The document provides a detailed overview of the incident, the factors that led to the explosion, and recommendations for future risk management practices. This assignment is available on Desklib, a platform offering a wide range of study resources for students.

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Risk Management
Name of the Student
Name of the University
Author’s note

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Table of Contents
1. Introduction............................................................................................................................1
2. The key issues which have a significant impact on risks associated with engineering
activities including safety and environmental management systems.........................................1
3. The risk management tools to propose and to analyze realistic risk scenarios and develop
risk management strategies........................................................................................................3
4. Analysis of the usefulness, applicability and limitations of risk assessment as a decision-
making tool.................................................................................................................................4
5. Analysis of risk perception and risk communication and effective development of risk
communication plans and skills.................................................................................................7
6. Conclusion............................................................................................................................11
7. References............................................................................................................................12

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1. Introduction
The major risks associated with the with the massive explosion occurred in Tianjin
port in China have been showcased in the report. The report further progresses on explaining
the risk management in details, effective risk communication plan will be highlighted in the
report as well. The mitigation plan will also be explained along with the risks. The topic will
explain the various risk analysis methodologies. Tianjin port has decided to conduct the
business activities once again after recovering from the explosion, and this report will discuss
the plan on how they should conduct the business from now onwards.Various research
methods will be detailed in the report.
2. The key issues which have a significant impact on risks associated with engineering
activities including safety and environmental management systems
The explosions are generally responsible to cause the environmental, financial, legal
and HR issues, all these issues make significant impacts on the risks correlated with the
engineering activities.
Financial
Nearly two hundred people died as a result of the massive explosion caused at the
Tianjin port. Also, numerous people got injured as a result of the explosion. The explosion in
China was destructive. The explosion destroyed many organisations, buildings as well as the
infrastructure. The cars parked in the region got demolished completely. The shops got
demolished due to the explosion (McNeil, Frey & Embrechts, 2015). The shockwaves
generated as a result of the earthquakes affected the regions located nearby, thus the
residential houses and the shops got completely destroyed as a result of this. The owners of
the shops faced heavy losses due to this. China faced a loss of property accounting to $2.5 to
$3.5 billion.

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Environmental
The environmental issues can affect the environment adversely. Tianjin port City had
various storage containers for keep hold of the chemicals such as calcium carbide and other
harmful poisonous gases like the carbon monoxide as well as the acetylene (Lam, 2014). All
these gases can cause harm to anybody, can damage the ecological balance of nature. The
trees, plants are the subject of destruction to nature. The trees, the plants nearby gets severely
affected. The emission of harmful as well as the poisonous gases pollute the surroundings and
degrade the environmental condition. The toxic poisonous gases make it difficult for the
people to breathe fresh air properly (Chance & Brooks, 2015). In this, the environmental
issues make a huge impact on the risks.
Legal
The safety standards sometimes are not checked appropriately and often gets
neglected. Sometimes it does not get checked whether the packaging has been done
accordingly or not. It is also ignored that the organsautional standards have been properly met
or not (Hopkin, 2017). The lack of proper monitoring leads to all kinds of threats and
vulnerabilities. The lack of proper maintenance or proper management leads to an explosion.
Similarly for the case of the Tianjin Dongjiang Port, the safety measures were not taken and
for this reason, the legal issues got erupted. The explosion at Tianjin port went viral on the
social media websites and the Government was forced to take the legal actions to mitigate the
issue raised as a result of legal issues.
Human resource issues
The human resources play an important role to carry out the business activities of a
particular organization. The productivity helps the organisations to gain profit. However, the

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explosion at the port killed multiple people (Pritchard & PMP, 2014). Besides that, the
explosion also created difficulties for the employees to work to the fullest. The Tianjin port
explosion also took lives of many people or the workforce. The state officials visited there
also fell sick and died ultimately. The firefighters chose who went for the rescue at the port
were also died. The workers in the port warehouse died due to the disaster (Brindley, 2017).
Thus the explosion caused devastating effects on the human resources.
3. The risk management tools to propose and to analyze realistic risk scenarios and
develop risk management strategies
The risk management tools can prove to be effective for assessing the risks associated
with the explosion.
The probability and impact matrix
The matrix assists in identifying the risks that require immediate response. The
organisations by applying the matrix can assess the risks beforehand, this can save them from
mishaps (Bromiley et al., 2015). The Tianjin have not followed the methodologies and the
risk management procedures, otherwise, they can predict the chance of explosion and the
devastating consequences that the explosion can bring.
Risk data quality assessment
The documentation contains the details of the project activities. The project manager
can assess the risks residing within the project by studying the documentation. The project
managers can apply the safety standards based on the documentation (Calkin et al., 2014).
The project managers of the Tianjin Port could have avoided the explosion.
Perform Quantitative Risk Analysis

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The quantitative risk analysis is to detect the probability along with the impact of the
risks in Perform Quantitative Risk. The detailed purpose of the Quantitative Risk Analysis is
to detect the risk response where urgent attention is needed (Sadgrove, 2016). The
Quantitative Risk exposure is helpful to know the risk exposure on the project, the risk tool is
also capable to detect the effect of risk on particular objective of a certain project. The cost
and the schedule of the project can also be determined if any kind of risk incurs. Thus, the
quantitative risk analysis helps to identify those risks that require heavy attention. In this
case, Tianjin Port had several containers that store chemicals like acetylene and calcium
carbide. These gases can cause harm and can cause severe damage to the environment. If
Tianjin Port followed appropriate risk management, then they could have avoided the heavy
explosion that took lives of many people. They should have analysed the risks that can incur
due to the chemicals- calcium carbide, calcium monoxide as well as acetylene (Bolton, Chen
& Wang, 2013). The quantitative risk analysis could help them to the devastating effect of the
release of those poisonous gas.
The probability, as well as the impact matrix, could help them to know that Tianjin
Port should have taken precautions beforehand (Marcelino-Sadaba et al., 2014). The usage of
the standardised matrix could assist them to take immediate response.
4. Analysis of the usefulness, applicability and limitations of risk assessment as a
decision-making tool
The risk assessment tools are capable to detect the risk of a particular project and
particular organisation. Similarly, in case of Tianjin port city, the appropriate application of
risk assessment tools can mitigate the risks of explosion (Aven, 2016). It is predicted that the
explosion occurred as a result of the explosion of eight hundred tonnes of ammonium nitrate.
The emission of ammonium nitrate caused because of the overheating of the containers of

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nitrocellulose. Moreover, there was negligence too. The safety standards were not checked
properly and the legal issues aroused due to this negligence. After the detailed analysis, it was
found that amount of the poisonous gas and the chemicals stored in the container were
beyond permissible limit and these are all responsible mass destruction. There were
numerous containers in the Tianjin Port city, however, only some of them were checked and
rest of them remained unchecked. There was negligence in the healthcare organizations as
well. Afterwards, the organisations become overcrowded with patients (Teller, Kock &
Gemünden, 2014). Thus the risk analysis is required for every project and for every
organisation. The risk assessment tools could analyse the legal issues pretty early. The utter
casualties led to such explosion and disaster.
The aim of the risks assessment is to administer the entire situation and based on that
the risk mitigation procedures must be applied to make the situation stable once again. The
SMART objective can prove helpful for analyzing the risks and to make the entire situation
stable once again (Wu, Chen & Olson, 2014). The Specific objective can be helpful to detect
the risks and measure the impact of risks from the perspective of environmental, financial and
legal perspective. The objective can assist to create an effective communication plan, the
objective can assist to focus on the performances of the business activities in the region after
the occurrence of the explosion. The objective will try to find out the details of the risk
occurring due to the explosion. The time-bound objectives are to solve the risks by agile and
effective means (Wiengarten et al., 2016). The time-bound objectives also help to develop a
supply chain management system. The supply chain management is to find out solutions to
the risks and the issues raised. The SMART consists of five objectives
i. The risks can be identified and the effect of the risks can be measured from the perspective
of environmental, financial and legal issues.

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ii. The SMART objective can be helpful to create an efficient communication problem.
iii. The SMART objective also aids to monitor the business activities in the Tianjin port city
after the occurrence of the explosion.
iv. The adverse effects that are caused by the explosion can be identified by developing a
mitigation plan.
v. The supply chain strategic management system can be helpful to find out the solutions to
the risks.
The supply chain management of the Tianjin Dongjiang Port Ruihai International
Logistics got destroyed completely and this created environmental, financial, HR and the
legal issues. The Port staffs must administer compliance with the standards of the
organisations, and they must follow the rules and regulations appropriately (Li et al., 2015).
As per safety records, it is permissible to store ten tonnes of chemicals. It is not allowable to
store more than that. Previously the rules were not followed and due to the negligence, the
explosion occurs.
The supply chain strategic risk management tool can be beneficial to manage proper
health as well as the safety standards. The supply chain management can prove to be effective
to avoid the explosions and the early signs of such risks. The continuous monitoring of the
supply chain at Tianjin Dongjiang Port Ruihai International Logistics should be carried out
by appropriate risk management procedures as well as proper strategic implementation
(Grace et al., 2015). The effective risk management plan can reduce the chances of
vulnerabilities. The facilities of the Tianjin Port must learn from the explosions that the
chemicals must be stored in considerable amount and the amount should not exceed the
permissible limit. The contingency plan is made with the assistance of implication of the

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supply chain risks management process (Giannakis & Papadopoulos, 2016). Therefore, this
kind of risk management tools can help them in effective decision making. The effective
decision making can assist the facilities to detect the risks and adaptation of supply chain risk
management can assist to identify the supply chains. All these risk management procedures
can be helpful in controlling the risks, the risk management approaches can ensure the
continuation of the services (Eckles, Hoyt & Miller, 2014). All these approaches and
procedures can help to mitigate the catastrophic incidents. The legal issues aroused as only
few storage containers were checked and rest of the containers remained unchecked. For this
reason, the excess storage of chemicals led to an explosion in the Tianjin port.
5. Analysis of risk perception and risk communication and effective development of risk
communication plans and skills
The risk communication plan can be helpful to detect the strategic issues. The risk
management procedures can help to analyse the impacts of risks which involves the
discontinuation of trade-related services. The risk communication plan can be beneficial for
fulfilling the responsibilities of regulatory compliance for securing the people over the port
area (Farrell & Gallagher, 2015). Thus any kinds of risks arising at the time of explosion can
be checked or controlled. However, now Tianjin Dongjiang Port Ruihai International
Logistics has decided to promote the risk communication plan to the workers. The workers
through effective communication plan can be aware of the safety rules as well as the
organisational standards. The business impact analysis is another procedure by which the
risks associated with explosion can be managed. The business impact analysis can identify
the resources that are needed for controlling the risks and in this way the damages associated
with environment, property and people.
The risks can be mitigated with the help of following steps-

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i. Obtaining the organisational support
To implement the risk communication plan, Tianjin port must strengthen their
management support. Tianjin port must develop an internal environment where the
employees should be allowed to share their ideas. They must maintain the credibility and
trust and so constant messages must be sent out by the organisation (Rockafellar & Uryasev,
2013). The communication must be established among the employees and among the local
residents of the Tianjin port. In this way, the risk management decisions can be taken with
ease and then the risks caused by such explosion can be mitigated.
ii. Determination of Risk Communication needs
Employee Communications
The communication with the employees is important. The safety and security of the
employees working in Tianjin port is mandatory as that can save the lives of the employees.
The top management must come forward and must educate o the workers and employees
about the health and security aspects (Farrell & Gallagher, 2015). The workers must wear the
safety helmets, safety shoes and must adopt all kinds of security aspects.
Plant modification communications
The Tianjin port must take into considerations the risks and based on that the risks the
top management must make modifications. The workers of the organisation may have some
doubts or may face difficulty, may oppose to do the tasks. The management body must
establish effective communication with the worker and should make them the understand the
potential benefits of the organisation (Rockafellar & Uryasev, 2013). This approach can save
them from explosions or similar kinds of disasters.
Crisis communication

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The explosion resulting from the poisonous chemicals and gases can be regarded as a
potential crisis. Tianjin port must learn from their previous lessons. They must stay ready
with a plan to handle those difficult scenarios. Tianjin port must share their communication
plan with the employees or the workers (Soin & Collier, 2013). This can help them to protect
themselves at the last minute. The plan should be effective enough to deploy within the 24
hours of any kind of critical incidents. The situation can be analysed very quickly and both
the worker and the management can perform smartly and effectively at the time of crisis.
New product companies
Tianjin port contains multiple storage containers. They must putt labels to each and
every storage containers, they must prepare safety data sheets, in addition to that they must
apply product health as well as safety bulletins. In this way, they can make sure that the
containers are holding chemicals to the permissible limit and the limit is not exceeding.
Governmental communications
The China Government must give approvals or the permissions to Tianjin port for the
industrial projects to continue. The risk communicator must communicate with the
Government about various kinds of product issues (Aldunce et al., 2015). The risk
communicator must communicate about various rules and regulations and the usage of
various kinds of chemicals.
iii. Forming communication teams
The verbal communication is generally carried out by one particular person, however,
the risk communication programs can prove to be effective to make the project venture
successful. It is the responsibility of the specialists to predict the human impact for the
particular hazards. The explosion took lives of the local residents as well. Therefore, it is

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absolute necessity to safeguard the people residing around Tianjin port (Wu, Olson &
Dolgui, 2015). The effective communication with the public involves methodologies by
which the local public can know how to protect themselves in case of adverse situations.
Different teams can be employed to assess the communication needs.
iv. Training the team members
The workers involved in the project conducting the risk communication programs
must get formal training about the risk communication fundamentals. The workers can get the
best training only via experience. The workers can learn only if the risks assessment
procedures are implemented in the real-life scenario. Thus Tianjin port must look into this
matter and must execute the risk assessment procedures in real life. The risk communicators
must assess the risks communication techniques, must assess the trainees (Aldunce et al.,
2015). They must also analyze one's limitations and should provide them with the
responsibilities based on the limitations. They should communicate with those trainees and
help them in need.
v. Forming focus groups
A focus groups consist of facilitator, representative of the company and the company
officials. These groups are beneficial to assess the books to the effective risk communication.
Similarly, in case of Tianjin Port, the management can analyze the obstacles they can face
while implementing the risk analysis.
vi. Practice
Practice makes one perfect. The risks management procedures must be executed in
the real-life scenario, the presenter and the risk communicator must prepare themselves to

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face the adverse effects of explosion (Wu, Olson & Dolgui, 2015). Tianjin Port thus adopt the
risk management procedures.
vii. Evaluate Communication program
The risk communication programs must involve all the workers team and the local
residents team of Tianjin port and this enables each team to learn from the experiences of
other team (Wiengarten et al., 2016). The program evaluation is an on-going practice that acts
as an effective communication effort between the surrounding communities residents as well
as the management of hazardous facilities.
6. Conclusion
It can be concluded from the above discourse that adapting effective risk management
procedures can help an organisation to safeguard themselves from any kind of risks.
Similarly, Tianjin Port of China can save themselves from such explosion in mere future. The
report has showcased several types of risks that have created adverse effects on the
engineering operations at the Tianjin port.The issues like the destruction of buildings, cars,
adverse effects on the environment, not following the rules of the China government have
been highlighted and because of all that the mass destruction occurs. The workers and the top
management must take the responsibility to monitor and measure the performance, they
should measure the amount of chemicals stored in the storage containers and should abide by
the SMART objectives as well. The primary objectives are to determine the risks, assess
those in details, developing a mitigation plan accordingly.The risk management plan has been
adopted by the regulatory mechanisms must be complied with the safety and security
standards, the business impact analysis have been planned to mitigate and to prevent the
damage to properties and loss of lives.

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7. References
Aldunce, P., Beilin, R., Howden, M., & Handmer, J. (2015). Resilience for disaster risk
management in a changing climate: Practitioners’ frames and practices. Global
Environmental Change, 30, 1-11.
Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their
foundation. European Journal of Operational Research, 253(1), 1-13.
Bolton, P., Chen, H., & Wang, N. (2013). Market timing, investment, and risk
management. Journal of Financial Economics, 109(1), 40-62.
Brindley, C. (Ed.). (2017). Supply chain risk. Taylor & Francis.
Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk
management: Review, critique, and research directions. Long range planning, 48(4),
265-276.
Calkin, D. E., Cohen, J. D., Finney, M. A., & Thompson, M. P. (2014). How risk
management can prevent future wildfire disasters in the wildland-urban
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Chance, D. M., & Brooks, R. (2015). Introduction to derivatives and risk management.
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Eckles, D. L., Hoyt, R. E., & Miller, S. M. (2014). Reprint of: The impact of enterprise risk
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Giannakis, M., & Papadopoulos, T. (2016). Supply chain sustainability: A risk management
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Grace, M. F., Leverty, J. T., Phillips, R. D., & Shimpi, P. (2015). The value of investing in
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Hopkin, P. (2017). Fundamentals of risk management: understanding, evaluating and
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Teller, J., Kock, A., & Gemünden, H. G. (2014). Risk management in project portfolios is
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