Risk Management Report: Tianjin China Explosion Case Study

This report provides a comprehensive analysis of the Tianjin China explosion, focusing on engineering risk management. It begins with an executive summary highlighting the importance of risk management in modern organizations. The report then delves into the identification and analysis of risks associated with the explosion, including financial, legal, environmental, and human resource aspects. It explores a plan for measuring and monitoring performance, outlining key performance indicators and strategies for performance assessment. The report also examines the process followed for strategic issues analysis, research principles, and methodology, including qualitative and quantitative methods. It concludes with a discussion of personal autonomy, accountability, and the application of risk management strategies. The report uses the Tianjin explosion as a case study to illustrate the practical application of risk management principles, emphasizing the importance of proactive planning and mitigation strategies. The report also includes a discussion of the limitations of risk assessment plans and how they could be overcome, including the use of SMART objectives.

Running head: ENGINEERING RISK MANAGEMENT
ENGINEERING RISK MANAGEMENT: Disaster Plan Analysis Report of Tianjin China
Explosion
Name of the Student
Name of the University

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Executive Summary
In recent days, one of the most vital managerial tools is the Risk Management. Many of the
organization depend on the standardization that has adopted Risk Management as their key
process for doing the work. Managing new projects or the ongoing operations the ICT Units tend
to apply Risk Management technique in almost every work. In this report, it is mainly discussed
about the preparation of Risk analysis on the case study of Tianjin China explosion of 13 August
2015. Generating an approach that is evidence based and is taken from a theoretical based
framework of the study.

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Table of Contents
Introduction..........................................................................................................................3
Identification and Analysis of the Risks..............................................................................3
Plan for Measuring and Monitoring Performance...............................................................4
Process Followed for Strategic Issues Analysis..................................................................9
Research Principles and Methodology................................................................................9
Conclusion.........................................................................................................................11
Personal Autonomy and Accountability............................................................................11
References..........................................................................................................................12

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Introduction
Engineering risk management is generally used as the planning tool that identifies the
possible alternatives of a project management or an operation taken to avoid the minimum risk.
Identifying and analyzing of the project risk is required for the effective management system.
Project risk management does not only focus on the identification and aggregation of the risks
and hence may not be used more often other than only in the point of risk assessment (Shulin,
2016).
The report is based on the case study of Tianjin China explosion that occurred in the mid
August 2015. There were two major, explosion took place in the port of Tianjin, making the
cause of death of several people and injuring several hundred as well. Risk analysis of this case
study by identifying the risks associated along with focusing on the business that includes the
mitigation proposal a cost benefit analysis.
Identification and Analysis of the Risks
On the day of 13th August 2015, Wednesday in China two huge explosion took place in a
warehouse that contained toxic chemicals and gases. Enormous explosion in the Chinese port
city at the warehouse that contained hazardous and flammable chemicals. The performance data
is the main target for effectively manages the risk that has been associated with the explosion in
Tianjin China. Listing the possible risks factors because of which the explosion occurred:
financial, legal, environmental, HR (Economy, 2011).
From the Financial perspective, the explosion destroyed some significant amount of
stored goods stored around the port, huge shipping containers and thousands of cars were tossed,

4ENGINEERING RISK MANAGEMENT
crumbled and destroyed because of the explosion. Moreover, buildings, windows glasses were
shattered and torn out (Chung & Kim, 2015). Thus, because of not using accurate financial
aspect by which the chemicals may have been placed in a safer place would have provided the
blast in such high scale.
The Legal risks are comparatively hard to measure so, we can only assume the legal
uncertainties thus measuring them along with the potential risks associated. Legal risks aspect
must have stopped the unethical production or if not then keeping the chemicals in a safer place
to avoid the fire catching sensation.
The Environmental risk management determines the risk of the environmental and
public health by managing the risks. From this case study of Tianjin explosion, we can assume
that there could be ecological risks because of the chemical manufacturing and storage facility in
the warehouse, which could have been solved by some legal impact (Haimes, 2015).
HR (Human Resource) of the organization must have recruited proper caretaker,
following some code of ethics and thus could have alerted the authority in such potential incident
(Bodie, 2013).
Plan for Measuring and Monitoring Performance
It gets difficult in cases to measure the performance measurement, which depends on
defining of measures, set the targets and thus collect performance data to balance the act between
by using the ideal information that is possibly available as well as affordable. Performance
information must be appropriate, focused, balanced, integrated, cost-effective and robust
(Almeida et al., 2015). These are the fact that helps in measuring the performances in a risk
management.

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Figure 1: Key Performance Indicator
(Source: By the Author)
Performance Indicators shows the extension where the outcome must be achieved by
some agencies while meeting the objectives in the strategic plans. Performance indicators have to
be identifies by every agency that have more than one relevant objective (Glendon, Clarke &
McKenna, 2016). These agencies have been encouraged for the development and setting
strategies that targets for the performance indicator wherever possible.
Key
Performance
Indicator

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relevance costing value usefulness
0%
10%
20%
30%
40%
50%
60%
70%
80%
Indicators
Values
Figure: Performance Indicator monitoring
(Source: By the author)
To monitor the performances the main aim must be to identify the areas of good
performances and the area where the performances can be improved in future (Park et al., 2013).
Thus, the Performance information must be revised and updated regularly and reflect the changes
in shifting and prioritizing in the chance of public policies. The performances that must be
regularly assessed are relevance, cost, value and usefulness of the strategies. Here, in this case
study of Tianjin there has been a lack of regularly assessing the performance of the
organizational behavior, thus we assume that affected the impact of the blast because of
carelessness.
The main Goals of the Analysis in this case study is to critically analyzing the main issues
of the risks associated with the engineering management of Tianjin China explosion. Objectives
of this case study is to identify the risk management tools that could be proposed to the risk

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scenario and thus develop the risk management strategies that could have been useful for
decision-making process of the warehouse organization. Limitations of risk assessment plans
which could be overcome by the following SMART objectives (Ayyub, 2014).
For the performance measurement and monitoring of performance of the risk
management that could have been used before the explosion of Tianjin China explosion may
have helped in identifying what processes and policies they want to work in.
These objectives could be set as the goal for the management process for better result and
success in project management:
Specific: Dealing with some of the specific areas of improvement in warehousing, Tianjin
port.
Measurable: Allowing some measurable progress of the designer’s success that required
to be developed in the case study of explosion in China.
Attainable: The goal that should have been planned before the explosion must have based
some realistic situation on the basis of the availability of the resources and existing constraints.
Relevant: The goals must be aligned to the business objectives.
Time-bound: The risk management should be having some defined end and hence excess
amount of storage must have been canceled.

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Figure 2: Framework of integration of risk management into strategic planning
(Source: Lam 2014)
Resource Plan for the Risk Analysis Study at the warehouse of Tianjin port that has been
occurred because of the hazardous and flammable materials. The process of identifying risks and
assessment of the risks of China explosion helps in developing strategies for the risk
management (Bromiley et al., 2015). It was essential for the organization to allocate some time,
budget and resources for the risk management plan along with a business impact analysis (Park
et al., 2013).. This would have helped to meet the legal obligation to provide a safer workplace
in the warehouse in Tianjin.
Contingency Plan for the Research: The method that has been used for the risk
management plan of the case study if fails at any case then some alternate planning must be used
like surveying and using both primary and secondary analysis accordingly.

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Process Followed for Strategic Issues Analysis
Since areas of risk has been assumed as one of the latest strategic important role in any
organization. Strategic issue analysis thus recognizes and provides the guidance provided,
mitigation of critical risks and aims to provide decision-making by risk assessment processes
(Haimes, 2015). There are three steps for risk analysis and management:
Risk identification: The risk of the case study must be identified at first and thus
analyzing the aspects of the risk associated with the incident. Risk identification in Tianjin port
must have been identifies by the analyst associated with the organizational facility management.
Risk analysis: After identification, the risk must be analyzed such that the suitable
management strategy must be prepared. Tianjin explosion analysis must have on the chemicals
safety and keeping in knowledge the inflammable chemicals, which should be kept aside.
Risk management strategy: The appropriate strategies must be identified such that it must
be sorted orderly. The strategy in the organization of Tianjin China should have followed the
KPI (Key Performance Indicator) for the safety management.
Research Principles and Methodology
1. What were the reasons for the explosion to occur?
2. What was the risk, which occurred due to the explosion?
3. What were the next steps after the explosion occurred?
The large explosion of the container storage station was due to the detonation of
ammonium nitrate. The risk, which was generated from this problem, pertained to the four areas
of factors:

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Due to the large explosion, there came a huge loss in the factor of money as well as
human life. Financial aid was to be provided to the workers as well as the people who had died
in the explosion. The organization had to answer legally to the higher authorities to make them
understand the faults in their management procedures (Bodie, 2013). The loss of life had to be
accounted by the government with accordance to correct proceedings and monetary allowance to
the family of the deceased. The waste generated along with the pollution of the environment
needed to be cleared out in fast proceedings, needed in order to clear out any harmful chemicals
leaked into the ecosystem.
For the assessment of the explosion, Qualitative and Quantitative method must be
followed (Glendon, Clarke & McKenna, 2016). Specifically, for the analysis of this explosive
accident, the report makes use of the qualitative analysis, as the quantitative analysis for this
accident would connect to the property of amount of destruction caused by the explosion.

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Conclusion
It is concluded that the process of risk identification and analysis requires the technique
of brainstorming. Following the main objective of identifying the risks associated in the case
study of Tianjin China explosion, we can conclude that engineering risk management. Thus, in
this case study we conclude that the risk management that has must be done must follow two
methodologies the qualitative and quantitative analysis. For the integration of risk management
in strategic planning, risk areas must ensure the information of the strategic risk assessment,
monitored and treatments has to be taken care of in every organization. Suitable monitoring of
strategic risks, through key risk indicators, enables the organization to foresee potential
problems. The impact of the risk management would have provided the explosion to happen and
safe the lives of several along with the economic and environment aspects.
Personal Autonomy and Accountability
I have learned about different risk management strategies. Analyze the main goal and
objective must at first. I learned about the process followed for the strategic issues and research
principles and methodology of the case study. I have learned that risk management must be
done in every organization for future perspective. I took responsibilities of own actions and
completed all the task of the research independently. I demonstrated the resilience by balancing
competing priorities, managing time effectively and developed strategies for overcoming
obstacles.

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References
Almeida, N. M., Sousa, V., Dias, L. A., & Branco, F. (2015). Engineering risk management in
performance-based building environments. Journal of Civil Engineering and
Management, 21(2), 218-230.
Ayyub, B. M. (2014). Risk analysis in engineering and economics. CRC Press.
Bodie, Z. (2013). Investments. McGraw-Hill.
Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management:
Review, critique, and research directions. Long range planning, 48(4), 265-276.
Chung, Y. S., & Kim, H. S. (2015). On the August 12, 2015 occurrence of explosions and fires
in Tianjin, China, and the atmospheric impact observed in central Korea. Air Quality,
Atmosphere & Health, 8(6), 521-532.
Economy, E. C. (2011). The river runs black: the environmental challenge to China's future.
Cornell University Press.
Glendon, A. I., Clarke, S., & McKenna, E. (2016). Human safety and risk management. Crc
Press.
Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.
Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

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Park, J., Seager, T. P., Rao, P. S. C., Convertino, M., & Linkov, I. (2013). Integrating risk and
resilience approaches to catastrophe management in engineering systems. Risk Analysis,
33(3), 356-367.
Shulin, M. (2016). A Study of CCTV Versus International Media Reporting of Chinese Disaster,
An Analysis of The Tianjin Disaster.