I had an interesting conversation this week on the topic of risk.  As you may know, risk is the combination of consequence (what happens) and likelihood (chance of it happening).  The concept of consequence is generally easy to understand, but likelihood is sometimes a source of contention.

This particular conversation was concerning the determination of the criticality of a piece of equipment and centered around whether likelihood should be based on the history of the circumstances you are considering.  My colleague was arguing that the chances of this particular piece of equipment to fail was directly tied to the failure rate of this piece of equipment at this point in time (Historic).  I asserted that the chances of failure is more of a statistical or general probability (Experiential).

The example I used was the likelihood of getting struck by lightning.  The general chances of getting struck by lightning in your lifetime is 1 in 3,000 no matter where you live in the US.  Consider two 40 year old twins, Bob and Jim.  Bob has been struck by lightning 3 times in his lifetime and Jim has never been struck.  Is the risk that Bob will be struck by lightning any greater than Jim if they’re both standing outside side-by-side during a thunderstorm?  I would argue that the likelihood that either of them will be struck by lightning is identical and not dependent on their particular history.  Would you consider it more important for Bob to stay inside during thunderstorms instead of Jim?  If I didn’t know anything other than they were both outside during a thunderstorm, I would caution them both equally to get inside as soon as possible.

Where I would argue there is a difference is if Bob is standing outside during a thunderstorm in Florida and Jim is outside during a thunderstorm in Kansas?  Here, my experience and judgment (and weather maps) tell me that it is much more likely for Bob to be struck by lightning than Jim.  In this case, I would consider it much more critical for Bob to have a plan for getting inside in case of a thunderstorm.

This is where I claim that likelihood is an “experiential” measurement instead of a “historic” one.  My point was that you shouldn’t just look at the failure history of the equipment, nor should you just go to the book to see what the manufacturer recommends for a failure rate.  I believe that it is a combination of the two and is based on the OEM recommendations, but has to be considered in operating environment.

I hope that I was able to explain my position clearly using the example.  I welcome any comments or questions.

Bio:

Bill Barto is a Senior Reliability Engineer Subject Matter Expert with Life Cycle Engineering (LCE). Bill joined LCE in 2012. Bill holds a Bachelor of Science degree in Mechanical Engineering from the University of Central Florida and a Master of Science in Reliability and Maintainability Engineering from the University of Tennessee. In addition, Bill is a Certified Maintenance and Reliability Professional and an ASQ Certified Reliability Engineer.

Prior to joining LCE, Bill spent the last 18 years working in and around theme parks as a Quality Engineer, Project Engineer and Maintenance Engineer. In his last position, he led the reliability engineering effort for the entire Walt Disney World property in Orlando, FL. In that role, he created new metrics for the maintenance and engineering departments, facilitated multiple Failure Reporting, Analysis and Corrective Action System (FRACAS) implementations, and used Failure Mode and Effects Analysis (FMEA) and Reliability Centered Maintenance (RCM) to create and optimize preventive and predictive maintenance tasks.