In any company, equipment and locations can fail. In some cases, these failures do not cause any immediate problems. For instance, consider a clothes dryer with a switch that shuts off the dryer automatically if the temperature inside the drum reaches 180 degrees Fahrenheit (F). If the switch stops working but the temperature never reaches 180 degrees F, meaning that the switch is never activated, the switch failure would not present any problems.
In other cases, however, a failure can cause not only problematic but catastrophic consequences. Consider the same clothes dryer and safety switch. If the safety switch stops working and the temperature inside the drum does reach 180 degrees F, the switch will not perform its intended function: shutting off the dryer. Instead, the dryer would continue to run, allowing the temperature to potentially rise even further, which could ultimately cause the dryer to catch on fire.
From this example, you can see that the safety switch failure is problematic because it could cause a fire, which would have safety, financial, and operational impacts.
In GE Digital APM, a risk is the combination of a harmful event or condition and the negative outcome of that event or condition. In the example described above:
- The switch failure is the harmful event.
- A fire is the negative outcome.
So, the risk in this example is the combination of the switch failure and the negative outcome. In other words, the risk is that the switch stops working and the dryer overheats, eventually causing a fire.
To perform a risk assessment of this situation, you would consider:
- The probability that the fire will have a safety, environmental, operational, or financial impact. For example, you might determine that an operational impact is inevitable, while an environmental impact is possible but not likely.
- The severity of the safety, environmental, operational, or financial impact. For example, you might determine that the severity of a safety impact is very high (homeowners could be killed), but the severity of an environmental impact is low (damage only to immediate, surrounding landscaping).