Risk assessment for the importation of Bitumen for road construction into South Africa

Hanekom, Christiaan H. (2016-03)

Thesis

ENGLISH ABSTRACT: The purpose of this research project was to identify, assess and model the risks associated with the importation of bitumen into South Africa. Bitumen has firmly established itself as a product which is not just essential to the construction and maintenance of roads, but also plays a key role as an economic driver of a country. In the years 2012 and 2013, South Africa was faced with a bitumen shortage estimated at 20% of the total production volume of the local industry. This was due to an untimely and unplanned shutdown of a refinery, causing disruption of the road construction industry of South Africa. Due to the unplanned shutdowns in 2012, COLAS – a South African bitumen supplier, imported 3849 metric tons of bitumen into Cape Town. After the operation the South African Bitumen and Tar Association (SABITA) published a document on the “Best practice guide for the procurement and importing of bitumen”. This document indicated that, even with risk management being the focal point of many activities and technologies, the risks associated with the importation of bitumen are not well known and documented. Furthermore, limited literature dealing with the international procurement of bitumen is available. This research project aims to assess and model the procedures and risks involved when importing bitumen into South Africa. The goal is to develop a structured guideline to determine and evaluate risks associated with the importation of bitumen. The guideline contains a procedural outline for the import of bitumen, as well as the identification and assessment of the associated risks. A system approach to the study of the import process was adopted. The system components were analysed and can be classified as physical, organisational and managerial components. The physical components of the system relate to the manufacturing, transporting and storage of bitumen. For the organisational component the different parties involved are discussed. The managerial components discussed are those for the financial, logistical, quality, safety, environmental and contractual management aspects. System related risks were identified by analysing the bitumen import system. Ten major sources of risk were analysed. The relative risk criteria were then determined, from which a risk breakdown structure was developed. Risks were then identified for each of the individual criteria. 75 risks were identified in total, with the risks being identified through literature and semi-structured interviews with industry related parties. It was established from the semi-structured interviews that intellectual property exists surrounding the quantification of the risks. The decision was made to analyse the risks by means of researching each individual risk, quantifying each based on expert knowledge gained from semi-structured interviews and studying academic literature. An industry professional from Australia was approached to give a second data set of quantified risks. The two data sets were used for the risk analysis. Risk analysis and modelling based on the fuzzy logic methodology was then done. The fuzzy logic methodology was deemed appropriate as the data sets comprised of data which could not be determined in a concise manner. The top 10 most significant risks were identified to be the following, (1) Product does not conform to specifications, (2) Viscosity changes of bitumen during transport, (3) Knowledge inadequacy, (4) Pollution in harbour during unloading, (5) Availability of product from other sources, (6) Unloading delay due to machine failure, (7) Unavailability of sufficient professionals and managers, (8) Inadequate project management controls, (9) Delay in solving contractual issues, and (10) Bad weather on open sea. It can be concluded that the importation of bitumen is a viable solution to deal with future bitumen shortages in South Africa, but requires expert logistic management and planning for the process to be a success.

AFRIKAANSE OPSOMMING: Hierdie navorsingsprojek behels die ondersoek na, analisering en modelleer van risiko’s wat geassosieer word met die invoer van bitumen. Bitumen, as 'n produk, is gevestig as 'n noodsaaklikheid, nie net vir die konstruksie en onderhoud van paaie nie, maar dit speel ook 'n belangrike rol in die ekonomie van 'n land. Gedurende 2012 en 2013, het Suid-Afrika 'n tekort aan bitumen ondervind wat geskat is op 20% van die land se totale bitumen produksie. Die tekort aan bitumen was weens 'n onbeplande sluiting van 'n raffinadery. As gevolg hiervan, was die totale pad konstruksie industrie van Suid-Afrika ontwrig. Gedurende die periode het COLAS, 'n Suid-Afrikaanse bitumen verspreider, inisiatief geneem, en 3849 metrieke ton bitumen ingevoer. Na afloop van die operasie, het (SABITA) 'n dokument getiteld “Best practice guide for the procurement and importing of bitumen” gepubliseer. Die dokument toon aan dat, alhoewel risiko bestuur in baie bedrywe en tegnologie vertakkings toegepas word, nie baie bekend is oor die risiko’s wat geassosieer word met die invoer van bitumen nie. Verder is beperkte literatuur wat die onderwerp van internasionale aankoop van bitumen aanspreek beskikbaar. Die doel van die navorsingsprojek is om die prosedures en risiko’s wat gepaard gaan met die invoer proses van bitumen te analiseer en te modelleer. Daar word beoog om 'n gestruktureerde riglyn dokument vir die invoer van bitumen te ontwikkel. Die riglyn dokument sal 'n prosedurele raamwerk uiteensit vir die invoer proses van bitumen. Hierby sal die geassosieerde risiko’s wat geïdentifiseer, en geanaliseer is volledig gedokumenteer word. 'n Sisteem benadering tot die studie van die bitumen invoer proses is vir die doeleindes van die studie-projek toegepas. Die sisteem komponente is geklassifiseer as fisiese, organisatoriese en bestuur komponente. Die fisiese komponent van die stelsel sluit die vervaardiging, vervoer en berging van bitumen in. Die organisatoriese komponente verwys na die verskillende partye wat betrokke is in die stelsel. Die bestuurskomponente verwys na die finansiële, logistieke, gehalte, veiligheid, omgewings en kontraktuele bestuur komponente. Na die ontleding van die bitumen invoer stelsel is die risiko’s geïdentifiseer. Tien hoofbronne van risiko's is analiseer. Vir die identifikasie van die relatiewe risiko kriteria, waaruit 'n risiko struktuur uiteensetting ontwikkel is, is 75 risiko’s in totaal geïdentifiseer, deur middel van literatuurstudie en semi-gestruktureerde onderhoude met belanghebbende partye. Deur die onderhoude te voer is daar vasgestel dat intellektuele eiendom bestaan rondom die kwantifisering van die risiko's. Die besluit is geneem om die individuele risiko te kwantifiseer deur middel van navorsing. Die navorsing het bestaan uit semi-gestruktureerde onderhoude en die nagaan van akademiese literatuur. 'n Professionele ingenieur van Australië was genader om 'n tweede stel gekwantifiseerde risiko's daar te stel. Die twee stelle data is gebruik vir risiko-modellering en analise. Risiko-analise en –modellering is gebaseer op die “fuzzy logic” metodologie. Die “fuzzy logic” metode is as geskik geag, omdat die data stelle bestaan het uit nie-eksakte data. Die top 10 mees beduidende risiko’s was geidentifiseer om die volgende te wees, (1) Produk voldoen nie aan spesifikasies nie, (2) Viskositeits veranderinge van bitumen tydens vervoer, (3) Kennis ontoereikendheid, (4) Besoedeling tydens die aflaai van die produk, (5) Beskikbaarheid van die produk vanaf ander bronne, (6) Aflaai vertraging weens masjien mislukking, (7) Onbeskikbaarheid van voldoende bestuurders, (8) Onvoldoende projekbestuur beheer,(9) Vertraging in die oplossing van kontraktuele kwessies, en (10) Slegte weer op oop seë. Daar kan tot die gevolgtrekking gekom word dat die invoer van bitumen 'n werkbare oplossing vir toekomstige bitumen tekorte is, maar dat deskundige logistieke bestuur, en beplanning benodig word om te verseker dat die proses om 'n sukses is.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/98535
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