Risk management in project planning is very important as even carefully planned projects can also become troublesome. Any project can face any unforeseen problems at any given time during the development of the project. So risk management can be used to recognize the potential risk factors that could affect the timelines in the project, then to find out the probability that the problem will occur and then to plan mitigation strategies to avoid or minimize the risk.
According to the book (Kendrick, 2015), the risk management involves the following:
1) Risk management planning
2) Identify risks
3) Perform qualitative risk analysis
4) Perform quantitative risk analysis
5) Risk response planning.
There are always uncertainties in the project, even easiest step can turn out to be a problem. This is the reason risk management planning is very important. This will help in identifying such uncertainties and it will give the strategies which will help to overcome these problems.
I work in pharmaceutical industry. I would give one of the example of risk management in pharmaceutical manufacturing. There are so many different processes involved in the manufacturing of a drug product. There are different departments like R & D, quality control, quality assurance and Production group are involved. The risk management group identified a risk of contamination from using different solvents during manufacturing. After manufacturing, batches started to fail as the level of impurities were high in drug product. After investigation, it was figured out that the contamination was from using different solvent. The root cause was unavailability of correct resources that is appropriate process operator was not present. This risk was very costly not only financially but also with time and resources. The risk for next batches was minimized by changing the production operator.
So Project planning helps to understand the right direction for the project. It helps to understand what could go wrong in project and thereby helps to minimize those risks.