Introduction

The engineering and construction industry is often considered a risky business due to the complexity of its demand, supply and internal operations management. Risk management includes the processes concerned with identifying, analyzing, and responding to risk. The sources of risk were categorized based on controllable and uncontrollable factors, which lead to cost and time overrun in a project. Risk identification is studying a situation to realize what could go wrong in the product design and development project at any given point of time during the project. Several techniques have been adopted to pursue risk analysis in the engineering and construction industry. Risk management attempts using all the information as derived in the two steps – risk identification and analysis – to suggest risk mitigating measures. Risk is inherent in any project and operation, as managers need to plan projects with minimal knowledge and information, but its management helps managers to become proactive rather than reactive.