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Consequences of Failure (CoF)
The result of an asset reaching functional failure ("F"), which is measured as the impact/significance on the following two entities:


Process
CoF is established through a criticality analysis and expressed along a criticality index
along the vertical (y-axis) of a risk matrix.



Ranking of Consequences
The severity of the consequences of failure are either expressed as linguistic variables (low, medium, high) or numerical values (1-100).

Listed below is an example of a four-tiered linguistic classification for CoF:
  • Tier 1: "Catastrophic"
  • Tier 2: "Critical"
  • Tier 3: "Marginal
  • Tier 4: "Negligible"
"Catastrophic" consequences would include matters such as loss of life and injury to persons. "Critical" would include significant damage to the building and components.



Types of Consequences
Listed below are some of the different types of consequences of failure.
         P h y s i c a l:
    • Greater nuisances from noise, vibrations, smells, etc. that affects the quiet use and peaceful enjoyment of the property.
    • Increased outages associated with power supply, water supply, gas, and other utilities.
    • Increased downtime and disruptions with essential services, such as elevators, etc.
    • Reduced reliability of systems and assets.
    • Collateral damage to finishes and substrates from water ingress and water escape conditions.
    • Unsightliness that detracts from the exterior and interior aesthetic appearance of the building. (aesthetic deterioation)
    • Accelerated deterioration of some assets requiring earlier renewal.
          F i n a n c i a l:
    • Increased costs due to lack of planning, reactive/crisis planning, accumulation of deferred maintenance, unnecessary repairs, shortened service lives, greater project scopes, etc.
    • Greater financial hardship through special levies, demand loans, etc.
    • Diminished marketability of the suites due to stigmatization, etc.
    • Lower resale value of the property.
    • Inefficiencies in the use of energy, coordination of people and other resources
    • Missed opportunities for leveraging economies of scale, etc.
    • Waste and ground contamination
    • Increased contingency allowances for substrate repairs
          L e g a l:
    • Potential for fines and penalties due to non-compliant conditions.
    • Potential accidents and Injuries to owners, guests and invitees due to unsafe slip, trip and fall conditions.
    • Increased insurance deductibles due to failure to mitigate
    • Increased risk exposure to individual owners and the organzation from failure to do the necessary due diligence.
    • Jeopardizing of warranties due to failure to meet duty of care
    • Litigation
    • Fire watch
           S o c i a l / p s y c h o l o g i c a l/ Communty:
    • Increased stress and frustration of individual owners/guests due to unresolved business and limited peace of mind.
    • Potential for conflict between owners due to unresolved isssues, greater time at general meetings, etc
    • Residents may have to vacate the premises during emergency repairs
    Further discussion on the different types of consequences can be found at failure effects and  maintenance motivators and replacement drivers.



    Weighting of Consequences
    The consequences of failure are established by weighted analysis of the following metrics or failure effects or maintenance motivators and replacement drivers:
    The owners risk profile is expressed by attaching weightings to each of the criteria. This may be established with the following:
    Weightings will be affected by subjective bias of the persons who are making the evaluation of consequences. For example, an engineering consultant will perceive the consequences of failure associated with deferment of the washing of the exterior windows as negligible while an owner who occupies one of the suites may consider this to be higher.



    Matrix of Consequences

    • Roof failure = physical and financial (but not legal). consqueqnces are tier 2/3
    • Fire alarm failure = financial and legal. consequences are tier 1/2


    Examples
    Listed below are some examples to help illustrate the application of the CoF to different scenarios:
    • A burst pipe that leaks into the building causing damage to interior finishes [Opex] and flooding into the elevator shaft [performance] would generally be considered "critical" (Tier 2)
    • The failure of a hot water recirculating pump will result in loss of domestic water and may be considered "marginal" (Tier 3).
    • The failure of a roof membrane that leaks into the building and causes significant disruption to the space users (Operations) and damage to interior finishes The quantitative and qualitative expression of possible loss that considers both the probability that an event will occur and the consequence of that event. would be classed as "critical" (Tier 2).
    • A canopy that is loose and could fall onto people entering the building and injuring someone (safety), perhaps fatally would be classed as "Catastrophic (Tier 1). 

    Methodology
    Listed below are some of the key steps in the assignment of CoF rankings to events:
    • Identify the asset (eg., roof)
    • Determine the criticality of the assets (bounded?)
    • Identify the failure modes (eg., blister in membrane that leaks)
    • Identify the failure effects (eg., collateral damage)
    • Classify the failure effect (eg., collateral damage is physical and financial)
    • Assign a weighting to roof leaks (eg., x3)
    • Assign a criticality score (eg., 70 out of 100)
    • Establish a preservation strategy that recognizes the probability of failure (PoF) over a given time horizon.

    Management Principles
    CoF is most essential for critical assets and bounded assets. and serves to provide data for a program of Risk-Based Maintenance (RbM).

    Consequences of Failure (CoF) represented on the vertical (y-axis) of a criticality matrix (risk matrix).
    Fig. Consequences of Failure (CoF) represented on the vertical (y-axis) of a criticality matrix (risk matrix).



    Risk-based decision making is at the heart of asset management and this requires mindful consideration of the relationship between the probability of failure (PoF) and the consequences of failure (CoF). The complexities of these correlations can sometimes be captured on a risk matrix.
    Fig. Risk-based decision making is at the heart of asset management and this requires mindful consideration of the relationship between the probability of failure (PoF) and the consequences of failure (CoF). The complexities of these correlations can sometimes be captured on a risk matrix.



    I. Care is oblivious to the extraordinary events that can totally wipe out his assets and upset the delicate order of things, such as force majeure, acts of God
    Fig. I. Care is oblivious to the extraordinary events that can totally wipe out his assets and upset the delicate order of things, such as force majeure and acts of God.



    3
    Fig. Photograph array of some of the physical consequences of failure.


    Risk matrix with tiered separation of the consequences of failure (CoF).
    Fig. Risk matrix with tiered separation of the consequences of failure (CoF).




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    I. Care spinning the wheel of misfortune to determine the consequences of deferred maintenance
    Fig. I. Care spinning the wheel of misfortune to determine the consequences of deferred maintenance.


    I. Care is trying to avert the cascading effect of one problem compounding another in his building
    Fig. I. Care is trying to avert the cascading effect of one problem compounding another in his building.


    I Care has opened up Pandora's Box and will now face all the consequences
    Fig.  I Care has opened up Pandora's Box and will now have to face all the consequences.

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