Reducing Risk by Segmentation

Reducing Risk by Segmentation

Michael Todorov Todinov (Oxford Brookes University, Oxford, UK)
Copyright: © 2017 |Pages: 20
DOI: 10.4018/IJRCM.2017070103

Abstract

The paper provides analysis of the various mechanisms through which the segmentation improves reliability and reduces technical risk and presents a classification of risk-reduction techniques based on segmentation. On the basis of theoretical arguments and examples, it is demonstrated that segmentation increases the tolerance of components to flaws causing local damage, reduces the rate of damage accumulation and damage escalation and reduces the hazard potential. The paper also demonstrates that segmentation essentially replaces a sudden failure on a macro-level with gradual deterioration of the system on a micro-level through non-critical failures. It is demonstrated that segmentation can even reduce the likelihood of a loss from opportunity bets and the likelihood of erroneous conclusion from imperfect tests. Finally, a comprehensive classification of methods and techniques for reducing risk, based on segmentation, has been proposed.
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1. Introduction

A systematic classification of generic methods for reducing technical risk is crucial to safe operation, to engineering designs and software, yet this very important topic has been overlooked in the reliability and risk literature. For many decades, the focus of reliability research has been primarily on reliability prediction instead of reliability improvement.

Work on formulating generic principles and methods for improving the reliability of engineering components and systems has already been done in (Todinov, 2007, 2015). The generic reliability improvement and risk reduction methods and principles are especially suited for developing new designs, with no failure history and with insufficiently researched failure mechanisms. The present paper contributes an important generic reliability improvement and risk reduction method referred to as ‘the segmentation method.’ Segmentation is the act of dividing an entity (assembly, system, process, task, time, etc.) into a number of distinct parts. Segmentation is often combined with its antipode - aggregation. Aggregation is the act of combining a number of distinct parts into a whole.

Reducing the variation of returns by segmenting and diversifying an investment portfolio into many non-correlated stocks is a well-documented technique for reducing financial risk by segmentation. With increasing the number of non-correlated stocks, the variance (volatility) of the portfolio, which is a measure of the risk associated with the portfolio returns, is reduced significantly (Teal and Hasan, 2002).

Micro-segmentation, aimed at improving the cyber security by isolating different applications and parts of computer networks has been discussed in (Mämmelä et al., 2016).

The struggle between the need of increasing efficiency and reducing the weight of components and systems and reliability is a constant source of technical and physical contradictions. In this respect, the method of segmentation has been used as one of the principles for resolving technical contradictions in the development of TRIZ methodology for inventive problem solving (Altshuller, 1984, 1996, 1999). However, the formulated principle of segmentation was primarily formulated as a tool for generating inventive solutions by resolving technical or physical contradictions and not as a tool for reliability improvement and risk reduction. Some examples of patents using segmentation to improve reliability have indeed been listed in (Altshuller 1984, 1996, 2007), but no specific discussion has been provided related to the mechanisms through which segmentation actually works in increasing reliability. No discussion regarding the mechanisms through which segmentation works exist in more recent literature related to TRIZ (Terninko et al, 1998, Savransky, 2000; Orloff, 2006; Orloff, 2012; Rantanen and Domb, 2008; Gadd, 2011). The insufficient understanding why segmentation actually works does not allow reaching the full potential of this technique, particularly in the area of reliability improvement and risk reduction.

In addition, the segmentation as a problem-solving tool in TRIZ has been introduced in a rather narrow context: primarily as size segmentation or time segmentation. However, a physical division of the size is not the only instance when segmentation is present. Segmentation is also present when no physical division is done but additional boundaries with different properties are introduced in the homogeneous component. Such is the case of welding stiffening rings around an underwater pipeline, at regular intervals. The purpose of these rings is to restrict the eventual collapse of the pipeline between two welded rings, thereby minimising the extent of damage. Segmentation is present without the existence of a physical division of the whole object.

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