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This paper will describe a modified strategic business analysis planning tool. It helps us understand the company's internal and external environment. By planning for and following a strategy, consistency in operations is achieved.
This paper will describe a modified strategic business analysis planning tool. It helps us understand the company's internal and external environment. By planning for and following a strategy, consistency in operations is achieved.
This paper will describe a modified strategic business analysis planning tool. It helps us understand the company's internal and external environment. By planning for and following a strategy, consistency in operations is achieved.
Management Discipline: Defining a Process Safety Strategy
Jerry J. Forest Celanese 1601 W. LBJ Freeway, Dallas, TX 75234 Jerry.Forest@Celanese.com
Prepared for Presentation at American Institute of Chemical Engineers 2013 Spring Meeting 9th Global Congress on Process Safety San Antonio, Texas April 28 May 1, 2013
UNPUBLISHED
AIChE shall not be responsible for statements or opinions contained in papers or printed in its publications GCPS 2013 __________________________________________________________________________
Management Discipline: Defining a Process Safety Strategy
Jerry J. Forest Celanese 1601 W. LBJ Freeway, Dallas, TX 75234 Jerry.Forest@Celanese.com
We often associate operational discipline with conduct of operations and define discipline as the tools to achieve repeatable results. While discipline in operations is primarily focused on the operator, engineers and management contribute to the success in achieving consistent results. A Plan-Do-Check-Act (PDCA) model, or Deming Cycle, can be used to represent the relationship among operational, engineering, and management disciplines. The management discipline part of the cycle involves making decisions (act) based on the output of the operations, and planning for success. This paper will describe a modified strategic business analysis planning tool that managers can apply to process safety in order to achieve a desired vision and objective. Too often we are reactive to incidents and create activity lists from year to year in order to achieve objectives and goals. The process safety strategic business analysis tool is a structured approach of data analysis. It helps us to understand the companys internal and external environment in order to set strategic alternatives that will bring a company from its present state to the desired future state. By planning for and following a strategy, consistency in operations is achieved, and repeatable results can be obtained.
In order to be successful in reducing process safety incidents, the causes of those incidents must be understood and eliminated. Since our manufacturing facilities are designed and operated by people, many of the causes are due to human error. Conduct of operations (COO) concerns the cultural aspects of an organization that are in place to define structural operational tasks designed to ensure that tasks are done correctly each time they are performed [1]. Management defines the process safety culture by setting expectations, providing accountability for performance, and allocating resources to achieve that performance [2]. Management must plan for success and set the strategic direction. This includes the COO tasks that are designed to eliminate human error.
This paper discusses a modified strategic business analysis process and tools to help the process safety manager define strategic alternatives for continuous improvement.
2. Management Discipline Model
COO is most often associated with the tasks that operators do when operating a processing or manufacturing facility. These tasks are actually elements of operating discipline (OD). They include making shift relief, writing shift notes, evaluating equipment, proper communication, and giving and receiving operating instructions. Haesle et al., and the Center for Chemical Process Safety (CCPS) concept book Conduct of Operations and Operational Discipline present good overviews of OD [3][1].
But COO is more than OD. It also includes an element that consists of technical evaluation of process data, including data collected by operators in evaluation rounds and shift notes. These COO activities are often called engineering discipline (ED). Engineers or technical people bring predictability to OD by checking the human performance and acting on that data [4].
Managers often make the decisions to act on the data collected in OD and ED. In addition to acting on the data, managers should be planning for continuous improvement based on that data. Management discipline (MD) describes the activities that managers do to act on data and plan for continuous improvement in COO [4].
COO is therefore a combination of OD, ED, and MD; the combination of which describe a Plan- Do-Check-Act (PDCA) cycle as shown in Figure 1, first published in Process Safety Progress in 2012 [4]. When each element is in place, human error causes of incidents can be reduced.
3. Process Safety Strategic Planning
Planning for success can take many forms. It seems that often we are reactive to incidents and create long lists of items to correct. By being busy we think that we must be improving something. Another complaint often heard is that it is difficult to justify capital or expense spending for risk reduction. One cause might be that as technical people, we tend to communicate in technical terms rather than in business terms most often used by the decision makers who control budgets.
A way for mangers to plan for continuous improvement, break from the reactive cycle of activity lists, and provide a tool that is understood by business managers is by using a strategic business analysis (SBA) applied to process safety planning.
3.1 Strategic Business Analysis (SBA)
Strategic planning is having an understanding where you are as an organization; setting a vision for where you want to be; and developing strategic alternatives on how to achieve that vision. There are many tools that business managers use to understand the internal and external business environment, the competition, and other forces that might affect the vision or strategic alternatives. In this example the term SBA is used to collectively refer to the tools used to set the strategic plan, and these come from different sources and experience [5][6]. Analogous to Lean Six Sigma, no one tool is better than another and different tools might be used in different situations. For purposes of this paper, an 8-step process safety SBA is described. Table 1 illustrates the steps. The inputs, outputs, and process methodology for each are described and a case study is given at the end.
Table 1. The Process Safety SBA Process Step Description Purpose 1 Beliefs Align organization on fundamentals 2 Future State Answers where we are going 3 Data Analysis Answers where we are at 4 Risks Analysis Pressure test; what could go wrong 5 Strengths, Weakness, Opportunities, Threats (SWOT) Defines what we think of ourselves 6 Strategies Preferred path and alternative paths 7 Action Plans How we get there 8 Monitor & Improve Check that plans are working
GCPS 2013 __________________________________________________________________________ 3.2 Beliefs & Future State
In order to make a strategic plan, an understanding of the existing organization is obtained to align the planning team on the fundamentals of where the organization is and how much work is required to achieve some future state. Therefore, define and write down what the organizational beliefs are.
For example, does your company really believe that all process safety incidents are preventable? If not, define exactly what the belief about incident prevention is so that you will align actions consistent with that belief. Other topics to examine in beliefs include: management systems, people and training, organizational structure, and process safety leadership. Use a simple brainstorming process. The output of this step provides a foundation for future steps, and helps define the organizations leveraging beliefs.
All strategic planning processes should include some definition of the desired future state, or vision. As Yogi Berra is often quoted, If you dont know where you are going, you might wind up someplace else. The initial inputs to this process are a definition of company constraints (capital and expense, resources, etc.) and alignment with the overall company vision. The process can be a brainstorm session, or simply the given direction of senior management. The output is more than the vision, however. It should also include a consensus belief of where the organization believes it is going relative to peers, key performance indicator(s) (KPIs) to measure progress, and possible future scenarios that affect achieving the vision.
3.3 Data, Risk, and SWOT Analysis
3.3.1 Data Analysis Data can come from several sources including process safety audits, incident investigation root cause analysis, and other leading indicators. It is not uncommon to complete an audit, develop a gap closure plan, and complete it. Similarly, after an investigation of a process safety incident is complete, we develop solutions that address causes and complete those actions. By stepping back and looking at this data as a whole, we can quickly identify common failure modes and management system weaknesses. Analysis of these lagging indicators should quickly surface the low hanging fruit from which to develop a strategy for improvement.
A methodology to group and objectively analyze and identify systemic management system failures was published in Process Safety Progress in 2011 [7]. It consists of structuring audit reports in a database type structure such that the subjective findings can be queried into logic groups. These groups can be used to describe the common systemic management system failures.
A simpler and more common type of data analysis is of the lagging indicators. Most companies document the results of incident investigation with various causal factor analyses. Various descriptive statistics coupled with graphical analysis can be performed on groups of data that will point to areas for improvement [8].
GCPS 2013 __________________________________________________________________________ 3.3.2 Risk Analysis Understanding hazards and risks should be a part of any process safety strategic analysis. The inputs include the key beliefs developed earlier, industry data, and major risks from process hazard analysis. Typically, this tool involves a detailed look at data in order to expose scenarios that must be avoided, the critical process safety success factors, and what the competition is doing to be successful.
3.3.3 SWOT Analysis A SWOT analysis is used in strategic planning to get a better understanding of both the internal and external business environment. Examination of a companys strengths and weaknesses results from analysis of existing internal beliefs. Similarly, analysis of the external business environment exposes external threats and opportunities.
This same type of analysis can be performed on process safety systems in order to surface existing beliefs in the company. In fact, by identifying beliefs, we are getting an idea of the process safety culture since culture is defined as a commonly held set of values, norms and beliefs [1]. Methodology to complete this type of survey includes use of a 5 point Likert scale and has been described in Process Safety Progress [9].
The results of the combined data, risk and SWOT analyses should show obvious areas for improvement. At this point, the strategic development team should analyze what strategies have worked in the past, and which have failed. Also note that the analysis will surface several areas to improve and therefore the team should develop strategic alternatives. Future conditions and assumptions may change. The organization needs to be in a position to change the strategy to match current conditions.
Note that strategic alternatives describe the overall improvement direction. Action plans define the activities aligned with the strategy, key milestones and KPIs to track success. The final step in execution of the strategy is monitoring performance so that changes in strategy and action plans can be made to optimize performance.
3.6 Process Safety SBA Summary
Table 2 summarizes the key inputs, processes, and outputs for each SBA step described.
Table 2. SBA Inputs, Processes, & Outputs Step Inputs Process Outputs Beliefs Experience, trends, fundamentals Brainstorm Common foundation for future work; Leveraging beliefs Future State Definition of company constraints, existing company vision Brainstorm Consensus beliefs of future scenarios, KPIs, overall vision Data Analysis Process Safety audit data, incident investigation root cause analysis, leading indicator data Descriptive statistics, Pareto and other graphical analysis Common failure modes, systemic weaknesses Risks Key beliefs, industry data, major Sub-team analytical Scenarios to avoid, critical process GCPS 2013 __________________________________________________________________________ Analysis risks from PHA work safety factors, successful competitors Strengths, Weakness, Opportunities, Threats Results of the data and risk analysis Survey Key opportunities and strengths, competitive assessment, leveraging areas for improvement Strategies Results of data, risk and SWOT analysis Assess past failures and successes, develop strategic alternatives, team meeting format Defined process safety strategy and strategic alternatives Action Plans Strategic Alternatives Team meeting format Milestones, KPIs, action plans, communication plan Monitor & Improve Strategy, action plan Existing performance monitoring processes Update plans or strategy or choose new strategic alternative based on results
4. COO Strategic Planning Case Study
This SBA strategic planning process was used at Celanese to determine the process safety elements that needed most attention for the largest improvement. Discussed here are a few of the outputs from the tools used and one year results.
Most interesting were the results of the data analysis combined with the SWOT analysis. Descriptive statistics were applied to three years of loss of primary containment (LOPC) root cause studies. In summary, about half of all causes were human error, COO related. Of particular concern are the incidents involving operator line-up, operator evaluation, and failure to respond to alarm; all direct OD topics. This analysis also surfaced two additional areas for improvement: Mechanical integrity human error failures, and the need for improvement in incident investigation and assignment of causes. Audit finding analysis confirmed management system weaknesses in some areas of our COO implementation. Figure 2 shows a high level Pareto chart of the results of this analysis.
Figure 2: LOPC Causes Conduct of Operation Related GCPS 2013 __________________________________________________________________________ Analysis of lagging indicators also showed that for the time period studied, 80% of all incidents occurred at 5 sites.
The SWOT analysis surfaced a surprising result that the company, across the globe, indicated that there was an opportunity for improvement through internal networking with other sites and improving the process safety competency at the sites. The SWOT also showed a weakness in the area of process safety training and the need for improvement in how corporate procedures are executed at the site level. Once the strategy was set, the SWOT analysis helped define the action plan.
The data analysis gave rise to several strategic alternatives for process safety improvement. Table 3 illustrates four strategic alternatives for improvement.
Table 3. Strategic Alternatives Objective Strategy Action Plan Reduce # incidents Human error reduction 1. COO workshops 2. COO Networks 3. Lessons Learned Project 4. Focused Site Support Improve process safety competency Management system improvement 1. Reformat procedures 2. Improve management process Improve leadership competency 1. Targeted annual training 2. New leader process safety certification process Improve operator competency 1. Improve and rollout process safety training for front line supervisors, operators and crafts.
Of course, each action is detailed with specific assignments, milestones, and KPIs.
Of particular interest for COO is the large number of incidents that are directly attributable to human error and the development of a targeted action plan to reduce human error. The overall improvement plan involved collection of COO best practices from across the company and development of a 2 day workshop to share those practices. Participants were asked to complete a gap analysis of their own site practices to the best practices and develop a closure plan specific for their site. We then followed up the action plans with network sharing of the practices, successes, and failures.
The result of implementation of the human error reduction strategy and action plans is reduction of COO related causes for process safety incidents from about half of the incidents to about one third in a one year time period. Most notable were improvements in operator line-up causes with various targeted programs on walk-the-line and pre-job focus on line-ups. While these results are encouraging, we recognize the need for continuous monitoring to show continued improvement, and make minor changes to the action plan and path forward based on the current conditions.
Conduct of operations is more than the operational discipline topics. In order to be most effective, it should include a management discipline element as well. The MD element acts on OD data and plans for continuous improvement.
A modified strategic business analysis can be used for process safety strategic planning. By analyzing incident and audit data, the common management system failures and human error related failures can be surfaced so that management can target specific COO areas for improvement. Tools such as risk and SWOT analysis will surface effective ways to implement action plans based on organizational beliefs and what has worked before.
Since the second law of thermodynamics is still in place, it requires energy to monitor, maintain, and make changes to the strategic plan in order to achieve continuous improvement in process safety.
6. References
[1] Center for Chemical Process Safety, Conduct of Operations and Operational Discipline, American Institute of Chemical Engineers, Newark, NJ. 2011. [2] OECD Environment, Health and Safety Chemical Accidents Programme, Corporate Governance for Process Safety, June 2012 [3] J. Haesle, C. Devlin, and J. McCavit. Improving process safety by addressing the human element, Process Safety Prog 28 (2009), 325-330. [4] J. Forest. Management Discipline. Process Safety Prog 31 (2012), 334-336. [5] Krajewski & Ritzman, Operations Management Strategy and Analysis, 4 th ed., Addison- Wesley Publishing Company, Inc., Massachusetts, 1996 [6] Hutt & Speh, Business Marketing Management A Strategic View of Industrial and Organizational Markets, 5 th ed., The Dryden Press, 1981 [7] J. Forest. Objective Analysis of Process Safety Audit Data with Microsoft Access. Process Safety Prog 30 (2011), 221-231. [8] J. Forest & K. Kessler. Correlating Process Safety Leading Indicators with Performance. Process Safety Prog (2013), on-line edition. [9] J. Forest. How to Evaluate Process Safety Culture. Process Safety Prog 31 (2012). 195- 197.