Global Congress on Process Safety - 2012 __________________________________________________________________________ How to Go From “Lessons” to “Learned”: A Systematic Process Safety Management Benchmarking System to Drive Learning Cindie Pridy Phillip Townsend Associates, Inc. 523 N. Sam Houston Parkway East, Suite 500 Houston, Texas USA 77060-4036 www.ptai.com [email protected] Robert Cravens Phillip Townsend Associates, Inc. [email protected] Prepared for Presentation at 8th Global Congress on Process Safety Houston, TX April 1-4, 2012 AIChE shall not be responsible for statements or opinions contained in papers or printed in its publications Global Congress on Process Safety - 2012 __________________________________________________________________________ How to Go From “Lessons” to “Learned”: A Systematic Process Safety Management Benchmarking System to Drive Learning Cindie Pridy Phillip Townsend Associates, Inc. 523 N. Sam Houston Parkway East, Suite 500 Houston, Texas USA 77060-4036 www.ptai.com [email protected] Robert Cravens Phillip Townsend Associates, Inc. [email protected] Keywords: benchmarking, gap analysis, metric, performance gap, process safety management system, risk based process safety element, survey Abstract In 2009, the CCPS® and Phillip Townsend Associates, Inc. (PTAI) entered into an agreement to develop a benchmarking system for process safety management systems (PSMS). The PSMS benchmarking program is a systematic study of process safety for the global chemical, refining and pharmaceutical industries allowing enterprises to compare their management systems with the goal of improving the design and implementation of management practices that impact process safety. Risk based process safety elements can be grouped into four key categories: Commitment to Process Safety, Understanding of Risk, Management of Risk, and Systematic Learning from Experience. Starting with six of the 20 elements: Process Safety Culture, Compliance with Standards, Hazard Identification and Risk Analysis, Asset Integrity and Reliability, Management of Change, and Measurement and Metrics; PTAI and CCPS® designed the PSMS benchmark with the intent of seeking to understand the relationship between process safety outcomes and management practices. This paper discusses the process of the PSMS benchmark and the value proposition to be gained by enterprises and other stakeholders in participation. Specifically, this paper focuses on the most important decisions and behaviors that leadership can take to improve process safety throughout the organization and close the gap to the top performers. The following topics are discussed in the paper: • What is Benchmarking? • What is the Value Proposition of Process Safety Benchmarking? Global Congress on Process Safety - 2012 __________________________________________________________________________ • • • How does it Work? What are the Benefits of PSMS Benchmarking? Key Applications and Lessons Learned 1. Introduction Chemical production and the associated processing industries dealing with hazardous and toxic materials have a significant commercial and societal responsibility to eliminate and/or mitigate the loss of primary containment or fires related to process materials while also ensuring adequate safety systems are in place. Process safety management systems differ from personnel safety management in that process safety focuses directly on the processes, equipment and technology involved in causing an incident. The broader application of process safety management decision making and leadership behavior needs to address loss of containment events of greater and lesser consequences, safety system challenges and failures that could have led to failure, and operating discipline and management behaviors that ensure adequate layers of protection are being maintained. The focus shifts from the lagging indicators that track incidents, to leading metrics that are used in a proactive manner to prevent incidents and continuously improve (see Fig.1). Figure 1. Process Safety Management System Leading and Lagging Metrics (API 754, 2010) The vision and recommendation of industry-wide process safety originated as a result of the 2005 explosion at the BP refinery in Texas City, Texas. Since then, the Center for Chemical Process Safety (CCPS®) has identified 20 process safety elements to be used as guidelines for a risk based safety process (CCPS®, 2007). In 2009, the CCPS® and Phillip Townsend Global Congress on Process Safety - 2012 __________________________________________________________________________ Associates, Inc. (PTAI) entered into an agreement to develop a benchmarking program for Process Safety Management Systems (PSMS). Viewed from a risk based perspective, the process safety elements can be grouped into four categories: Commitment to Process Safety, Understanding Hazards and Risk, Managing Risk, and Systematic Learning from Experience. PTAI and CCPS® designed the PSMS benchmark selecting six of the 20 elements: Process Safety Culture, Compliance with Standards, Hazard Identification and Risk Analysis, Asset Integrity and Reliability, Management of Change, and Measurement and Metrics (see Fig.2) (CCPS®, 2007). The key goal was to seek an understanding of the relationship between process safety outcomes and management practices Figure 2. Program Scope COMMIT TO PROCESS SAFETY • Process Safety Culture • Compliance with Standards UNDERSTAND RISK • • Measures and Metrics LEARN FROM EXPERIENCE • Asset Integrity and Reliability • Management of Change Hazard Identification and Risk Analysis MANAGE RISK This paper discusses the details of the PSMS benchmark and the value proposition to be gained by enterprises and other stakeholders. Specifically, the paper focuses on the most important decisions and behavior changes that leadership can make to spread process safety awareness throughout the organization and close the gap to the top performers. 2. What is Benchmarking? Benchmarking identifies how well a company is doing compared to its peers in the industry, what the industry top performance is, how large the gap is to the top performers within the industry, and create a stimulus for continuous improvement (see Fig.3). Benchmarking programs seek to understand the relationship between outcomes and management practices. The PSMS benchmarking program is a systematic study of process safety between companies that will allow sites/companies to compare their management systems with the goal of improving the design and implementation of management practices that impact process safety. Global Congress on Process Safety - 2012 __________________________________________________________________________ Figure 3. Benchmarking Performance Model 3. What is the Value Proposition of Process Safety Benchmarking? PSMS benchmarking can elevate a company’s process safety performance through four distinct steps: 3.1 Identify performance gaps The identification of a company’s performance in relation to Performance Quartiles will highlight key drivers for performance enhancement versus its peers (see Fig.4). These quantifiable results will replace perceptions with a data-based reality check. In addition, these results will identify if the enterprise policies, practices, and procedures are operating as intended and are achieving the desired results. 3.2 Create performance enhancement goals Data driven information will provide a measure of the enterprise effectiveness – emphasizing strengths, weaknesses and potential for improvement over time. This will help focus attention on the critical aspects of an enterprise that create risk. It will also underscore what improvements should be made – providing quantifiable performance enhancement goals. 3.3 Measure the effectiveness of improvement programs PSMS benchmarking can be a starting point for goal setting and performance initiatives aimed at boosting step change improvements in process safety. The clear outcome is that this will add significant shareholder value through reduced risks of catastrophic incidents. 3.4 Maintain continuous improvement The PSMS benchmark will help maintain a stimulus for continuous improvement. It will provide the necessary motivation to ensure consistent top performance results. Global Congress on Process Safety - 2012 __________________________________________________________________________ Figure 4. Quartile Comparison and Gap Identification 4. How Does it Work? A peer group is established of sites/companies agreeing to compare their process safety programs and performance in an effort to identify best practices and drive improvement. Ensuring consistency and protection of each participant’s interests are critical to a successful benchmark. A confidentiality agreement must be completed along with execution of a participation agreement. The Data Collection Instrument (DCI), providing clear and consistent definitions for all participating sites/companies, is made available. The use of a secure site over the internet ensures security of data and ease of use by participants as they are able to see all the survey questions and select their answers (see Fig.5). A kickoff discussion to align key stakeholders at each of the sites is critical. Figure 5. Sample Asset Integrity and Reliability Survey Question Global Congress on Process Safety - 2012 __________________________________________________________________________ Following submission of the data, PTAI validates the data on a site and company basis and provides analysis of the results (see Figs.6-8). In particular, statistical analysis of the data is performed to evaluate various drivers of process safety. The quantitative and qualitative results are distributed to participants with numerical scores for each element along with an overall site/company specific score. Strengths, as well as the main opportunities for improvement to close the gap towards the top performers are identified. A discussion of the study results and gap opportunities is held with the executive management. Figure 6. Sample Hazard Identification and Risk Analysis Results Figure 7. Sample Measurement and Metrics Results Does Your Company Collect "Leading Metrics" on Process Safety? Yes: Near misses associated with management system failure Challenges/demands on safety systems Releases below the threshold level set for an incident Your Company Your Company The effectiveness of the process safety management systems Use data to set corporate-level goals No 0% 10% 20% 30% 40% 50% 60% 70% 80% Global Congress on Process Safety - 2012 __________________________________________________________________________ Figure 8. Sample Management of Change Results Percent MOCs Closed More Than 90 days after Approval to Operate Frequeuency of Respondents 0.45 0.40 0.38 0.35 0.30 0.25 0.23 0.23 0.20 0.15 0.10 Your Company 0.14 20-40% >40% 0.08 0.05 0.00 5% 5-10% 10-20% 5. What are the benefits of PSMS Benchmarking? Management review is an integral part of moving from lessons learned to systematic improvement of PSMS. A review of the performance gaps can identify potential problems and address them before an incident occurs; as well as, identify opportunities for improvement to move from current levels to the level of top performers. PSMS benchmarking can also help an organization prioritize the allocation of process safety resources, both financial and human, to focus on the highest identified risk areas Among the benefits of PSMS benchmarking, there are certain ones that can have a big impact on an organization. There should be a marked increase in staff awareness of process safety issues. This awareness will expand the issues from the Health & Safety group to Engineering to Operations. Based on the organizational level of results discussion, it will potentially increase awareness from site management to impact those that are responsible for setting corporate strategy. PSMS benchmarking creates a common understanding and language on process safety matters. Benchmarking can also reduce risks by potentially providing an incident early warning system. Sometimes the opportunities for improvement can be very different from the perceived gaps in an organization. Identifying and gaining insight on perceived gaps versus actual gaps is greatly enhanced by an independent benchmark which effectively creates consistency across multiple sites within a company and with the others in the peer group. 6. Key Applications and Lessons Learned Traditional process safety surveys have identified a list of both quantitative and qualitative issues. Translating the qualitative issues into measurable, actionable steps is a key issue for Global Congress on Process Safety - 2012 __________________________________________________________________________ senior management decision making and allocation of resources. Benchmarking results must be measurable and use a scoring methodology that will not only identify the performance gaps, but also quantify the impact of selected actions. The PSMS benchmarking process designed by CCPS® and PTAI includes a scoring methodology that does just that. Benchmarking is a systematic way to make site-to-site company comparisons and view a company’s performance level in relation to that of top performers. The application of the benchmarking results to identify performance gaps provides meaningful insight for organizations as they develop goals and the associated improvement plans to reach those goals. Repeated benchmarking monitors the rate of improvement. One example of a lesson learned that applies to numerous organizations relates to Process Safety Culture. The findings from the Process Safety Culture section indicate the largest range of results compared to the other sections. The underlying cause of the low scores was a direct outcome of not monitoring the process safety culture through the use of an employee survey. Without a way to assess their work force’s values, attitudes and behaviors pertaining to process safety, an organization will have no meaningful basis for making and measuring improvements. 7. Conclusions Process safety is a mature, but continuously evolving concept with practices and procedures varying widely among the refining, chemical and chemical processing industry. Moving from a compliance model to a risk-based model requires a comprehensive approach to managing process safety. Substantial improvement opportunities exist for even the current top performers. Specifically, no site has made a perfect score on any of the risk-based elements of the PSMS benchmark. The PSMS benchmarking program is a unique methodology to allow companies to identify how large the gap is to top performers and to “learn” how to prioritize resource allocations based on the greatest impact opportunity to improve their process safety management system. This shifts the understanding of current practices to the lessons learned that are measurable and actionable. The benchmarking process identifies top quartile management practices while highlighting not only a company’s strengths, but also potential development opportunities. The program’s scoring system provides a marker to track improvements and measure the gaps within the company sites and against external top performers. Using a systematic Process Safety Management System benchmark drives lessons learned to strategic and organizational learning. 8. References [1] American Petroleum Institute, API RP 754, “Process Safety Performance Indicators for the Refining and Petrochemical Industries, First Edition,” 2010. [2] Center for Chemical Process Safety CCPS®, “Guidelines for Risk Based Process Safety,” John Wiley & Sons, Inc., Hoboken, NJ, ISBN 978-0-470-16569-0: liii-liv, 2007.