SH&E Metrics: From Compliance to System Improvement

SH&E Metrics: From SH&E Metrics: From Compliance to System Compliance to System

ImprovementImprovement

Presented by:Presented by:Holly Elke, Holly Elke, CRSP, CSP, CMQ/OECRSP, CSP, CMQ/OE

OwnerOwnerSH&E System SolutionsSH&E System Solutions

INTRODUCTIONINTRODUCTION

The purpose of the SH&E The purpose of the SH&E management system is to management system is to protect the assets of the protect the assets of the company.company.

How do we know if the How do we know if the system is working to system is working to achieve this purpose?achieve this purpose?


We use performance standards We use performance standards or or MetricsMetrics to measure the to measure the achievements, to identify the achievements, to identify the deficiencies and to evaluate deficiencies and to evaluate the effectiveness of the SH&E the effectiveness of the SH&E Management System.Management System.


CATEGORIES OF PERFORMANCE STANDARDS:CATEGORIES OF PERFORMANCE STANDARDS:

Financial Financial – Shareholder perspective and – Shareholder perspective and investment in resourcesinvestment in resources

CustomerCustomer – Customer experience/ perceptions – Customer experience/ perceptions

Business Process Business Process – Key processes to meet and/or – Key processes to meet and/or exceed customer/shareholder requirements.exceed customer/shareholder requirements.

Learning and Growth Learning and Growth – How is change and – How is change and continuous improvement encouragedcontinuous improvement encouraged

The Science of METROLOGYThe Science of METROLOGY

METROLOGY METROLOGY IS THE SCIENCE IS THE SCIENCE OF LOGICAL MEASUREMENT, OF LOGICAL MEASUREMENT, WHICH IS VITAL TO WHICH IS VITAL TO CONTROLLING PROCESSES CONTROLLING PROCESSES AND PRODUCTS THAT CAN AND PRODUCTS THAT CAN IMPACT THE SH&E SYSTEM.IMPACT THE SH&E SYSTEM.


DATA COLLECTION IS A CRITICAL DATA COLLECTION IS A CRITICAL PART OF METROLOGY. THERE ARE PART OF METROLOGY. THERE ARE 3 BASIC TYPES OF DATA THAT 3 BASIC TYPES OF DATA THAT CAN BE COLLECTED AND CAN BE COLLECTED AND ANALYZED:ANALYZED:

1.1. ATTRIBUTE DATAATTRIBUTE DATA

2.2. VARIABLE DATAVARIABLE DATA

3.3. LOCATIONAL DATALOCATIONAL DATA


ATTRIBUTE DATAATTRIBUTE DATA

Also known as counted data.Also known as counted data. Answers questions of “how many” Answers questions of “how many” or “ how often”.or “ how often”.

For example, how many accidents, For example, how many accidents, how many stop work orders.how many stop work orders.

Commonly used with Lagging Commonly used with Lagging indicators.indicators.


VARIABLE DATAVARIABLE DATA

Answers questions like “how Answers questions like “how long”, “what level or volume” or “ long”, “what level or volume” or “ how much time” or “how far”.how much time” or “how far”.

Measuring devices are often used Measuring devices are often used to collect this type of data.to collect this type of data.

This data is higher in quality, more This data is higher in quality, more precise and contains more precise and contains more information.information.


LOCATIONAL DATALOCATIONAL DATA

Simply answers the question Simply answers the question “where”.“where”.

A “measles” chart can be used to A “measles” chart can be used to plot multiple or repeat locations.plot multiple or repeat locations.

This data can be used to identify This data can be used to identify factors that are associated with a factors that are associated with a location. For example, weather location. For example, weather conditions with outside conditions with outside environments. environments.


DATA MANAGEMENTDATA MANAGEMENT Identify types of data to be Identify types of data to be collected and media (manual vs. collected and media (manual vs. electronic).electronic).

Determine how the data can be Determine how the data can be used to create information.used to create information.

Determine if the data needs to be Determine if the data needs to be “upgraded” to create information.“upgraded” to create information.

Identify the customers who will Identify the customers who will use the information.use the information.


DATA MANAGEMENTDATA MANAGEMENT Identify methods required to Identify methods required to search and access the data after search and access the data after collection or it will be abandoned. collection or it will be abandoned.

Establish protocols or standards Establish protocols or standards for managing the data: use, for managing the data: use, maintenance, handling, access, maintenance, handling, access, preservation, retention and preservation, retention and disposal.disposal.


DATA DATA IN THE RAW FORM IS IN THE RAW FORM IS MEANINGLESS AND REQUIRES MEANINGLESS AND REQUIRES MANIPULATION. THIS MAY INCLUDE:MANIPULATION. THIS MAY INCLUDE:

CALCULATINGCALCULATING SORTINGSORTING

CATEGORIZINGCATEGORIZING TESTINGTESTING

SUMMARIZINGSUMMARIZING ANALYZINGANALYZING

TO TRANSFORM DATA INTO TO TRANSFORM DATA INTO INFORMATIONINFORMATION



INFORMATIONINFORMATION

The result of manipulating data.The result of manipulating data.Has meaning within the Has meaning within the organizationorganization

Is based upon the interpretation Is based upon the interpretation of the user of the information.of the user of the information.

The user may choose to store, The user may choose to store, share, or ignore the information.share, or ignore the information.


KNOWLEDGE KNOWLEDGE has 2 forms; has 2 forms; TACIT TACIT and and EXPLICITEXPLICIT..

Tacit Knowledge Tacit Knowledge consists of consists of difficult to articulate “know difficult to articulate “know how” or expertise that is part of how” or expertise that is part of the individual or organization. the individual or organization. This is our “expert” knowledge.This is our “expert” knowledge.


Explicit knowledge Explicit knowledge is recorded is recorded or codified information that or codified information that makes up our procedure, makes up our procedure, standards and other standards and other documents.documents.

The Knowledge ManagementThe Knowledge Management effort usually focuses on trying effort usually focuses on trying to convert Tacit to Explicit to convert Tacit to Explicit knowledge without losing value knowledge without losing value or meaning.or meaning.


WISDOM WISDOM is developed from the is developed from the collective database of:collective database of:

Knowledge and Experience,Knowledge and Experience, Value systems, andValue systems, and Expert insights of the individual or Expert insights of the individual or the organization.the organization.

Wisdom can provide the capability Wisdom can provide the capability to use and apply knowledge gained to use and apply knowledge gained for informed decision making. for informed decision making.

WHY MEASUREWHY MEASURE

Common metrics focus on Common metrics focus on traditional loss or accident traditional loss or accident statistics. These are known as statistics. These are known as Lagging IndicatorsLagging Indicators..

Examples include: Fatalities Examples include: Fatalities Loss Time Accidents / Incidents Loss Time Accidents / Incidents Medical and First Aid cases Medical and First Aid cases Return to Work, Frequency and Return to Work, Frequency and Severity rates, etc.Severity rates, etc.


Lagging IndicatorsLagging Indicators focus on focus on “after the event” or “end of “after the event” or “end of the pipe” measurements the pipe” measurements that provide a limited that provide a limited picture of the overall picture of the overall performance of the performance of the company. These metrics company. These metrics focus on focus on historical failurehistorical failure. .


Key Performance Indicators Key Performance Indicators (KPI’s)(KPI’s) focus on the focus on the achievements of the company as achievements of the company as well as on the opportunities for well as on the opportunities for improvement. These metrics improvement. These metrics should measure performance should measure performance throughout the companythroughout the company

PLAN – DO – CHECK - ACT PLAN – DO – CHECK - ACT


PLAN PLAN to establish strategic and to establish strategic and tactical goals (Financial, Customer).tactical goals (Financial, Customer).

DO DO establish performance establish performance measurement standards to reach measurement standards to reach these goals (Business Process).these goals (Business Process).

CHECK CHECK for achievements and for achievements and opportunities for improvement (KPI’s).opportunities for improvement (KPI’s).

ACT ACT upon the analysis or evaluation upon the analysis or evaluation of the data and information collected of the data and information collected (Learning and Growth).(Learning and Growth).

WHAT TO MEASUREWHAT TO MEASURE

THE COST OF POOR SAFETYTHE COST OF POOR SAFETY

The cost of The cost of NOT DOING SAFETY NOT DOING SAFETY needs to be measured assessed needs to be measured assessed

and analyzed.and analyzed.

The most common method for The most common method for measuring “measuring “Poor SafetyPoor Safety” is the ” is the ILCI Iceberg ModelILCI Iceberg Model. This model . This model

focuses on costs associated focuses on costs associated with losses that have occurred. with losses that have occurred.


Types of Costs Cost Range Cost Activities

Injury & Illness Costs

$1 Medical and Compensation (Insured)

Property/Ledger Costs (uninsured)

$5 to $50Building, Tool, Equipment, Product, Material damage; Expenditures for emergency situations – supplies and equipment; Repair and replacement costs

Uninsured Miscellaneous Costs

$1 to $3Time to investigate; wages paid for lost time (non-injured); hiring/training replacements; Overtime; Additional supervisory time; Admin time, Decreased output from injured or replacement or affected workers; Loss of corporate reputation; Public perception.


THE COST OF SAFETY THE COST OF SAFETY metrics metrics should include costs for should include costs for “Doing” and “Not Doing” to “Doing” and “Not Doing” to determine effectiveness. This determine effectiveness. This costs are categorized by:costs are categorized by:

Prevention (Doing)Prevention (Doing)Appraisal (DoingAppraisal (DoingFailure – Internal (Not Doing)Failure – Internal (Not Doing)Failure – External (Not DoingFailure – External (Not Doing


PREVENTION COSTSPREVENTION COSTSThese should include activities that These should include activities that

are conducted to prevent poor or are conducted to prevent poor or sub-standard safety designs, sub-standard safety designs, practices or standards. practices or standards.

Examples: Examples: Planning, Design or Planning, Design or Purchasing Reviews, Qualification, Purchasing Reviews, Qualification,

Selection & Evaluation, Control Selection & Evaluation, Control Strategies to eliminate, substitute Strategies to eliminate, substitute or engineer the hazard.or engineer the hazard.


APPRAISAL COSTSAPPRAISAL COSTSThese should include activities that These should include activities that

measure, evaluate or audit products measure, evaluate or audit products or services required to assure or services required to assure compliance or effectiveness of compliance or effectiveness of control strategies. control strategies.

Examples: Examples: Inspection & monitoring, Inspection & monitoring, equipment calibration, audits, risk equipment calibration, audits, risk

assessments, performance assessments, performance reviews, task observations, etc.reviews, task observations, etc.


FAILURE COSTSFAILURE COSTS

These should be divided into These should be divided into Internal and External costs due Internal and External costs due to losses that have occurred. to losses that have occurred.

The Iceberg model can be used to The Iceberg model can be used to define these cost activities. define these cost activities.


Internal Costs Internal Costs – Wage, equipment, – Wage, equipment,

or product replacement, retraining, or product replacement, retraining,

downtime, administration.downtime, administration.

External Costs External Costs – Public relations, – Public relations,

Corporate reputation, emergency Corporate reputation, emergency services, fines, lawsuits, uninsured services, fines, lawsuits, uninsured costs.costs.



THE COST OF RESOURCESTHE COST OF RESOURCES

PeoplePeople TimeTime MoneyMoney Equipment/ToolsEquipment/Tools Facility/Location Facility/Location

upgradesupgrades TrainingTraining


BUSINESS PROCESSESBUSINESS PROCESSES

Benchmark current standards, Benchmark current standards, methods, practices, procedures methods, practices, procedures and corporate requirements with and corporate requirements with the best practices of the industry the best practices of the industry or market leaders.or market leaders.

Involve other areas of the company Involve other areas of the company in this process to create “buy in”.in this process to create “buy in”.


VOICE OF THE CUSTOMERVOICE OF THE CUSTOMER

Define who are your customers – Define who are your customers – employees, contractors, regulators, employees, contractors, regulators, the public, shareholders, etc.the public, shareholders, etc.

Use independent and structured Use independent and structured tools, such as perception surveys,tools, such as perception surveys,management system audits, 360 management system audits, 360 feedback, and evaluation processes feedback, and evaluation processes for contractors .for contractors .

WHEN TO MEASUREWHEN TO MEASURE

PLAN PLAN Strategic goals – Strategic goals – 1 to 5 yrs1 to 5 yrs

Tactical goals – Tactical goals – 3 to 12 months.3 to 12 months.

DO DO Assess Performance standards Assess Performance standards Quarterly to Annually.Quarterly to Annually.

CHECK CHECK Periodic achievements and Periodic achievements and opportunities for improvementopportunities for improvement

Daily to MonthlyDaily to Monthly

ACT ACT Analyze or evaluate the data andAnalyze or evaluate the data and information collected information collected

Monthly to Annually.Monthly to Annually.

HOW TO MEASUREHOW TO MEASURE

Follow the principles of Follow the principles of METROLOGY: METROLOGY:

Establish clear measurement Establish clear measurement standards; use established reference standards; use established reference standards where possible.standards where possible.

Use standardized equipment or terms Use standardized equipment or terms of reference to collect and verify of reference to collect and verify conformance to established standards conformance to established standards or specifications.or specifications.


Calibrate measuring equipment or Calibrate measuring equipment or tools to traceable and approved tools to traceable and approved standards.standards.

Perform data integrity evaluations to Perform data integrity evaluations to confirm the quality (bias, usefulness,confirm the quality (bias, usefulness,

value, etc.) of the data collected.value, etc.) of the data collected.

Establish rules for interpreting data Establish rules for interpreting data (trends and system variation).(trends and system variation).


RULES FOR ANALYSISRULES FOR ANALYSIS

1.1.System Variation – Common CausesSystem Variation – Common Causes

85% of process problems are due to 85% of process problems are due to this cause.this cause.

Corrective action at the basic or root Corrective action at the basic or root cause level is needed to eliminate the cause level is needed to eliminate the cause.cause.

Change the system, process, facility/ Change the system, process, facility/ equipment/ tool design, materials,equipment/ tool design, materials,standards or task requirements to standards or task requirements to effect permanent change!effect permanent change!



2.2.System Variation – Special CausesSystem Variation – Special Causes

15% of process problems are special 15% of process problems are special causes. causes.

These causes can affect the process in These causes can affect the process in unpredictable ways and result in unpredictable ways and result in unstable outcomes.unstable outcomes.

Premature reactions to these causes Premature reactions to these causes can lead to ineffective changes. can lead to ineffective changes.



2.2.System Variation – Special CausesSystem Variation – Special Causes

Ex. The use of multiple suppliers for the Ex. The use of multiple suppliers for the same service (training) may cause different same service (training) may cause different learning outcomes. A change in training learning outcomes. A change in training material or presentation will not resolve material or presentation will not resolve this situation. this situation.

3.3.Trend AnalysisTrend Analysis

Use visual aids to chart system variation: Use visual aids to chart system variation: Histograms, Pareto & Scatter Diagrams, Histograms, Pareto & Scatter Diagrams, Control Charts, Check sheets, Measles Control Charts, Check sheets, Measles Charts, Spaghetti maps, etc.Charts, Spaghetti maps, etc.


CODE #DESCRIPTION

GENERAL EHS INSPECTIONS: Facility 1 – Manufacturing Areas

G1ACCESS

G2 ELECTRICAL

G3 CHEMICAL/ ENVIRONMENTAL

G4 HAZARDOUS PRODUCT WASTE

G5 EMERGENCY EQUIPMENT

G6 ERGONOMIC

G7 SAFETY DEVICES

G8 WORKING AT HEIGHTS

G9 PRACTICES AND PROCEDURES

G10 DOCUMENTATION


PRESENTING YOUR METRICSPRESENTING YOUR METRICS

Visualize the outcome of your metrics Visualize the outcome of your metrics by asking:by asking:

?How should we appear to our How should we appear to our stakeholders (Financial)?stakeholders (Financial)?

?How should we appear to our How should we appear to our customers (Customers)?customers (Customers)?

?What business processes must we What business processes must we excel at (Business Processes)?excel at (Business Processes)?

?How will we sustain our ability to How will we sustain our ability to change and improve (Learning & change and improve (Learning & Growth)?Growth)?



CONCLUSIONCONCLUSION

Focus on activities & resources Focus on activities & resources that affect profitability but may that affect profitability but may be hidden.be hidden.

Encourage participation and Encourage participation and timely corrective actions timely corrective actions through a regular review through a regular review process;process;

Evaluate the consistency of Evaluate the consistency of organizational alignment,organizational alignment,

internally and externally.internally and externally.

QUESTIONS ?QUESTIONS ?

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SH&E Metrics: From Compliance to System Improvement

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