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During the stages of conception, designing, building, operating, and decommissioning in the petroleum industry, a quantitative risk analysis is a primary tool used to analyze the safety and risk management in an effort to control hazards and operate safely. The quantitative risk analysis can identify potential hazards, determine the likelihood of them occurring, and the consequences of the hazard should it arise.
Why Quantify Risk?
Your company needs to be reliable and safe in the competitive petroleum industry. The potential harm to employees, the environment, assets, reputation and the local community should be priority number one.
How Do You Quantify Risk?
In most scenarios, the use of a HAZID can be applied. A HAZID can help identify the potential risks during installation or operation of your company's work. Often, a hazard can become a series of hazards as they break down into a plethora of hazards, also known as an event tree. That is, when one operation breaks down, the HAZID can pinpoint the likelihood of the consequential events that may happen. Not only can the HAZID determine what might happen next, the HAZID can also quantify the probability of the events to follow.
Planning for the Future
With the risk analysis tools in place, your company can easily plan for the future by identifying your risks and quantifying the likelihood of their occurrence. With proper risk management, your company can avoid unnecessary costs, downtime, and injury to workers.
For more information on how Accupoint’s solutions can help you manage your risk assessment process, please contact us today.
The Department of Labor states that on-the-job fatality rates are seven times higher for oil and gas extraction workers than all other industries. The only solution to this serious problem is proactive compliance with a comprehensive safety and health management program. Continual risk identification, analysis and policy enforcement are the keys to keeping workers safe and avoiding operational downtime.
Hazards in oil and gas industry are divided between safety and injury dangers and health and illness hazards. Front-line supervisors should work with safety managers to conduct risk assessments that are founded on historical experience, analytical methods and field knowledge and judgement. A risk assessment will ask three basic questions for each possible event: what can go wrong, how likely will it occur and what are the impacts. Both qualitative and quantitative answers offer unique value. Safety planning and risk assessments require that everyone involved understands the objectives, the methods, the resources required and how the results will be applied.
Standard Evaluation Methods
A risk assessment generally involves four basic steps: hazard identification, frequency projection, consequence assessment and risk evaluation. Hazard identification methods include literature research, safety audits, periodic walk-throughs and what-if brainstorming. Popular tools include FMEA, HAZOP and HAZID. Frequency assessment methods include fault tree, event tree, human reliability and common cause failure analysis tools. Consequence assessment methods include source term, aquatic transport, atmospheric dispersion and blast and thermal radiation models. Popular evaluation methods include risk profiles, indexes, matrixes and density curves.
The Hazard Identification (HAZID) Technique
HAZID is a safety tool to describe activities that identify risks and associated events. Offshore petroleum facilities often use HAZIDs to identify potential hazards to personnel, such as injuries and illness, to the environment, such as spills and pollution, and operational issues, such as delays and production losses. Offshore petroleum leaders often use the HAZID technique to analyze operational procedures on vessels and machinery. A HAZID planning session will involve an interdisciplinary team that includes those who have experience with facility design, such as engineering, and facility operation, such as veteran employees. Together, they will use checklists to methodically brainstorm and identify potential hazards associated with each part of the system.
A what-if analysis uses subjective questioning to ponder potential performance problems and their consequences. For example, if an intake air filter is blocked, this will reduce the air flow through the compressor, which will consume more energy and lead to functional inefficiencies. The solution is through monthly inspections and scheduled filter replacements. Contact us today to learn how Accupoint can streamline your safety, compliance and risk assessments processes.
Securing materials and equipment is the first step in the supply chain. A company's competitiveness is directly influenced by the performance of suppliers. A supplier that does not perform well can add costs, cause serious delays and can damage your company's reputation. It is imperative to have a system to evaluate your suppliers. It will help you determine potential problems like low standards of quality, poor communication, and substandard resources. Every company needs to have a supplier evaluation model in place to measure a supplier's ability to comply with their contractual obligations.
Supplier evaluation will identify their strengths and weaknesses. Several criteria should be considered including quality, delivery, service, and flexibility. Generally, the most important factor is quality followed by delivery, service and then flexibility. An effective means of evaluating suppliers is assigning them to one of four categories based on performance: full partner, associate partner, high risk and incapable. A full partner meets or exceeds all expectations. An associate partner needs some work, but performs well overall. A high risk supplier must be carefully evaluated. They can be used for the production currently underway, but future contracts require consideration. An incapable supplier will be dropped as soon as possible as they cannot properly fulfill their obligations.
A full partner must be compatible with you company’s current and future business plan. They will always demonstrate high quality, on-time delivery, superior service and flexibility. The supplier participates in your automatic ordering system. They will provide full support quickly, and be available anytime for questions. A full partner should also assist with new designs and provide samples within one to two weeks. They will demonstrate an ability to develop new processes and be committed to research and development. They will not ship out-of-spec parts, and have well documented quality controls. They will optimize lead times and allow order flexibility within reason. They will show commitment to cost reductions and share their cost structures and pricing models.
An associate partner will meet most of the criteria of a full partner. The associate partner should demonstrate a commitment to improving quality and delivery. You can work with them to develop action plans to meet your goals. The supplier must fulfill the needs of your company. They should be willing to work toward meeting the criteria to become a full partner.
High Risk Partner
A high risk partner is not compatible with the goals of your company. Their current quality and delivery are acceptable to maintain current production, but there is no benefit in expending the resources to bring them to associate or full partner status. The cost and quality are below your company’s acceptable standards.
Incapable suppliers do not meet quality standards. They do not demonstrate the capability of improving quality, delivery, service or flexibility. These suppliers must be dropped immediately.
Evaluating the performance of suppliers using an Analytical Hierarchy Process (AHP) model helps to determine the importance of each criterion and interpret the findings. You will determine what is most important for your company, and use that to rate your suppliers. Supplier can be measured based on the four main criteria: quality, delivery, service and flexibility. To determine the rest of the criterion you should consider whether the attributes are “soft” criteria (like supplier commitment or service) or “hard” quantifiable criteria (like the supplier's ability to fulfill orders). When thinking about cost, consider that the total cost of a product includes all the factors that go into getting your product to market in addition to its initial procurement cost.
For further information on how Accupoint can help your critical supplier management process, contact us today.
The petroleum industry requires dangerous work. Protecting personnel from injury requires rigorous monitoring and training protocols and scrupulous attention to reporting, prevention and data analysis when an accident occurs. Here are three fundamental concepts to keep in mind when designing an effective injury management program:
1) Know your hazards. Most injuries in the petroleum industry fall into one of two large categories: safety-related injuries and health-related injuries.
Safety-related injuries include those related to:
Health-related hazards include:
Be aware of where each of these may appear in your site or team workflows and make sure preventive and responsive protocols are in place to deal with each.
2) Manage your risks. A robust risk management program has the following 7 steps:
3) Design a program that works. Effective injury management programs must satisfy the following requirements:
If you adhere to the guidelines above when designing and refining your injury management program, you will be able to anticipate problems more effectively and resolve them more efficiently. For more information on how Accupoint’s web-based solution can help you improve your injury management program, please contact us today.
Visitor management refers to the tracking and accounting of visitors to a facility. Visitor management is very important in the petroleum industry because of the unique safety concerns that arise. The best practices for visitor management take the visitor from arrival to departure, making the experience both informative and safe for everyone involved.
The visitor management process begins with registration. This should be done electronically when a new visitor arrives. The visitor's name, business, and time of arrival will be recorded. At this time, a badge or other form of identification can be given to the visitor so they are clearly identifiable by employees.
With the types of equipment and chemicals used in the petroleum industry, visitor safety is a major concern. Visitors may be given hard hats or other safety equipment as needed.
Making sure visitors are always properly supervised is a best practice for visitor management. Employees involved with supervising visitors should give visitors access to any relevant safety rules before allowing them into the facility. The employee should remain with the visitor for the duration of the visit.
There may be certain areas of your facility that visitors cannot go. Using electronic visitor management, you can restrict these areas to all or certain visitors. You may also be able to track a visitor's movements throughout a facility using their badge.
Visitors should be released by reversing the registration process. They will need to return their badge and any safety equipment they used. The time they are released will be noted electronically in the visitor record.
Using these visitor management best practices, your facility and all visitors will remain safe and well accounted for.
To find out how Accupoint Software can help your business with visitor management, contact us.
Depending on the industry under discussion, there are varying levels of incidents that can occur which make having an effective incident management plan a necessity. The petroleum industry most certainly falls into the category of operations where establishing and consistently maintaining an effective incident management response is of paramount importance. Understanding that there is no way to completely prevent incidents -- only to successfully and completely prepare for them when they do occur -- is often the difference between a brief interruption in operations and a long-lasting, expensive situation that negatively impacts a firm's reputation. Read on as we outline four basic steps in any solid effective incident management plan.
Develop a communication plan
This pertains to internal and external communication. Internally, the specifics of the plan are dependent on different factors unique to your organization (size, location, company culture), but whatever form the communication plan takes, it should be well-defined and able to be acted upon immediately. All internal employees should refer questions to your company spokesperson, with no exceptions.
Externally, an honest assessment with a realistic timeline is the best course of action. Ensuring stakeholders and the public in general that you are taking every step necessary to deal with the incident in the timeliest manner possible is vital at this point.
Understand how to classify (and respond to) the incident
At this juncture, the severity of the incident is quantified. Will it affect operations in just one location, or at multiple company locations? Obviously this step will no doubt be drastically different depending upon the circumstances, but the key here is to understand what threats can result from the incident, and gauge the response accordingly.
Formulate a basic framework for costs
There's no question that any incident needs a successful resolution. However, a cost analysis is necessary to ensure that the response and recovery to the incident are not out of proportion to the severity of the situation. As with any business decision, a budget helps immensely for this step.
Ensure your team is complete
Probably the most important step in any effective incident management plan, having the right people in the right places is of utmost importance. The key here is to have a clearly defined plan of action, where all the members of the incident management team understand their role -- without any ambiguity -- and are ready to jump into action immediately.
Developing an effective incident management response is certainly an important consideration, especially for companies operating in the petroleum industry. As is the case with any successful concept, ample planning will ensure that your organization is ready to respond -- and act quickly -- should an unexpected incident occur.
If you have any questions about developing or maintaining your incident management plan, please don't hesitate to reach out to us -- there's a reason why our compliance management solutions are so highly touted!
As we continue into our evaluation of the API Spec Q2 standard, we thought we would concentrate on a topic that many organization struggle with, Customer Satisfaction Bench-marking
The API Spec Q2 standard requires us to monitor and work to improve our customer satisfaction. According to the standard:
The organization shall maintain a documented procedure to monitor customer satisfaction. The procedure shall address customer feedback, key performance indicators (KPIs), and other information that the organization monitors to determine whether the organization has met customer requirements. Records of the results of customer satisfaction information shall be maintained (see 4.5).
Having the procedure is not the problem. Obtaining actionable information from the customer is. There are many ways to gauge customer satisfaction; some organizations develop in-depth questionnaires while others rely on the Net Promoter (NPS) format.
Regardless of the collection method, we need to analyze the responses to develop an action plan to drive our continual improvement efforts. Below is a Deming circle, outlining the major components:
For more information on how Accupoint can help you manage the Customer Satisfaction requirements of the API standards, call us toll-free at 800.563.6250 or visit us at www.accupointsoftware.com.
The API Spec Q2 standard has created some confusion regarding the implementation of certain requirements. One frequent conundrum centers around the definition of a critical supplier, as well as the QMS requirements of said supplier.
The standard defines critical, in 3.1.6, as follows: That deemed by the organization or customer as indispensable or essential, needed for a stated purpose or task, and requiring specific action.
Let’s start with a simple definition of a critical supplier. The term “critical” and the criteria used in the designation should be determined by your organization and/or customer. That being said, if a supplier is integral to the process or you cannot survive without them that would be a pretty good indicator that the supplier is “critical.” Keep in mind that “critical” can be defined in a variety of ways, so development of internal criteria is essential.
Next, let’s look at how to verify that your critical suppliers’ QMS conforms to your internal requirements. You may require your suppliers to have a third party certification in order to be approved. In this case, you can outline the standard(s) required to satisfy your conditions. If you do not require certification, you should develop an audit checklist to verify that their QMS meets expectations.
The API Q2 standard requires the following, in section 5.6.1 Purchasing Control:
For critical services or service-related product, the criteria for the initial evaluation and selection of suppliers by the organization shall include the following prior to initiation of the purchase agreement:
Remember, you’re only as good as your weakest link. Q2 requires the management and monitoring of the supply chain. Understand that this can create burdens and require additional resources to verify. It is important that you develop a simple process to evaluate and monitor your vendors.
To find out about how Accupoint can help you streamline your supply chain management process, call us at 800.563.6250 or visit www.accupointsoftware.com
The oil industry is going through a rough patch right now. It may seem dire with wells going offline and new exploration being reduced, but this is not the first time this has happened and it won't be the last.
During times like these, companies find themselves looking for ways to maintain productivity and revenue while limiting exposure to the markets and unnecessary costs. Operational excellence lies at the heart of these efforts.
If your organization is reeling from the market shifts and looking for ways to survive, then now is the perfect time to re-examine your operational expenditures, project management, and other critical processes.
It can be hard for companies to step back from the current crisis and see the big picture, but gaining a high-level view of the company, markets, and industry is essential to long-term success. Doing this now will help you spot opportunities for cost reduction and reinvestment while the market is down, and it will place you in a better growth position once prices begin to rise again.
Remember that the ability to look at your current situation through the lenses of operations, compliance, and quality management is a strategic strength. It gives you a perspective that balances data, business goals, and risk management. Organizations that use this approach will discover ways to do more with less and re-establish growth.
If your organization is weathering the current storm well, then you should take advantage of your balance sheet and relatively strong position to realign operations toward future investments and even better results once the downturn ends.
Firms in a good position can arguably benefit the most quickly from improving operations because they are starting from a strong foundation. That said, operational analysis and management still needs to be taken seriously and given attention. You cannot rest on your laurels.
Companies that commit to improving their operations and/or maintaining their already high standards will see their fortunes improve much faster than firms that ignore issues during the downturn. Firms practicing operational excellence or working towards it will be more agile and responsive to market changes during this cycle and future ones.
Operational excellence is an asset in itself and times like these prove it. Take a look at your operations now and be willing to make changes, so that you are ready for the future. If you don't, then rest assured that your competitors will and it will cost you.