RBI - Eliminating Misconceptions and Misapplications
Background and Perspective
In the early days (circa 1988-1991) of introducing the petroleum refining and chemical industries in the US, to the idea that RBI implementation could be valuable many fell into the trap of focusing on how much money could be saved, to the exclusion of risk mitigation. This led to some unfortunate misconceptions that led to misapplication that led to dead ends in how to evergreen or maintain effective RBI programs. It is important to “get back to basics”, with an improved perspective, based on experience, of where the evolution of the RBI process is leading us.
The focus on cost savings is not accepted well by regulators and insurers, and justifiably so. Their focus is loss aversion or risk mitigation. While they also saw the benefits in the RBI approach they appreciated that RBI could not be sold to the public or shareholders on the basis of saving operating plants money. Why? Because the public and shareholders would think the benefits of cost savings would overshadow doing what needed to be done to assure a safe workplace and community. While this is not the outcome of a well-thought out and implemented RBI program it could be inferred when the primary selling point was cost savings. Choose your words carefully when explaining the justification for RBI implementation. Consider this a word to the wise for discussions with regulators and insurers.