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Understanding Key Performance Indicators (Lest We Forget...) - Part 3

By Greg Alvarado, Chief Editor at Inspectioneering Journal. May 13, 2013
This article is part 3 of a 3-part series.
Part 1 | Part 2 | Part 3

 

This is my third of three posts on Key Performance Indicators (KPIs) based on requests and discussions on the issue. View the previous blog posts here and here.

In summing up a discussion of KPIs, it is hard for me to discuss KPIs without recognizing their vital relationship between Integrity Management (IM) and Process Safety Management (PSM) programs and activities. This is also reinforced by:

  • Numerous observations and recommendations made at the US CSB (United States Chemical Safety Board’s) meeting in August 2012 on the preliminary findings of the Horizon/Macondo incident in the Gulf of Mexico;

  • Various incident reports on the CSB web site; and

  • API RP 754; among other reports.

Let’s consider a few examples of traditional and non-traditional indicators. It is important to understand how the indicators will be used and for what purpose. If they are used to make comparisons at one facility, at a minimum one must be consistent from iteration timeframe to iteration timeframe in order to ensure that improvement or lack thereof is properly compared on the same piece of equipment or area. If they are used to compare multiple pieces of equipment, the assessment system models for metrics must be normalized so that all equipment is compared on the same level playing field.

Let’s reinforce the importance and gravity with a quote referencing past performance by Trevor Kletz, from Learning From Accidents:

“Accident investigation is like peeling an onion…Beneath one layer of causes and recommendations there are other, less superficial layers. The outer layers deal with the immediate technical causes while the inner layers are concerned with ways of avoiding the hazards and with the underlying causes, such as weaknesses in the management system. Very often only the outer layers are considered and thus we fail to use all the information for which we have paid the high price of an accident.”

Reinforcing the importance of understanding indicators and the connection between equipment integrity management and process safety management:

“Business managers must understand what can go wrong – however unlikely – and focus their attention on proactive measures to ensure that failures do not occur. Key to achieving this is the development of leading indicators that focus on the process safety elements that matter, thereby providing a true measure of how an asset is performing.

Some industry sectors and some companies are showing the right level of leadership in process safety. Those who have embraced the identification and reporting of real and meaningful leading and lagging indicators can demonstrate that it has driven performance improvement that is already delivering substantial bottom-line benefits as well as inherently safer and more reliable operations…”

The vast majority of industry calamities, where integrity management played a role, did not happen because a single layer of protection against such events failed. It is because a series of layers were violated, hence the importance of understanding the relative role of KPIs and integrity management in the PSM process.

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