The Business Case for Process Safety The Center for Chemical Process Safety (CCPS), a not-for-profit organization associated with the American Institute for Chemical Engineers, counts as its members more than 70 of the world’s leading manufacturers of chemicals, petroleum products, pharmaceuticals, and other related materials, as well as insurance companies and others that serve these industries. At the urging of the CCPS Advisory Board, an executive panel consisting of more than 20 senior industry executives, CCPS undertook this landmark study to identify the business case for companies to implement a strong Process Safety Management system. CCPS was assisted in this study by four Chief Executive Officers, the senior executive members of its Advisory Board, representatives from its member companies, and other industrial stakeholders. The study identified four distinct business reasons that cause a company to benefit from a strong Process Safety Program CCPS thanks you for sharing the “Business Case for Process Safety” with your company. If you would like assistance with this presentation, more information about CCPS, or general information about Process Safety, please contact CCPS at 212-591-7319 or ccps@aiche.org
The CCPS Advisory Board members include large company executives such as Arnold Allemang of The Dow Chemical Company, as well as executives from much smaller companies. This study showed that benefits of Process Safety accrue to companies of all sizes.
No further elaboration required
Qualitative Benefits Corporate Responsibility Impact the way the company is viewed by its customers, regulators, employees, and the public Business Flexibility License to Operate: The better you manage Process Safety, the less likely you are to have intervention from communities, regulators Increased business options: Another way of saying this is “Self Determination”, having a greater ability to get into the business you want, when and where you want to This study identified qualified benefits that the participants recognized, but did not attempt to assign economic values to these benefits
Quantitative Benefits Risk reduction You do not plan to have accidents, but you must bear the costs when accidents occur Alternatively, your insurance must bear these costs, with short and long term implications on premiums Sustained value The rigorous, integrated management systems required for Process Safety favorably impact quality, reliability, efficiency, and other parameters which directly impact the bottom line The study identified economic values realized by study participants for these quantitative benefits.
Process Safety A comprehensive system of good design and proactive operation that protect your company’s technical, operational, and human resources TECHNOLOGY Accurate process safety information Process hazard analyses Well defined safe operating procedures and practices Managing changes to equipment, technology, and personnel Designing inherently safer processes FACILITIES Mechanical integrity of plant equipment and software Preventative maintenance Safety reviews PERSONNEL Employee involvement and training Contractor management Incident investigation Auditing for improvement
Corporate Responsibility Slide is self explanatory Look for opportunities to link these topics to opportunities in your company Reminder: The benefits described on this and the next several slides were gleaned from interviews with Chief Executives and Senior Executives of large, medium, and small operating companies across a range of industries.
Corporate Responsibility Slide is self explanatory Look for opportunities to link these topics to opportunities in your company Reminder: The benefits described on this and the next several slides were gleaned from interviews with Chief Executives and Senior Executives of large, medium, and small operating companies across a range of industries.
Business Flexibility - Freedom to Operate Slide is self explanatory Look for opportunities to link these topics to opportunities in your company In particular, speaker may wish to describe examples pertinent to their company of situations in which any of the above have restricted business options or slowed the progress of a project Reminder: The benefits described on this and the next several slides were gleaned from interviews with Chief Executives and Senior Executives of large, medium, and small operating companies across a range of industries.
Business Flexibility - Freedom to Operate Slide is self explanatory Look for opportunities to link these topics to opportunities in your company In particular, speaker may wish to describe examples pertinent to their company of situations in which any of the above have restricted business options or slowed the progress of a project Reminder: The benefits described on this and the next several slides were gleaned from interviews with Chief Executives and Senior Executives of large, medium, and small operating companies across a range of industries.
Risk Reduction Most of the above are self explanatory. Protecting market share arises from avoiding having customers switch to an alternative supplier after an accident renders your company not capable to supply.
Risk Reduction The most obvious financial impact of an accident is the equipment loss and the impact of human injury Business interruption can also have a significant effect However, the loss of productive management time in responding to a major accident, time that could otherwise be spent by on growing and maintaining the business, may be the biggest and longest term impact of that accident It is also worth noting that individuals the chain of management may be held criminally liable for accidents resulting from failing to meet their obligations. More than the executive’s job may be at risk
Risk Reduction It is easy to see that your safety performance in one part of the country or world can impact your performance in other parts of the world. It is also readily apparent that an accident at a key supplier’s site can adversely impact your performance It is also a fact of life in this industry that an accident in an unrelated company can negatively impact your company For example, significant accidents can drive regulatory bodies to develop new regulations, which impact the entire industry Therefore, companies benefit from carrying the message of process safety across the company, through the supply chain, and throughout industry
Sustained value data These data were supplied by participants in a CCPS workshop in 2001. The actual data points obtained, stretching over this range, were taken from seven example facilities: Olefins Olefin derivatives Batch pharmaceuticals Batch emulsion polymerization Polystyrene Specialty polymers Petroleum refining
Sustained Value By meeting the obligations of Process Safety, which we must do to be a responsible corporate citizen, maximize our business flexibility, and avoid losses, we focus productive attention on these areas, with positive benefits, such as those listed here on the slide.
Sustained Value Continued listing of benefits Consider involving the audience to identify additional opportunities
Sustained Value Continued listing of benefits Consider involving the audience to identify additional opportunities
Sustained Value Continued listing of benefits Consider involving the audience to identify additional opportunities
Sustained Value Continued listing of benefits Consider involving the audience to identify additional opportunities
Sustained Value The data compiles the process safety value-added reported from the seven study facilities The largest savings were in the areas of Productivity – a direct top-line impact to the business Maintenance – a major cost reduction
As mentioned before, the rigorous attention to detail brought by Process Safety Management touches on many, if not all, areas of production and process development Process Safety Management must be the most robust – this just makes sense since the consequences of a Process Safety incident can be the most severe. The management framework for Process Safety is therefore readily adaptable and expandable to accommodate other required and voluntary management, such as those listed
Realize the benefits to achieving business excellence through process safety management Personnel at plant and corporate levels. Include accountability for operating unit executives Continual learning. The more you learn about process safety, the better your results in all four benefit areas. You can learn from courses, books, and by networking with peers in other companies Link your management systems based on the rigor of process safety management For example, goals could be around: implementation or integration of systems reduction of incidents, leaks, etc. reduction of off-site consequences reduction of on or off-site risk Use measurements to drive performance and communicate goals On a period basis (for example, every three years), revisit your process safety program and revalidate process safety studies to maintain improvements and to progress further
CCPS has three “Technical Steering Committee” meetings each year at which company representatives can share their experiences in process safety and discuss topics of current relevance At any time, CCPS has 10 – 15 projects underway, each aimed at developing technical and management guidance for process safety topics. Involvement in projects allows participants to learn in depth as well as to contribute to the body of industrial process safety knowledge CCPS’s annual international conference is the world’s premier annual process safety event, featuring attendees, speakers, and attendees from around the world CCPS sponsors companies are a community of networked peers that can help each other address process safety challenges. The CCPS publication program includes over 80 titles. Find the book you need at www.aiche.org/ccps/products
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