Process Safety & Operational Risk Management Survey 2018: Insights from Industry Leaders, Part 2
Published by Laura Dean,
Simon Jones, Head of Professional Services, Petrotechnics, discusses the state of process safety and operational risk management, arguing it is time for a digital makeover.
Having explored, in part one of the Petrotechnics 2018 report, how operational risk management (ORM) and process safety management (PSM) in the global hydrocarbon industry are feeling the squeeze following the low oil price, part two explores the overwhelmingly positive views coming from senior industry leaders about the digital horizon. Here we share how well technologies that fall under the Industry 4.0 umbrella are understood, how far they are deployed today, how they compare to incumbent enterprise systems, and the value they will deliver to safety and risk management.
Ringing alarm bells
The consistent message from the first part of the 2018 report is that there are significant areas of concern in the way process safety and operational risk are perceived and managed. A disconnect between intention and reality persists, and the economic climate has heightened tensions in the way operational risk and process safety are managed on a daily basis.
Of the industry leaders taking part in the 2018 survey, only 38% believe industry operators proactively manage process safety risk. In addition, 86% believe there are gaps between organisations’ intentions for process safety and the daily operational reality on the plant. That number is a notable increase since the 2017 survey when 70% agreed these gaps exist.
In 2018, 56% of respondents said operational risk increased between process safety review periods. This is a decrease from 2017, when 70% said the same. This may indicate increased optimism about the way safety and risk are managed between review periods. However, in the context of the overall survey results, perhaps a more realistic explanation is the gap between intent and reality is not adequately reported to senior leadership.
Delivering tangible improvements
According to independent analyst, Verdantix: “Delivering the full operational risk value proposition is a complex technology challenge” in which organisations have to fulfil the following four requirements:
- Aggregate data from asset management databases, safety reports, and equipment.
- Model asset performance and barrier health with near real time data feeds.
- Analyse interactions between workers, equipment, and external factors.
- Engage user groups with a variety of roles and requirements.
Furthermore, improved use of technology is vital and should be imbedded in every organisation.
An overwhelming majority, 84%, of respondents say organisations use enterprise asset management (EAM) or maintenance management systems (MMS) – as key components for delivering process safety and operational risk management. A further 66% said they used environmental health and safety software (EHS); 65% said they used asset performance management (APM) systems; and 52% reported using enterprise resource planning (ERP) solutions.
However, many of the systems and solutions used today to ensure the delivery and upkeep of process safety design intent, are primarily built and implemented to perform or support other tasks or they manage safety and risk as separate processes - divorced from the day to day operational reality. There is little scope to manage or monitor risk status or deliver tangible improvements to process safety within these applications simply because they are not designed to do so.
The design-to-reality gap
Industry leaders were asked about solutions that specifically address safety and risk issues:
- Only 40% believe companies have effective systems in place for monitoring and managing impaired process safety barriers.
- Only 40% believe companies have effective systems to manage deviations from performance standards associated with critical equipment.
- Only 36% believe companies have systems for managing deviations from management system requirements or expectations.
In contrast, 80% believe operational activities have the necessary management systems in place. The relatively low rates for barrier impairment monitoring is unexpected, given the emergence of regulatory requirements in some parts of the world that now require operators to know and understand the status of process safety barriers on their facilities. However, it may also reflect the quality and effectiveness of the systems involved: they are in place, but they do not deliver. Manual processes are the norm, with a focus on people gathering data from disparate systems to be manually entered into a spreadsheet or KPI application to generate lagging indicator reports. Although these offer leadership teams an overview of asset integrity and may inform long-term investment decisions, they do not provide the hourly, daily, or even weekly review of the risk status that is needed on the ground.
This means the design-to-reality gap is the not the only observable disconnect. A reliance on manual data gather and input to drive KPI applications creates a lag between reported KPI status and actual real time status.
A reason for optimism – the digital future
What is needed is a software layer that can glue together disparate systems and present a common view of risk regardless of the business system producing the risk data.
Technology investment plays a significant role in engaging the frontline workforce to manage work-related hazards and reduce the potential for adverse events. In particular, technologies that digitise cumbersome processes, remotely monitor equipment, and run analysis of operational data in near real time can help to keep risks under control and boost production. Industry 4.0 technology platforms give users the ability to digitalise the knowledge, status, and experience contained within organisations and people, making that information available in easily digestible, visual formats through readily accessible systems and devices. A digital view of the operational reality unlocks greater efficiency, effectiveness, and consistency that operators are looking for while minimising operational risk. As Verdantix says, “Putting a digital twin modelling capability at the heart of technology has the potential to transform the ORM value proposition”.
ORM digital twin solutions are already making a big difference for organisations, from being able to link safety cases to deviations and management systems, to developing an integrated view of process safety and operational risk management systems. Respondents said they expect to use Industrial Internet of Things (IIoT) platforms, digital twinning, machine learning, and predictive analytics more in the future.
Most are starting from a low base. 29% report using predictive analytics today, and 31% say they use mobile workforce applications. This is followed by digital twins and machine learning (both 9%), IIoT platforms (7%), and artificial intelligence (5%). However, the potential growth rates are staggering. Petrotechnics asked industry leaders whether digital technologies were helping process safety and operational risk management now and whether they could help in the future.
Industry leaders predict the value of:
- Digital twins to simulate what-if scenarios will increase nearly fivefold in the future.
- Advanced analytics to understand where to make safety improvements will increase 2.5 times.
- The ability to access a single, shared view of operational reality will double.
- And field mobility to improve frontline safety will increase 1.5 times in the future.
The future is bright… but there is still work to be done
“Technology and data improvements play a significant role in overall industry risk reduction, as the economic benefit of better managing risk is clear – helping operators reduce costs, risks and optimise resources.” – 2018 survey respondent
The good news from this year’s survey is technology strategies are actively being discussed, with a strong intent to improve process safety. 73% of industry leaders said technology would make companies and their work teams safer by reducing vulnerability to high-potential near misses and major hazard events.
In addition, 80% said giving the workforce and management access to real time process safety risk indicators on the plant would improve risk awareness and safety. And 68% said advanced analytics have the potential to help the organisation better understand where to make safety improvements.
The focus on prioritising work and optimising maintenance has always been a driver of technology investment, with an overall goal to improve maintenance plan attainment. Reported in part one, the low oil price added a new dynamic in which these systems are viewed as a means to achieve greater operational efficiency and cost savings. But there is a missing piece to the puzzle – addressing process safety is fundamental to ensuring reliable, profitable operations. In the hazardous industries, ensuring resources are used effectively and with due consideration of risk management, is a question of business survival. Work has to be safe, secure, and all risks managed. This must be factored into any productivity and efficiency calculation. And it’s not just a compliance obligation or an insurance policy.
As the 2018 survey suggests, the industry is looking favourably at the technology needed to manage this 3D chess game. But digital is yet to deliver a decisive checkmate. There is a lot of work to be done, with this positive intent turned into action with proven business benefit. Without this, the intended digital makeover of process safety and operational risk will not become a reality, merely the industry’s pipedream.
Methodology and participants
The Petrotechnics PSM Survey 2018 was conducted online between May and July 2018. More than 100 individuals took part, of whom 53% have worked in process safety, asset integrity and operational risk for more than 15 years. In addition, 61% are responsible for managing corporate or regional process safety. The remaining respondents are responsible for single-site or asset process safety. Respondents represent companies of all sizes and are located around the world: in total, more than 80% are located in North America, APAC, Europe and the Middle East.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/26102018/process-safety-operational-risk-management-survey-2018-insights-from-industry-leaders-part-2/
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