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On July 10, 1976, the engineering world changed. There was an industrial incident in Seveso, Italy, when dioxin (the chemical that causes chlorache, and can be lethal in small quantities) was released by accident. About 600 people were evacuated from their homes, and about 2000 people were treated for dioxin exposure.

That was the day the lawyers entered the world of engineering. After that, without fail, when there was an industrial incident, the law changed.

Let me be the first to tell you … the law is about to change.

Many of you will be aware of the oil leak in the Gulf of Mexico that began on April 20, 2010. The magnitude of the leak is continuing to grow, as new evidence continues to emerge. In addition, many of our basic assumptions are being found to not be valid, or may be not be “valid enough”. Consider the most basic of assumptions … that oil floats on water. The original estimate of the size of the leak was based on surface observation, because oil is supposed to float on water. Undersea plumes of oil were found – which have not yet had time to float to the surface, causing the estimate of the leak to grow by 500% (from 1000 to 5000 barrels per day). Some estimates put the size of the leak much higher. I am not in a position to say what is the size of the leak, but it is significant.

Another tragedy is that 11 people were killed, but that is not what is going to cause the law to change. The spill is going to cause the law to change. It is “odd and sad” that death to workers does not cause the law to change. Instead, it requires outrage of voters to cause the law to change.

I cannot tell you how the law will change, but I expect the following:
Laws requiring industries to clean up offshore oil spills to a satisfactory level. Unfortunately, satisfactory may be defined by the voters, meaning better than before any incident.
Laws requiring industries to develop a “superfund” to pay for these clean-up projects. These superfunds may be on a state, national, or regional international basis. The GCC group of countries (Kuwait, Bahrain, Saudi Arabia, Qatar, United Arab Emirates, Oman, and Yemen) may be one example of an international group. The countries that share the North Sea oil and gas (Norway, Denmark, Netherlands, and United Kingdom) may be another.
Laws requiring companies supporting these industries to prove they can work to prevent a spill from occurring
What will be interesting is to see how the lawmakers go beyond the offshore oil industry in these new laws. For example …
Will these new laws apply to inland waterways?
Will these new laws apply to spills on soil instead of on water?
Will these new laws apply to only the oil drilling industry, or also to oil shipping?
Will these new laws apply to mining companies?
Who will be the ultimate responsible group of companies? Looking at the Gulf of Mexico spill, there are three companies heavily involved (BP, Halliburton, and Transocean). Each has a different ability to respond – both technically and financially.
What will nations with national oil companies do? Since “the government cannot sue itself”, when the government oil company causes a spill, what is the government supposed to do?
And … please allow me to speculate for a moment …
What would have been the international response had this happened a few hundred kilometers away – in offshore MEXICO instead of offshore USA. Would the world be viewing this has another problem with the developing world trying to do too much?
What would have been the international response had this happened offshore BRAZIL – one of the world leaders in deepwater drilling. I do not know the intricacies of the south Atlantic ecosystem compared to the Gulf of Mexico ecosystem, but would the world news media be covering that event daily?
What would have been the international response had this happened offshore Arctic RUSSIA? This is the time of year that significant quantities of polar pack ice melt. Floating ice bergs would make clean up more difficult and potentially impossible, and the lower water temperatures would make some of the chemical options less viable.
The law will change. The ramifications of these law changes have not yet been comprehended.

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One of the more high profile bad management decisions is playing out as I write this … a professional rugby league team here in Australia has been found to have systematically abused and violated the league’s salary cap rules for the past 5 years. During that time, they won 2 premierships. The fallout has been “interesting”, but the collateral damage is what I would like to discuss. This bad management decision appears to have done the following:

Damage the reputation of the players (at the time of this writing, it is not clear if they were or were not willing participants in the salary cap scandal)
Damage the reputation of the current and past employees of the club
Damage the reputation of club sponsors
Damage the reputation of the sport
Jeopardise deals for stadium usage and broadcast rights
Alienate fans, supporters, and club members
Reduced attendance at games, with reduction in income for venue catering personnel
Reduce demand for team apparel, with the follow on effect of less apparel being made, and subsequent potential job losses in the apparel sector
Disenfranchise the young, causing them to participate in a different sport, (and I admit this is a stretch) jeopardizing the future of the league due to a lack of players.
And … the people and organizations on the list are collateral damage – they did nothing wrong, but are suffering the consequences of bad management.

Industry and government are both littered with examples where bad management has resulted in significant collateral damage. While I am not going to give names or specific examples, let’s look at some general examples.

Outsourcing. Outsourcing is a market based decision, and can provide short term gain. However, once something is outsourced, control is lost. Loss of control equates to loss of vision, loss of long term goals, and loss of the ability to use something for benefit. When government outsources infrastructure, history shows us it works as good or better less than half the time – meaning most of the time it works worse. Industry outsourcing departments has not had the same lack of success, but the failures have been more spectacular. Outsourcing human resources and IT departments has resulted in the occasional breach of a sensitive database, or a lack of accountability of staff compared to long-term contractors. Governments tend to follow guidelines, where private enterprise looks for ways to not follow these guidelines as a way of improving profit. Large corporations (with a reputation to protect) have established corporate policies which are followed, while smaller corporations (which are often on the receiving end of outsourcing) do not have these policies in effect. One of the best examples of “bad outsourcing” happened within the past few years when a large police force outsourced management of human resources. The outsourced company followed all specifications, but did not secure the database – it was not identified as a requirement. The database was hacked, and all personal details of every police officer entered the public domain. Bad management caused collateral damage.

A secondary effect of outsourcing is the ability to divide the responsibility so there is no single point of contact for anything but the most trivial issue. A few years ago, a new stadium was built here in Australia. It was “state of the art” with a “high tech” ticketing system. Because it was a new stadium, the existing transport infrastructure could not cope with the demand. There were software issues with the new ticketing system. I do not remember all of the other issues, but the result was about half of the crowd did not get into the new stadium until after halftime. One thing I do remember is the media discussing the problems with the pertinent companies. The result was the CEO of the stadium saying “not my fault”, the CEO of the transport company saying “not my fault”, the CEO of the ticket management company saying “not my fault”, etc. Bad management caused ill-will – another form of collateral damage. Deferral of key maintenance. Delaying maintenance is always tempting – as individuals we probably do it with our homes and automobiles – but statistically it is a form of gambling. If we defer maintenance and nothing happes, we win. If we defer maintenance and something happens, the downside can be significant. if there is an incident involving a system where scheduled maintenance was deferred, the public outcry could be extremely loud – potentially to the point where politicians will change the law.

Bad management can cause collateral damage in a variety of forms. There are other examples, but I am sure you can see the issue. In summary, good management can strive for years to create something good. It can be goodwill between a factory and a village, an industry and government, or government and citizens. Bad management can destroy the good work very quickly, and the collateral damage will affect those outside of the “guilty group”.

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Years ago I learned about the concept of “industrial ecology”. In involves industrial facilities constructively working together with neighbouring industrial facilities to better manage local resources and issues.

Not only does it make good economic sense, it makes good community, social, and environmental sense. And it is very applicable today – just like it was applicable years ago.

So … why is it not done more often? The normal answer is … “it is not in our core business.” I find that answer interesting, because I thought that increasing income, reducing expenses, and improving corporate image is always core business.

Let’s consider some examples that I have observed.

A small chemical company was very interested in reducing electrical costs. They purchased electricity from the grid, and paid two prices … one for consumption, and one for peak power. The peak power portion is used by the power companies to provide peak capacity in their power plants. Of note was the fact that down the road from the chemical plant was an aluminium smelter, which had its own dedicated power station. The load on the chemical plant was a very small fraction of the load on the smelter, and it is likely the chemical plant could be serviced without an increase in the size of the power station. Working together, the aluminium smelter could sell power to the chemical plant at the same consumption cost, but no fee for peak power. The aluminium smelter makes a profit selling surplus capacity, and the chemical plant has a reduction in electrical costs because the peak power fee is eliminated. Win-win.
Another small chemical plant was located next to an oil refinery. Here, the two companies do work together closely, sharing many things. The chemical company feedstock is waste from the refinery, and the chemical company shares in the cost of security, canteen and basic utilities (such as fuel and cooling water). Shared expenses always cost less. Win-win.
A steel forming facility was located adjacent to a hydrocarbon fractionation facility. The steel forming facility purchased fuel gas from the grid to run its ovens. The hydrocarbon fractionation facility had a stream of low value gas from purifying some of its products, and it was excessive for their fuel needs. An effort was made to sell this low value gas from the hydrocarbon fractionation facility to the steel forming facility, but the “marketing people” made the process too hard. The result … low value gas is flared from the hydrocarbon processing facility, and the steel forming facility continues to buy fuel gas at market prices. A win-win opportunity lost.
A group of companies in the same area agreed to pool fire fighting resources. They interconnected fire water ring mains, allowing them to operate in either stand-alone mode or connected to other facility mode. Training exercises were shared, and ultimately each facility agreed to provide personnel to fight any fire as required. Training costs were reduced, and security of firewater and fire fighting personnel were increased. Win-win.
A coal gasification facility was built – with part of the syngas being used to make power and the balance being used to make commodities. Naturally, the power station used boiler feed water. To utilise low grade heat, the boiler feed water was circulated around the complex to collect the low grade heat – reducing the load on the fuel and steam system. As part of the design, this circulating boiler feed water was used as a SOURCE of heat for such items as building heat and heat tracing. Any steam could then be preserved for power production, or running the process. Win-win.
There are other examples. One is fabrication shops. Once there are enough industrial facilities, light and heavy maintenance shops can open in the neighbourhood, and additional opportunities can be opened for industrial ecology. For example, a fabricating shop would have a heavy load on compressed air, but would be a nominal 8-hour day operation. The surplus capacity for the remaining 16-hours could be sold to the continuous processing facilities. Again, win-win.
I am sure there are many more where the opportunity to work with the neighbours can be mutually beneficial. Please tell us about your examples – we would love to hear about them.

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I was speaking with a friend that is a project manager, and he was telling me about a new project to install a new air compressor / dryer / receiver system for an existing facility. The new air system would provide air for recently completed and planned organic growth. And I was amazed at the problems he was having – until I thought about it.

He was being asked to install a system that no one takes seriously into a facility, but if his system does not work, the entire facility does not work.

And … for something as basic and well established as compressed air, why are we still finding ways to get it wrong? The most basic issues are frequently re-visited for many new projects, and existing facilities are still creating “lessons learned” stories. Why? Why have we not learned to learn? We have been using compressed air since 1800s when it was used for mine locomotives. Since then it has been used in pneumatic tools and controls in numerous facilities around the world. Why are there still problems?

Let’s look at some of the issues with compressed air that we seem to never learn.

Compressed air is dangerous. A simple search of websites such as youtube will show examples of how an organisation tried to use pneumatic-testing instead of hydro-testing to save a few dollars … and the result was an explosion. A small leak will dissipate a significant amount of stored energy … when the fluid is a liquid. But when the fluid is a vapour, the dissipation is trivial. Tony Sofronas states in an article in Hydrocarbon Processing magazine (September 2006, page 119) that (using an example from the article) a 10 kilogram end cap will drop about 1 metre away from the system when pressurised with water (to the circumstances in the article). In the same circumstances, when pressurised with air, the end cap will travel at about 200 kilometres per hour over a distance of about 20 metres. In addition, I have lost track about how many times I have been in a HAZOP while reviewing a compressed air system and the team tends to “mentally shut down”. After all … it is only air.
Material selection. After over 100 years, we still do not have comprehensive guidelines on what to use for compressed air piping. People are constantly looking for a lower cost material, but our efforts have often been unsuccessful. Reduced CAPEX often creates increased OPEX. Some regions have difficult environments, and material selection is based on external corrosion issues. My project manager friend told me about the corrosion of coastal Southern Peru / Northern Chile. The combination of coastal and desert environments is brutal on metals … with many systems requiring painted stainless steel. Most places do not have this problem, and material selection is usually based on internal corrosion and fluid management. While I have not seen everything, I have learned stainless steel often has only one problem and that is high CAPEX. Other materials (carbon steel, galvanised steel, PVC, polyethylene, etc) all tend to have higher OPEX than stainless steel for a variety of reasons.
Inventory. This is one we seem to get correct most of the time, but occasionally we get it wrong. From my experience, the biggest problem with insufficient inventory is that the response of the compression system is not fast enough to keep pace with variable demand. One of the good things about this problem is that it is relatively easy to rectify … just adding volume (usually in the form of another receiver) is often all we require to fix the problem.
Dryness. Companies in colder climates will almost always use desiccant dryers which dry air to about -40degC – and they tend to have very reliable compressed air systems. Companies in warmer climates often use refrigerated dryers, which dry air to about +4degC, and realise significant CAPEX savings. Anecdotally, the companies with refrigerated dryers tend to have more problems with their air systems. This may be because they have air with higher moisture content, or because they tend to look for ways to reduce CAPEX (which often involves an increase in OPEX).
Air Quality. This issue was potentially a major issue for my friend, because (due to organic growth of the facility) my friend had to deal with vehicle emissions as a potential contaminant in the air inlet. Unburned diesel and compressed air do not sound like a good combination.
Source Compressor and Driver. This is one area where we have made very good cost reduction decisions in the design of air compressors. Compared to 30 years ago when fixed speed motor driven reciprocating compressors were the norm, the progress is very impressive.
We would like to hear about your compressed air systems, or (better yet) your horror stories about compressed air systems. Please contact us to tell us about them

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While the obvious answer is … if the project KPIs (Key Performance Indicators) are met, then the job is done well, is this answer good enough? The global financial crisis was brought on in part by organisations meeting their KPIs. So it is clear to me that the KPI approach in isolation is not adequate, and potentially short sighted. It is a valid method, and should not be scrapped, but by itself it is probably not universally adequate.
The project manager has other tools available – such as audits. Speaking from first hand experience, I hate being audited for anything. I consider it an insult to my professionalism. But … I have learned to accept them. An auditor provides confidence to the project manager that I am doing my job well. A good audit result means my credibility goes up. A non-compliance in the audit gives me a tangible item to improve my performance – which will become good for me.

So … how does a project manager decide when to do an audit, and what kind of audit is required?

There are numerous audits (ISO9001 audits, safety audits, compliance to internal corporate procedures audits, tax audits, etc). Some are initiated by a project execution plan. Others are initiated by a concerned project manager. Some are one-off, others are on-going. But one thing about audits is constant … any non-compliance is a problem that needs to be addressed.

I remember one of the best project managers I ever had. He possessed an uncanny ability to know when something was going onto the critical path about 2 days before it happened. He would then go ask the lead engineer about it, and the problem was avoided. On one project with an extremely aggressive schedule, he approached me quite frequently. While I was able to keep to the schedule, I was not happy with the way the project was progressing. He sensed this and organised a schedule audit for me and my discipline. While I was originally insulted by the “special treatment”, the audit found ways for me to improve my performance. I implemented the recommendations, and not only was the project successful, but I became a much better engineer because of it. I am forever grateful to that insightful project manager.

I recently met one of the most respected specialists in Process Safety in Australia. While we never mentioned this verbatim, I got the impression he feels there is a need to audit the performance of safety audits (such as HAZOP studies). Compliance with IEC61882 may not be good enough for many risk assessments. Having participated in many HAZOP studies and risk assessments, I will agree with him.

Other “things” that may justify an audit

Effectiveness of the spam filter on your email. Mine is quite good, but not perfect. The other day I found a normal client email in my spam folder. I have learned the best path forward for me is to leave the setting alone, but check the spam folder daily. So far I have not had any spam in my inbox, and just the occasional non-spam email in my spam folder.
Filter performance. A perfect filter will provide perfect separation of the “good stuff” and the “bad stuff”. While it is normal to measure the performance based on the amount of bad stuff that passes through the filter, should we also consider the amount of good stuff that is trapped with the bad stuff? For a drinking water filter, the amount of good stuff trapped with the bad stuff is trivial, but how about a process where the trapped good stuff can be a hazard?
I am sure there are others.

Have you had an interesting audit? Please tell us about it, and with your permission we will put it in a future newsletter.

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I am sure everyone is familiar with the concept of the triple bottom line (economic success, ecological succes, social responsibility success), so I will not elaborate on the three components.

As I write this, the UN climate change meeting in Copenhagen has completed, with an outcome that many would call disappointing. One possible reason for the result was that governments had trouble reconciling their environmental national interest with their economic national interest. And … the meeting required simultaneous cooperation of over 150 nations. Sounds difficult, doesn’t it?

I am not going to use this newsletter to say if or how we should manage carbon emissions. Instead, because there is some global momentum for something to happen, I instead want to ask the question …

Is it possible for industry to show governments how to reduce carbon emissions?

History is filled with examples where industry showed government how it could be done. The current practice with ensuring diamonds are not “blood diamonds” is one example. Governments were pivotal in creating the Kimberley Process as a way to manage the sale of diamonds that were being used to fund civil wars against legitimate governments. Industry (the World Diamond Council) then created a system of warranties to meet these requirements. It gives companies and nations some freedom on how to meet these requirements. For example, every diamond mined in the Northwest Territories of Canada is laser inscribed and entered into a database. They are then able to charge a premium because each stone is extremely unique, and can be verified with complete certainty of how it was collected – right back to the mine.

So how can industry show government what to do? The current corporate culture of using the triple bottom line could be one mechanism. For example, one very simple way is to report the grams of carbon produced to put an item on the shelf. Consider a can of paint. If one company says “we only produced x units of carbon in delivering this can of paint to your store”, they could use that as a marketing tool. People could then decide to use the environmentally responsible paint (open and transparent, data available) or the potentially environmentally unresponsible paint (no information … “they must have something to hide”). This will then cause other suppliers of paint to label their products – and make a big deal if they are lower.

This starts the process. One company gets a competitive advantage, others catch up. They determine how much carbon they produce, and if lower, can announce they are more environmentally friendly. And the naturally competitive process of the market can drive things to a natural conclusion.

At this point, governments can enter the situation. They can then work to ensure the manner of reporting carbon is uniform and consistent, so the consumer can make an easy comparison.

What do we get?
A benchmark
A reduction – although the amount of reduction will not be known, but the process will be started.
A process in place that is working
It is also at this point that governments can start to do other things with carbon, because they have the information and it is managed. Some countries that were very passionate at Copenhagen (such as the island nations) could introduce a “carbon tariff”. By itself, one nation probably could not make this work, but a collective effort of island nations in a region (such as the Pacific Island nations, or the Caribbean Island nations) might have enough collective size to cause something to happen.

If we learned one thing from Copenhagen, it is that governments are not willing to fund carbon management with taxes. Even though the amount of money in the world is finite, using taxes to collect the money is not desired. Another mechanism of collecting the money for carbon management is needed, and it is very possible for industry to cause the change to begin.

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The information in this article is entirely anecdotal.

I recently delivered two unrelated training courses in the United Arab Emirates.
One was a public course. There were 12 delegates from 4 companies (and maybe more importantly, 4 countries).
The other was an in-house course. There were 13 delegates, and because it was an in-house course, they were all from the same company.
Both were very challenging and rewarding experiences for me as the “trainer” – and I put trainer in quotes because I also learned a great deal.
But the differences between these two courses (from my perspective of evaluating the performance of the delegates, not from the perspective of course content) was quite significant, and I cannot help but wonder if the in-house environment was less conducive to learning than the public session environment.
In the public session, the delegates were very willing to share their experience, analyse the problems of other delegates, offer encouragement, swap stories, swap jokes, and generally actively interacted with each other. Eventually, all became comfortable with everyone else in the group. The delegates were not disrespectful, but were very willing to engage in lively discussion.
In the in-house session, the delegates had worked together (in some cases, they had worked together for years). The companionship was good but different – with the discussions tending to focus on general work issues rather than training issues.
Feedback from the delegates in both sessions was positive and that the delegates benefitted from the training. But from my perspective, the public session was livelier and more interactive, and I am 100% certain more was learned in the public session than the in-house session.
I then reviewed my notes on all of the training sessions I have run in my career. In reviewing my notes, I believe my observations from the United Arab Emirates was not unique – I believe almost every public course has been a better course than every in-house course I have ever run – just purely because of the cross mix of delegates.

From this, I can anecdotally conclude that training sessions work better when the delegates are from a mix of organisations.
With an in-house session, the delegates are probably familiar with each other, and are less likely to interact in a way to learn something new from each other.
With a public session, the delegates are meeting for the first time. There are more opportunities to learn – not just from the trainer, but from the other delegates.
In addition, in-house delegates tend to be more intimidated and less likely to constructively interact.
Training is not about the trainer delivering the material, it is about the delegates learning. The trainer will not have a 100% success rate. But … if one delegate learns from the trainer, that delegate can then interact with the other delegates, increasing the knowledge of all. I have learned that we learn more through dialogue than monologue, and monologue is what happens with the delegates do not interact.

If a delegate can teach another delegate something (because my message was not effective) then both learn. The teaching delegate learns because he must formulate and understand all information in his mind before explaining it. It is win-win.

Now, there are benefits of in-house training over public training.
Lower cost
No travel cost
No venue cost, as an under-utilised meeting room can be used instead of leasing a venue (usually from a hotel)
In an “emergency”, management can pull the delegates out of the training to attend to the “crisis”
Material can be customised to be company specific, with real company situations
All of these tend to lower the per delegate cost of training – it is very measureable and tangible.

For this reason (lower cost) I expect in-house training will remain popular and potentially more popular than public training. That is … until we can develop some new measurements of the relative success of public training.

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Recently, we delivered a training course on IEC 61508 and 61511 (the two standards that form the basis for many safety instrumented systems in the process industries). The course was developed by another company, and it does a good job of showing how other “things” supplement safety instrumented systems. One of the best examples from the course was a fence. The fence reduced human access to a dangerous area, and the risk reduction factor was determined to be about 10. This means (if we use SIL terminology for a non-instrumented system) the fence was a SIL 1 safety system.

Now … the standards discuss the need for ongoing proof testing of the safety instrumented systems, in an effort to find “dangerous undetected faults”. These are the faults that can cause the system to not work when it needs to work.

One delegate asked a fantastic question … “how do you proof test a fence?” When you consider that a proof test is not an audit but a performanced based demonstration, and when you consider management of change, it is an outstanding question. And it begs another question … should safety non-instrumented systems be scrutinised to the same level (looking for systematic faults) as safety instrumented systems? And if you answer “yes”, how is it done in a proof-testing environment?

The class was able to create two scenarios where the integrity of the fence could be tested. I am not going to describe the shortcomings, but you will clearly see they are not ideal.

The first scenario involved a “test” of the fence and the permit to work system. It would have to be staged with knowledgeable people to better manage the unusual situation.
The responsible employee (potentially the safety engineer for the owner company) would conceive of the need for a “maintenance activity” inside the fence. The maintenance activity would be pertinent to a warranty.
A group of people would show up one day with pertinent documents, showing authorisation for work to be done inside the fence. These people would be knowledgeabe in the situation, but would pose as normal skilled and unskilled labour personnel.
They would then produce a “tool” that would not fit through the fence gate. This would mean some of the fence would have to be dismantled to use the tool. And, because the tool was required for “warranty” purposes, it becomes extremely important that this tool be used. As the class discussed this issue, it became clear the tool would need to be special – we would not want a small crane to simply lift the tool over the fence. A device permanently mounted to a vehicle could be a good option for this tool.
At the last moment (just before the fence is dismantled, or when the plant manager says the warrantly is no longer worthwhile), the people posing as skilled and unskilled labour would “confess”.
The robustness of the permit to work system, and the fence, would have been proof tested. It is possible a systematic error in a “SIL 1” system would be identified.
Naturally, this will cost money to set up and execute the test. There are some risks, but the cost and risks potentially are of the same order of magnitude as proof testing of safety instrumented systems.

The second scenario involved a project. Again, it would have to be stages with knowledgeable people to manage the situation.
The responsible employee (the owner’s project manager) would have to orchestrate this test. The project design team would need to come up with a reason to move the fence. It could be for installation of a new item required by the project, but the reason would need to be something that would not arouse suspicion.
The project would proceed with the plan to move the fence.
When the project reached a certain milestone (say … during the HAZOP, or during the construction review) and the problem with relocating the fence had not been detected, the responsible employee would “confess”.
The robustness of the project management of change system, and the integrity of the fence would be proof tested. Again, there are costs and risks, but again they potentially are similar to the cost and risk of proof testing safety instrumented systems.
The class then discussed the ethics of these two scenarios. The similarities to hidden camera television shows (such as “Candid Camera”, “Punk’d”, “Just for Laughs Gags”, and “The Jamie Kennedy Experiment”) is very evident. While it is one thing to use this format for entertainment, it is a completely different situation when using this format to test a safety system. How would this method impact the performance of the employees in real situations? Or in normal situations that were practice drills (would they become more cynical)? With safety instrumented systems, these (by analogy) would be called spurious trips. When using people, these would potentially be called something like “management losing the trust of the employees”.

Now … it should be possible to create a culture where these kind of scenario based tests are considered routine – just like fire drills to evacuate a building. There are other emergency response drills that could be considered scenario based, but it is often known in advance that these are exercises and drills, and not “real”.

Proof testing is an accepted part of safety instrumented systems. Why are they not an accepted part of safety non-instrumented systems? Or are they? Tell us how you proof test safety non-instrumented systems. We would love to hear from you.

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I am noticing an interesting but disturbing trend … companies are cutting back on training.

In his article in the July 2009 issue of “Hydrocarbon Processing”, Heinz Bloch goes so far as to say this about company management and training
“…Management will not support what it deems of little value….” (and I do not think I am taking him out of context).
While I think management sees more than “little value” in training, the cutbacks do seem quite severe.

In my personal experience, about 85% of the training I have received during my career (paid for by my employer) has resulted in a positive payback to my employer. While I do not have firm numbers, my estimate is that return on investment (ROI) over the life of the facility was well over 6, and the payback period was frequently less than 6 months.

Surely good training on a business asset, even in these tough economic times, is good sound economic management, isn’t it? (Forgive me for being cynical, but) What university is producing MBA graduates that decline to invest in a business specific opportunity with ROI=6 and payback of less than 6 months?

In addition, when the recovery begins (and it will), how will companies be able to respond to the new challenges, opportunities, or developments? Those that made an investment in training (and an investment in training is typically a very small number compared to other ongoing costs) will be able to recover and act faster and better, leaving their competitors behind. I understand some companies are in worse situations than others, where there is no liquid cash available (that is another topic, how organisations are managing with invoices not being paid in a timely manner, which impacts the cash flow chain thoroughly from top to bottom). But tough times call for bold and forward thinking contingency plans. Doing nothing = standing still, standing still = no progress, no progress = losing a competitive advantage.

Query … why cut back on training? The usual answer is the need to either cut costs or preserve capital. Those two mindsets are defeatist. Training should be viewed on the asset side of the ledger. Since that disposition will take time to overcome, here is a more practical alternative … why are companies not negotiating with training organisations to deliver training on an alternative structured payment plan? This allows companies to retain cash for longer, it allows companies to keep the skill set of the remaining employees up, and it better positions them for the pending recovery.

Query … why are companies not identifying and quantifying the skills gap now, to better determine what will be required when the economy improves? This allows training companies to use this slow period to develop new products/services, and improve/enhance existing products/services.

When we look at professional sports, sports people continually train. They train for situations that may never happen, but they train. In sports, an amateur trains to get something right, but a professional trains until they cannot get it wrong.

But I guess the ultimate query is … do companies see training as adding to the value of the company AND the employee, or just to the employee?

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While delivering a training course on risk assessment, one of the delegates asked that particular question.

In thinking about it, my answer needed two parts:

1. I needed to genuinely answer his question

2. I needed to not provide a blatant description of myself (while I may not always succeed, I do try to be professional)

So … back to the query … and if you have alternative suggestions, please contact us and let us know.

? Do you require your facilitator to have any kind of certificate / diploma credentials? Some legislation requires these credentials, but that is the exception and not the norm. Check with your appropriate government authority to see if a certificate or diploma is required.

? What special skills do you require, and do you expect your facilitator to provide these skills? You might need the facilitator to fill a role your company cannot fill. For example, if your company is doing a compliance assessment of an existing facility – for the first time – you may want to get a facilitator that has worked with your government authorities, and understands THEIR requirements.

? Do they have references? Ask for them, and contact them. Then (and this is important) ask the references for contact details of other members of the assessment team, and contact them. The reference person will almost always give a glowing recommendation, but another member of the assessment team will give a more balanced appraisal. Find out what the facilitator did well, and what the facilitator did badly.

? What software does the facilitator provide? While you may provide your own software for an assessment, you should ask anyway. A facilitator that has invested in dedicated process hazard assessment (PHA) software has made a corporate commitment to risk assessment. It should therefore be part of their core business. The response does need to be compared to the size of the company. A company with one person (a self-employed risk facilitator) may not be able to justify the investment is dedicated PHA software (which can cost thousands of dollars). On the other hand, a large company that provides only public domain word processing and spreadsheet software is a reason to avoid that company, and their facilitators. NOTE: If you provide your own software, you will need to ensure the facilitator is familiar with the software. One of the most important jobs of the facilitator is managing the data as it is generated, and a facilititator that is not familar with the recording software can become a liability.

? Check insurance. Risk assessment is an inherently higher risk industry than other engineering services. Check that the facilitator has more than the basic insurance requirements. Again, a higher level of coverage shows a corporate commitment to risk assessment as a core business.

? Scribe. Who will scribe the assessment? If you (the organisation hiring the assessor) will provide the scribe, it is vital the facilitator and scribe meet and ensure they can work together. I once was assigned a scribe that had trouble with my accent (note: I am a migrant to the land where I base my employment). I had to spend a few hours having simple discussions with the scribe, until he was comfortable with my accent. On the other hand, some facilitators are also the scribe. A person that performs the facilitator/scribe dual role is often more efficient in recording the minutes, but cannot be a technical contributor to the assessment.

? When does the role of the facilitator end? If the assessment is short, it is reasonable for the role to end after issuing a report. For longer assessments (weeks to months) it is reasonable for the facilitator to be involved in close out actions. Check for references regarding performance outside of the assessment itself.

What is your opinion? We hope you will contact us and give us your opinion.