best-in-class contractor managementsafetyexecutivesny.org/2014 pdc/presentations/best in class...
TRANSCRIPT
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Best-in-Class Contractor Management
Safety Executives of New York
69th Annual Professional Development Conference
April 8, 2014
© 2014 ISN Software Corporation Dallas Calgary Sydney London Los Angeles New York 1-800-976-1303
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• Web-based Contractor/Supplier Information Management
• Collect & review HSE, Quality, Procurement, Compliance and Training
data
• Industries Served:
– Oil & Gas
– Chemical
– Mining
– Manufacturing
– Utilities
– Healthcare &
Pharmaceuticals
Introduction: What is ISNetworld?
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Source: International Association of Oil and Gas Producers. "Safety Performance Indicators – 2012 Data". Report No. 2012s, June 2012.
http://www.ogp.org.uk/pubs/2012s.pdf
Increasing Contractor Hours, Higher Incidents
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Contractorization – Opportunity and Challenge
• Increasing contractorization not necessarily a negative trend for safety
– Bring specialization, skill and equipment
– Enables safe and sustainable operations
• Prime duty for safe operations and environmental
stewardship lies with the owner organization
– Robust strategy needed
– Better risk mitigation
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10 Strategic Elements
1. Establish a clear
communication strategy
2. Are designed to measure
performance
3. Incorporate a risk-ranking
process
4. Follow a three-step due-
diligence process
5. Maintain a qualified
contractor list
6. Establish consequences
7. Address subcontractor
management
8. Follow standardized and
transparent guidelines
9. Integrate with internal
business processes
10. Leverage technology
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1. Establish a Clear Communication Strategy
What
How
Engagement
• A well thought out plan for both internal and external communication
– 99%: U.S. enterprises in the Construction Industry with fewer than 100 employees. US Census
• Zero incidents goals
• Golden rules
• Scorecard status
• Performance and audit gaps
• Timely and consistent
• Traceable and auditable
• Mailings/emails
• Contractor handbooks
• Electronic platforms
• One-on-one meetings
• Workshops / Councils
• Community meetings
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Engagement
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2. Designed to Measure Performance
• If it matters, measure it
• Use both leading and lagging metrics
Leading
• Employee turnover rate
• 3rd Party certifications achieved
• Completed vs. expected trainings
• Completed vs. scheduled inspections
• New/enhanced safety controls implemented
• Observations/investigation results
• Risk assessments and job hazard analyses
• Employee perception surveys
Lagging
• Injury frequency and severity
• Near misses (frequency, trend)
• Fatality or other accidents
• Lost workday rate
• Chemical releases
• OSHA citations (number and type)
• Workers' Comp claims and trends
• Experience Mod Rate (and changes)
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Common Evaluation Components
Percentage of Clients per Evaluated Component in a Centralized Evaluation*
Management
System
Questionnaire
OSHA
Recordable
Statistics
Workers’
Comp.
Experience
Rating
Desktop Audit
of Safety
Programs
Verification of
Insurance
100% 100% 92% 97% 63%
*Based on 232 Owner/Operators and 564 grading configurations
2. Designed to Measure Performance (cont’d)
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Case Study: Chevron Gulf of Mexico
Grade Components
A-B No Restrictions
C Mitigation plan and pre-job meeting required
D Mitigation plan, pre-job meeting required; management
approval in writing; trained HES person on site during work
F Not allowed to be used; VP approval required
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Case Study: Chevron Gulf of Mexico
Contractor Incident Rates by Year
Data Based on an Average of 12 Million Work Hours per Year
• 92% decrease in contractor TRIR* over 10 years
• Optimized contractor base by 42%
• 90% of spend is with A & B contractors
*Based on 200,000 hours
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3. Incorporate a Risk-Ranking Process
• Contractors come in various sizes, capabilities, risk profiles
• Classify risks according to pre-set criteria and matrix
– Potential adverse consequences
– Frequency, duration and / or scope of work
– High, Medium, Low
• Re-evaluate / adjust contractor risk periodically
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3. Incorporate a Risk-Ranking Process (cont’d)
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4. Utilize a Three-Step Due-Diligence Process
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5. Maintain a Qualified Contractor List
• “Quick, we need them now!”
• Proactive, structured process for finding, qualifying,
onboarding, and monitoring contractors
• Builds stronger and lasting partnerships with contractors
• Enhances procurement integrity
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6. Establish Consequences
• Establish, communicate and enforce consequences for
non-compliance
• Develop contracts and agreements carefully
• Eliminate time/effort required to manage challenging
performers
• Provides a base of fewer, safer service providers
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7. Address Subcontractor Management
• Have you ever seen service providers with logos you don’t
recognize on your jobsite?
• Subcontractors typically have a higher likelihood of incidents
• Best practice subcontractor approaches:
1. Ensure they are qualified/monitored to same
level of standards as general contractor or,
2. General contractor required to demonstrate
the same level of rigor for qualifying subs
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8. Follow Standardized and Transparent Guidelines
• Consistency and transparency is a common
challenge
• Utilize a single, well organized database
• Improves procurement transparency
• Minimize duplication and inefficiencies
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8. Follow Standardized and Transparent Guidelines
• Challenges with Dispersed Operations (Kinder Morgan)
Source: http://www.kindermorgan.com/asset_map/
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9. Integrated with Internal Business Processes
• Contractor management as an integral part of the complete
business processes
• Goal is to drive end-to-end risk management
• Examples of Key Performance Indicator (KPI) integration:
– Purchase orders issued only to
qualified contractors
– Site entry ID badges tied to contractor
approval status
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Case Study: Apache Helipass
• Designed to check all required information prior to an
employee/contractor heading offshore for Apache
• Checks core training and drug & alcohol information
0
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• Without technology/automation, contractor management
can become laborious, inefficient and disorganized
• Use of Internet and specialized management tools
– Collect and share information in a secure and
efficient environment
– Reduce duplication and administrative cost
• 59% of best-in-class organizations
use technology to enhance
HSE performance(2)
(2) http://www.aberdeen.com/Aberdeen-Library/6991/RA-envinronment-health-safety.aspx
10. Leverage Technology
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Dashboard: Centralized Contractor Information
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CASE STUDIES
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6.3
3.9
2.39
5.8
3.6
2.06
5.7
3.5
2.01
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
BLS State and Local Government* BLS Private Industry* Actively Managed Contractors**
No
nfa
tal
TR
IR (
Rate
of
Incid
en
t p
er
100 E
mp
loyees)
Nonfatal TRIR (Total Recordable Incident Rate)Public Sector vs. Private Industry vs. Actively Managed Contractors
Public vs. Private vs. Actively Managed Contractors
2008 2009 20102008 2009 2010 2008 2009 2010
*2008 BLS Nonfatal TRIR, http://www.bls.gov/iif/oshwc/osh/os/ostb2071.pdf
*2009 BLS Nonfatal TRIR, http://www.bls.gov/iif/oshwc/osh/os/ostb2435.pdf
*2010 BLS Nonfatal TRIR, http://www.bls.gov/iif/oshwc/osh/os/ostb2813.pdf
** ISNetworld.com
38%
41%
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What Gets Measured, Gets Done
2.54
2.25
1.84
1.191.11
0.91 0.91
0.89
0.87
0.85
0.70
0.75
0.80
0.85
0.90
0.95
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
<2 Yrs 2 to 4 Yrs 4 to 6 Yrs 6 to 8 Yrs ≥8 Yrs
Exp
erie
nce
Mo
dific
atio
n R
ate
(EM
R)In
jury
Ra
te p
er
10
0 E
mp
loye
es (
TR
IR)
Number of Years Participating in a Best in Class Contractor Management System
ISN US Contractor’s TRIR and EMR vs. Years Subscribed24,515 US Contractor’s Data Through March 2013 (99th Percentile Data Used)
2012 TRIR
Current Year EMR
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White Paper on Best-in-Class Contractor Management
Request Whitepaper at : http://www.isnetworld.com/contractorManagement
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In Summary
• What gets measured gets done
(3) http://www.ilo.org/global/meetings-and-events/events/world-congress-on-safety-and-health-at-work/lang--en/index.htm
“Occupational safety and health is first of all a matter
of human rights and respect for human dignity.” Juan Somavia
(3)
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Contact Information
Richard Cerenzio, Director
214.866.4723
Laura Tabor, Sr. Group Supervisor – NYC Office
646.722.4370
Brad McAnally, Sr. Account Supervisor
214.866.4733
www.isnetworld.com
© 2014 ISNetworld
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Questions/Comments?