Sustainable Safety Management: Incident Management as a cornerstone for a successful safety culture

Bernd Freibott, Director Business Development / Global Services Sustainability Hub SAP SustainabilityLabs Markdorf, Germany May 30h, 2011

Making use of incidents driving health and safety performance and safety culture globally

Presentation outline

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Incident Management in the context of EHS: The reality is complex! New approach to Incident Management: The central pillar of a well-run safety culture and prevention Lessons Learnt: What to keep in mind when setting up a new and efficient Incident Management

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Sustainability > EHS > Incident Management A structured view, the SAP Solution Map
Executive Management Environment, Health & Safety Operations Supply Chain
Strategy Management Engagement & Corp. Citizenship Benchmarking & Analytics Materiality & Assured Reporting Financial Risk & Performance

Environmental Compliance

Industrial Health & Safety

Process Safety

Risk Assessment & Reduction

Emergency Management

Facility Energy Management

Production Energy Management

Carbon Management

Natural Resource Management

Smart Grid Participation

Sourcing & Procurement

Traceability & Recall

Green Logistics

Supply Chain Design & Planning

Product

Product Compliance

Material & Product Safety

Recycling & Reuse

Sustainable Design

Product Footprint

Consumers

Personal Footprint

Mobility

Residential Energy

Human Resources IT

Diversity

Strategic Workforce Management

Labor Compliance & Human Rights

Travel Management

Availability, Security, Accessibility & Privacy

Green IT

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Sustainabiliy - EHS - The reality is complex! EHS

Purchasing Material Mgmt. Production Warehouse/ Distribution

HAZ MAT Mgmt.

WASTE Mgmt.

3rd Party Contract Mgmt.

INCIDENT Mgmt.

IND HYG. SAFETY

Financials/ Cost Accounting

ENV COMPLIANCE

OCCUPATIONAL HEALTH
Plant Maintenance

Individuals
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CLAIMS/ DISAB Mgmt.

HR

Challenge EHS Global Strategy

Federal Facility Compliance Act China-RoHS

Multi Language Support

OSHA / OHSAS 18001

ADR/RID

ISO 14001

Kyoto-Protocol

Clean Air Act

RoHS REACh GHG Management Permit Management IPP (Guidline EC 2001/68)

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I(n)solated Point of View as Source of Error

No man is an island!*
Any isolated approach is bound to fail.

*John Donne (1572-1631),It appears in Devotions Upon Emergent Occasions, Meditation XVII

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Key Questions concerning EHS

Key Questions
What information do I have to collect? What processes I have to set up? Whom do I need to inform or involve? How to design processes? How can I monitor the efficiency of my EHS activity and processes? How can I better manage preventive activity to avoid accidents? EHS Manager

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EHS Objectives for a new approach

Gain visibility and control - align objectives, monitor and analyze performance, report, and Analytics & Performance Mgmt.drive continuous improvement Production Report Proactively reduce risks - systematically identify, assess, and control risks to prevent incidents and management system failures
Enterprise Risk Management

Improve EHS performance - automate EHS processes in core operations to improve compliance, productivity, and operational continuity
Integrated EHS Management

Asset Safety and Reliability

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Maximize asset productivity - optimize maintenance to improve asset reliability and process safety
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Incidents Have High Hidden Costs and Risks Indirect Costs Exceed Direct 5-10X
Risks $1
Brand damage

Costs
Direct costs of injuries, illnesses

$5-50
Production and quality problems Criminal sanctions

Indirect: Uninsured costs of property damage, process interruptions, etc. Lost wages, lost productivity, retraining, admin, etc.

Whats possible? For a 10,000 employee company with average safety performance: 20% reduction in TRIR = $4M savings
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Renewed Focus on Incident Management as Lever to Reduce Operational Risks

Executive Management
Reduce operational risks: Improve productivity, ensure business continuity

Customers
Business won or lost on safety performance

Regulators
Increased costs; possible fines, criminal prosecution

Investors and Community

Demand proof of effective risk management

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Safety and environmental risks to the enterprise How to reduce risks at a lower cost?
Accidents happen, 270 million accidents/year

Regulations violated up to $1 billion loss/incident

April 14, 2009

Safe Workplace

Invista Settles With EPA, Violation Fixes Will Cost $500 million

Protect Environment

Safe Products

Product Safety impact $800 billion losses/year

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Swiss Chesse Model Various failures for one incident!

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The idea
What we see, what we notice, what we report, what we investigate. What we do not see,

1%

99%

10 29 Lost Workday Cases Serious 300 Minor Accidents Recordable Injuries Injury

1 1 Major Fatal Fatality Injury accident 30

what we do not notice,

30 3,000 300 Accidents Near Misses (estimated)

This is the room what we have no clue about, for

what we have no IMPROVEMENTfigures about.

600 Incidents 300,000 Incidents (near miss) At-Risk Behaviors (estimated)

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The idea

1%

Chipping of the tip does not remove the iceberg.

I need to know more about whats under water.

99%

I need to get everyone involved. I need to get good quality data on what goes on under water. I need to get a picture on the current situation but also on its development. I need to attack the iceberg from below.

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What Does This Mean for Your Business? How Does this Impact Health and Safety?
How Can We:
Consistently implement an incident management process across global operations? Efficiently support an active Safety Culture? Know with confidence our incident performance and gain better visibility into trends and risk hot spots? Effectively implement a proactive risk management approach and drive continuous performance improvement? Streamline and ensure the accuracy and timeliness of our health and safety reporting? Embed the health and safety function into our operations to ensure compliance and add business value across our value chain?
SAP AG 2009. All rights reserved. / Page 25

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Objective of EHSM Incident Management

1 Fatality

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Look into all kinds of safety relevant events

not only incidents but also safety observations and near misses

Lost Workday Cases

300 Recordable Injuries

3,000 Near Misses (estimated) 300,000 At-Risk Behaviors (estimated)

Involve every employee of your organization into the process

everyone can provide / record information encourage safety culture

Ensure consistent and breach less management of all information

no manual re-capturing of information clean handover of information keep track of progress

Develop and provide a clear picture based on the gathered facts

dashboard and statistical analysis to point out where and how to improve safety
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SAP EHS Management: Health and Safety Overview and Capabilities

What is it?
SAP EHS Management: health and safety functionality provides an enterprise-wide platform to help assure the safety and well-being of employees and communities

Hazardous Substance Management Substance management Material safety data sheet import Rule-based classification

Industrial Hygiene Work area management Risk assessment Measurement management Safety measures

Incident Management Incident recording Incident investigation Incident processing Incident reporting

Occupational Health Health surveillance protocols Scheduling with OH planning cockpit Medical service Injury/illness log Reporting Vaccination Brief consultation OH reporting

Standard operating Release of hazardous procedures materials for purchase Person-related Hazardous substance exposure profile inventory Substance information system and tracking
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SAP EHS Management: Incident Management

Focus Areas
Support Safety Culture
Extending Incident recording to all employees

Provide Process Guidance

Support, standardization, and monitoring via delivered standard processes and work flows

Help Ensure Compliance

Automatic determination of relevant reports and audit proof documentation

Promote Incident Prevention

Flexible analytical capabilities to achieve transparency of risks

Improve Data Quality

Individual inquiry forms for different roles with SAP Interactive Forms software by Adobe

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Incident management process and integration Best practice seamless information flow and visibility
HCM, EAM, Fleet Management, Business Partner, Material Management, Health Risk Assessment Data and Business Process Integration
Incident Prevention Initial Reporting Capture all incidents types Record near misses and safety observations Simple initial reporting by anyone, online or offline Incident Processing Incident Investigation

Reporting and Analysis

Set targets Monitor performance Manage exceptions Monitor process flow Identify, mitigate risks Deploy lessons learned and best practices

Gather all relevant information File regulatory reports Investigate, determine cause Assess risks Trigger corrective actions Manage actions and closeout Prevent incidents

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Initial Incident Recording Description, Challenges, and Business Value

Incident Prevention
Initial Reporting Incident Processing Incident Investigation Reporting

Intuitive sequence as guided activity Flexible adaptability with respect to sequence and input structures Ability to capture non-structured information for occasional untrained user Easier to customize structured information gathering

Initial reporting online via Web or portal and offline via offline forms
Various input scenarios for different initial reporter group and competence

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Example incident reporting user interface

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Incident reporting: easy process

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Incident Processing Description, Challenges, and Business Value

Incident Prevention
Initial Reporting Incident Processing Incident Investigation Reporting

Challenge:
Need for systematic investigation approach Information gathering from various involved individuals Varying legal needs due to jurisdiction or local/regional regulations Various stake holders in incident process Difficult monitoring of information and process flow Identification of involved assets/environmental impact Risk assessment and trigger follow-up measures
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Solution:
Robust and safe process guidance Flexible adaptability with respect to structured info gathering Adherence to schedules due to reliable task management Automized info request or testimonials Structured incident investigation and risk assessment Automatic choice of relevant legal/ regulatory reporting Comprehensive documentation tool

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Incident Processing Screen Example

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Incident Reporting Description, Challenges, and Business Value

Incident Prevention
Initial Reporting Incident Processing Incident Investigation Reporting

Challenge:
Standardized KPI setting and monitoring Difficult diffuse processes

Solution:
Standard pre-built KPI reports Flexible ad-hoc reporting with userfriendly tools and graphics Flexible process monitoring (e.g., bottleneck analysis) Dashboard integration for managers Compliant regulatory reporting with automatic determination of the right form and approvals by simultaneously tracking the timelines during the process Automized tractability of activity stream

Compliance with regulatory standards

Ad hoc reporting as basis for incident investigation and prevention Monitoring and benchmarking Exception management

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Incident Management Analytics

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The Business Case for Incident Management Process Improvement Reduce Costs and Risks
Improve productivity
Decrease Costs

Standardize and streamline incident management processes

Lower IT support costs

Better assure compliance Enforce standard processes in operations
Reduce Risks

Quickly detect and correct hazards Proactively reduce operational risks Keep license to operate

Creating Business Value

Protect Brand and Revenue

Protect brand and reputation Win more business

Implement an effective safety culture enterprise-wide

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Quick Start Implementation Program: In 12 Weeks* You Can:

Reduce time and cost of incident investigation and follow-up, while improving results.
Automated incident management

Implement actionable safety program Enable all employees to quickly and easily report incidents, near misses & observations.
Simple capture and reporting

Gain visibility to trends and hot spots to proactively reduce risks and prevent incidents.
Real-time dashboards and analytics
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Wrap Up

Make incident recordings as easy as possible

Promote incident recording heavily Establish stable and efficient process for prevention Integrate your systems in order to manage risks effectively
HR and Contractors Asset Management Fleet Management Occupational Health Industrial Hygiene and Safety Cost Accounting

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Thank You!
Contact information: Bernd Freibott Director BD Global Sustainability Services Hub SAP Sustainability Labs Dornierstrasse 3 88677 Markdorf - Germany BERND.FREIBOTT@SAP.COM