June 2009
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IChemE Commits to the HSE's new five-point pledge, The Health and Safety of Great Britain
The UK Institution of Chemical Engineers has committed to the UK Health and Safety Executive’s new five-point pledge, The Health and Safety of Great Britain.
Any signatory organisation commits to the following five pledges:
- Agrees to play its part in reducing the numbers of work-related deaths, injuries and ill-health in Great Britain.
- Calls on employers to put health and safety at the heart of what they do and to take a common sense approach to health and safety.
- Commits to debunking myths around health and safety that trivialise the impact of injuries, ill health and deaths on individuals and their families.
- Recognises the importance of health and safety in difficult economic times and the dangers of complacency.
- Pledges to work with the Health and Safety Executive and its partners to Be Part of the Solution.
This blog is very pleased to see the many themes covered in the blog detailed in these pledges. By signing up, the IChemE commits its members to these points. Its now up to all of us to translate these fine words into action.
Posted by Andy Gibbins 30th June 2009
Fire and Explosion in Food Plant
The food firm ConAgra makes Slim Jim beef jerky snacks in its North Carolina factory. From a health and safety perspective, this would be generally considered a low risk operation. However on 9th June, a fire and explosion killed 3 workers and injured 40.
CSB have indicicated the possibility that a gas line, supplying a gas fired water heater, was purged to remove air and vented into the pump room (where the heater was installed) which is an internal room. Source of ignition is not clear at this time.
There were 100 people in the vicinity when the explosion occurred.
Risks such as this are well understood in the chemical industry but maybe less so in other industries. Risk assessment, however, is a relatively simple process and might have picked up this scenario before it happened for real.
Posted by Andy Gibbins 25th June 2009
Chemical Industry Destocking Complete
In the excellent and informative Chemicals and the Economy blog, Paul Hodges gives figures indicating that the phase of destocking in the chemical industry is now complete and 'normal' demand levels have been re-established, albeit at much lower levels than existed pre-recession.
At least this gives us a truer picture of current demand. Reduced auto sales and new house starts have a big impact, particularly on petrochemicals. Growth is expected to return although most commentators believe that the rate of recovery will be slow.
So what impact for chemicals manufacturers? Operating rates of 75% are not economically sustainble and rationalisation will be required. Question is, can the key players work together to achieve this in collaboration or will a dog-eat-dog mentality drive behaviour?
Challenging times.
Posted by Andy Gibbins 22nd June 2009
Consultants Are Gloomy
According to the UK Chartered Management Institute, three-quarters of management consultants expect the recession to last for two years, based on a survey of UK managers. Consultants were markedly more pessimistic than other respondents to the survey, only 61% of whom expected the recession to last this long.
Whilst most consultants claim that business has been reasonably stable, it is clear that consultancy budgets are being reduced as businesses and public sector bodies cut back on discretionary spending.
According to Alan Downey, President of the Institute of Business Consulting “The consultancy projects most likely to survive are those that generate an immediate financial return, and consultants may increasingly be asked to place some or all of their fee at risk, contingent on the delivery of tangible financial benefits. The challenge for consultants will be to demonstrate that our services add real value.”
posted by Andy Gibbins 19th June 2009
Emergency Preparedness
The CSB has produced another excellent video to highlight the need for emergency preparedness. Ideally, we prevent these events from happening in the fist place BUT in the event they do occur, good preparedness can make the difference between a near-miss and a multiple fatality incident.
A good reminder why emergency planning must never be overlooked
Posted by Andy Gibbins 18th June 2009
Collaboration the Key to Cutbacks in the Chemical Sector
According to an article by Reuters in the UK Guardian newspaper, European chemical producers should consider the joint venture route as a means of sharing the burden of chemical site closures.
The article goes on to say that these kinds of pacts could also help to solve the problem of funding expansion projects in emerging markets.
This blog knows from personal experience that site closure is unlike any other kind of project. The strategic thinking process related to closure is initiated in the boardroom, usually several months ahead of an actual closure announcement and is highly sensitive. The actual implementation of the closure is emotionally charged (due to the people impact) and can be complex, with the difference between a well managed closure and a poorly managed closure being several millions of dollars as well as a significant impact on an organisation's reputation.
The idea of collaboration has worked for new construction projects - several current Middle Eastern projects demonstrate this clearly. However, the prospect of coordination of closure projects would represent a paradigm shift for the industry and could require the use of intermediaries to ensure fairness, equality and consistency of approach.
Posted by Andy Gibbins 15th June 2009
Refinery and Petrochemical Plant Construction Costs Falling
According to IHS Cambridge Energy Research Associates, the cost of building new refineries and petrochemical plants fell 9 percent between the third quarter of 2008 and the second quarter of 2009, after several years of steady and significant increases.
According to IHS, the cost decline we've seen so far is mostly due to the reduced cost of commodities. Costs are expected to fall further due to factors such as reduced workload with the major contractors.
The blog thinks that this is a mixed blessing. Clearly for the contractors, the fact that order books are weaker is bad news. For manufacturers, inflation in this area has been running at very high rates, making capital investment very expensive. The end of this bubble should make things easier at a time when spending is being cut due to the impacts of recession.
Posted by Andy Gibbins 12th June 2009
HSE Myths
This blog is a great advocate of effective HSE governance in organisations. Good governance means active involvement in HSE at all levels of an organisation, framed by a strong HSE policy and backed up with effective procedures and practices.
Good HSE is a strength to an organisation and it is very much the case that companies with strong HSE values are often those that are also successful financially.
HSE is a way of being. It should not be used as an excuse for inactivity. However some organisations like to hide behind 'health and safety' as an excuse for not doing certain things and these stories are much loved by the press. The UK Health and Safety Executive (HSE) publishes an excellent 'myths of the month' section which exposes some of the most common rumours in circulation.
Posted by Andy Gibbins 11th June 2009
CSB Video - 'Anatomy of a Disaster'
The blog has mentioned previously that this video is a must see. In times of recession it is highly relevant as cost pressures dominate. The video lasts 55 minutes; so including coffee, this is an hour very well spent.
Postes by Andy Gibbins 9th June 2009
CEFIC Expects 11% Drop in Chemical Industry Output
The European Chemicals Industry Council CEFIC, has indicated that it expects Europe's chemicals output to drop by 11% this year and then show a gradual improvement in 2010.
This will mean that low capacity utilisation and temporary plant closures will continue to be a fact of life for many chemicals producers.
For chemical manufacturers, this means that a short-medium term strategy is required based on this reality. The blog believes that this strategy should be focused on the elements outlined below. Communication and good dialogue with the workforce is essential in order to minimise uncertainty.
In order to survive, proactivity is an absolute must in this situation.
Posted by Andy Gibbins 8th June 2009
Cost Cutting in Recession
As recession has been very much the blog's theme in June, I have decided to share some views on cost cutting. Undoubtedly this is a business imperative for many organisations at present.
As an opening thought, I'd like to share a recent discussion with a University Professor with much experience in HSE. He postulated that 10% of turnover could be lost as a result of poor safety performance. This gives a very big number for all organisations. Is the number correct? Difficult to say - but if you sit down and tot up the figures, the results may be surprising.
As noted previously, the blog's view is that the role of a manufacturing manager is essentially made up of 5 broad areas of focus and all of the activities of a manufacturing unit can be grouped under these main headings.
Safety, Health and Environment
People
Asset (getting the most from it)
Customer (satisfaction in terms of quality, delivery, performance etc)
Costs
All of the focus areas are interlinked, so an organisation needs to be excellent in all 5 in order to be truly successful. The flip side is that when making any changes related to one specific area, the management of change process has to include an assessment of the impacts on the other elements.
For example, take SHE. If a company gets this badly wrong; it will affect the people, the customer reputation, the costs and will certainly mean that the asset is not being used most effectively.
This doesn't mean that cost cutting is wrong. Clearly during the current recession, it has to happen BUT it absolutely must be done using a highly considered and holistic management-of-change approach.
Posted by Andy Gibbins 4th June 2009
People Management in Recession
Managers of chemical and process plants have to manage a wide number of issues. The blog likes to group these issues under 5 headings; SHE, People, Customers, (managing the) Asset and Finance. If you stop and think about the range of activities covered, they can be reasonable grouped under these 5 headings. A balance scorecard approach can be used to measure and track performance in these areas.
People management is always very important and becomes even more complex during times of recession as emotion and fear can cloud the judgement of even the best employees. The grapevine becomes red hot as rumours circulate and everyone in an organisation knows that change is likely to happen and at pace. To be an effective, a manager must be conscious of the effects of change and have a strategy in place for dealing with its effects.
The attached clip by Professor Nigel Nicholson, Professor of Organisational Behaviour, London Business School gives some excellent food for thought
Posted by Andy Gibbins 3rd June 2009
Feedback on Process Safety During Recession
The previous post on the topic of process safety during recession has led to much discussion and debate.
The culture and values of any organisation are very much tested during these times. It is when the going gets tough that the true values of an organisation come to the fore.
Leaders and Managers are inevitably under intense pressure to achieve cost reductions in both fixed costs and CAPEX. It is not uncommon for an organisation to impose a blanket reduction (e.g 20% off all budgets). Undoubtedly, some activities will have to be curtailed, projects deferred etc but if this is done correctly and with the right risk assessment process, the impacts can be minimised.
Leading indicators provide an early warning system for things going wrong. The blog believes that it is imperative to maintain such indicators in these conditions. Communication with all of the stakeholders in an organisation will help to maintain the safety dialogue and bring out pertinent concerns.
It's also important for managers and HSE professionals to be prepared to push back where necessary and justify to an organisation why something has to be done in order to address known risks. Clear and coherent justifications are required in such cases.
Finally the blog agrees with those who advocate on-going education during these times. A gentle reminder of high profile cases such as Texas City, Longford, Piper Alpha, Buncefield etc is useful to keep everyone mindful of the consequences of bad decisions.
Posted by Andy Gibbins 2nd June 2009
Process Safety Being Overlooked During Recession
When cash is in short supply, every possible source of cost saving is looked at by organisations. Whilst this is a business reality, groups such as the US Chemical Safety and Hazard Investigation board (CSB) are becoming concerned and are increasingly urging companies to maintain their focus on all aspects of safety and especially PSM.
The blog believes that effective management of change is essential at all times but is absolutely paramount just now. The impacts of changes to hardware, organisation and operating/maintenance philosophy need to be clearly understood. Short term economic gain can have catastrophic consequences if the impacts of any changes are not assessed properly.
Posted by Andy Gibbins 1st June 2009