Embed Size (px)
Citation preview
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
• 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?
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
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
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
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
Engagement
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)
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)
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
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
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
3. Incorporate a Risk-Ranking Process (cont’d)
4. Utilize a Three-Step Due-Diligence Process
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
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
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
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
8. Follow Standardized and Transparent Guidelines
• Challenges with Dispersed Operations (Kinder Morgan)
Source: http://www.kindermorgan.com/asset_map/
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
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
• 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
Dashboard: Centralized Contractor Information
CASE STUDIES
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%
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
White Paper on Best-in-Class Contractor Management
Request Whitepaper at : http://www.isnetworld.com/contractorManagement
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)
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
Questions/Comments?
