LEADING INDICATORS
Rev. 0
- HSE Development, Corporate HSE, 24 Sept. 2012
1
Borouge reference line 2006
© 2006 Borouge
CONTENTS
• USE OF PERFORMANCE INDICATORS
• LIMITATIONS OF LAGGING INDICATORS
• DAILY LIFE EXAMPLES OF LEADING INDICATORS
• BODY WEIGHT
• DRIVING – DASHBOARD INFORMATION
• BIRD’S TRIANGLE
• LAGGING AND LEADING HSE INDICATORS
• BEING REACTIVE OR PROACTIVE
• RELATIONSHIP BETWEEN LEADING AND LAGGING INDICATORS
• LEADING PERFORMANCE INDICATOR AS A PART OF PROCESS
• METHODOLOGY FOR USING LEADING INDICATORS
• BOROUGE STORY
• CONCLUSION
• BENCHMARKING
2
Borouge reference line 2006
© 2006 Borouge
USE OF PERFORMANCE
INDICATORS
•
Performance indicators provide information on:
•
What is happening around us;
•
How well we are doing;
•
What has happened so far (i.e. Historical Performances);
•
Warning of impending problems or dangers to enable us to take
appropriate action.
3
Borouge reference line 2006
© 2006 Borouge
LAGGING INDICATORS –
LIMITATIONS (1)
•
Lagging indicators may not be sufficient
because of
•
The time delay between the actions we
take and the resulting outcome(s) i.e.
information too late for us to respond.
For example, by the time ill effects from smoking are apparent it may be too late to
avoid ill health.
4
Borouge reference line 2006
© 2006 Borouge
LAGGING INDICATORS –
LIMITATIONS (2)
•
For plant operations where there is
potential for disastrous outcomes but
the
likelihood
of
such
events
is
extremely low, the absence of these
events (lagging performance indicators)
may not be a true indicator that the
potential dangers are being proactively
managed.
The outcomes are so severe that one can’t wait for it to happen to find out that the
implementation of the HSEMS has been effective or not.
5
Borouge reference line 2006
© 2006 Borouge
LAGGING INDICATORS –
LIMITATIONS (3)
•
Lagging indicators may fail to reveal
latent hazards that have a significant
potential to result in a disaster.
The fact that a car’s engine is running doesn’t mean that it is not loosing oil and will
not breakdown before the next service. Regular checking of the oil level is a
sensible precaution and a leading indicator.
6
Borouge reference line 2006
© 2006 Borouge
BODY WEIGHT
•
Comparing our weight to the healthy
weight for somebody of our age and height
can provide advance warning of potential
future health problems such as Heart
Disease.
•
Here body weight is the leading indicator.
Advance warning of weight increase can encourage changes in diet and life style to
reduce the risks.
7
Borouge reference line 2006
© 2006 Borouge
DRIVING – DASHBOARD
INFORMATION
•
Lagging Indicators:
•
•
The odometer value provides the
measure of how far we have
travelled.
Leading Indicators:
•
Petrol gauge, temperature gauge and
oil
indicator
lamp
provide
information allowing us to take
action before the car stops through
lack of fuel or engine seizure.
Lagging indicators provide information on the outcomes of our actions i.e. results from
past actions.
Leading indicators measure the inputs to the process that affect future outcomes.
8
Borouge reference line 2006
© 2006 Borouge
BIRD’S TRIANGLE
•
Fatality
In many cases HSE performance
is reviewed by assessing lagging
indicators.
Lost Time
•
Lagging indicators like First Aid,
Medical recordable, Lost time,
Medical
Recordable
Fatality are outcomes.
•
First Aid
Reactions to outcomes, though
important, are like reacting to a
stock market change rather than
Near Miss
incident occurred
9
Borouge reference line 2006
© 2006 Borouge
predicting the change to protect
investments.
LAGGING AND LEADING HSE
INDICATORS
Fatality
These are the
outcomes
we try to
avoid
Lost Time
Lagging
indicators
Medical Recordable
First Aid
Near Miss – incident occurred
Leader site visits; Leader Audits
Leading
indicators
Permit to Work audits; JSA Audits; HSE Training
Safety Critical Equipment PM; PM backlogs
the
Closure of actions - investigations; audits; HAZIDS
Risk
Safety Observations; Proactive Near-Miss reports
10
Borouge reference line 2006
© 2006 Borouge
see
Reading
the signs of
emerging
risks
BEING REACTIVE OR PROACTIVE
Reactive feedback and control
Input
Desired
Value
Error
Detect
Process
+
Controller
Output
Accident &
Incidents
Frequency
Lagging indicators monitor the outputs from
the process. Corrective action is taken if the
outputs deviate from the required standard.
The control is reactive as corrective action
cannot be initiated until the unwanted
outputs have occurred.
11
Borouge reference line 2006
© 2006 Borouge
Proactive feedback and control
Input
Process
Leading Metrics
Desired
+
Value
Error
Detect
Controller
Output
Accident &
Incidents
Frequency
Leading indicators monitor inputs to the
process at stages before any adverse
outcomes have occurred. Leading indicators
provide feedback earlier in the process and
enable proactive corrections to be made
before any adverse outputs have resulted.
RELATIONSHIP BETWEEN LEADING
AND LAGGING INDICATORS
•
The effectiveness of leading performance indicators can be improved by
better understanding the contributions that different inputs make to the
desired output performance;
•
When using leading performance indicators, it is important to periodically
analyze the relationships between the leading and lagging indicators that
are being used and measure effectiveness.
12
Borouge reference line 2006
© 2006 Borouge
LEADING PERFORMANCE
INDICATOR AS A PART OF PROCESS
•
Monitoring the petrol level without
responding when the gauge shows
near empty or relying on a faulty
gauge that always shows more than
half full will not prevent the car
stopping when it runs out of fuel.
Leading performance indicators should be seen as a part of a process to guide
actions that will improve future performance.
13
Borouge reference line 2006
© 2006 Borouge
METHODOLOGY FOR USING
LEADING INDICATORS
•
Identify where
weakness
or
improvement;
•
Identify what can be done to counter a
weakness or deliver on improvement
opportunities;
there are potential
opportunities
for
•
Set SMART performance standards for
the actions identified;
•
Monitor performance
standards;
against
Act
Plan
if the outcome
deviates from
the plan
correct it
The activity of
improvement
Check
Do
the
•
Take corrective actions to improve
performance;
•
Repeat the process, using the continual
improvement model.
Measure the
Outcomes
Execute
the plan
Effective use of leading performance indicators can help to take the “luck” out of
managing health, safety and environmental performance.
14
Borouge reference line 2006
© 2006 Borouge
BOROUGE STORY – FROM LAGGING
TO LEADING HSE INDICATORS
INDICATOR
TYPE
Year 2010
KPI’s
Year 2011 KPI’s
% Serious Potential Incidents with RCA
and Incident Investigation within 30 days of
the incident occurrence.
% Serious Potential Incident action close
out within 30 days of target date
LEADING
Closeout of
actions from
process
safety
incidents (%)
Year 2012 KPI’s
% Serious Potential Incidents & TRI Investigation
% of Serious Potential Incidents & TRI
Investigation Action Close Out
Occupational Health Improvement Program
Milestones
Emergency Exercises completed against
plan
Emergency Exercises (with OSC/IMT/CMT
Involvement)
Observation Tours
Observation Tours
HSE Training sessions completed against
plan
HSE Training (attendance)
HSE CES assurance verification tasks
completed within 30 days of plan
HSE Critical Equipment Systems tested within 30
days of planned date
Physical changes implemented following
Management of Change process
Management of Change – Physical changes
implemented following MOC process
TRI
Frequency
TRI Frequency
TRI Frequency
Quantity of Waste held at Ruwais Facility
(Tons)
Energy (MWh/Ton)
Flaring (KT)
Flaring KT of Hydrocarbon (YTD)
Flaring KT of Hydrocarbon (YTD)
LAGGING
New / Development in year 2012
15
Borouge reference line 2006
© 2006 Borouge
CONCLUSION
•
By measuring the input to a process, leading performance indicators can
complement the use of lagging indicators and compensate for some of their
short coming.
•
Leading indicators can monitor the effectiveness of the control systems and
give advance warning of any developing weaknesses i.e. show the condition of
systems before failure occurs. In this way, they help to control risks and
prevent accidents.
•
Leading performance indicators can also measure the inputs that people are
making to the management process. Used in this way they have a role in
promoting and monitoring a positive culture towards improving HSE
performance.
•
Leading performance indicators provide information that helps the user to
respond to changing circumstances and take actions to achieve desired
outcomes or avoid unwanted outcomes.
•
Leading Indicators should be objective and measurable; and provide
information that guides action to improve performance.
16
Borouge reference line 2006
© 2006 Borouge
BENCHMARKING
•
Leading performance indicators can be used for industry benchmarking;
•
This can be done using a set of leading performance indicators that are based
on the actions that are considered to be of most importance for improving the
performance of the Industry as a whole;
•
Performance standards can be developed based around the desired level of
Industry Performance;
•
The benchmarking process can help to identify areas of weakness compared to
other organizations and opportunities for improvement. These can provide a
fruitful source of data that can be developed further for the organization’s own
leading performance indicators.
17
Borouge reference line 2006
© 2006 Borouge
Thank you for your time!
18
Borouge reference line 2006
© 2006 Borouge