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On a recent ProcessMAP EHS Leadership Roundtable, Malavika Tohani, Research Director – Operational Excellence for Verdantix, presented her insights on how digital technologies can enable Operational Risk Management (ORM) and Environmental, Health & Safety (EHS) functions to collaborate for comprehensive risk management. Verdantix is an independent research and consulting firm with expertise in environment, health, safety and quality, operational excellence, smart buildings, as well as ESG & sustainability technologies.
Based on independent research and surveys conducted across multiple corporate leaders, Verdantix believes digital technologies close the gap between assets and workers to enable real-time risk management. The availability of such innovative digital technology as sensors, drones, wearables, and software solutions enable cross-functional collaboration, as well as information sharing in real-time for risk management.
Traditionally, the EHS function has focused heavily on individual well-being and safety. EHS initiatives can also have a significant impact on the company’s bottom line. A labor force survey conducted in the UK recently indicated that 6.9 million days were lost due to work-related musculoskeletal disorders between 2018 and 2019. Additionally, an organization’s profitability can be impacted due to fines stemming from EHS violations and insurance claims. Verdantix also recognizes that safety professionals need to be more agile in dealing with “black swan” or surprise events. The COVID-19 pandemic is an example of how corporate safety executives worked with other departments including operations, human resources, senior management, production and maintenance to ensure work safety, and to build business resilience to keep their operations going.
Verdantix recently conducted an Operational Excellence Survey, interviewing 258 executives in operations, maintenance, process safety, and engineering roles. Verdantix found that firms are increasingly working towards achieving operational excellence in three areas:
The survey strongly indicated that EHS leaders now play an integral role in achieving operational excellence results. EHS has transformed from being just a cost center to a strategic and value-added corporate function. Through the integration of digital technologies and more forward-thinking approaches, EHS management has evolved into an innovation-driven value-transformation component of a firm’s operation. The survey also validated that the EHS leaders have a significant part to play in defining the firm’s operational excellence framework.
Additionally, there has been a rapid acceleration in the cloud deployment of EHS and Operational Risk Management solutions, which helps in the transition from high-capital expenditure to spreading the cost over time. With limited budgets and constant focus on faster realization of RoI, companies prefer spending lesser amounts upfront, but rather spacing out the investment over time.
Digital technologies enable real-time risk management across assets and workers. On the workers’ side, historically the focus has been on analyzing the root cause of incidents that have happened, observing safety issues or lagging indicators. The next steps point towards the predictive, collecting leading indicators, looking at behavior-based safety, performing proactive risk mitigation, applying predictive analytics to understand high-risk areas, evaluating incident reports and root causes of safety incidents and what steps should have been taken. Prompts are sent in real-time to workers undertaking the task to minimize risks.
Similarly, on the operations side, real-time asset data monitoring using sensors and IoT-enabled devices, and predictively building digital twins of entire equipment or even facilities, brings in data in real time about where different types of work is occurring, real-time asset health and providing location information about various workers to improve safety with less downtime and increased production efficiency.
Acceleration in the Digitization Process
EHS decision-makers have been increasingly embracing the digitization process. In the aforementioned survey, 84% of the respondents stated that increasing digitization efforts was either a “high” or “moderate” priority for the EHS function, and COVID-19 has only accelerated digitization efforts, particularly with industries such as banking, insurance, the real estate industry and business services.
While the hierarchy of controls, consisting of the five hazard control processes – elimination, substitution, engineering controls, administration controls and PPE Controls, is a well-adopted approach to risk management, by incorporating digital technology into the hierarchy of controls, firms can more effectively manage risk and protect their workers. This includes such tools as drones that can enter confined spaces to perform inspections, and robotics such as the marine autonomous system that BP uses to survey its underwater pipelines, that can substitute technology in place of workers for high-risk tasks. Companies are also utilizing industrial wearables or even augmented reality headsets to communicate in real time.
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