GCPS 2013 __________________________________________________________________________

Best Practice Management of Change & PSSR Process

Michael Bearrow Optimized Systems and Solutions Inc. 8303 McHard Road, Suite 200, Houston, TX 77053 Michael.E.Bearrow@o-sys.com

Prepared for Presentation at American Institute of Chemical Engineers 2013 Spring Meeting 9th Global Congress on Process Safety San Antonio, Texas April 28 May 1, 2013 UNPUBLISHED

AIChE shall not be responsible for statements or opinions contained in papers or printed in its publications

GCPS 2013 __________________________________________________________________________

Best Practice Management of Change & PSSR Process

Michael Bearrow Optimized Systems and Solutions Inc. 8303 McHard Road, Suite 200, Houston, TX 77053 Michael.E.Bearrow@o-sys.com

Keywords: MOC, process safety code, recommendation,

Management of Change (MOC) and Pre Start-up Safety Review (PSSR) are still the most challenging elements of OSHAs Process Safety Management (PSM) standard, the EPAs Risk Management Program (RMP) rule, and now, the US Department of Interiors Bureau of Safety and Environmental Enforcements Safety and Environmental Management Systems (SEMS). Even though the PSM standard has been around since 1992 and the industry has been managing change for several decades, we still can get it wrong, sometimes with disastrous results. The mindful or diligent efforts of many working in concert are necessary to ensure that change is identified, analyzed and executed in a quality way. Just when we get it right on paper and get the workforce upto-speed, we have employee turnover, neglect and sometimes regulatory change. New actors and a constantly changing script make it hard to manage change efficiently and effectively. This paper discusses how the chemical process industry has defined the MOC and PSSR best management practices and how they should be automated. Management of Change (MOC) and Pre Start-up Safety Review (PSSR) are still the most challenging elements of OSHAs Process Safety Management (PSM) standard, the EPAs Risk Management Program (RMP) rule, and now, the US Department of Interiors Bureau of Safety and Environmental Enforcements Safety and Environmental Management Systems (SEMS). Even though the PSM standard has been around since 1992 and the industry has been managing change for several decades, we still can get it wrong, sometimes with disastrous results. The mindful or diligent efforts of many working in concert are necessary to ensure that change is identified, analyzed and executed in a quality way. Just when we get it right on paper and get the workforce upto-speed, we have employee turnover, neglect and sometimes regulatory change. New actors and a constantly changing script make it hard to manage change efficiently and effectively. Many high-profile companies have addressed this challenge by creating and automating standard processes across their manufacturing or production facilities. MOC and PSSR are two of these major processes that have been successfully automated. Technology has been used to automate each step of the MOC workflow, enabling the collection of change

GCPS 2013 __________________________________________________________________________

ideas, formalizing the analysis of the ideas, and documenting the approval and execution of the change. Reports and dashboards can provide visibility of the health or current state of your MOC and PSSR processes. The use of software can enable the standardization of best practices. This paper discusses how the chemical process industry has defined the MOC and PSSR best management practices and how they should be automated. What is a best practice? Best Practice is an overused buzzword, like so many, and they are hard to define. Similar terms include Industry Standard, Best of Breed, Lesson Learned, Core competency, and Customer-centric, Downsizing, Drinking the Kool-Aid, Eating your own dogfood, Granular, Herding cats, Holistic, Low Hanging Fruit, Mindshare, Mission Critical, Management Visibility, Pain point, Return on Investment, Seamless, Touch point, Value-add and Visibility. Fortunately, there is a working definition of a best practice. A best practice is a method, process or technique that consistently shows results superior to those achieved by other means. It is hard to prove that you have developed a standard process--like MOC--that enables your company, facility or organization to achieve repeatable superior performance, but it has been done. Some other terms synonymous with best practices are good operating practice, good agricultural practices, good manufacturing practice, good laboratory practice, good clinical practice, good distribution practice, and Recognized And Generally Accepted Good Engineering Practices (REGAGEP). In the chemical process industry, the PSM standard relies on REGAGEP to ensure facilities adopt best practices. REGAGEP is specified in federal statutes from OSHA and EPA, and is also mentioned in the American Chemistry Council (ACC) Responsible Care Process Safety Code. How do you identify a Best Practice? Everyone would like to be known as the best practice company. Even if you did not create the best practice, identifying them and using them can achieve the same results. If you can tick the box next to these five requirements, then you may have a best practice: 1. 2. 3. 4. 5. Gives a company or facility a tangible competitive advantage. Takes advantage of technology. Improves EHS performance, product quality, and also lowers cost. Gives management more visibility, control and influence over outcomes. Must be a working system; i.e. not a theoretical best practice

The benefits of having such a best practice might separate your company from your competition or keep you from costly business disruption, fines and/or law suits. Many of the best practices have common themes, including: ensuring consistency; standardization; simplifying processes; zero redundancies; leveraging technology and web-based software solutions; and single source for all data (one source of truth). It may be difficult for you

GCPS 2013 __________________________________________________________________________

to prove you have adopted/created a best practice. However, it is easy to identify a best practice when a confluence of large and small companies adopt the same technique or process and are successful. In the context of this paper, we are focused on best practice MOC and PSSR automation. Now that we know what a best practice is, lets define change and discuss how to manage it. What is Change & Why Do We Manage it? Change means to transform or cause to be different. In the chemical process industry, change is omnipresent and required to stay competitive. William Edwards Deming, a famous American statistician, professor, author, lecturer and consultant, once said, It is not necessary to change. Survival is not mandatory." In order to survive, a company must learn, change and continuously improve to survive. Successful change requires you to learn from your experience and the experience of your peers and make changes that will improve your competitiveness. Change is a normal part of business, but uncontrolled or poorly managed change has resulted in some of the worst disasters in the chemical process, oil and gas and refining businesses. According to Ian Sutton, a noted PSM expert, The root cause of all accidents is uncontrolled change. Leaving aside sabotage and other malicious acts, all industrial facilities are designed and operated to be safe, clean and profitable - yet incidents continue to occur. In every case, the fundamental cause of the incident is that someone, somewhere lost control of the operation, i.e., they allowed operating conditions to deviate beyond their safe range. Hence, the proper management of change is the
foundation of all safety and accident prevention programs; an effective Management of Change (MOC) creates an atmosphere of "no surprises".

Whether it is Bhopal, Piper Alpha or Deepwater Horizon, time after time the difficulty of managing change confounds some of the most proven processes of the most successful companies in the world. As a consequence of these disasters and hundreds more, we have rules, standards, regulations and laws to help ensure that companies manage change better. Guidance documents on managing change include the following sources: US EPAs Risk Management Programs for Chemical Accident Prevention (40 CFR PART 68) or EPA RMP US OSHAs Process Safety Management of Highly Hazardous Chemicals standard (29 CFR OSHA 1910.119) or PSM, US Department of Interiors Bureau or Safety and Environmental Enforcement (BSSE) - 30 CFR Part 250 Subpart S - Safety and Environmental Management Systems (SEMS), OHSAS 18001, 2007 revision - ANSI/AIHA Z10-2005. European Union Law Seveso II Directive (see Annex III of EU Council Directive 96/82/EC). API-691 - Risk Based Machinery Management (RBMM) (in development)

GCPS 2013 __________________________________________________________________________

What kinds of change are there? All ideas for improvement require change. No one ever suggests that we should do exactly what we are doing today, tomorrow. This fact is lost on a segment of the chemical process industry who do not think of recommendations as changes. Recommendations should be treated as in-kind changes because they are. They do not have to follow a formal and rigorous MOC and PSSR process, but they are certainly recommendation for change. All change can be separated into three categories: corrective actions; preventive actions; and continuous improvements. Corrective actions are meant to fix something that is broken, or at least to improve efficiency and functionality. These ideas for change originate from accident investigations, incidents and negative operating experiences. Preventive actions can also come from incidents, but are more commonly created from near misses, safety observations, audits, hazard reviews, inspections, emergency response critiques, and/or general surveillance or observations. These ideas for change help ensure that we address upstream issues or causes before a negative outcome (incident, fine, loss) results. The final kind of change is continuous improvement. These are generally ideas for increasing production, reducing manufacturing costs or increasing product quality. No matter what kinds of changes you have, they all should be managed. No matter how good an idea is, it must be analyzed for impact (positive and negative) and executed expertly. Ideas can also be rejected or denied if the risk or cost of implementation exceeds the benefits or value of the change. If the change affects the design and/or operation of a facility, it is likely going to require formal change management or MOC. The diagram below illustrates three kinds of change in the idea universe. Figure 1.0

GCPS 2013 __________________________________________________________________________

OSHAS Two Categories of Change The common way to refer to an idea that requires formal change management as defined by OSHA PSM or EPA RMP is an MOC or Management of Change (Not in Kind). MOCs are managed for changes to equipment, materials, technology, personnel, processes, procedures or anything that deviates from the original design, processes, operating procedures, or maintenance program. In the chemical process industry, we refer to two categories of change. These are Replacement In-Kind and Replacement Not In-Kind. These odd-sounding categories can have ambiguous meanings, but are explained by Ian Sutton, a noted process management expert, as follows:
If an equipment item is to be replaced with one that is functionally identical, i.e., if the new item is built to the same specification as the old one, then the change is "in-kind". Otherwise it is "not-in-kind", and the MOC process has to be followed before the change can be implemented.

The most challenging aspect of managing change is identifying that the proposed modification is in fact a change. 1. Management of Change is needed if the change is Not-In-Kind. 2. A Not-In-Kind change is one where Management of Change is needed. In other words, the terms "Management of Change" and "Not-in-Kind" tend to be defined in terms of one another. The second difficulty to do with the In-Kind/Not-In-Kind decision, noted above, is that all changes are, when analyzed deeply enough, not-in-kind. What is the role of PSSR in the MOC process? Pre-Startup Safety Review, or PSSR, is not actually part of the MOC process per se. It is intended to be a redundant check or review to ensure that an MOC has been implemented in a quality and safe manner. The PSM standard states: The employer shall perform a pre-startup safety review for new facilities and for modified facilities when the modification is significant enough to require a change in the process safety information. Process safety information includes all information about the process. That covers about everything. The pre-startup safety review shall confirm that prior to the introduction of highly hazardous chemicals to a process: Construction and equipment is in accordance with design specifications; Safety, operating, maintenance, and emergency procedures are in place and are adequate;

GCPS 2013 __________________________________________________________________________

For new facilities, a process hazard analysis has been performed and recommendations have been resolved or implemented before startup; and modified facilities meet the requirements contained in management of change, paragraph (l); Training of each employee involved in operating a process has been completed.

When is Management of Change (MOC) Required? OSHA requires the employer to establish and implement written procedures to manage changes (except for "replacements in kind") to process chemicals, technology, equipment, and procedures, as well as changes to facilities that affect a covered process. The MOC procedures shall assure that the following considerations are addressed prior to any change: The technical basis for the proposed change; Impact of change on safety and health; Modifications to operating procedures; Necessary time period for the change; Authorization requirements for the proposed change; Employees involved in operating a process and maintenance and contract employees whose job tasks will be affected by a change in the process shall be informed of, and trained in, the change prior to start-up of the process or affected part of the process; Updates to process safety information and operating procedures.

The industry has been practicing process safety for over 20 years. The definition of MOC and PSSR are well understood. Some companies have developed great procedures for addressing both of these elements in an integrated fashion using Internet-based web applications and powerful database engines. These software systems simplify the complex MOC process and enable standardization, ensuring a higher level rigor which is difficult to impose with paper-based execution. While the best practices for MOC and PSSR work practices continue to evolve, the following sections reveal what is currently accepted as best practice. Best Practice MOC Part 1 Collecting Change Ideas from the Idea Generators As established above, continuous improvement is impossible without implementing change ideas that can come from anywhere. The problem is how can organizations empower their workforce to initiate ideas, capture and evaluate them then act on the ones that will improve the business? Can you imagine how successful your business would be if you could leverage all of the grey matter at your disposal to solve production problems? In order to efficiently and effectively capture these ideas, we need to leverage technology. Using Internetbased software can make it easy for ideas to be collected at the source. The easier we make it for staff members to pass on their ideas, the more of

GCPS 2013 __________________________________________________________________________

these ideas we will receive with time to act on them. One best practice that has surfaced to address this need is to design an electronic suggestion or idea box. Web-based quick entry screens can be accessed using a browser on any company computer to easily suggest a change or improvement. Once these ideas are entered, they are automatically communicated to idea reviewers (supervisors) for vetting, categorization (in-kind or not in-kind) and prioritization. No matter what happens to these ideas, the reviewer must provide feedback to the idea initiators on what happened to their ideas. If an idea results in tangible savings or competitive advantage, a tangible reward will serve to prime the idea generator for the future. You can visualize the best practice MOC process using a series of funnels (below). Changes begin as ideas and they can be entered by anyone in the company into a single quick entry screen and collected in the main funnel. The supervisor is automatically notified that a new idea has been entered for their unit or area. Each idea is meticulously reviewed and categorized as a recommendation or a MOC. Using electronic submission, this centralized collection funneling system is infinitely more efficient and effective than word-of-mouth, a paper system and/or multiple systems that collect and manage ideas. One common system for collecting, vetting, prioritizing and categorizing ideas is a best practice.

Figure 2.0

GCPS 2013 __________________________________________________________________________

Best Practice MOC Part 2 Managing the Recommendations (In-Kind Change) Recommendations can come from audits, incidents, risk assessments, process hazard analysis, emergency response critiques, inspections, reviews, and surveillances. These recommendations are generally ideas for continuous improvement aimed at improving safety, environmental performance, quality or efficiency. Automating and standardizing the recommendation management process makes it repeatable, measurable and more readily understood. Utilizing software that illustrates the correct process and visually progresses users through the workflow is key to the acceptance and the eventual success of the MOC program. Once the idea has been reviewed, assigned and categorized as a recommendation, or inkind change, a simple workflow can be leveraged to ensure the idea is addressed in an efficient manner. A simple database can be used to document the steps in this process, but a best practice is to use software that illustrates the work process on screen as it is executed. The use of a visual workflow to navigate from step to step, showing progress with check marks or color-coding and enabling steps only when precursors (predecessor steps) are satisfied is a best practice. In addition, email notifications should be used to alert persons assigned to manage, approve and execute actions along the workflow. The more proactive the communication and visual the workflow is, the more intuitive it is to the end-user. The workflow presented below is used for hundreds of thousands of recommendations per year. The entire work process is automated from beginning to end. Figure 3.0

The workflow begins in the proposal step or in the idea generators mind. The recommendation proposal must contain a title, a description (what needs to be done), a

GCPS 2013 __________________________________________________________________________

justification (why it is important) and a deadline (when it needs to be done) for getting this idea accomplished and a responsible person (RP). The reviewers of the proposal will ensure the accuracy and the resources are available to address the idea. The next step is to accept the idea into the system and automatically notify the RP. The acceptance is illustrated by a check or tick mark in the proposal icon. After a review of the recommendation, the RP moves to the Approval step. It is in this step that they must decide whether to approve the idea, refute the idea, close the idea as an acceptable risk or decide it needs to be treated as an MOC. Approval of the idea will enable the creation of action items. Refuting a recommendation or addressing it as an acceptable risk should require proof or explanation. These comments must be documented for future reporting and analysis and automatically communicated to the idea generator. Best Practice MOC Part 3 Managing MOCs (Not In-Kind Change) If the idea needs to be managed as a Not in-Kind change or MOC, a more complex workflow is required. Similar to the In-Kind change, it still requires a proposal, acceptance and assignment to a RP, but additionally will need a formal hazard review and planning. In almost all cases, a MOC also requires the pre-startup safety review (PSSR) step, a Startup Approval step and some post startup steps. Because of its complexity and the need to enforce a rigorous process, a live workflow showing what steps are necessary, which ones have been accomplished and which ones are left to do is essential. The workflow below is considered the best practice MOC and PSSR. There are no steps left out and no superfluous steps either. Figure 4.0

GCPS 2013 __________________________________________________________________________

After the acceptance of the idea into the system, the RP receives a notification that they have been assigned a MOC to manage. The next step in the workflow is to Evaluate the MOC. This evaluation process is meant to ensure that the hazards of the change are reviewed, understood and mitigated, or at least a plan for mitigation is created. It is also meant to reveal the process safety information that will be affected and the training that will be necessary. Of vital importance is the creation of an action plan to make sure hazards are addressed and that appropriate training is done and all process safety information is completed. Just identifying the need falls very short of hitting the target. In fact, if you identify the need for action and then do not follow through, you have created the proverbial smoking gun and a red flag for auditors. A smart checklist of questions should be presented to the RP in this step which are based on the category of the change. This eliminates the need to answer questions that have nothing to do with the change. Automation gives you the ability to tailor the evaluation process so that it is more effective and efficient to use. Asking evaluation questions unrelated to the change is very inefficient and can also make finding the right questions difficult. Even more automation can be leveraged to pre-assign reviewers to questions that only they should be answering and configuring automatic/predictable actions with associated questions. Here in this step we can make the comments and closure of all questions mandatory for moving to the next step. Until all questions are closed, we cannot move to the next step, the Approval step. The Approval (to implement) step can be done by a person or groups of people. Their job is to look back at the MOC proposal, review the evaluation that was undertaken and judge whether it was done effectively by the right people. They should also take notice of the mitigating actions that resulted from that review. If more evaluation is required, the reviewer can loop back in the process and create more evaluation questions to satisfy. They should also ensure that actions have been tagged appropriately as pre- or poststartup. If the resulting actions or time have otherwise made this MOC a bad idea to execute, the MOC can be denied at this point with closure comments. Those comments are sent to the idea generator and should be documented in the system. If they are satisfied, then approval can be selected and we can begin implementing the MOC. The MOC Action Step Now the real work begins--updating procedures, marking up drawings, making sure all affected personnel are trained, writing work orders, getting an environmental permit, and all of the other actions required for completion to do a quality job. Once all actions (prestartup) are completed, then you get a check mark over the action icon and we move on to the PSSR step.

GCPS 2013 __________________________________________________________________________

Figure 5.0

The PSSR Step As previously stated, the PSSR is a redundant check to ensure the MOC has been properly executed. Like the Evaluation step, once we have chosen a category of change, automation can be used to ensure that the appropriate PSSR checklists/questions are presented to the RP. This increases the efficiency and effectiveness of this step as well. Once the PSSR is completed, we receive our check mark in that workflow step, and an automatic email is sent to the appropriate manager asking for permission to Startup (Startup Approval). Startup approval is the formal acceptance of the change and the acceptance of the risk associated with it by operations or production. The person who completes this step should review all of the previous work steps in the workflow as well as physically review the work in the field. The last two steps in the MOC workflow are closure items and post-startup actions. Although these are not referred to in any of the governing regulations, there will be nonsafety related activities that are not required to be completed by startup and still need to

GCPS 2013 __________________________________________________________________________

be managed. This best practice will ensure these actions are accomplished and documented. Past Due email notifications are sent appropriately if the MOC becomes past due. There are some distinct advantages to adopting the best practice MOC and PSRRs workflows discussed herein. As the best practice evolves, so must the users of the technology. Refresher training, upgrades and constant tuning and tweaking of the workflow are all part of continuous improvement of an MOC and PSSR program. This minimal investment is a small price to pay to avoid poorly managed changes or the opportunity cost of not collecting ideas from your idea generators. How does Automation help? Automation of the MOC and PSSR process helps in several ways. First, we can collect ideas at the source of the risk, whether it is the plant or on the platform. This is where the risk is and where continuous improvement is accomplished. Furthermore, it is also where most of the practical/achievable ideas for continuous improvement come from. The best practices must be useful and used where the money is made. Technology makes that possible. Todays technology is perfectly suited for collecting, analyzing and sharing ideas. Accomplishing these actions without automation is nearly impossible. The days of paper-based MOCs are almost non-existent because automation makes these tasks more efficient and effective as well as less likely to be overlooked. Reporting metrics and automatic alerts when MOC and PSSR actions are assigned, closed and past due ensure diligence and accountability. Technology can spread the news quickly to those who can create and execute a plan of action and do something with new ideas. Morse code, paper reports and snail mail do not get the job done like email communication and automatic reminders. A central corrective and preventive action tracking software can help ensure that identified issues are dealt with in a safe and timely manner. Idea or recommendation management and action tracking can be accomplished with one database engine worldwide. That means one system to learn, maintain and continuously improve. It also means you have one global change management system to get things done, communicated and for generating reports. Managers can get the visibility they need to measure performance without bothering the people making the money. An automated best practice MOC and PSSR system helps ensure that once you get it right, you keep it right. It also makes sure that change is appropriately identified, evaluated, approved and executed. It also makes poor change management easy to identify and correct through management surveillance.

GCPS 2013 __________________________________________________________________________

Automation is not the goal; best practice is. Like reporting and management visibility and lots of other byproducts of this best practice, the goal is managing change efficiently and effectively. Words of Caution A cardinal sin of MOC & PSSR process automation is using a finance or maintenance technology that you already have to automate your best practice, because you already have it. This will sub-optimize a best practice faster than anything you can do, and it will likely defeat the purpose of the automation. Remember that 95% of your users are engineers, operators and mangers--not accountants, IT geeks or maintenance planners. And finally, you can develop your own best practice MOC and PSSR, but to be successful as best practice software, you must have a full-time MOC best practice expert leading the development. Otherwise there will be several months of trial and error. Make no mistake; software development is difficult enough with unlimited resources, expert developers and patient end users. You cannot automate a business process you do not understand. Remember that managing change is a complicated management system for operations or production personnel. You cannot write a requirements document so thoroughly and clearly that a software development team can automate your MOC best practice workflow without constant oversight from the MOC experts.