PSM Training - 1 month payback demonstration for Confidential Client

Overview

The commissioning of Process Safety Matters PSM Fundamentals training course for Front Line Supervisors in a Hydrocarbon Processing Plant demonstrated a 27% increase in Leading Indicator Metrics demonstrating a 1 month payback.

Process Safety Management Training - A 1 month Payback…..Really!

I know what you might be thinking…..this guy’s got to be kidding, right? Everyone knows that while PSM Training is one of the leading indicators which prevent you landing on the Accident Triangle, from where you’ve got nowhere to go except up (towards damage, injury and fatality). I get that. But the problem has been that the cost of PSM Training is very quantifiable, while the benefit is nebulous. After all, you can’t do a Controlled Experiment on seeing the impact on outcomes before and after carrying out PSM on a workforce.

Or can you?

Our client, which owns and runs a major HC processing facility, has done exactly that. And is cautiously encouraged by the results. They commissioned us to prepare a customised PSM Fundamentals Training course for their front line supervisors. We ran this course in August 2015. The supervisors were then encouraged to informally disseminate the knowledge gained to their teams. Ahead of the course, they designed a leading indicator ‘spot check’ audit program, by which they were able to measure compliance with good PSM behaviour. The audit looked at level of compliance with procedures (especially during Abnormal Operations), degree of empowerment response (indicated by level of unsolicited reporting during TBTs) and willingness to act autonomously when deviation occurred. They then repeated the repeated the process in December 2015 (which was deemed to be a sufficient ‘bedding in’ period for the information communicated).

And the results?

The 2nd audit indicated a 27% improvement in the PSM behavioural metrics. My client, which has an excellent safety record when measured in terms of TRIR, felt that it’s level to LOPC events was unacceptable (leading to around 1.3% of uptime). Typically, they were experiencing 1 major unplanned SD, of average 2 day duration, due to PS deviations per train per year. Now we hope you can see where this is going. We are now finally able to quantify the benefit of PSM Training, based a set of technical and financial figures:

Assumptions

  • TR4 Incident caused 2 day Production SD
  • Client income $6bn / year
  • TR4 is one of 5 identical trains
  • All trains run for av 350 days per year
  • 1 suite of PSMF Training is for 4 x 2 days x 15 supervisors
  • Benefit of Training is that frequency of TR4 type incident falls from 1 / year to 3 / 4 years

PSMF Cost

  • 4 sets of 2 day training for 15 supervisors (cost of additional salary)
    • 4 x 2 days x 15 x $100k / 200 days
    • $60k
  • Cost of Running / Hosting courses
    • 4 x 2 x $10k / per training day
    • $80k

 

Total PSMF Cost = $140k

PSMF Benefit

  • TR4 down for 2 days
  • Lost production value
    • 2 x $6,000k / (5 x 350)
    • $6,857k
  • Before PSMF – TR4 type incident happens 1 / year
  • After PSMF – TR4 type incidents happens 3 / 4 years

 

 PSMF Benefit $6,857k / 4 = $1,714k per year

PSMF Payback

PSMF Payback $140k x 12 / $1,714k = 0.98 months