Learning with Leading Indicators “Working Together for Safety -- Exploiting the Natural Synergy between Safety Disciplines” November 11, 2005 Steve Prevette, ASQ Certified Quality Engineer Fluor Hanford http://www.hanford.gov/safety/vpp/trend.htm

Learning with Leading Indicators Introduction Fluor Hanford is making use of leading indicators and statistical methodology to assist in safety We have achieved significant safety improvements – 87% reduction in OSHA case rate from 1996 to 2005 Use of leading indicators has correlated to a 55% reduction in OSHA case rate over past 24 months Learning with Leading Indicators

Learning with Leading Indicators Results Learning with Leading Indicators

Learning with Leading Indicators Use of Leading Indicators has had a profound effect at Fluor Increases visibility to safety and production processes Requires understanding of leadership and how to use data Will show examples and stories Will also help you with theory and use Learning with Leading Indicators

D.O.E. Voluntary Protection Program Simply complying with regulations is not sufficient for continual improvement VPP has helped to focus management and union efforts and teaming Leading Indicators fit in with worksite analysis Learning with Leading Indicators

Learning with Leading Indicators Trending Statistical Process Control is used at Fluor Hanford - Standardized - Proven - Moves focus away from random noise Trend detection Learning with Leading Indicators

Learning with Leading Indicators SPC Description Data are plotted in time sequence Baseline average (center line) is added Upper and Lower Control Limits are added, 3 standard deviations above and below the average UCL and LCL represent the expected range of variation in the data. Variation outside this range is circled (other rules are used in addition) See the “Hanford Trending Primer” at http://www.hanford.gov/safety/vpp/trend.htm. Learning with Leading Indicators

Common Trending Errors Typical Behavior Reaction Action Reacting to Ups and Downs (False Alarms) Comparisons point to point, to average, to last year Tampering and knee jerk reactions, frustration When stable, work on long term history, fix the system Failure to detect trend No criteria to separate trend from noise Molehill grows into mountain Use SPC to detect trends accurately and in time Learning with Leading Indicators

Learning with Leading Indicators SPC Cost Savings Not only more reliable, but less expensive: Can automate retrieval and processing of data Saves time (15 seconds per chart update, 5 minutes per new chart) Actual case – reduction of time needed for charts from 40 hours per month to 15 minutes per month Quicker read by executives, better comprehension Allows risk minimization Becomes integral to business model Learning with Leading Indicators

The Red Bead Experiment Helps by providing a hands-on, emotional “a ha” experience Fluor has script and video available, with ISMS and VPP focus “Standard” management practices used, and then a better way shown One hour with the Red Beads will accomplish more than years of discussion Learning with Leading Indicators

Learning with Leading Indicators Systems Thinking Would putting a Rolls-Royce engine in a Geo Metro make an improved automobile? Nothing wrong with either, but the combination probably won’t work (Russ Ackoff) Learning with Leading Indicators

Systems Thinking Concepts Pay attention to interactions more so than components Knowledge of statistical variation more so than discrete numbers Long term focus more so than short term Cooperation more so than fear, blame and internal competition Learning with Leading Indicators

Early Fluor Experience with Indicators Annual Employee Training VPP survey 5 Hazardous Occupations No. of Indicators from 300 per month to 1,600 but later dropped to 1,300 Good comments in VPP and DuPont reviews In 2000, OSHA rate “flat-lined” at 1.5 cases per 200,000 hours Learning with Leading Indicators

Jump Start with Leading Indicators Just what are leading indicators, anyway? Predictions of future? or A means to create a better future? Learning with Leading Indicators

Creating a Better Future We have gotten distracted by calls to predict future, delaying development of leading indicators At a low injury rate, little information exists in the outcome indicators Trending response time long at these low rates Use leading indicators to measure lower threshold data and activities Quickens trend response, reduces injuries and improves outcomes Learning with Leading Indicators

Our Current Leading Indicators Events - First Aid Cases, Occurrences, Near Misses Safety Inspections - Number and Score Employee Input – Safety Concerns and Survey Responses This list has changed, and will likely change as the need arises. Statistical Process Control (SPC) is used. Learning with Leading Indicators

Learning with Leading Indicators Events Learning with Leading Indicators

Learning with Leading Indicators Safety Inspections Learning with Leading Indicators

Learning with Leading Indicators Employee Sentiment Learning with Leading Indicators

Learning with Leading Indicators Results There were some recent trends that allowed management to stay ahead of issues OSHA Recordable Case Rate has dropped 30% since start of use (Aug 03 – Apr 04 compared to May 04 – Jan 05) Finished FY 2005 with lowest OSHA Recordable Case Rate yet Allows focus on doing the right things right Learning with Leading Indicators

Learning with Leading Indicators Correlations Note: Black line is OSHA Case Rate, Green line is the Leading Indicators Learning with Leading Indicators

Learning with Leading Indicators Correlations Learning with Leading Indicators

A Color-Coded Dashboard Integrated presentation for Leading and Lagging Indicators Combines the best of “balanced scorecard” with the best of SPC Better than rolling all data into one index Allows a Systems Approach Learning with Leading Indicators

Red Yellow and Green Control Chart Result Decision Color Leadership Action Stable Level is Acceptable Green Stay the Course Level is Not Acceptable Yellow Improve System Trend Adverse Red Corrective Action Improving Reinforce – Stay the Course Learning with Leading Indicators

Use of “White” Addition of White to the dashboard can be advantageous: Use White (or Yellow) for one month away from a trend Use for stable at an okay level, but not superior Minimizes some of the push to be “All Green” while allowing for opportunities for improvement Learning with Leading Indicators

Learning with Leading Indicators

Learning with Leading Indicators Conclusion Tools and methodologies such as Statistical Process Control, Systems Thinking, Surveys, and Leading indicators, Can provide insight for decision making Learning with Leading Indicators

Learning with Leading Indicators Conclusion Leading Indicators provide insight and focus for leaders Allows managers, workers, and safety professionals work towards one future, to build the future Moves management focus forward toward prevention Safety excellence is achievable, if you lead with and learn from your leading indicators. Learning with Leading Indicators