In a perfect world, the inputs (processes, technology, the physical environment and people) that organizations use to produce output are managed to achieve perfect production, quality and safety. In this context, the probability of production losses, quality deficiencies and incidents is zero. This is shown by the ‘Entropy Model’, a Loss Causation Model illustrated in the Figure below.
The Model shows the ‘perfect world’ in the first vertical section in blue with the orange line at zero being nil losses. In the next section, we will call the ‘real world’, there is always a residual risk as shown by the green rectangle. The probability of losses is shown throughout the model as the solid orange line.
As low as reasonably practicable (ALARP) means that the residual risk cannot be reduced in the short-term because of cost and technological constraints. This concept of residual risk is well understood in industry, particularly in hazardous industries such as chemical processing, mining, oil and gas, where the residual risks are relatively high.
In addition, system inputs tend to degrade as shown by the dashed blue line. This degradation can be cyclical, variable, gradual or rapid depending on underlying management factors and conditions. The model shows that as systems degrade, the probability of losses in production and quality increases, and so do health, safety and environmental (HSE) incidents. This is referred to as ‘Entropic Risk’ – the tendency of all system inputs to degrade. Accordingly, in addition to managing residual risk, organizations need to prevent entropic risk to mitigate HSE incidents and other losses.
Figure: The Entropy Model
The Model shows that as systems degrade, the probability of incidents rises until losses become inevitable. Corrective action is needed to turn around this trend, however, ongoing maintenance of all system inputs is also required to bring the risk to ALARP. Failure to recognize trends ie the repeated need for the same or similar corrective actions without addressing underlying causes, means the organization is continuously exposed to degradation and losses. Through the operational discipline of embedding corrective actions and maintenance practices, the organization achieves optimal HSE performance, production output and quality.
The model shows (on the right-hand side) that if organizations do not sustain corrective actions and maintenance practices, systems will again degrade and the probability of losses rises until such losses become inevitable. There is therefore a relationship between complacency and cyclical failures. The model also provides a ‘Four-Fold Strategy’ (4 steps shown in red) to manage residual and entropic risks. These apply at all levels of the company requiring a multi-disciplinary approach from senior management and concurrently consistent behaviors from the workforce.
The next article will explain that ‘Entropic Risk’ also applies to the quality of leadership, competencies and management systems. If these degrade, the probability of production losses, quality deficiencies and HSE incidents will also escalate. By tying the ‘Entropy Model’ with the ‘Alignment Fallacy’ (see my previous article), organizations can pursue production, quality output and HSE incident mitigation concurrently through the effective management of risk.
ALIGN Risk Management specializes in Productive Safety Management. We believe HSEQ systems can be efficient, cost-effective and ensure continuity of production.
The ‘Entropy Model’ is the second key tool of Productive Safety Management. It will be re-released in the upcoming publication, Safety Leadership and Professional Development, American Society of Safety Professionals, June 2018. Go here for a more detailed explanation of the Entropy Model.
Tania Van der Stap, Founder and Principal Director of Align Risk Management
Tania Van der Stap is the Founder and Principal Director of Align Strategic Management Services Pty Ltd established in 2002, after having Productive Safety Management published internationally by Butterworth-Heinemann. The publication presents a strategic, multi-disciplinary management system for hazardous industries that ties safety and production together.
From 2002 to 2012, Tania provided HSE consulting services to Chevron’s Gorgon Project, Monadelphous, Baker Hughes, Fortescue Metals Group and Worley Parsons. Thereafter for 5 years, Tania took a HSE Manager’s role with AngloGold Ashanti Australia where she made significant improvements taking the department from ‘vulnerable’ to ‘proactive’ on the HSE journey.
In late 2016, her company was rebadged to Align Risk Management specialising in HSE Consulting and Risk Leadership Programs for managers, supervisors, HSE professionals and workers. Her chapter on ‘Risk Leadership – A Multi-Disciplinary Approach’ has been accepted by the American Society of Safety Professionals and will be published in Safety Leadership and Professional Development ahead of the ASSP’s 2018 Safety Conference.
In addition to Productive Safety Management being a substantial, refereed publication, Tania’s credentials include academic qualifications in Commerce and also Public Health and Safety.
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