What is Best-in-Class in Contractor Management?

Transcription

1 What is Best-in-Class in Contractor Management? David Bibby, CMIOSH, EurOSHM ISNetworld 2014 ISNetworld Dallas Calgary Sydney London Los Angeles New York Toronto +44(0)

2 Introduction: What is ISNetworld? Web-based Contractor/Supplier Information Management Collect HSE, quality, procurement, compliance, and other data from contractors Review and verify contractor information Connect Hiring Clients with safe and sustainable contractors Global solution for standardizing the contractor management process

3 Increasing Use of Contractors A Global Trend Contractors accounted for 78% of work hours in 2013 Contractors have 86% higher total recordable injury rate than Companies in 2013 Source: International Association of Oil & Gas Producers (IOGP) Link to the publication: Safety Performance Indicators 2013 Data

4 Contractorization Opportunity and Challenge Increasing contractorization is not necessarily a negative trend for safety Better specialization, skills and equipment Enables safe and sustainable operations The primary duty for safe operations lies with the hiring client organization Robust strategy needed Better risk mitigation

5 Best-in-Class Contractor Management Systems 10 Strategic Elements: 1. Establish a clear communication strategy 2. Designed to measure performance 3. Follow a three-step due-diligence process 4. Incorporate a risk-ranking process 5. Maintain a qualified contractor list 6. Establish consequences and an exit strategy 7. Address subcontractor management 8. Follow standardized and transparent guidelines 9. Integrated with internal business processes 10. Leverage technology

6 1. Establish a Clear Communication Strategy Goal: A well thought out plan for both internal and external communication What Zero incidents goals Golden rules Scorecard status Performance and audit gaps How Timely and consistent Traceable and auditable Mailings/ s Contractor handbooks Electronic platforms Engagement One-on-one meetings Workshops Community meetings

7 2. Designed to Measure Performance If it matters, measure it Use both lagging and leading metrics Lagging Leading Injury frequency and severity rates Employee turnover rate Near misses (frequency, trend) 3 rd Party certifications achieved Fatalities and other incidents Completed vs. expected trainings Lost workday rate Completed vs. scheduled inspections Chemical releases New / enhanced safety controls Violations / citations / convictions implemented Risk assessments and job hazard analyses Observations / investigation results Insurance claims and trends Employee perception surveys

8 3. Utilize a Three-Step Due-Diligence Process

9 Case Study: Chevron Gulf of Mexico Grade Components A-B No Restrictions C Mitigation plan and pre-job meeting required D Mitigation plan, pre-job meeting required; management approval in writing; trained HES person on site during work F Not allowed to be used; VP approval required

10 Case Study: Chevron Gulf of Mexico Contractor Incident Rates by Year Data Based on an Average of 12 Million Work Hours per Year 92% decrease in contractor TRIR* over 11 years Optimized contractor base by 42% 98% of spend is with A & B contractors *Based on 200,000 hours. Exposure hours reported by Chevron Gulf of Mexico contractors in ISNetworld.

11 4. Incorporate a Risk-Ranking Process Contractors come in various sizes, capabilities, risk profiles Classify risks according to pre-set criteria and matrix Potential adverse consequences Frequency, duration and / or scope of work High, Medium, Low Re-evaluate / adjust contractor risk periodically

12 Contractor Risk Matrix - Example

13 5. Maintain a Qualified Contractor List We need them qualified urgently! Proactive, structured process for finding, qualifying, onboarding, monitoring, and terminating contractors Enhances procurement integrity Builds stronger and lasting partnerships with contractors

14 6. Establish Consequences and an Exit Strategy

15 6. Establish Consequences and an Exit Strategy Establish, communicate and enforce consequences for noncompliant contractors Develop contracts and agreements carefully Eliminate time / effort required to manage bottom performers Fewer, better service providers

16 7. Address Subcontractor Management Contractors with logos you don t recognize on your jobsite? Subcontractors have a higher likelihood of incidents Best practice approaches: 1. Subs qualified / monitored to same level of standards as general contractor 2. General contractor required to demonstrate the same level of rigour for qualifying subs

17 8. Follow Standardized and Transparent Guidelines Consistency and transparency is a common challenge Utilize a single, well organized database Improves procurement transparency Minimize duplication and inefficiencies

18 9. Integrated with Internal Business Processes Contractor management as an integral part of the complete business processes Goal: to drive end-to-end risk management Examples of contractor KPI integration: Purchase orders issued only to qualified contractors Site entry ID badges tied to contractor approval status

19 Case Study: Apache Helipass I. Designed to check all required information prior to an employee/contractor heading offshore for Apache II. Checks core training and drug & alcohol information

20 10. Leverage Technology Without technology / automation, contractor management can become laborious, inefficient and disorganized 59% of best-in-class organisations use technology to enhance HSE performance * Use of Internet and specialized management tools Collect and share information in a secure and efficient environment Reduce duplication and administrative cost *

21 Nonfatal TRIR (Rate of Incident per 100 Employees Public vs. Private vs. Actively Managed Contractors 7.0 Nonfatal TRIR (Total Recordable Incident Rate) BLS Public Sector, BLS Private Industry and Actively Managed Contractors % % BLS State and Local Government* BLS Private Industry* Actively Managed Contractors** *2010 BLS Nonfatal TRIR, *2011 BLS Nonfatal TRIR, *2012 BLS Nonfatal TRIR, ** ISNetworld.com

22 Benchmarking Contractor Performance

23 Benchmarking Contractor Performance

24 Benchmarking Contractor Performance

25 Benchmarking Contractor Performance Link to publication:

26 In Summary What gets measured gets done The Challenge is to develop protective Health & Safety programmes nationally and internationally It is not right that global supply chains can deliver good profit at one end and lethal working conditions at the other. Guy Ryder* * Guy Ryder, Director-General of the UN International Labour Organization (ILO), speaking at the World Congress on Safety, Frankfurt, August 2014

27 Resource: White Paper on Best-in-Class Contractor Management Request Whitepaper at :

28 Thank you / Questions David Bibby Senior Group Supervisor, ISNetworld dbibby@isn.com

29 What is Best-in-Class in Contractor Management? David Bibby, CMIOSH, EurOSHM ISNetworld 2014 ISNetworld Dallas Calgary Sydney London Los Angeles New York Toronto +44(0)