The Correlation between Safety & Productivity: Oil & Gas Perspective

While we have written on how safety and productivity are inter-related, we have not really examined it in some specific industries. Let’s take the Oil & Gas industry. Injuries and other incidents used to be relatively more common in Oil & Gas over other production and manufacturing industries, just based on their hazardous environments. From heavy rotating pumps, to large scale use of industrial chemicals, to remote locations; certain factors have always made that industry a challenge from a safety perspective. But programs over the last several decades have brought modern safety programs to the industry.

One thing the Oil & Gas companies know is how to analyze data. Oil & Gas companies were pioneers in data historians and using that data to increase throughput and yields. Safety is no different. Our research shows that almost half (51%) of Oil & Gas companies use analytics to manage complex decision making around safety performance. That is compared to only about 40% of all other companies. Oil & Gas companies are just plain more likely to be using the analytical tools available to them to manage safety.

As Aberdeen always states, top performing organizations realize investments in safety is not only a cost avoidance and compliance measure, there are also tangible operational benefits. By realizing that safety does more than just prevent adverse events, companies will be able to increase brand reputation, improve efficiency, and ultimately the bottom line (Table 1).

Table 1: Examining the Best-in-Class vs Oil & Gas

Definition of Maturity Class Mean Class
Performance

Best-in-Class

Top 20% of aggregate
performance scorers

  • 0.1 Recordable Injury Frequency Rate
  • 90% Overall Equipment Effectiveness (OEE)
  • 2% Unscheduled Asset Downtime
  • 7% Decrease in TCO to manage safety systems
All Others

Middle 50% of aggregate performance scorers
  • 1.0 Recordable Injury Frequency Rate
  • 85% Overall Equipment Effectiveness (OEE)
  • 8% Unscheduled Asset Downtime
  • 2% Increase in TCO to manage safety systems

Oil & Gas

Bottom 30% of aggregate performance scorers

  • 0.4 Recordable Injury Frequency Rate
  • 87% Overall Equipment Effectiveness (OEE)
  • 5% Unscheduled Asset Downtime
  • 1% Decrease in TCO to manage safety systems

 

The Best-in-Class are clearly doing something right when it comes to safety and safety technology. But Oil & Gas companies as a whole are doing better than all of the other companies. That can be tied indirectly to their history of using data analysis to solve complex operational problems. But they can do better and strive for Best-in-Class. Starting with some key points below:

 


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Topics: Safety Management, Industry News, Health and Safety Program Management