Safety Articles

Basics of Loss Prevention

By Jitu C. Patel, CPEA - pateljc2002@yahoo.com

Modern Loss Prevention philosophy includes protection of business resources, including employees and physical assets, against human distress and financial loss resulting from accidental occurrences. Accidental occurrences are controlled through a thorough and professional management system.

First Step

In organizing your loss prevention process, the first and most important step is the writing of a comprehensive “Policy Statement” by business owners, executives and managers. Defining safety ownership and responsibilities of business proprietors, executives, managers, supervisors, and employees is a key part of the policy statement. To do this effectively you must form a Safety Committee to provide directions for development of the loss prevention process and its implementation. Management must participate and offer guidance, but not outweigh the contributions of all participants on the Safety Committee.

The process methodology includes: identifying all loss exposures, evaluating the risk of each exposure, planning how to handle and manage each risk according to a definite plan. The Plan should identify work to meet long-term and immediate objectives, set standards for that work, and detail methods for measuring performance against the standards, evaluating the significance of deviation from the standards, and commending superior performance and correcting substandard performance.

Sources of loss : Employees at all levels who plan, design, build, operate, or maintain the business are exposed to risks. Sources of loss include: a) equipment - the fixed plant, machines, tools, protective gear or vehicles; b) material – process substances, supplies and products that may have physical and chemical hazards affecting people, equipment, and the environment; and c) surroundings and environment - buildings, surfaces, lighting, noise, radiation, weather, and social or economic conditions which can affect safe performance of people, equipment and materials.

Causes of loss : Unsafe acts and conditions cause incidents which could result in injury, property damage, and business upset. Examples include: operating equipment without authority, failure to warn, failure to secure, operating at an improper speed, making safety device inoperable, removing safety devices, using defective equipment, using equipment improperly, failure to use personal protective equipment (PPE), improper manual material handling, servicing equipment in operation, horseplay, and many more.

Many times substandard conditions are discovered, including: inadequate guards and improper PPE, defective tools or materials, restricted movement during performance of a task, inadequate warning systems, fire and explosion hazards, poor housekeeping. A hazardous environment may include noxious gases, dust, smoke; lack of oxygen; exceeding noise, vibration, or radiation standards; extreme temperatures, inadequate illumination or ventilation and much more. Typically, unsafe conditions and practices are the results of: a) environmental factors due to inadequate design, purchasing, maintenance and work standards, normal wear and tear, abnormal use rate or method, and b) personal factors due to lack of knowledge, skills and motivation, physical and mental incapacities, and stress.

Environmental and personal factors are negatively affected by inadequate loss prevention management processes that do not include the necessary principles and practices for reducing risk — the process standards typically are: vague, lack of employee education, fail to adhere to compliance with the requirements, and lack motivation and positive enforcement.

Root cause(s) of accidents include poor system design and design failure where operating conditions are not adequately foreseen. Examples of poor system design are not planning for temperature and pressure excursions, not following applicable codes and standards, improper metallurgy, lack of emergency shutdown or isolation considerations. Operating errors typically occur because of unclear instructions or instructions are not understood, equipment inadequately labeled, poor work environment – extreme noise, access, housekeeping, stress under abnormal situations. Equipment failures generally occur due to defective manufacture, engineering faults not detected and vibrations. Maintenance and inspection deficiencies occur due to inadequate or deferred equipment, for example, corrosion rates, poor mechanical design, instrument and electrical maintenance improperly performed. Also, inadequate supervision and training contribute to accidents because of failure to enforce procedures and regulations, examples are deficient work permit system, operating manuals not maintained, the lack emergency drills, safety meetings, written instructions or refresher training. Many times training is used to overcome system deficiencies; however, the human factors investigation of accidents usually indicates that training is a very poor substitute for proper system design.

Historically, the record shows that design, process or equipment failure cause 30% of the accidents; maintenance & inspection deficiencies 20%; inadequate supervision, training or plant and machine operations 45%; and natural phenomena cause only 5% accidents. Fortunately, many accidents result in no injury or damage. Few accidents result in minor injury or damage. One cannot tell which unsafe act will be the cause a serious fatal injury, because so many unsafe acts go undetected. “Near hits” must be studied in detail to understand how and why they occur. Therefore, it is imperative that all near hit are thoroughly investigated for their lesson learning potential and application.

For an effective loss prevention process decide on the proper functions of the safety committee(s), select members who can contribute to those functions, set authority and budget for the committee(s), and, set the meeting procedure, receive reports on actions and assign corrective action responsibilities and dates for completion.

Further overviews of Loss Prevention Principles and Practices will be outlined in future newsletter issues.

Editor's Note : Jitu C. Patel , CPEA, is currently a member of the ASSE Arizona Chapter and serving the Chapter as a Senior Board Adviser. He is an international safety consultant who has a bachelor's degree in Chemistry and a master's in Fuel Science. For 21 years, he has provided health and safety professional services to Aramco, the oil and gas producing and processing corporation in Saudi Arabia. He also has provided technical training and conducted research for 15 years on the topics of fires, explosions, and health and environment safety issues at a heavy chemical manufacturing company owned by U.K. oil companies. Mr. Patel has prepared safety audit reports and has developed and conducted fire and safety seminars for Safety & Fire Prevention engineers and line management staff of industry organizations. He has prepared and presented many technical and safety presentations, as well has been published in several international publications. He has served on such boards and committees as the Safe Operations and Laboratory Safety committees at Associated Octel and Aramco; the Toxic & Flammable Gas Detector Sensor Development Committee of Users and Manufacturers at the SIRA Institute, UK; the Steering Committee for the 5th and 6th Professional Development Conferences organized by the ASSE Middle East Chapter; and the International Advisory Committee of the Bhopal Gas Tragedy 20th Anniversary Process Safety Conference organized by the Indian Institute of Technology. He was a speaker and member of the Conference Organizing Committee of the 7th PDC of the ASSE-MEC, March 18-22, 2006 in Bahrain.