FUNDAMENTALS OF LPS

Fundamentals of the
Loss Prevention System (LPS)

1
Background to LPS
 What is LPS?
– A system to prevent or reduce losses using behavior-
based tools and proven management techniques.
 What is a loss?
– Any unplanned cost or business interruption
– Injury, fire, equipment damage, regulatory violation,
product quality incident, or inefficiency
 What is the objective?
– To provide all employees with a safe, healthy, loss-free
workplace.
 Why was LPS chosen?
– Successful application in different industries and
cultures
– Result of 30 years research and application (Dr. James
Bennett)
2
Background to LPS (cont’d)
Why are companies not successful in
preventing losses or unplanned costs?
 Methodology for preventing incidents (losses) is
not systematic
 Focus is on symptoms and conditions, not on
causes and underlying behaviors
 Business unit depends on SHE staff “to make
loss prevention happen” (no personal ownership)
 Focus on reacting after an incident, rather than
working proactively to prevent incidents
 Preventing incidents (losses) is managed
differently than normal business
3
Background to LPS (cont’d)
Why has LPS been successful?

 Research indicates 90% of losses have root

causes related to work activities (behaviors) –
only 10% are work conditions only.
 LPS is a behavior-based system that focuses
primarily on the 90%!
 LPS encourages active participation by all levels
of organization – workers, supervisors, managers

4
 Safety Performance Improvement

Facilities

Management Systems
Incident Rate

Human
Performance

Time
From F.Sprow Presentation
1998 Exxon HF Practitioner’s Conference
Houston TX 5
Fundamentals of LPS
Basic Concepts of LPS
 Direction from top-down, solve problems from
bottom-up.
 Roles and responsibilities for all workers.
– Workers more directly involved
– Supervisors as mentors/coaches
– Active manager participation
 Proactive focus versus reactive.
 LPS integrated with daily business activities.
 Simple concepts and simple tools for all levels.
6
Fundamentals of LPS
 Seven LPS tools & techniques.
– Safe Performance Self-Assessment (SPSA).
– Pre-Operational Standards
– Job Safety Analysis (JSA).
– Loss Prevention Observation (LPO).
– Near-Loss Investigation (NLI).
– Loss Investigation (LI).
– Stewardship.
 Business unit can tailor LPS tools to meet specific
local needs.
– Language, terminology
– Leverage existing practices
7
LPS and OIMS

OPERATIONS INTEGRITY
MANAGEMENT SYSTEM

ELEMENTS LPS TOOLS

1. Management leadership, commitment, 1. Stewardship,
& accountability LPO/LI Quality Reviews
2. Risk assessment & management 2. SPSA, JSA, LPO
3. Facilities design & construction 3. JSA, LPO
4. Process information/documentation 4. JSA, LPO
5. Personnel & training 5. SPSA, JSA, LI/NLI, LPO
6. Operations & maintenance 6. JSA, LPO
7. Management of change 7. SPSA, JSA, LPO
8. Third party services 8. SPSA, JSA, LPO
9. Incident investigation & analysis 9. LI, NLI, LPO
10. Community awareness & 10. JSA, LPO
Emergency preparedness 11. Stewardship,
11. Operations integrity & improvement Solution Tracking 8
Fundamentals of LPS
Industry Safety Statistics & Incident-Ratio Triangle

 Insurance Company of North America study in 1969.

– Over 1.75 million cases studied.
– 297 Companies from 21 industries.
– Over 3 billion work hours.
1
 Study identified “incident-ratio triangle”.
10
– This concept now widely recognized as
“Safety Triangle”. 30

600*

* Estimated 9
Incident Ratio Triangle

Major
Injury 1
Minor
Injury 10
3
Equipment / Property
Damage 30
21
Near Losses 600
180
Average forExxonMobil
Typical 21 Industries

How different is a Near Loss from a Major Incident?

10
 LPS Loss Sequence

Major
Injury We suffer the
Minor
consequences at the
Injury top of the triangle!
Equipment /
Property Damage

Near Losses
If we don’t correct the
problems at the base Undesirable Behaviors
of the triangle…
Root Causes
11
LPS Pyramid
Major Injury
1
Minor Injury Root Cause Analysis
10 Flowchart (RCAF)
Equip / Prop Damage LI
30
Near Losses I
N L
6 00

Unde PO
sirabl L
Beha e
viors
PSA
S SA
Motiv J O
ations P ip
Root & s h
Cause r d
s e w a
St

12
 LPS Characteristics
 Beyond personnel safety – all
losses
 Easy to understand basic
Major
Injury
concepts
Minor  Focus on Behaviors
ive

Injury
act

 Proactive – rooted in base of

Equipment /
Re

Property safety triangle

Damage  Emphasis on feedback – positive
Near Losses reinforcement
e iv

 Integrated tools
act

Undesirable
Pro

Behaviors The system is greater

than the sum of its
Root Causes parts!
13
Example LPS Results
Results for Esso Inter-America 1994-1999

Employee Involvement
and Tool Usage
VE
MAJ 1

TI
O
AC INJU R 4
RY 14

LI
RE

MINO 22
INJU R 28
RY
26
0

Incidents
E QU 14

LI
IPME

N
PRO NT 0
PERT / 19
DAM Y
AGE
25
0 00
20
VE

O
LP
NEA 00
TI

RL
REPO OSSES 14 0
00
AC

RTED 17
O

30
PR

00 er
90 Aft 8-99
9
OBS
ERVA a t ion 19
t
TION
S 0 m en
ple 6-97
Im 9
19
e
e for 5
B 4- 9
9
19 14