Analysis: Engineering values from the top down
The attitudes at the top of your company influence everything, for better or worse.
Does your company value its people in the most literal sense of the word? While writing the article global process engineering (which will be in the April issue of Control Engineering ), it became obvious that much manufacturing philosophy comes from the top of an organization down, even for something as basic as safety. Some of those people in offices on “mahogany row” are making decisions that could determine if you go home tonight in one piece. Here are two extreme examples.
Example 1: You probably heard about the Texas City BP refinery explosion in 2005 with its fatalities and injuries, not to mention the environmental impact and community disruption. After a very extensive investigation of the incident, the U.S. Chemical Safety and Hazard Investigation Board laid responsibility for this event squarely at the feet of BP management. A summary of the board’s findings was headlined : “U.S. Chemical Safety Board concludes‘organizational and safety deficiencies at all levels of the BP Corporation’ caused March 2005 Texas City disaster that killed 15, injured 180.”
In the text of the same document, these two paragraphs sum up the grim situation, including management’s knowledge of the growing problems: “BP acquired the Texas City refinery when it merged with Amoco in 1999. The CSB report found that‘cost-cutting in the 1990s by Amoco and then BP left the Texas City refinery vulnerable to a catastrophe.’ Shortly after acquiring Amoco, the BP group chief executive ordered an across-the-budget 25% cut in fixed spending at the corporation's refineries. The impact of the cost cuts is detailed in many of the more than 20 key investigative documents the CSB made public today, including internal BP safety audits, reviews, and emails. Among other things, cost considerations discouraged refinery officials from replacing the blowdown drum with a flare system, which the CSB previously determined would have prevented or greatly minimized the severity of the accident.
“Chairman Merritt said,‘The combination of cost-cutting, production pressures, and failure to invest caused a progressive deterioration of safety at the refinery. Beginning in 2002, BP commissioned a series of audits and studies that revealed serious safety problems at the Texas City refinery, including a lack of necessary preventative maintenance and training. These audits and studies were shared with BP executives in London, and were provided to at least one member of the executive board. BP's response was too little and too late. Some additional investments were made, but they did not address the core problemsin Texas City. In 2004, BP executives challenged their refineries to cut yet another 25% from their budgets for the following year.’”
Example 2: The opposite extreme of the spectrum has to be Dow Chemical Corporation. Hopefully there are many companies that share such a depth of commitment to personal and process safety. In a presentation delivered at ARC Advisory Group’s 2008 Global Manufacturer’s Forum, Margaret R. Walker, vice president, engineering solutions, technology centers, and manufacturing and engineering work process, made Dow’s global vision clear: “You cannot compromise safety, regardless of local customs. Personal safety and process safety should be your number one priority and you should never lose that sight. There are few things more motivating to an employee than knowing the employer is making sure everything possible is being done so that they go home safely and that everyone around them is safe.”
Jerry Gipson, Dow's director of itswe start with a safety moment. We try to personalize the message to put in each of our minds the idea of going home safely at the end of the day, but also expand it into larger stewardship that we do nothing to adversely impact the community. Back in the 1960s, when we launched our manufacturing excellence focus and embarked on some of the global standardization efforts, that was driven by the desire to achieve differentiated safety performance. It was safety that got us up and going.”
Where is your company on this spectrum? I suspect most are somewhere in between, but hopefully closer to Dow. That’s something you might want to think about carefully as you look at the top management of your company.
—Peter Welander, process industries editor, PWelander@cfemedia.com ,
Process & Advanced Control Monthly
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.