Managing Construction Risk through Pre-Operational Planning
September 2006
Has anyone in your organization really stopped
to analyze why your projects are experiencing disruptions, accidents, and losses?
Why are workers getting hurt in spite of safety standards, programs, policies,
procedures, training, and possibly everyone's best efforts? What can be done
to reduce losses, control the cost of risk and optimize the bottom line?
by Peter
G. Furst
Liberty Mutual Group
These are important questions to address in a time when industry is under
great pressure to increase efficiency, effectiveness and profitability.
In construction, typically safety is treated as a discrete and separate function
within the contractor's organization. Much of what we do in safety revolves
around incidents, accidents, and losses. We use programs and other strategies
to help us control their adverse effects. We train our workers in accordance
with safety standards. We measure our success in reduced incidents and by comparing
our loss data to national statistics.
Our accidents and losses impact our cost of risk and ultimately our very
competitiveness in a highly competitive industry. This also may well diminish
our ability to market construction services and/or secure work. Accidents usually
do not happen due to fate or intent on the worker's part. They happen because
of ineffective processes, inadequate procedures, poor planning or lack of foresight.
Therefore, we must get away from the predominantly worker-focused interventions
common in the industry, and look into areas that the worker has little or no
control over but are the underlying contributing causes of incidents and losses.
The industry's focus on the worker for resolution of its safety concerns
is driven by historic precedent and the enactment of safety standards by the
government. Back in the 1920s, Heinrich conducted a study of a large number
of accidents and determined that 88 percent of the causes of those accidents
resulted from "unsafe acts" by the workers. This was followed by a number of
other studies where an even great percentage was attributed to the worker.
I recently heard a speaker at one of the national safety conferences state
that virtually 100 percent of the cause of accidents was the unsafe acts of
workers. The underlying assumption of these statements is that the worker has
control over his/her actions and therefore can stop taking risks that may lead
to an injury. But what this assumption ignores is that the worker has very little
"power" over operations, compared to management.
Figure 1 provides a graphic representation of "The Balance of Power."
So it becomes clear that management not only controls just about every planned
activity on a construction site, but also has quite a bit of control over the
worker. Management hires the worker, assigns the tasks, and oversees his/her
actions. The supervisor can assess the workers knowledge, capabilities, actions,
motivation, and other abilities to perform the assigned tasks. This same foreman
can determine if this is acceptable or not and what should be done to eliminate
any deficiencies. The foreman can also change the worker's assignment, coach,
provide additional training or greater oversight, or decide remove the worker
from the site. So by this example, management can exercise quite a bit of control
over the workers actions as well. Therefore, the solution to the incident/accident/loss
problem resides elsewhere in the operation.
One rather straightforward approach to making a significant inroad into addressing
the incident/accident/loss picture is to look at a process that the contractor
already has in place, is easy to modify, and highly effective in addressing
this critical need.
Pre-Operational Planning
Planning is an integral part of contracting and the construction process.
Virtually every aspect of contracting involves some form of planning. Successful
contractors are generally effective planners. It is through planning that the
appropriate materials are secured, delivered, and installed. It is though the
process of planning that all the trades work harmoniously on the site. Without
effective planning, all the diverse elements, aspects, and functions of construction
would not come together to result in the final finished product—the building.
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Pre-operational planning is the review of planned operations before and
during the construction process to identify and eliminate potential sources
of loss.
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The goal of preplanning is to reduce hazards, which will minimize disruption,
increase efficiency, and lower costs.
So, if incidents on the construction site cause disruptions and losses, then
it begs the question, can we apply the fundamentals of planning to safety and
therefore minimize these undesirable outcomes? Fortunately, the response is
YES; so let's look at the planning process and see how we may affectively integrate
safety management into the contractor's operational planning.
Why Preplan?
A research study conducted by the Construction Industry Institute in the
1980s identified the single most effective tool contractors have to prevent
accidents on their work sites as pre-project/pre-task planning. A follow-up
study in the 1990s confirmed this same conclusion. See the CII web site for further information.
Construction jobs are dynamic and ever-changing. Planning is a necessary
management tool with which to marshal, manage, and control the resources—workers,
material, and equipment.
Safety is a managed process, just like any other in the construction business.
One would not dream of running the job without a plan. And safety management
should be treated in the same manner.
Preplanning is proactive. You manage people, resources, events, and accident-causing
situations based on a plan. By being proactive, you try to anticipate problems
(loss sources) and plan to minimize their impact or all together eliminate them.
Pre-Operational Safety Planning Process
The goal of preplanning is to reduce risks, which will minimize disruption,
increase efficiency, and lower costs. Pre-operational safety planning is the
integration of safety into the construction operational plans and procedures.
It looks at potential risk in the operational plan, construction procedures,
or work processes and either eliminates them or provides for controls that will
minimize their adverse effect. Exposures resulting from procedures and work
methods are anticipated, and reviews of applicable safety program elements are
made to make sure that the operations are in compliance with the intent of the
program, as well as see if they are addressed by the program. In a nutshell,
preplanning looks at the when, how, who, where, and what of the construction
process.
When To Preplan?
The pre-operational safety planning process can be performed at four distinct
times in the life of a project. These are before the bid or the pre-construction
effort, before any work is started in the field, at the beginning of each major
phase of construction, and before each individual task. The greatest value of
this effort comes about if it is conducted at the earliest possible time in
the life of a project.
At Bid Stage
This is the most effective time to address safety issues, because they can
be identified, eliminated, and/or budgeted for. One may even decide not to bid
a project, thereby avoiding taking on unacceptable risks.
At Job Mobilization
This is where risks can be addressed as they may apply to the whole project.
This is the time to address the interfaces of the operations of various subcontractors.
This is also the time and place to get the most "bang for your safety buck."
At Pre-Operations Stage/by Job Phase
This phase allows you to fine-tune your previous plan. By this time, you
may have more detail available to you, so you can address more issues in greater
detail.
Special Operations/Tasks
You may have unique situations that require special attention, such as helicopter
lifts, etc. These need to be addressed in great detail and contingency plans
drawn up to address the potential exposures.
Figure 2 provides a graphical illustration of "The Value of Early
Pre-Operational Planning."
The pre-operational safety planning process is accomplished at three levels:
Globally for the complete project, for specific operations with high risk and
exposure potential, as well as for each individual task. Obviously, it is most
beneficial to look at the whole project as that is the time for arriving at
the most effective and all encompassing solutions.
Who Should Be Involved in Preplanning?
All the folks involved in the different disciplines in constructions—estimating,
planning, purchasing, cost control, and field operations—need to be involved
in this process at certain given times.
The Estimator
This is the person in your company, who first sees the job. He/she has to
evaluate the job risks and budget for them.
The Safety Director/Safety Coordinator
This person should be consulted at the bid stage to help evaluate risks that
the estimator has not identified or appreciated the seriousness of. Safety also
provides input as to how to most effectively and cost efficiently provide the
necessary controls. The safety director brings to the table familiarity with
the safety standards, and other local regulations.
Project Manager/Job Superintendent
This person provides scheduling, site layout input, and may select equipment.
They may also help select subcontractors. These inputs are under the purview
of the contractor and should be evaluated for any unique risks that they may
bring to operations in the field.
Other Management
There may be special requirements imposed on the project by the owner. Your
company may have rules that are not common to the industry, and your organizational
structure may have special requirements that should be reviewed and addressed
at this time.
Insurer/Broker Loss Prevention Representative
This is a resource available to contractors, in the preplan of their operations.
The broker/insurer may have a great deal of in-house information and expertise
that the contractor can draw on. The contractor should assess the capabilities
of its broker or insurer in providing assistance in this area.
How To Preplan
There are four phases of the preplanning process: fact finding, analysis
and evaluation, the preplan meeting, and follow through.
Fact Finding
The sources to get information are from the project plans and specifications,
the contract, and the owner's requirements. Another source is the "means and
methods" the company or the subcontractors are planning to use as well as the
operational, logistic, and tactical plans. Other areas to consider are the site
and its adjacencies, including local ordinances, traffic patterns, public usage,
and other neighborhood realities.
Analysis and Evaluation
The things that need to be evaluated and analyzed are the potential for worker
injuries, both the contractor's and the subcontractor's workers. Other things
that need to be addressed are the potential harm to the public, as well as damage
to property both in and around the job site.
The Preplan Meeting
The key to an effective and efficient meeting is preparation. Everyone must
do their "homework" before attending the meeting. At the meeting's conclusion,
there must be agreement as to what the risks are and what controls are going
to be implemented. The result of this meeting will be an action plan for the
control of risks, hazards, and exposures.
Follow Through
Of course, for any plan to work, there must be following through. Inspections
must be conducted to ensure that controls are put in place and that they are
sufficient to address to existing conditions. If there are changes, then modifications
are made to meet the changing conditions.
Figure
3 provides a graphical illustration of the preplanning process.
What Do You Preplan for?
You "plan" for everything that has risks that are not acceptable to the organization.
Through the planning process, you identify these risks, then eliminate them
or try to reduce their adverse effect to the lowest possible level. To best
address what to preplan, a general checklist should be created to assist the
participants in addressing all possible areas involving risk.
The preplanning process, if properly done, is a "continuous improvement process."
It starts with the identification of areas of risk, through the collection of
data. The risks are then analyzed. Solutions are found that will address the
risks. The solutions are then evaluated for effectiveness and if they meet project
needs. The "best" solution is selected and then implemented. Audits are conducted
to ensure that the implemented solution is effective and "working." If it is,
then the process is taken to the next risk element and If not then it is revaluated
and the process starts all over again.
Summary
Preplanning is the review of planned operations before and during construction
in order to identify and eliminate potential loss sources. The goal of preplanning
is to reduce hazards, which will minimize disruption, increase efficiency, and
lower costs.
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author’s employer or IRMI. This article does not purport
to provide legal, accounting, or other professional advice or opinion. If such advice
is needed, consult with your attorney, accountant, or other qualified adviser.