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Corrective Action for Complex Enterprises:Principles and Practices

Approach to the Successful Deployment of an Integrated Corrective Action Program

For Owner-Operators

A Bentley White Paper

Danie Saaiman Independent Industry Expert

Published August 2011

Corrective Action for Complex Enterprises: Principles and Practices 2

Introduction

Owner-operators in highly-regulated industries, such as energy, transportation and utili-ties, are constantly challenged with simultaneously increasing operational efficiency while maintaining or improving safe and compliant operations.

To achieve these objectives, executive management must be aware of the advantages that asset and process performance improvement programs offer the enterprise. This paper provides a framework for increasing the emphasis on continuous improvement through an integrated Corrective Action Program.

Success for these programs is vested in processes that ensure a holistic approach towards optimizing environmental, health, and safety requirements against process efficiency and asset utilization.

Factors conducive to continuous improvement require constant attention to the execu-tion of day-to-day operational activities. The cornerstone to a successful asset and process improvement program is the ability to detect an opportunity for improvement, which can then be followed by steps necessary to prevent or correct a future occurrence.

An integrated corrective action program (CAP) provides the framework for the creation of a culture focused on excellence. CAP is an encompassing term. It integrates and applies management and technical disciplines that are advantageous to the lifecycle (concept, design, construct, operate, maintain, disposal) of highly engineered infrastructure assets and are both critical to business objectives and bound by regulatory requirements.

Business & Operational Drivers

Management objectives .are achieved from a leadership position that secures the most effective results by exploiting the processes of planning, organizing, leading, and controlling.

This principle signifies the management effort toward continuous improvement, i.e., securing the most effective results. It also identifies the element of control, which is required to access and regulate work to ensure results.

Management regulation of work is a fundamental aspect of controlling enterprise activ-ities involving business, engineering, operations, logistics, and maintenance. Extending this control to continuous performance improvement for the entire enterprise implies an integrated approach.

The CAP objective is to provide the necessary infrastructure, facilitate management control, and support the culture toward enterprise-wide performance improvement.

An integrated CAP interfaces and interacts with every internal and external business process critical to realizing enterprise objectives. It addresses the business, engineer-ing, operations, logistics, and maintenance processes—including the associated

“A basic tenet of safety regulation is that the

Contractor shall not profit more by non-compliance

than by compliance. Further, the Contractor should benefit by plac-

ing appropriate emphasis on safety. These are the targets of the program.”

– Corrective Action Program Description

U.S. Department of Energy RL/REG-98-06 Rev 4


product or service, people and organizations, projects, assets, systems, equipment, and related parts. A CAP facilitates rational decision-making by providing a holistic view of all relevant dimensions to be considered in designated management control actions.

A successful CAP ultimately establishes a framework that provides management with information access to critical enterprise processes in the context of:

•Related business, technical, and regulatory requirements;

•Performance measurement and detection of nonconformance or opportunity for improvement;

•Quantification and qualification of nonconformance or improvement impact on business and regulatory requirement;

•Formulation and management of corrective and/or improvement actions to prevent recurrence of nonconformance and/or enhance performance; and

•Verification of nonconformance correction and/or performance enhancement.

Process nonconformances and the undesired business outcomes do not just happen; they are caused. When an enterprise process does not conform to defined require-ments, it results in defective products or services, or fails to comply with regulatory re-quirements. The challenge to the enterprise is to fix the defects and correct the process in the most cost-effective manner.

A well-established CAP facilitates this detection/correction/prevention effort by providing the ability to improve and, when required, to correct and prevent nonconformance. The resulting return on investment is proportional to the degree of conformance with the CAP.

Figure 1 illustrates how a CAP facilitates a closed-loop management control process:

•A CAP provides performance feedback for associated critical enterprise processes.

•Enterprise processes are analysed against valid and concise criteria constituted by the enterprise business, technical, and regulatory requirements.

•The processes are then underwritten by valid and concise documents and data.

•The CAP documents and data facilitate identification of deviation/nonconformance or opportunity for improvement.

•Management institutes corrective action and verification to prevent recurrence.

The combination of these principle interfaces and their interactions with the enterprise processes comprise a CAP.

“In physical science the first essential step in the direction of learning any

subject is to find principles of numerical reckoning and practicable meth-

ods for measuring some quality connected with it. I often say that when you

can measure what you are speaking about, and

express it in numbers, you know something about it;

but when you cannot mea-sure it, when you cannot

express it in numbers, your knowledge is of a meager and unsatisfactory kind; it

may be the beginning of knowledge, but you have scarcely in your thoughts

advanced to the state of science, whatever the

matter may be.” – Electrical Units of Measurement

Volume 1 1883 William Thomson, 1st Baron

Kelvin (1824-1907)


Figure 1 – Principle interfaces and interactions of a CAP

The overall success of a CAP as a management control tool relies on the degree to which these interfaces and interactions with the enterprise are established. These interfaces and interactions allow visibility to be gained through the gathering, process-ing, and presentation of information that facilitates decision-making.

However, the decisions made are only as good as the information provided.

The importance of accurate information in the decision-making process cannot be over-emphasized. This is particularly the case when it is directed at optimizing enterprise processes within the constraints of technical, regulatory, environmental, and health and safety issues.

A successful CAP supports management decisions based on the assessment of real facts provided in time, in context, and with complete integrity. It minimizes, if not eliminates, decision-making based on fuzzy data adjusted by fudge factors and historical comparisons.

Possibly the most advantageous by-product of a successful CAP is that it connects people and processes, the metrics, the business, and its customers. Therefore, it is imperative to understand CAP principles and practices.

Correct

∑

Measure

Products & Services

Enterprise Processes

Management, Infrastructure, Organizations, Projects

Requirements consistent with Data & Documents consistent with Real EnterpriseRegulated by Closed-Loop Change Management

InvestmentCapital

MaterialsResources

ManagementInfrastucture

DisturbancesEconomy

Equipment FailuresMaterials AvailabilityDemand FluctuationsResource Availability

Cust

omer

Dem

and

Data & DocumentsPoliciesProceduresStandardsSpecificationDrawings

DiagramsManualsDirectives & OrdersFormsRecords

Enterprise RequirementsOperationsMaintenanceLogisticsEngineeringInformationProduct

Sales & MarketingFinance & AccountingHuman ResourcesQuality ResourcesEnvironment, Health & Safety Services

Business RequirementsExecutive OrdersProduct StrategyMarket StrategyReturn on InvestmentBusiness Policies

Fiduciary DutiesAccounting PoliciesFinancingMergers & Acquisitions

Regulatory RequirementsExecutive OrdersProclamationsAdministrationDefinitionsReporting

LimitationsRecordsLicensingRegulations...etc.

AnalysisActual vs. Required - Root Cause Analysis

Correction & Prevention

Corrective Action Plan

Non-Conformance

Report

Deviation / Non-Conformance Reporting

Requirements

Requirements

Information

Info

rmat

ionCo

rrec

tive

& Im

prov

emen

t Act

ions

Feedback - Process Performance Results

Requ

irem

ents


Anatomy of a Corrective Action Program

CAP Fundamentals

Reference to a CAP often calls up a solution consisting of forms that capture capabilities supported by workflow and status monitoring. Although this is an underlying component of a CAP, by itself such a solution can only serve as a tool to support CAP automation.

A successful CAP designated as a management tool for enterprise-wide efficiency im-provement must address every aspect of the program in an integrated and consolidated manner. It must facilitate:

•A valid and concise view with complete traceability to all relevant identified performance requirements, to real assets and processes, and to relevant data and documents.

•The continuous identification of ownership pertaining to performance requirements for critical asset and processes, and their underwriting documents and data;

•The continuous identification, updating, recording, and procedural promulgation of critical process performance monitoring requirements, including associated perfor-mance criteria and testing, measurement, observation, and reporting methods;

•Timely observation and correct measurement against valid requirements, and subse-quent valid and concise communication of the identified improvement opportunity or nonconformance to the appropriate authority;

•The identification and authorization of applicable resources to perform complete impact analysis supported by risk quantification and prioritization.

This effort is directed at determining the real and potential consequences and critical-ity for an improvement opportunity or detected nonconformance. It considers business, operations and maintenance, engineering, logistics, safety, and environmental factors as well as associated regulatory requirements.

Real and potential consequences are expressed in terms of revenue, cost, schedule, technical performance, and risk criteria as they pertain to areas of impact:

•The identification and authorization of applicable resources to conduct root-cause analyses directed at relevant asset and process configurations, supporting docu-ments and data, and associated external and internal processes; results from the root cause analysis provide the basis to institute improvement, or corrective action, and prevent recurrence;

•Corrective action implementation planning, including the identification and authoriza-tion of resources designated for corrective action execution and the communication of valid and concise instruction that is supported by defined cost budget, schedule, logic of execution, deliverable result(s), and acceptance criteria;

“Measures shall be established to assure that

conditions adverse to quality, such as failures,

malfunctions, deficien-cies, deviations, defective

material and equipment, and non-conformances are promptly identified

and corrected. In the case of significant conditions

adverse to quality, the mea-sures shall assure that the

cause of the condition is determined and corrective

action taken to preclude repetition. The identification

of the significant condi-tion adverse to quality, the

cause of the condition, and the corrective action taken shall be documented and

reported to appropriate levels of management.”

– 10CFR50 Appendix B Section XVI:

Quality Assurance Criteria for Nuclear Power Plants and Fuel

Reprocessing Plants


•Corrective action progress monitoring and, when required, remedy in terms of cost, schedule, and technical performance;

•Verification of all corrective actions to ensure complete implementation; it includes maintenance and safekeeping of records to represent evidence, traceability, and demonstrated accountability.

CAP Success Factors

The encompassing nature of a CAP to facilitate management control requires interfac-ing and interaction with a broad range of enterprise processes. The capability of a CAP to provide this service relies significantly on these interfaces and the degree of information quality exchanged between a CAP and enterprise processes.

A major cornerstone of CAP success is information quality, where information quality is defined as the degree to which the information source(s) can:

•Provide use interaction with information where and when required,

•Facilitate finding and using information in direct context of the need,

•Enable the user to quickly define a valid and concise set of information,

•Allow information access and retrieval in the required format,

•Provide information with unquestionable integrity.

The “user” may be man or machine and “information” may be structured and unstruc-tured, irrespective of its source, format, or media.

The information interfaces and interactions with enterprise processes are not the only determining factors in the successful deployment and operation of a CAP. Cognizance must also be given to the functions and processes internal to a CAP, as well functions and processes external to a CAP. These internal and external functions and processes are denoted in Figure 1.

As the basis for a CAP success factor discussion, this diagram will now be elaborated.

ENTERPRISE REQUIREMENTSFrom a business, technical, human resource, and regulatory perspective, requirements regulate every aspect of the enterprise, through its complete lifecycle. In simplest terms, nothing in the enterprise happens without a requirement dictating it.

This argument can be extended to conclude that corrective action is a by-product of deficient requirements (or noncompliance with sufficient requirements).

Management requirements are thus directed at the continuous identification, definition, maintenance, and promulgation of qualified and quantified performance criteria to which enterprise processes must conform.

Failure Reporting, Analy-sis and Corrective Action

Taken - A controlled closed-loop system assuring that

all failures and non-con-formances are reported,

analyzed, and positive corrective actions are iden-tified to prevent recurrence,

and that the adequacy of implemented corrective ac-

tions are verified by test – DoD MIL-HDBK-2155:

Failure Reporting, Analysis and Corrective Action Taken


Enterprise requirements therefore constitute the absolute performance reference base for:

•All aspects related to the design, imple-mentation, operation, maintenance, and end-of-life activities for enterprise pro-cesses; it specifies what to plan for, do, and measure, and when to correct;

•Performance measurement to ascertain and control the degree to which enterprise processes conform to stated requirements.

The reference base concept is illustrated in Figure 2.

Requirements management is the foundation of CAP objectives to monitor, detect, analyze, and – when required – institute and verify cor-rection to prevent recurrence.

As to the criticality of requirements manage-ment in a CAP and the enterprise, a number of factors require consideration:

•Enterprise requirements are presented by business opportunity and often conflict with regulatory requirements. It is imperative to provide a consolidated view with complete traceability among all requirements. Figure 1 illustrates this principle.

•Requirements must be expressed and promulgated in the context of associated enterprise entities. This concept is reflected in Figure 3. The full impact of nonconfor-mance or improvement can only be deter-mined if the requirement is identified and communicated in context.

•The requirements and associated perfor-mance criteria selected for promulgation and monitoring must identify key perfor-mance indicators representative of business and technical success within the boundaries of regulatory compliance.

•Requirements must be complete, clear, and valid, where complete means suit-able identification and description to allow unambiguous interpretation by all parties.



Quaiified & quantifiedenterprise process performance priteria

dictatesprocess design, development, implementation,

0perations & maintenance

Quaiified & quantifiedenterprise process performance criteria

dictatesprocess measurement, verification, and

degree of conformance

Figure 2 – Requirements prescribe process performance and verifications

RequirementsSpecify performancecriteria embedded in

SpecificationDiagramsDrawingsData SheetsProceduresStandardsthat pertain to

SystemsStructuresEquipmentComponentspositioned and operating in

Locationsbeing managed by

People Organizationsexecuting & controllingProjectsProcessesEvents that must conform to

Requirements

Figure 3 – Requirements in context to Enterprise Entities


Clear means easy to understand and valid means that the outcome will be correct if associated requirements are fulfilled.

•Consistency must be retained between requirements, underwriting documents and data, and real enterprise processes with associated resources and infrastructure.

In a complex enterprise characterized by frequent incidents of change, consistency can only be retained by instituting a closed-loop change-management process.

The closed-loop change-management process assures the continuous recognition of change and, when required, the formal implementation and verification that ensures consistency among requirements, data and documents, and real enterprise. This con-cept is illustrated in Figure 4.

Figure 4 – Assuring consistency between Requirements, Information, and Real Enterprise

DATA AND DOCUMENTSIn the context of the CAP, data and documents describe the enterprise processes and criteria for fulfilling business, technical, and regulatory requirements. They are the sole source of information exploited by the CAP and the enterprise processes they describe. Figure 5 illustrates this concept.

From an information management perspective, this capability entails the identification, planning, creation or capture, safekeeping, and controlled promulgation of information in support of enterprise processes, inclusive of a CAP.

In a complex enterprise, a very large range and volume of documents and data, repre-senting both structured and unstructured content in many different formats and media, has to be managed by this information source.

RequirementsWhat needs to be there

(product, process & plant performance criteria)

Closed-LoopChange Management

assures Consistency and

Conformance

What we say there is, planned & actual

(documents & data records)

Design Information

Design Information

Support, Maintenance,

Training &ProcurementInformation

Information Product, process,plant, project

Real world, planned & actual(physical & functional

configurations)

Consistency

Must ConformCon

siste

ncy

Must C

onfo

rm

Consistency

Must Conform

“An immense and ever- increasing wealth of

knowledge is scattered about the world today; knowledge that would

probably suffice to solve all the mighty difficulties of our age, but it is dispersed and unorganized. We need

a sort of mutual clear-inghouse; a depot where knowledge and ideas are received, sorted, summa-

rized, digested, clarified and improved.”

– Herbert George Wells1940


Typical information entities associated with the complex enterprise include:

• Specifications and regulations that iden-tify, define, and describe a wide range of requirements and performance criteria for plant design, operations, maintenance, safety, environment, legal, commercial, etc;

• Drawings, diagrams, and item lists that identify and describe components, equip-ment, and configuration of systems and structures;

• User and service manuals that provide instructions for the correct use and mainte-nance of equipment;

• Training manuals that provide guidelines, educational content, exercises, examples, and aptitude assessment for the trainer and trainee;

• Procedures that provide instructions for the correct execution of process steps under specified conditions;

•Calculations that establish and verify the operational envelope of components, systems, and structures;

•Records that represent data logs, measurements, observations, engineering change, deviations, failures, non-conformance, maintenance events, modifications, inspec-tion events and outcomes, corrective actions, etc;

•Design baseline documents that represent the operational configuration of the plant and definitive proof of compliance with regulatory and operational requirements;

•As-built and as-maintained baselines that underwrite past, current, and designated future configurations of the enterprise;

•Project documents that detail cost, schedule, technical objectives, risk analysis, responsibilities, procurements, and work authorizations;

Data and documents used in the role of information source for a CAP and the enterprise must have the following characteristics:

» The information source must be capable of providing a unified view of all business, technical, and regulatory requirements data and documents.



Data & Documents communicate complete,clear and valid requirements and

underwriting information to the enterprise

Data & Documents communicate complete,clear and valid requirements and

underwriting information to support analysis

Requirements are embedded indata & documents

Figure 5 – Data & Documents communicate Requirements & Supporting Information to the Enterprise


The ability to assure process conformance is directly proportional to visibility of and access to requirements information.

» The information source must be capable of providing a unified view of all technical, commercial, and management data and documents relevant to enterprise success.

The enterprise efficiency is directly proportional to the visibility of and access to clear, valid, and concise information underwriting enterprise processes.

» The information source must conform to the principles of information quality.

» The information source must assure con-sistency between requirements and real enterprise (see Figure 4).

Information consumers must always be presented with the correct information, even when it changes.

» Data and documents must be identified in context with enterprise entities. This is illustrated in Figure 6.

This principle makes it easy to present complete information to the user based on needs. For example, upon the query “Failure Event X for Pump A,” the user is presented with related P&ID, data sheets, drawings, maintenance manual, failure reports, mainte-nance log, and modification history.

» To demonstrate accountability, the information source must identify and control information records, and then dispose of these records in a controlled manner when they have served their useful life.

» The information source must be able to declare, on a continuous basis, the fit-for-use status of information associated with past, present, and future require-ments and associated enterprise configurations.

ENTERPRISE PROCESSESFrom a CAP perspective, enterprise processes may be defined as:

Predetermined interaction, regulated by business, technical, and regulatory requirements, between a given infrastructure and associated resources with the objective of converting materials and effort to products and services designed to satisfy specified customer demand.

Informationis embedded in

SpecificationsDiagramsDrawingsData SheetsProceduresStandardsthat pertain to

SystemsStructuresEquipmentComponentspositioned and operating in

Locationsbeing managed by

People Organizationsexecuting & controllingProjectsProcessesEvents for which they require

Information

Figure 6 – Information in context to Enterprise Entities


This definition reinforces the primary objective of a CAP: namely, the continuous improve-ment of enterprise processes. Ultimately, it is the process that suffers from degradation or nonconformance when equipment fails or procedures are incorrectly executed.

Corrective action in legacy systems is often found to be only directed at the correction of process or equipment failure. In this approach, continuous corrective action does not necessarily imply continuous improvement of the enterprise process.

Repetitive correction of failure directly impedes the two fundamentals to continuous process improvement:

•Consistent conformance is achieved by communicating complete, clear, and valid requirements and associated measurements (see Figure 7).

•Continuous process improvement can only be achieved through consistent conformance.

Figure 7 – Process consistency and improvement depends on clear valid requirements, data, and documents

In order to advance from a state of continuous corrective action to that of continuous process improvement, the following conditions must be met for CAP deployment:

•Complete visibility of and traceability to real functional, positional, and physical configurations that establish the infrastructure;

•Complete visibility of and traceability to both internal and external organizational interactions with the defined infrastructure to the level where control is required;

•Complete visibility of and traceability to business, technical, and regulatory require-ments for designated configurations and related organizations.

These conditions must be met by all the embedded information in data and documents.

The premise here is that management efficiency is directly proportional to the availabil-ity and accuracy of information presented in the context of the decision-making event.

As illustrated in Figure 4, the establishment and retention of consistency between requirements, information, and real enterprise is imperative to the success of a CAP.

Correct

∑

Measure

Products & Services




InvestmentCapital

MaterialsResources


DisturbancesEconomy


Cust

omer

Dem

and

Corrective action in legacy systems is often found

to be only directed at the correction of process or

equipment failure. In this approach, continuous

corrective action does not necessarily imply con-

tinuous improvement of the enterprise process.


MEASUREMENTWhile clear, concise, and valid requirements establish the framework for performance definition, effective measurement provides the ability to verify performance confor-mance. These two principles — requirements and measurements — are prerequisites to achieving consistent conformance.

In the context of a CAP, the act of measuring refers to determining a performance value in accordance with the procedure for assessing a specific performance criterion stipulated by a requirement.

It is the act of performance verification that affords the chance to detect nonconfor-mance or identify an opportunity for improvement. This principle is illustrated in Figure 8.

Figure 8 – Measurement allows the detection of Non-conformance and Feedback

Depending on the entity being verified, the act of measurement in a CAP may imply either quantification or qualification of a performance value. For example:

•Quantitative statement: “The output voltage Vout shall be stabilized at 5±0.1 VDC with a maximum ripple current of 15mV RMS through the output current range of 0 < Iout < 10A.”

•Qualitative statement: “Design documents shall be reviewed and approved for release by the design authority and the end-user.”

This means the act of measurement may be conducted by suitable instrumentation, observation, or combinations of these.

Depending on the nature of the enterprise, many types of measurement processes may be applicable to detect nonconformance or opportunity for improvement. These measurement processes include:

•Continuous inspection and observation, as dictated by process quality and safety con-trol procedures; this includes real-time process monitoring and data logging systems;

Correct

∑

Measure

Products & Services




InvestmentCapital

MaterialsResources


DisturbancesEconomy


Cust

omer

Dem

and

Non-Conformance

ReportTo be analyzed


•Scheduled maintenance events for inspection and calibration;

•Scheduled self-assessment for the evaluation of human and business performance;

•Formal audit or review, conducted by either an external or internal authority;

•Operating experience for the exchange of knowledge by same industries to compare, identify, and negate potential safety or process degradation issues; Operating experi-ence is also applied conversely to identify the potential for process improvement;

•Benchmarking for the systematic comparison of same industry products, services, and practices for the specific purpose of identifying best practices and performance gaps, and setting targets that lead to improved performance or processes;

•Recording ad-hoc failure events associated with structures, components, equipment, or procedure execution.

As the prime input to corrective action and, ultimately, process improvement, these measurement processes are critical to the success of the CAP. Therefore, measure-ments pertinent to the CAP must adhere to the following parameters:

•Conformance measurements must be directed at all enterprise processes represen-tative of business, technical, and regulatory success.

•Conformance measurements must accommodate change. Consistency, supported by complete traceability, must be retained among the embedded data and documents for conformance measurements, requirements, and the real enterprise.

Conformance measurement is an integral part of the closed-loop change management process that assures consistency among requirements, data and documents, and real enterprise (see Figure 4).

•Conformance measurement must be assigned to a designated authority with respon-sibility and accountability to ensure measurement disposition and execution.

•Conformance measurement procedures and policies must clearly identify designated ownership and methods for measurement, recording outcomes, and processing mea-surement results. (The latter includes diagrams indicating logical and conditional flow to assure complete closed-loop communication and disposition of results.)

•Conformance measurement procedures and policies must be concise and easily applied.

•Conformance measurement records must be retained and preserved in accordance with record management principles; i.e., demonstrate accountability and evidence of measurement, and record preservation and disposition.

•Conformance measurement records must be identified in context and be traceable to the measurement event, designated authorities, target process and associated physical and/or functional items, relevant procedures, supporting documents and data, and measurement outcome and disposition.

Conformance measure-ment is an integral part

of the closed-loop change management process that assures

consistency among requirements, data and

documents, and real enterprise


Identification should include, where applicable, references to conditions and failure modes, safety and business consequences, failure/nonconformance/improvement op-portunity classifications, trending codification, and priority for resolution.

•Conformance measurement records must be traceable to all disposition activities and status. They include subsequent corrective actions, engineering change, modifi-cations, repairs, training, process verification, and qualification.

ANALYSISAnalysis in the context of a CAP involves the screening and assessment of confor-mance measurement to identify process variation, potential degradation, realized deviation, and non-conformance or opportunity for improvement.

The analysis determines cause and effects, with the subsequent course of action designed to institute correction, prevention, and improvement.

The analysis process is critically dependent on the accuracy and completeness of the data and documents that identify and describe the non-conformance. The information sources must be of high integrity and be supported by clear and valid requirements. These dependencies are illustrated in Figure 9.

Figure 9 – Analysis and its critical interfaces

Analysis is a formal process conducted by a review board with the objective to deter-mine root cause, required correction, and preventative actions. The review board is typically constituted by authoritative members with specialized skills such as represen-tatives from projects, sales and marketing, operations, maintenance, logistics, design and system engineering, reliability, quality assurance, and configuration management.

It is the responsibility of the review board to perform the following:

•Screening and disposition of nonconformance or opportunity for improvement;

•Analysis to determine cause, impact, corrective action, and prevention;

•Documenting and promulgating defined actions for correction and prevention;

•Monitoring and controlling corrective action implementation status;

•Reporting of CAP-associated aspects such as trending, impact, action status, issues, and successes as related to enterprise organizations, processes, and associated infrastructure.

AnalysisActual vs. Required - Root Cause Analysis

Correction & Prevention





Corrective Action Plan

Non-Conformance

Report

Concise, clear & valid requirements

For implementation to designated processes

Concise, clear & valid information

From measurement & non-conformance detection


Screening

Screening is a critical step of a CAP because it provides the opportunity to identify and collate nonconforming performance measurements. The objective is to identify similar enterprise-wide issues and consolidate corrective actions. It also eliminates duplicate actions.

A further objective of the screening process is to establish decision models for the escala-tion of issues in the context of their business, technical, and/or regulatory significance.

Screening methods may vary depending on the level of conformance measurement effort, presentation, and results. The most common screening methods applied in a CAP include:

•Statistical analysis ranging from sampling plans and control charts to advanced techniques such as cluster analysis, ordinal regression, and forecasting models;

Statistical analysis is mainly applied to determine process variation and the potential for degradation and eventual nonconformance by defect or failure; it is a powerful tool to detect trends, particularly when the source data allows trending in the context of time, related events, nonconformance rates, modes of operation, conditions, classes, associated physical items, functional systems, organization, and location reference;

•Inspection and interpretation of nonconformance reports such as self-assessment, benchmarking, and operation experience reports.

Cause, Impact, Corrective Action, and Prevention

The focus of this CAP core activity is to determine:

•The cause of non-conformance;

•Its impact on business, technical, and regulatory requirements, related processes, organizations, and infrastructure;

•Appropriate action to correct and prevent the cause; this includes, when required, directives to the closed-loop change process, illustrated in Figure 4, to ensure con-sistency between requirements, data and documents, and real enterprise.

Several investigative or analytical techniques can be applied in root-cause analysis such as brainstorming, nominal group technique (NGT), failure mode and effects analy-sis (FMEA), fault-tree analysis (FTA), Ishikawa cause-and-effects diagrams, worst-case/design-margin analysis, statistical design of experiments, etc.

Lessons learned, best practices, and noteworthy accomplishments should be consid-ered as part of the analysis.

Screening is a critical step of a CAP because it

provides the opportunity to identify and collate non-conforming performance

measurements. The objec-tive is to identify similar enterprise-wide issues

and consolidate corrective actions. It also eliminates

duplicate actions.


Impact assessment can typically be aimed at four areas of interest:

•Impact on business requirements, addressing criteria such as revenue, costs, schedule, risk, enterprise reputation and stature, etc;

•Impact on technical performance requirements, addressing criteria such as availability, reliability, maintainability, operational safety, etc;

•Impact on regulatory requirements, addressing criteria such as safety, health, environment, limitations, regulations, operating license, etc;

•Impact of change; this addresses the potential consequences of change affecting enterprise requirements, processes and procedures; infrastructure acquisition and/or modification; and human resource re-training and qualification. It also includes the need to update data and documents, and re-establish design and operating baselines.

When the cause and impact of nonconformance, or opportunity for improvement, has been determined, corrective action must be formulated. Most often, corrective ac-tion decisions are made from among several alternatives. These alternatives must be clearly defined, and their relative merits must be evaluated.

Some complexities and challenges in decision-making may be introduced by opposing business, regulatory, and risk requirements.

Corrective action formulation must discriminate between immediate correction (i.e., material rework, repairs, customer service, etc.) and preventative action to eliminate potential recurrence.

Corrective Action Documentation and Promulgation

Corrective actions are communicated by the review board through a documented cor-rective action plan that generally identifies and describes the following aspects in a complete and valid manner:

•Target process, associated infrastructure and organizations, and supporting data and documents;

•Corrective and preventative action supported by appropriate data and documents;

•Associated nonconformance events and reports;

•Roles and responsibilities for corrective action implementation;

•Priorities, prerequisites, and logical sequence of implementation;

•Verification methods, responsibilities, and acceptance criteria.

It is always good practice to promote the participation of related organizational entities, both internal and external, in the compilation and review of a corrective action plan. However, the corrective action review board is ultimately responsible and subsequently accountable for the formal review, approval, and release of a corrective action plan.


As illustrated in Figure 9, the corrective action plan constitutes the absolute basis for execution of corrective actions.

Corrective Action Plan Monitoring and Controlling

Monitoring and controlling are closely related to planning simply because without plans to set objectives and specify activities, control would serve no useful purpose. The corrective action plan as described above serves as the basis for monitoring, con-trolling, and status reporting.

The review board is responsible for ensuring the complete implementation and closure of the corrective action—from measurement, nonconformance detection, analysis, cor-rective action identification, and planning to final execution, verification, acceptance, and closure.

Close interaction between the review board and the activities executed during the correction process must be established. This requires CAP integration with planning, scheduling, and budgeting. Work authorization and cost accumulation systems are key elements for cost and schedule control.

These systems should be employed in an integrated manner to provide overall CAP progress monitoring for day-to-day management, and to allow timely and meaningful decisions when deviation is detected.

The prime areas designated for corrective action plan monitoring and control are:

•Cost and schedule control,

•Technical performance measurement,

•Corrective action reviews.

Cost and schedule planning inherently assumes adequacy of corrective action to meet technical requirements. Technical performance measurement is accordingly a key ele-ment in providing confidence in a CAP; it demonstrates and verifies the degree to which the technical objectives are achieved. Technical performance assessment points should coincide with the planned completion of significant corrective action milestones to facilitate the verification of results.

Successful monitoring and control also requires the establishment of corrective action reviews. The following reviews should be considered:

•Process and infrastructure technical design reviews—conducted at major milestones and decision points in a corrective action lifecycle. These reviews should include a comprehensive examination of the solution design, performed by qualified personnel. They contribute largely to early verification that the corrective action and its desired outcome will conform to business, technical, and regulatory requirements.

Close interaction between the review board and the activities executed during

the correction process must be established. This requires CAP integration

with planning, schedul-ing, and budgeting. Work

authorization and cost accumulation systems are key elements for cost and

schedule control.


•Corrective action progress reviews—routine review of corrective action progress against cost, schedule, and technical requirements. These reviews contribute to early identification and control of corrective action problems.

•CAP reviews—encompass the entire CAP, with the objective of assessing overall trends such as process improvement, identification of CAP critical areas, and degree of conformance to business, technical, and regulatory requirements, etc.

CAP Reporting

Reporting of CAP trends, impacts, action status, issues, and successes across the enterprise organizations, processes, and infrastructure not only provides essential in-formation to management, but also mobilizes CAP awareness and participation through all levels and by all members of the enterprise.

CAP reporting applies to entities that are both internal and external to the enterprise. External entities include contrac-tors, vendors, industry organizations, and federal and state regulators.

The value of reporting is not only vested in the typical communication of time-based trends, noncon-formance distribution and status reporting, but also in the sharing of root-cause analysis outcome, success-es in best practices and operating experience, etc.

Reporting CAP performance metrics should focus on key performance indicators (KPIs) designated to associated business, technical, and regulatory requirements, as well as CAP elements such as processes, organizations, products, and services.

Today’s reporting technologies offer tremendous opportunity to produce flexible, graphics-laden presentations directed at specific audiences. These applications dimin-ish the IT management efforts to ensure the delivery of suitable and tailor-made CAP instruction and feedback to every CAP participant across the entire enterprise.

The application of real-time digital dashboard reporting interfaces contributes significant-ly to a CAP. It is truly a critical element in the manifestation of information quality– i.e., the right information at the right time and place, in an easy-to-understand format.

Figure 10 illustrates a KPI dashboard example.


CORRECTIONThis CAP element involves the implementation of corrective action plans to institute correction, prevention, and improvement. Figure 11 depicts the process and interfaces for implementing the corrective action.

Figure 11 – The Corrective Action Plan institutes correction, prevention & improvement

Correction requires the responsible authorities, assigned by the corrective action plan, to authorize the required corrective action tasks and disseminate work packages to designated organizations.

Detailed organizational planning and control is typically involved following the prudent principles of project management.

The project management process directs the flow of work and work authorization to the individuals, facilities, and organizations that perform the required work within estab-lished budget and schedule criteria. It is also engaged in the:

•Identification of applicable work packages, associated statement of work, work package support documents, and data provisioning such as modification or training instructions, drawings, diagrams, etc;

•Monitoring and controlling prerequisite events and inputs from other work packages;

•Monitoring, controlling, and reporting progress and completion status of work pack-ages to the organization and the corrective action review board.

In the complex enterprise, correction tasks typically involve many organizations, both internal and external. For example:

A corrective action plan at a power plant calls for engineering to redesign a process with participation from reliability to assure safety and availability. At the same time,

Correct

∑

Measure

Products & Services




InvestmentCapital

MaterialsResources


DisturbancesEconomy


Cust

omer

Dem

and

Non-Conformance

ReportFrom Analysis

Correction requires the responsible authorities,

assigned by the corrective action plan, to authorize the

required corrective action tasks and disseminate

work packages to designated organizations.


configuration management directs the updating, review, approval, and release of documents and data to establish new design baselines required by the regulator. This information is required by procurement, maintenance, and multiple subcontractors for planning, purchasing, and contracting. Meanwhile, human resources plans for and implements retraining and requalification. Business, operations, and project manage-ment determine the best outage opportunity to minimize business impact.

In such an enterprise, the complexities introduced by the efforts to meet cost and schedule in concert with business, technical, and regulatory requirements constantly challenge CAP management. These challenges affect many aspects of plan deploy-ment, including:

•Scheduling, budgeting, work authorization, and resulting time and cost accumulation;

•Meeting objectives to conform to all critical requirements, necessitating continuous change management’

•Monitoring a multitude of actions and events with respect to progress and status’

•Frequent remedy to remain on track’

•On-time creation, change, release, and use of the correct information to support all of the above activities.

The ultimate challenge for CAP management is the constant influence of a continu-ously changing environment. This phenomenon requires conscientious management, because it can be detrimental to a CAP when the rate of change exceeds the ability to accommodate change. When that occurs, it creates a never-ending spiral of ineffective corrective action—constantly addressing a symptom and never reaching the point of continuous improvement.

These challenges can be met by the exploitation of a well-defined CAP that is sup-ported by an enterprise-wide capability to manage and control non-conformance and associated corrective and preventative work, all underwritten and supported by infor-mation with unquestionable quality.

Challenges to Successful CAP Deployment

The challenges faced in deploying a successful CAP can be grouped into two catego-ries: 1) Challenges posed by the nature of fragmented organizations and associated processes; and 2) Challenges posed by the nature of stand-alone information systems.

Fragmented Organizations and Associated Processes

The complex enterprise is characterized by a collection of diverse organizations rep-resenting many different kinds of processes. These organizations include accounting, marketing and sales, operations, and maintenance.

The ultimate challenge for CAP management is the

constant influence of a continuously changing envi-ronment. This phenomenon

requires conscientious management, because it can be detrimental to a CAP when the rate of

change exceeds the ability to accommodate change.


Each of these entities may further be typified by its own intrinsic complexities. For example:

•They are often geographically dispersed.

•Unique processes and infrastructure are tailored to the requirements of the specific organization.

•Unique management systems are tailored to the requirements of the specific organization.

•They have their own organizational cultures.

This organization-centric complexity contributes to organizational fragmentation. It is not uncommon for this fragmentation to result in organizations that are loosely con-nected by unstructured and uncorrelated interfaces.

Organizational fragmentation presents challenges to a CAP, particularly in achieving the objective of continuous improvement. The most prominent challenges are:

•Limited visibility and unawareness of enterprise requirements—This invariably promotes organizational-centric activities based on information sources and experi-ences that are not always on par with interfacing processes, products and services, or the enterprise as a whole.

A typical example may be where modifications were performed and recorded during maintenance events but with no further documented propagation. For a future plant out-age, engineering, project management, procurement, and maintenance each perform the required planning, design, and procurement—from their own perspectives and informa-tion sources—only to discover incompatibilities and non-conformances at the time of the outage. This, of course, leads to repetitive organizational-centric corrective actions.

•High susceptibility to change during the entire lifecycle—Driven by the continu-ous demand for process improvement to meet changing regulatory, environmental, investor, operational, and consumer requirements, these organizations and their associated processes and infrastructures are in a constant state of change.

However, fragmentation again leads to organization-centric change, with little overall benefit to the enterprise. Not much is gained by improving a process if its integration with other processes.

•Focus on treating the symptom rather than the cause—Organization-centric corrective action rarely gets to the root of the identified problems.

For example, a bill of material defined by design engineering may require restructuring by manufacturing or construction to transform it from a functional hierarchy to a manu-facturing/construction hierarchy. This action not only introduces the potential for error,

For a future plant out-age, engineering, project

management, procure-ment, and maintenance

each perform the required planning, design, and

procurement—from their own perspectives and

information sources—only to discover incompatibilities

and non-conformances at the time of the outage.


but also creates a new baseline that logistics, procurement, and others are unaware of. There will be a high probability of costly corrective action to expedite/re-procure components, rework, update documents, etc.

STAND-ALONE INFORMATION SYSTEMSA complex enterprise is almost synonymous with an extensive legacy of many different IT systems and associated support infrastructures. These IT systems are deployed in a wide range of applications, usually functioning as mission-critical management, business, and technical process tools on an organizational basis. These systems are also recognized for handling very large volumes of data and documents over short periods of time.

Information systems in a complex enterprise are typically characterized by the following traits:

•No single system provides a complete enterprise IT solution—Although often claimed, such a solution is not possible at this time. Typically, multiple organiza-tions deploy the best-of-breed, line-of-business systems supported by a multitude of proprietary and commercial IT solutions.

•Individual IT systems focus on specific organizational processes—The IT infrastruc-ture supports a narrow range of solution technology typically associated with a specific enterprise process and its associated organizations.

Examples are enterprise resource planning (ERP) vs. design tools such as CAD, and enterprise content management (ECM) vs. configuration and change management tools.

•IT solutions are supported by multiple vendors and platforms—Across the enter-prise, organizational IT solutions are from multiple vendors, and operate on different hardware platforms and operating systems.

This situation also demands system-focused and specialized IT support, which often rules out the efficient leveraging of IT skills across the enterprise.

The enterprise IT scenario described above invariably results in a multitude of stand-alone IT systems that function as islands of automation with silos of data. The contents of these data silos are in multiple formats and media, both electronic and physical.

These stand-alone systems present two major challenges to the CAP: information integrity, and information access and collation to obtain useful information.

Information Integrity

Masses of data and documents are created by stand-alone systems and disseminated to many users and other systems in diverse organizations. This most often takes place through inefficient interfaces with an inadequate record of distribution and use.


The very nature of the information in its role of underwriting enterprise processes predisposes it to frequent change. This tenure, in combination with the information silo syndrome, poses exceptional challenges to retaining information integrity.

To preserve information integrity, complete closed-loop change implementation requires visibility to all related information; the information silo syndrome makes this inherently difficult.

When the rate of change reaches a level where the change management system cannot completely track the changes within a closed-loop change implementation, information integrity starts deteriorating.

The use of incorrect information warrants nonconformance, which may manifest as re-peated rework or reprocurement, financial loss, and critical safety issues—all of these initiating chronic corrective action.

The cycle of incorrect information leading to chronic corrective action greatly mitigates the primary objective of the CAP—i.e. to achieve process consistency and improvement across the enterprise.

Information Access and Collation

The many sources of information represented by many different systems impede overall visibility and access to the relevant and accurate information required to execute CAP-related tasks.

Different silos of information have different content formats and access procedures. In-formation may be in dissimilar electronic formats such as different databases, spread-sheets, office documents, and scanned images, as well as in various physical media such as printed reports and paper drawings.

These conditions complicate the ability to hone in on relevant information and then extract it from the various sources in an efficient and timely manner to satisfy CAP information requirements.

Challenges common to CAP information access and collation, and to the enterprise in general, can be found in:

•Obtaining and sustaining the know-how of where to find information. This knowl-edge is often embedded in an individual’s field of experience. This condition is aggravated by changes in IT systems or by the availability or loss of the individual;

•A collation process that involves validation to assure relevance and integrity, followed by manual effort to convert formats and media before producing the desired output;

Different silos of informa-tion have different content

formats and access procedures. Informa-

tion may be in dissimilar electronic formats such as

different databases, spread-sheets, office documents, and scanned images, as well as in various physi-

cal media such as printed reports and paper drawings.


•The validation and elimination of discrepancies from the different information streams. Conflict may evolve in the quest to ascertain which information source constitutes the master.

A Working Solution for CAP Success

The CAP challenges described above stem from fragmented organizational processes and information. The result may be a legacy CAP typified by weaknesses such as:

•Lost opportunities to identify and act on lessons learned;

•Corrective actions backlog with implementations by designated organizations in an uncorrelated, nonsynchronized way;

•Inadequate trending and root-cause analysis, often attributed to insufficient or non-existing records;

•Absence of a closed-loop, with incomplete follow-through to root-cause and preventative remedy to permanently resolve the problem;

•Continuous operation in a reactionary, fire-fighting mode to address recurring problems;

•Focus on interim solutions that preclude the enterprise from attaining process consistency and subsequent continuous improvement—which remains the primary objective of the CAP.

To overcome these challenges and achieve a successful CAP deployment—whether by eliminating the weaknesses from a legacy CAP or by deploying a new CAP—a unified approach across the enterprise should focus on these critical requirements:

•Introduction and maintenance of a CAP directed at the continuous performance improvement of processes to meet documented requirements;

•Information quality, which is the cornerstone of a successful CAP; consistency between the data and documents and the enterprise requirements remains a prerequisite for continuous improvement;

•Conformance measurement (i.e., inspection, test, observation, etc.) conducted by designated persons in accordance with documented procedures;

•Documented nonconformance recorded as a set of required data items that fully identify and describe the observed event in complete context to the enterprise; Figure 12 depicts this concept.

•Based on non-conformance type, a corrective action must be assigned in accordance with a predetermined flow logic and responsibility definition for analysis and dispo-sition by designated persons.


•Root-cause analysis conducted by subject experts, supported by complete, clear, and valid data, documents, and records, and presented in the context of the non-confor-mance event; the objective of the analysis is to determine root causes and develop corrective actions to rectify the immediate problem and prevent recurrence;

•Documented corrective action identified and described in complete context of the enterprise; Figure 12, depicts this concept;

•Controlled work authorization process allocating documented corrective action to responsible persons and organizations for implementation to ensure accountability for completeness, cost, and schedule criteria; the documented corrective action may require formal rework, modification, etc., with resulting change requests and subsequent change management as an integral part of the process;

•Verification performed by designated authorities to ensure that the corrective action has been implemented; it includes, where applicable, verification of updated data and documents and the re-establishment of baselines;

•Complete record establishing accountability by the capturing evidence of the non-conformance, associated events, and consequent activities or transactions;

•Continuous monitoring and trending to ensure that corrective action objectives for process consistency and process improvement have been achieved.

These CAP requirements present complexities in information management that cannot be readily solved by the deployment of generalized line-of-business information solutions.

A successful CAP solution requires consideration of the distinctive characteristics asso-ciated with the complex enterprise, as well as recognition of some primary principles.

First, the overall information management solution for the complex enterprise is a com-bination of best-of-breed systems that provide solutions through the complete lifecycle of the enterprise. This combination of systems implies that the CAP must be capable of integrating with the enterprise solutions infrastructure to a degree that a unified view towards all relevant documents, data, requirements, nonconformance, and corrective action can be established.

A key success factor is bringing these systems together to operate as an integrated information entity that provides a holistic solution serving the needs of all participants at all levels of the enterprise.

These individual systems, including the CAP, often materialize as information silos that create complex challenges in realizing a successful solution. It is thus imperative that the CAP solution be deployed in a unified manner to interact with and support legacy enterprise systems.

A key success factor is bringing these systems

together to operate as an integrated information entity that provides a holistic solu-

tion serving the needs of all participants at all levels

of the enterprise.


Introducing Bentley’s CAP Solution

Bentley’s AssetWise platform delivers incident management/corrective action capa-bilities that provide a consistent, enterprise-wide framework for incident response, analysis, and dissemination of feedback to relevant parties, and implementing the appropriate changes.

AssetWise products automate and facilitate the identification and resolution of issues and incidents that are adverse to quality through user-friendly condition reports, re-views, action tracking, and eventual closure. Because AssetWise links all relevant interrelated information types across disparate repositories, issues and incidents can be directly related to equipment, systems, pro-cesses, documents, organizations, and people. This unique approach enables organizations to analyze problems quickly and make informed decisions about corrective and preventative actions in the context of a specific role. Furthermore, a powerful trending feature catalogs all events and actions for statistical analysis and reporting.

AssetWise is further supported by proven deployment principles and Bentley’s extensive expertise and knowledge in:

•Information modeling, requirements/concept definition, design, engineering, con-struction, operations, and end of life;

•Solution deployment principles that maximize rapid return on investment and, at the same time, minimize risk;

•Technology and applications capable of providing a complete asset lifecycle infor-mation management system in harmony with existing enterprise IT systems.

As a CAP solution, AssetWise provides enterprise-wide process discipline and methods that enable consistent CAP practices directed at product, service, project, and infra-structure in context with all asset data, documents, and organizational elements.

DocumentedCorrective Action

DDoDocumente

DocumentedNon-Conformance

Locations where there are:SystemsStructuresComponentsProcesses

Described by:Technical ManualsDrawingsProceduresStandards

Managed and controlled by:ProjectsPeopleOrganizations

Participating in:ProcessesChange RequestsChange NoticesModificationsWork Orders

Figure 6 – Information in context to Enterprise Entities


© 2011 Bentley Systems Incorporated. Bentley, and the ‘B’ Bentley logo are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated, or one of its direct or indirect wholly-owned subsidiaries. Other brands and product names are trademarks of their respective owners. BAA018880-1/0001 07/11

The fundamental principles behind this solution facilitate a timely and complete CAP cycle, including measurement, nonconformance detection, analysis, and correction/prevention/improvement, all against clear and valid requirements supported by high-integrity information.

AssetWise provides access to and delivery of complete, accurate, and meaningful CAP information relative to business processes and the end-user’s role across the enterprise.

Accurate and meaningful CAP information is a critical management tool. An AssetWise CAP augments management’s capacity to:

•Meet the demands of constantly changing regulatory and business requirements;

•Establish complete and unified CAP visibility and documented traceability across the enterprise in context with process trends, detected nonconformance, corrective action status, and process consistency and improvement;

•Optimize process efficiencies by identifying trends and instituting timely correction to avoid deviation and subsequent nonconformance;

•Moderate the implications of regulatory compliance through an established, docu-mented process that provides complete traceability from nonconformance to root cause through corrective action and subsequent verification;

•Achieve the objective of process consistency and improvement through preventative action, in contrast to a reactive and repetitive approach to nonconformance.

To Learn more about Bentley’s AssetWise products and services visit www.bentley.com/assetwise.

“Forget about tinkering with your company’s organi-zational structures, job

descriptions, or machinery. Instead, prepare to chal-

lenge, and in some cases, abandon fundamental

assumptions on how your company does its work.

Look beyond tasks, jobs and organizational struc-

tures to focus on processes - sets of activities that cross

functional borders and which take information, raw

materials, labor and other inputs to produce outputs

designed to meet customers’ needs.”

– Michael Hammer James Champy

Reengineering the Corporation, 2003