Machine Safety: Managing operational risk

Risk management has historically been a core element of business management to protect vital enterprise resources. Key executives now take a much broader perspective called “Managing Operational Risk,” with benefits for machine safety. See six data points or ways to measure.


Strategies like “Best In Class” and “Overall Equipment Effectiveness” (OEE) bring together business macro’s like Social Responsibilities and Business Strategy KPI’s with a key common focus called – Machine Safety. Courtesy: JB Titus & Associates

Risk Management has historically been a core element of business management as viewed from the insurance perspective and the assurance of protecting the vital resources of an enterprise. No longer! Key executives now see a much broader perspective called “Managing Operational Risk,” which includes several more key aspects critically important to a healthy business.


Six data points/ways to measure: How important does your organization consider some of the following items relating to their database of “know how” for feeling the pulse of their business operations?

  1. Production control automation data
  2. Risk assessment data
  3. Change management data
  4. Dashboard tools
  5. Non-compliance data
  6. Unplanned downtime data


As you look at these items you readily understand that you don’t see any data about how many stocking locations are too high, which reduces the effectiveness of installed overhead sprinklers guarding against fire hazards. Obviously risk management is no longer the exclusive domain of the insurance perspective. I believe executives are now expanding the practice of managing operational risk because they understand the potential negative impact and because software tools now exist that enable efficient gathering and reporting of critical data.


In fact, in my opinion, one reason companies are transitioning from wired electro-mechanical safety devices to electronic/software based safety devices is to enable the efficient gathering of critical safety-related data. This further enables manufacturers to see the bigger picture of their operations and to develop solutions for eliminating un-planned downtime. We actually see some companies feeding this information to plant level employees via their mobile devices or work stations to support relevant timely continuous improvement action.


Can this expanded approach to Managing Operational Risks actually have resulted from Enron?


J.B. Titus, CFSE

Your comments or suggestion are always welcome so please let us know your thoughts. Submit your ideas, experiences, and challenges on this subject in the comments section below.


Related articles:

Aberdeen Group - “Operational Risk Management”, November 2012

The term Operational Risk Management (ORM) is defined as …..Wikipedia

Machine Safety: Where do effective safety cultures roost?


Contact: for “Solutions for Machine Safety”.

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