JCI Facility Risk Real

7/30/2019 JCI Facility Risk Real

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12 BioProcess International DECEMBER 2007

Is Facility Risk Real?Understanding Facility Risk Management

by Gregory Weddle, Jonathan Coburn, and Javier Morell

FOCUS ON... BUSINESS

Buildings can inspire us withtheir beauty or impress us withtheir functional elegance. In thelife sciences industry, the

relationship between form and functionis influenced by the processrequirements of products we wish tobring to market. Pharmaceutical and

biotechnology companies may buildtheir corporate headquarters withinspiration in mind. But, they build,operate, and maintain manufacturingand laboratory facilities as functionalsites. Such facilities are built to serve aspecific purpose that supports anowners business. But facilityconstruction also brings risk into abusiness that can be significant andunforeseen. On closer inspection, youdont have to look far to see the

implications of facility risk.

A FACILITY RISK NIGHTMARE

One good example from outside thebiopharmaceutical industry illustrates animportant element of risk awareness. AtConAgra two seemingly minor andinconsequential facility problems causedSalmonellacontamination of Peter Panpeanut butter, ultimately sickening 628people across 47 states in early 2007(Facility Risk At Work box).ConAgra recalled the product on 14February 2007 and reintroduced it fivemonths later after both internal andexternal (US Food and Drug

Administration, FDA) investigations.The problem there was not a lack of

knowledge. Undoubtedly the people atConAgra, whose core business is foodproduction, know how moisture canaffect the presence of bacteria and howtheir manufacturing processes work, andthey are certainly concerned aboutproduct contamination. Yet it appears

that no one at ConAgra connected the

leaking roof and fire sprinkler to the riskof product contamination. A contributingfactor to this disconnect, and commonpractice among many large companies, isspecialization. Specialists who work indifferent departments each have pieces ofa big picture. But their collectiveknowledge is not brought together and

focused through the lens of facility risk.ConAgra reported $66 million indirect (accounting) costs associated withthe incident. However, those costs areonly a fraction of the total economic costthe company now faces. They do notinclude revenue and profit foregoneduring the recall, lawsuit exposure(lawsuits were filed within days),increased regulatory audit costs over thecoming years, and long-term damage tothe brand. With additional costs, the$66 million price tag currently associated

with this incident is shockingly low.Regardless of the final tally, its clearthat the overall cost from this incident ishuge when compared with the minorcost of understanding the possibilitiesand probabilities of failure in addition topreventing the problem from the start.

How Could That Happen?Thisquestion plagues us as we struggle withthe consequences of an incident hindsight is always 20:20. Unfortunately,the human tendency is to think

deterministically, not probabilistically.

We dont know about all the times,if any, that water leakage at theConAgra factorydidntresult inproduct contamination. The peopleinvolved received no clues about therisk associated with those particularevents and, apparently, treated them asroutine repair issues.

Extensive research indicates thathumans are extremely poor judges ofrisk. Nothing in our evolution preparesus for the masses of information and thecomplexity of the environments we liveand work in today. Our history preparedus to react to visible and concrete risks(e.g., an attacking lion), but not toabstract ones. Individually, we havelearned to make decisions based ontraditional rules of thumb that havethen been shaped by our individual

experiences. This makes us especially ill-equipped to accurately assess low-probability, high-consequence eventsbecause we dont have enough experience

with them to develop an accurateinstinctive response after all, theydont happen that often. Instead, we areconditioned to equate low-probabilityevents to low risk, without consideringthat such an event can still be very riskyif the consequences are high enough.

Additionally, when people think aboutfacility risk, they often include somecommon misconceptions (see FacilityRisk Management Myths box).

FACILITY RISK DEFINED

Although the concept ofrisk canmean many different things to manydifferent people, risk is defined by asimple equation:

Risk = Probability Consequence

Facilities are used to establish andmaintain indoor environments

necessary to support business activities.

WWW,PHOTOS.COM


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Therefore, facility risk is related to theability to achieve and maintain thoseenvironments.

An office building has relativelysimple human comfort requirements. Bycontrast, a pharmaceuticalmanufacturing space can have stringentspecifications for work flow, security,temperature, humidity, air flow, and

containment or particulate count. Mostlife-science facilities contain a variety ofspace types: office and common areas,production suites, laboratories, animalrooms, warehouse and stability areas,and utility plants. Differentenvironmental requirements can exist forthe same type of space at differentlocations in a facility. Here we refer to aphaseas a unique combination of spacetype and environmental requirements.

In all facilities two primary elements

establish the proper indoor environment.The first is the building envelope: Itisolates the indoor environment from theoutside world and creates the physicalspaces in which unique environments areestablished. The purpose of the secondelement is to establish, maintain, andmonitor required environmentalparameters. That is achieved throughcomplex interaction of electrical andmechanical utility systems (e.g.,switchgears, boilers, chillers, aircompressors, air handling units, exhaust

fans, and fume hoods). Everything isinterconnected by pipe-, wire-, andductwork and orchestrated by some sortof control system to maintain theenvironment within acceptable limits.

So how does this view of facilitiestranslate into a comprehensiveinterpretation of the risk equation?

Probability reflects the chances that

an unacceptable indoor environment willoccur in one or more of the facilityphases as a result of system or componentfailure. Because utilities and equipmentcan be interrelated and interdependent inestablishing indoor environments, systemand equipment dependencies should beconsidered when assessing probabilities.

Consequence reflects the monetaryloss incurred by not maintaining properindoor environmental conditions requiredto sustain product integrity throughout

various phases. Consequences can takethe form of lost production time (lostrevenue), lost research (opportunity costof delays in bringing product to market),lost product (direct cost), regulatory fines(regulatory risk), brand damage fromadverse publicity, and any number ofother potential outcomes that businesses

want to avoid.By defining both probability and

consequence in this way, the riskequation becomes quantified in monetaryunits. For example, the amount of lost

revenue is directly affected by the lengthof downtime incurred. In terms ofmonetary loss potential, risk as definedby this equation simply becomes anothercost, just like fuel, electricity, andoperations. Ultimately, this is the ideal

way to approach facility risk todramatically and positively affect amanufacturers bottom line.

But that is not how most businessesview their facilities and facility risk.These questions could be asked: Is

facility risk real? Does this viewpointprovide value? The results of facility riskanalyses at several life sciences facilitiesmake it clear that companies are exposedto significant business risks directlylinked to their facilities. Their risks aregoing unrecognized, often because ofcompartmentalized (departmental)thinking that fails to understand theinterdependencies of plant operations.Facility risk assessment brings focus tothe core business deliverable, thepotential for and the value of loss, and

what will help reduce facility risk. Byadopting this paradigm, companies cangreatly reduce their risk exposure.

Here are some general observationsto pull from.

No Holistic Approach to Risk

Management Exists:The current risk-assessment tool kit available isinadequate. The most popular tools such

as FMEA (failure mode and effectsanalysis), FMECA (failure mode,effects, and criticality analysis), andGAMP (good automated manufacturingpractice) methodology are notquantitative and do not consider thecomplex systems and equipmentinterdependencies associated with facilityrisk (Figure 1). These tools yieldoutcomes based on opinion, whichmakes the results subject to the naturalrisk judgment limits we share. When

implemented through a get expertstogether in a room and vote process,outcomes are also subject to additionaldistortions imposed by interpersonaldynamics and politics within the group.

Risk Considerations Are Not Part of

the Operational Mindset: Even atfacilities where it is clear that severebusiness consequences can result fromenvironmental failure, a risk paradigmhas not been adopted. Staff at such

FACILITY RISK AT WORK

Associated Press, 6 April 2007

Moisture from a leaky roof and faulty

sprinkler helped Salmonella

contaminate peanut butter at the

Georgia plant of ConAgra Foods last

year, sickening more than 400 people

nationwide, ConAgra said Thursday.

The Omaha, NE, company conducted

nearly a two-month investigation intothe contamination and pledged to insure

that Peter Pan peanut butter is safe when

it returns to stores in mid-July.

Stephanie Childs, a ConAgra

spokeswoman, said the company traced

the Salmonella bacteria to three problems

at its Sylvester, GA, plant in August.

The roof leaked during a rainstorm, and the

sprinkler system went off twice because of

a faulty sprinkler, which was repaired.

Moisture from these three events mixed

with dormant Salmonella bacteria in the

plant that Childs said likely came from

raw peanuts and peanut dust.

FACILITY RISK

MANAGEMENT MYTHS

People are good at judging facility

risk. In fact, people are very poor judges

of risk that does not arise directly from their

own experience or is complex in nature.

Complying with regulations is the

same as managing risk.This view is

understandable. After all, government

regulation exists to minimize risk to the

public. If a company complies with

regulations, it pays much more attention

to regulatory compliance than it does to

facility risk management.The experts know where the risk is.

There have been many cases where

expert opinion has been wrong when

considering risk quantitatively. No one

person or group knows enough to make

a thorough and accurate risk assessment.

Facility managers and operators have

the tools needed to make risk-based

decisions.The current tool kit for risk

assessment is mostly quantitative and

does not consider complex interaction

between systems and equipment.


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facilities tend to think too narrowly, donot understand the interdependencies ofplant operations as they relate to risk,and have little understanding of the

consequences within their scope ofinfluence at the worker level. The olderthe facility, the greater the disconnectbetween risk and operations. How manytimes have you been asked to participatein a postmortem that doesnt considerany possibility of failure other than thespecific event that precipitated it?

Regulatory Compliance Is Mistakenly

Equated with Risk Management:Regulatory compliance targets regulatoryrisk. It is possible to comply with allapplicable regulations and still be

exposed to significant business risk. If aproduction facility goes down because ofequipment failure, the public may not bein danger. However, the company thatowns the facility will experience asubstantial economic loss.

BALANCING PROFITABILITYAND RISK

How does a company find a balancebetween profitability and risk? How doesit go about ensuring a well-informed and-prepared future?

At the core, our experience inapplying a quantitative risk assessmentmethodology defines a facilitys risk inspecific dollars exposed. We identify thisnumber by understanding the impactthat inadequate maintenance has onenvironmental conditions required toensure product quality. To start, thisapproach identifies the basicrequirements of both stated and regulatedproduct need. The methodology breaks afacility down into its basic support areas,identifying dependent utility and system

components. It then compares producttiming and exposure with phase value.Ultimately, this approach models facilityenvelopes, utilities, equipment

performance, and maintenance methodsagainst exposed consequence. Thatresults in a scientific measure of risk atany one time.

A facility can consist of severalphases, spaces, or distinct productionsteps. Each phase has its own set ofrequired environmental conditions.Product value tends to increase as itprogresses through each phase (e.g.,formulation to fill and finish).

Additionally, product exposure alsochanges from phase to phase because of

process limitations, packaging, and yieldvariances. From a risk standpoint,research phases pose interestingchallenges in evaluation andidentification of consequence. Moreover,as facilities age and evolve, manychanges muddy the waters, allowingfacility owners and operators to lose sightof their original requirements.

A facility can consist of many systemsthat support the production requirementsof each phase. Our approach focuses on

understanding interdependenciesbetween systems that support each phase.Some phases depend on more systemsthan others. Multiple phases oftendepend on a single system or utility. Thefailure of a single system has significantconsequences to each dependent productphase. The types of utilities and systemsthat are considered include power, chilledand hot water, steam, air handlers, andexhaust fans. All those utilities andsystems can support areas aroundmultiple production suites.

Systems and utilities are modeledagainst their age, constructioncategory, historical and statisticalfailure probability, and maintenanceexposure. Advanced statistical toolssuch as fault tree analysis (FTA)generate failure probabilities for suchsystems, also considering performanceinterdependencies.

The fault tree approach alsoknown as a reliability block diagram is a big step beyond the industryscurrent practice, using largely qualitativeapproaches to assessing risk. Although itis not a cure for our natural risk-analysisdeficiencies, FTA provides a disciplinedframework that forces risk analysts toidentify interdependencies. Thisapproach requires scientifically reliabledata that creates meaningful results. Forfacility risk, the failure consequence of a

phase is combined with the probabilityof failure outlined by the FTA,quantifying risk in monetary units.

Figure 2 represents our recommendedrisk analysis method. It goes beyondequipment and system levels to addressbusiness outcomes. It allows for explicitanalysis of risk-reduction benefits againstthe cost of operations, maintenance, andcapital spending. As a result, systems andcomponents can be ranked according totheir contribution to total risk. Thatallows a company to prioritize its

maintenance and monitoring efforts.This approach can also help reduce andrefine the scope of qualification, helpingfacilities put resources where there is thehighest risk.

LIFE-CYCLE APPLICATIONS

The above approach can be used todesign facilities for optimum risk/costbalance, expose continuous riskmanagement needed during facilityoperations, and guide facility investment.

Facility risk modeling can be used toadjust building and equipmentconfigurations and preventredundancies to the optimum cost and/or risk point before actually breakingground. Use this approach to answerthe following questions:

What is my risk exposure as a resultof my facility design?

Would changes in the designprovide sufficient payback in terms ofrisk reduction? Does this justify theadditional investment in the facility?

Figure 1: In this risk assessment spectrum, current risk assessment tools are largely qualitative,

resulting in arbitrary and inconsistent reporting. Fault tree analysis (FTA) takes risk assessment

several steps further by incorporating component failure data, modeling how components and

systems interact to achieve required environments. When coupled with outcomes such as the

monetary cost of downtime, FTA makes risk assessment truly quantitative.


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What is the risk impact of mycapital project portfolio?

How should I prioritize myinvestments to gain the biggest reduction

in risk within my capital budget?A facility risk model (connected to

production schedules, current equipmentstatus and availability) can guidemaintenance decisions. Typical questionsthat may arise include

Can I change my maintenanceprogram to reduce both risk andexpenditures?

How can I prioritize mymaintenance and operation activities interms of their risk impact?

What is the individual risk impactof each system or utility in my facility?

What are the interdependenciesbetween various components andsystems? How do theseinterdependencies affect risk?

Can I perform maintenance withouta production shutdown?

Can I respond to this emergencywithout a production shutdown?

Additionally, facility risk modelingcan help companies understand theimpact of implementing both major andminor modifications to its facility.

Through this process, you may ask How will my risk profile change

when adding a new product line orphase to existing systems?

Will statistical risk analysis showthat I can implement energy savingsprojects without causing undue risk toexisting production areas?

How do I prioritize capital projects?By conducting a detailed assessment

of a facilitys life cycle through riskmodeling, companies can makeinformed decisions. The process oflong-term risk planning empowers

manufacturers to truly understand

their facilities as well as the overall

business risk inherent in a process.

LOOKINGTOTHE FUTURE

Admittedly, this is a great amount of

information. The life sciences industry is

on the verge of adopting a holistic

approach to manufacturing and business.This is a huge step forward that requires

a bit of gumption and many open doors.

To decrease the risk of a Peter Pan

peanut butter situation and avoid the

huge loss associated with such an event,

the industry must look inward.

Each company must open its eyes to

the possibility that a seemingly

inconsequential system has the potential

to cause significant and long-term harm.

Risk modeling redefines mission

critical, identifying where true risk lies.

And ultimately, this is the kind of

knowledge that will help the industry

understand how the nuts and bolts of

facilities play into the big picture. By

strategically addressing risk scientifically,

the industry can make smarter more

business-conscious decisions.

Gregory Weddle is global manager of critical

environments, Jonathan Coburn is enterprise

account director in life sciences, andJavier

Morellis critical environments solutions

consultant at Johnson Controls, Inc., 5757

North Green Bay Avenue, PO Box 591,

Milwaukee, WI 53201; 1-414- 524-1200; www.

johnsoncontrols.com.

Figure 2: Facility risk-assessment methodology at Johnson Controls, Inc.

JCI Facility Risk Real

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