Safety, Incorporated

Total Quality Management was bound to be overtaken by a new trend in business sooner or later. With Safety Management Systems (SMS) gaining in popularity and talk of regulation by FAA, that time is now but not without its fair share of skepticism within the industry.

The good news is that SMS is not entirely new. The National Air Transportation Association (NATA) started its own SMS program three years ago. Some companies in the chemical, mining, and nuclear industries have already embraced SMS, as well as certain aviation industries abroad.

"It's basically combining programs from the past like behavioral-based safety, system safety, and safety theory, all of these things combined are going into what FAA is looking at with SMS," says Scott Simpson, director of project management with Safety and Security Instruction, an aviation industry-focused e-learning company based in Tempe, AZ.

"Everybody does SMS in some way, shape, or form now," says Russ Lawton, director of safety and security at NATA. "You have to, because otherwise you couldn't stay in business."

SMS is more of an organizational change in the culture and approach toward safety, rather than just another manual or rulebook to follow, say those close to it. "SMS is an evolution, not revolution," says Amy Koranda, director of safety management at NATA.

Adds Lawton, "It's organization-wide. Typically we've taken a reactive approach to safety, where something happens and we go out to investigate.

"Whereas under SMS, the emphasis is proactive, where we go out and look at potential hazards within the company and evaluate the risk associated with those hazards. That way, we can get out in front of them."

SMS includes reviewing safety plans and hazards periodically to ensure everything is working. Expect the culture change to affect every person within the organization, says Lawton.

"You're instituting a way of doing business with everyone in the company," says Lawton. "With SMS, everyone knows what they're responsible and accountable for within the company."

It sounds ambiguous because it is. SMS is highly dependent on the individual company and its particular situation. The good thing is that it's highly adaptable to individual situations. The downside is the investment of time, money, and training necessary for an organization to develop an SMS.

"For most organizations, you're looking at a year or more, easily, to get all the components of the SMS in place and get all your employees and vendors trained," explains Lawton. "Everybody has to be in sync with the way the SMS is working, so it could take several years before it's all in place."

Adds Simpson, "Once you start an SMS, once you've got a good safety program, it never ends. It's a continual process that you repeat over and over because your hazards will change, your environment will change, your employees will change, and all the mitigation factors might not work as they used to work."

SMS also includes a non-punitive reporting system. "A big part of that is ensuring that any employee that comes forward with a safety report does so without fear of retribution," Lawton says. "Let's face it, we're all human. We hate to admit when we screw up. This is a way of making people feel secure about the fact that we can't be proactive unless we know what's going on out there.

"We're trying to get the frontline people, who are out there everyday, to tell us what's going on."

Talk of SMS and regulation started when the International Civil Aviation Organization (ICAO) began issuing SMS standards and requirements under the Chicago Convention.

"Under the treaty that all countries signed, we've agreed to comply with that regulation unless we file to do it differently," says David Bennett, director of airport safety and standards at FAA.

To get the ball rolling, FAA released an advisory circular earlier this year, outlining what standards might be included for a regulated SMS. In September, the Transportation Research Board released a white paper on SMS for airports.

Perhaps most significantly, a pilot program for SMS also started this summer with FAA. Most of the 21 airports included in the study received grants under the Airport Improvement Program, so they could hire a consultant to begin working on SMS. Results are expected by spring of next year.

"It's a plan of implementation of SMS," says Darryel Adams, SMS project manager of airport safety and operations division at FAA. "It depends on the existing infrastructure of that airport. Some airports are more advanced than others. Some airports have more elements of SMS and some may have more work to do than other airports.

"The pilot study is reaching across a large spectrum of airports of various sizes and complexities. Hopefully what we'll glean from that is that SMS can be scalable to fit any size operation at a very low cost. If anything, it may eventually turn out to be a money-savings rather than a cost to the airport."

Comments FAA's Bennett: "[The pilot program] does two things. One, it gets someone out there working and some experience in the United States. Also, because they're obligated to report what they do back to us, we'll have the benefit of that experience as we move to implement it at other airports."

A detailed guidebook on SMS is also in the works, which FAA targets for release next year.

"Eventually, we'll be looking at whether to go ahead and adopt regulations, whether it's actually necessary to do a regulation or not. That decision will probably be made in 2008." Bennett estimates the chances of a regulated SMS at more than 50 percent.

"There's a lot of fear, I call it a healthy fear, from the airport group," says Simpson. "The airports are fearful because FAA has not stated how or what [regulations are] truly going to be.

"[Airports] are very scared of what they're going to be held accountable to, how they're going to be held accountable to it, and where they're going to get the funding to make this stuff work."

Simpson says he does think SMS should be regulated by FAA, but only to a point: "Regulated to the point where FAA gets to interpret what your program will do versus your interpretation of what it will do, I don't agree with that. If the FAA comes in and says your determination of a hazard can't be different than mine, that can make it difficult for an airport to understand what they're supposed to do."

Says Lawton, "The challenge for FAA in regulating SMS is that SMS is process-based. The difference is, it's not all about regulatory compliance."

FAA has already started to think about how to enforce SMS regulations. "As an auditor of SMS, what you're looking for is key elements of system safety," explains FAA's Adams. "One of those things would be a non-punitive reporting system. As an auditor, you would go in to see if they have that system in place, and then you validate it against their existing culture by actually interviewing employees, looking to see if they physically have that system in place, verifying records, etc."

The reaction FAA has seen has been a bit different. "I'd say it has very largely been positive," Bennett says. "From a few people you hear concerns about how much regulation will it entail and how much the FAA will be involved and checking what they do. But that's pretty standard with any new program.

"Overall, we've had a lot of interest in it. When we talk about it at conferences we get good attendance at any sessions having to do with SMS. We have a lot of interest in this pilot program and had an easy time ? I think we were looking for about 10 airports or so, and we got more than 20."

"Until FAA actually puts out the Notice of Proposed Rulemaking next year, so that we have an idea of their true thoughts in going forward with what they want out of an SMS, everybody's kind of on hold," Simpson says.

What to do in the meantime?

"I'd jump the gun on FAA," Simpson remarks. "I'd put a program together using the same techniques and tools FAA has already put out within the A.C. and white paper."

Koranda agrees. "My advice would be to hop on board, because those that have gotten on the bandwagon early will be much farther ahead than those that wait until it's mandatory. They're going to be a day late and a dollar short, because all of a sudden they're going to have to get up to speed."

Adds Lawton: "There's a large group that sees the benefit of it. They want to be the first, all for good reasons. By the time regulation rolls around they can say, 'Hey, we're done.'"

There are plenty of options for organizations interested in starting SMS. NATA offers workshops on how to get started, and continual support in implementing a program. The program has been adapted to fit the standard outlined in the advisory circular. Other organizations and consultants are beginning to offer help in starting an SMS as well.

SMS has won its share of converts.

"That's why NATA took the bull by the horns," Koranda says. "We decided to provide this to our members because we thinks it's the right thing to do, whether it's regulated or not. So we're trying to educate our membership, that SMS is a good thing." Comments Bennett, "I think it's not a high-cost program, and airports see that they can do this with their own resources. It just takes work and a new way of thinking. They seem to be willing to do that."

There are a good number of arguments for SMS and the idea of proactive safety, beyond FAA regulation, according to NATA's Russ Lawton. Incidents and accidents are doing more damage to airports than many people realize.

"There's some hard data that shows a multiplier effect that takes place here," says Lawton. "Let's say you've got $100,000 in losses that you've paid out over the year. Depending on the profit margin of your company or operation, there's an exponential multiplier in terms of what you have to recoup in sales."

For example, an organization with $100,000 in losses and a five percent profit margin, Lawton says, would have to make up $2 million in sales ? not to mention the damage in reputation.

"Many people will say accidents are what they have insurance for," Lawton says. "But there are a lot of direct and indirect costs.

"Let's say in the course of the year you damage some airplanes moving them around the ramp. There's the direct cost of reimbursing the customer the cost of the damage. But the biggest issue is customer loyalty and customer relations. Do you think anyone will want to come back to your facility once you've damaged their airplane?"

"Our industry is judged by the lowest common denominator in the business," Lawton says. "It doesn't matter what part of the industry. The public perception is going to be driven by the last accident that happens out there. So it's in our best interest to get together and say, it's not acceptable and we're going to keep the safety bar high and ensure that everyone else in the industry does as well."

Lawton offers an example used by a colleague. "He said to the CEO of the company, 'If you went to your CFO and asked for the company's financial picture and you were told that you were doing OK, that you haven't bounced any checks lately, would that be an acceptable response?' And of course the CEO said no.

"My colleague said to him, 'So, if you went to your safety manager and asked how you were doing on safety, and he told you that you were doing OK, that you haven't had any accidents, is that acceptable?'"


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