Risktopics The Zurich Hazard Analysis
Issue No. 8, December 1998
Risk Engineering Where standard solutions are the exception
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Zurich Risk Engineering
A customer driven risk management tool
“You determine the gravity of the risks
The objective of identifying, assessing and prioritizing risks is not to sell insurance but to provide you, the customer, with risk transparency and improvement measures. Zurich Risk Engineering developed a hazard analysis technique specifically designed for this purpose.
identified, and you decide what level of risk you’re prepared to tolerate.”
The Zurich Hazard Analysis (ZHA) works on the premise that you know your own management systems and operations better than anyone else. With the ZHA, you make all the key decisions yourself: you determine the gravity of the risks identified, and you decide what level of risk you’re prepared to tolerate. The ZHA therefore maximizes the use of your company’s own expertise. This degree of involvement usually increases the customer’s confidence in the results of the analysis, making it easier to develop tailormade risk reduction measures. Drawing on the expertise and experience of those who are directly involved with the component, product or system under review (management as well as staff ), is one of the greatest advantages of the ZHA. Another major strength of the ZHA is that it encourages participants in the analytical process to look for the interaction between various influencing factors. Together, these factors can bring to light hazards not immediately associated with the scope of the analysis. Here are a few examples. • A consumer goods distributor believed that he had his fully automated warehouse well protected (sprinklers and smoke/fire alarms). But a ZHA demonstrated that he overlooked the possibility of a computer virus being imported through the electronic ordering system which is linked to the computer that controls the random access warehousing operation. This turned out to be an even greater risk to the business than fire! • Even supposedly simple pieces of machinery, like devices used to inject baked
products with filling mass, can be hazardous; as indicated by a ZHA carried out at a food processing facility. Such injectors are often operated with pressurized air and when disassembled, the components can still be under pressure, resulting in possible injuries through flying projectiles. Moreover, in the course of tracing the various hazard sources it also became apparent that the machine operator was illiterate and could not read the operating instructions, leading to a much higher probability of error. • Contrary to the description in a technical manual, not every heating system control unit is equipped with a safety thermostat. As a result the unit could overheat and cause a fire. The false assumption was discovered during the questioning of a customer’s service engineer who took part as an expert in a ZHA. This finding con-
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tioning, the mechanic also conceded that the motors had to be replaced frequently due to overheating. If it hadn’t been for the ZHA, and the mechanic hadn’t been on the analysis team, this potentially devastating hazard might never have been discovered.
• When a subsidiary of a major bank designed its new head office nothing was left to chance. A ZHA of the building plans clearly showed up heavy snowstorms as a potential threat to the stability of the roof. As a result the specifications for the roof were altered to withstand a major storm, at a relatively modest increase in building costs. In one of their other buildings, which was of similar size and occupancy, the company had to fortify the existing structure at considerable expense. Conclusion: the benefits of the ZHA can be maximized by implementing improvement measures while a product, process or system is still in the design stage.
“If it hadn’t been for the ZHA, and the mechanic
The ZHA and Total Risk Profiling
firmed to the management that such assumptions must always be verified. • The participation of a maintenance mechanic in a ZHA of a high-rack warehouse containing perfumes, not only led to the discovery of a major fire hazard but also revealed that a small motor fire had in fact already occurred! When, during the analysis, the risk manager was prompted to find an ignition source, the mentioning of the forklift truck triggered a response from the mechanic. He recounted how the forklift operator was once stuck in his ‘order picker’ (vertically extendible operator’s cabin, which moves with the forks), high up in one of the rack aisles, when fire broke out in the forklift motor below him. Fortunately other workmen were able to extinguish the flames. The fire started because the forklift had been used so hard that the motor overheated. During further ques-
The ZHA has been successfully applied for many years to a broad range of industrial installations, components and/or systems, and it is widely accepted by regulatory bodies (e.g. Occupational Safety and Health Administration in the USA, and the Swiss Ordinance for the Protection of Major Accidents). Now, in response to the growing complexity and interdependency of business activities, the same analytical process is being extended to cover the entire spectrum of risk, from the way a company is organized as, for example, its geographical spread, brand image and key employees, to external factors, such as interest rate and exchange rate movements and changes in legislation. This broad top-down approach to risk analysis, known as Total Risk ProfilingTM (TRP), will help business managers to better understand the relationship between commercial and entrepreneurial balance sheet risks on one hand and conventionally insured events such as fire, product failure and workplace injury on the other.
hadn’t been on the analysis team, this potentially devastating hazard might never have been discovered.”
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Eight Steps of the Zurich Hazard Analysis
Defining the Scope The scope of a ZHA describes both the content and the boundaries of the system or process to be analyzed. A realistically delineated scope takes into consideration the expertise and time available for the analysis.
Choosing a Teamleader This is the only person on the team who really must understand the ZHA methodology well. The teamleader must also have at least a basic understanding of the technical aspects of the selected scope. More importantly, however, it is the teamleader’s responsibility to remain objective and to guide the team through a disciplined and focused analysis.
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Selecting a Team The more thoroughly the team members are able to cover the spectrum of hazards within a given scope, the more complete and accurate the analysis will be.
Identifying Hazards The ZHA has two different – yet complementary – ways of making this job much easier and more thorough. A’Tickler List’ consisting of thought provoking words encourages the team to systematically focus on each type of potential threat. In addition, ‘Pathways’ can be selected which define the route that the analysis team will follow through the scope.
Completing the Hazard Catalog Each hazard potential or risk can have one or several causes (‘triggers’) which may be listed separately or as a group. Likewise, each cause can have one or several effects. As each hazard scenario is developed and entered in the Hazard Catalog, it must be assessed in terms of its relative severity and probability.
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Establishing the Risk Tolerance Boundary The ZHA Risk Profile is a grid divided into four Severity Categories and six Probability Levels, whereby the upper right hand corner of the grid represents the highest severity and the highest probability. An important part of any company’s risk policy is its desired level of protection. In drawing the ‘Tolerance Boundary’, a segmented line across the Risk Profile, the team establishes the border between tolerable (below the line) and intolerable (above the line) risks. Clearly, this protection level is likely to be different for different analyses.
Developing Risk Improvement Actions Improvement actions are devised to eliminate or reduce the risks above the Risk Tolerance Boundary in decending order, starting with those scenarios representing the highest level of risk.
Reviewing the Analysis Given that legal parameters, industrial standards, consumer expectations and indeed your own systems continue to change, it will be necessary to review the analysis periodically.
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Advantages of a ZHA-Based Risk Analysis
• Is flexible in its application: on one level it can be used to provide an overview – a complete picture of the interaction between direct and consequential risks. The ZHA has been successfully applied to a wide range of risks. By simply narrowing the scope (the pre-determined area scrutinized) the same method can also be used for a more detailed analysis. • Facilitates risk prioritization: ratings for probability and severity of consequences help to relate individual risks to each other and thus facilitate the prioritization process. • Generates risk ratings based on customer’s risk management policy: relative ratings enable team members to place risks in the context of their company’s actual business environment and their own benchmarks. Where appropriate, team members may combine qualitative and quantitative data to determine the probability and severity of risks. • Visualizes risks: the risk profile is an excellent risk communication tool; i.e. a graphic depiction of each identified risk on the profile, helps you to illustrate to other parties the rationale of your risk improvement measures. • Software supported: a specially developed ZHA software allows risk managers to record the assessment results and manage the implementation of risk improvements. • Recognized by safety authorities as an efficient and comprehensive risk management tool. The ZHA can serve as a validated basis for self regulation. • Customer driven: the direct involvement of your own company’s experts not only helps to optimize the results of the analysis, it also raises the level of acceptance within the company, and makes it easier to develop effective risk reduction and/or improvement measures, which reflect the company’s own risk management policy. • Guarantees systematic hazard identification: the team environment stimulates structured brainstorming. This forms an important step in the hazard identification process and ensures a comprehensive risk analysis. • Requires no prior knowledge of, or experience with, the ZHA method: those who participate in the assessment do not need to understand how to use the Analysis. The team is led by an experienced teamleader, who may be a Zurich risk engineer or someone from the customer’s own company specifically trained for this function by Zurich Risk Engineering. • Is highly efficient: the combined knowledge of the team ensures optimum risk improvement at the lowest possible cost and in the shortest time possible: team analyses take a fraction of the time usually spent by outside consultants. For further information regarding the ZHA, please contact the Zurich Risk Engineering Service Center near you.
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Zurich Risk Engineering has a number of tools and services to help you manage your risks. They are based on Zurich’s proprietary hazard analysis methodology, the Zurich Hazard Analysis:
Learn the ZHA methodology and practice it within your own company! The Zurich Risk Engineering Course will provide you with the training and practice to become a ZHA teamleader. This new handbook is the authoritative guide to performing hazard analyses. It is based on the popular Zurich Hazard Analysis methodology and includes a discussion of hazard analysis fundamentals as well as details on properly defining the scope of an analysis and choosing a team.
your perspective broadens with every turn Risk Engineering Where standard solutions are the exception
Imagine having one tool to consistently manage all your risks at every location, and being able to keep track of them as they change. ZHA-NT, the new risk management software, makes all your risks instantly visible! For further information contact your local Risk Engineering Office or: Disclaimer: The Zurich Hazard Analysis (ZHA) is widely recognized as a thorough and reliable hazard analysis method. Zurich, however, makes no warranties and accepts no responsibilities regarding its use. Neither does it guarantee the identification of all the hazards relevant to the scope under investigation nor the adequacy of the risk improvement measures defined during its use; or that the use of the information contained in RiskTopics will provide for the health or safety of the workplace.
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