AAOM Handbook

SS.01 Extract Performance Targets

Context

The purpose of a Service Strategy is to identify the most cost effective way to manage threats related to a Process. The objective is to deliver the safe, cost effective life required from Processes that the Business is accountable for, or relies upon. Achieving this entails; • protecting people from harm, • protecting the environment from harm, • maintaining stakeholder support (investors, communities and regulators), • preserving the Effectiveness of the Process, • preserving the Efficiency of the Process, and • preserving the operational life of the Process. By definition, a threat has potential to cause harm, either to communities, employees, the environment or the process performance. It is not possible to produce a zero risk situation, hence, setting a Service strategy must start with defining the level of risk that the stakeholders in any situation consider acceptable. The acceptable level of risk is shaped by many factors, and it is not equal for all people in every situation, and will change over time. For example, one survey in a western society revealed that on average this group felt that a 1 in 10,000 risk of being killed in a car accident, a 1 in 100,000 risk of being killed at work, and a 1 in 1,000,000 risk of being killed at home were acceptable. In the Operating Model three types of Process performance parameters are defined; • Effectiveness - does the Process deliver the output that is required in a period or by a time (quality product in/by time), • Efficiency - what is the output delivered compared to the resources used in producing it (e.g. recovery of product, unit cost of output, return on investment, etc.), and • Sustainability - is the Process positioned to continue delivering the output into the future (does it have the resources, asset condition and licence to operate – i.e. regulatory and community support). The consequences of any threat related to a Process can be expressed in terms of one or more of these parameters, or the characteristics that make them up.

The Effectiveness of a Process is a function of; • time usage (including availability and utilisation), • operating rate, • quality performance(on-specification product), and • reliability, The Efficiency of a Process is a function of; • yield/recovery, • Effectiveness (units output per time period), and • fixed and variable costs.

© McAlear Management Consultants 2006

Operational Planning: Set Service Strategy

Updated: August 2018

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