AAOM Handbook

SS.10 Identify Most Cost Effective Strategy

Context

There are six basic strategy options that may be applicable to manage a threat. These are; 1. Modification of the process – remove or reduce the threat and the need for service work. 2. Monitor process condition and/or performance to identify the best time and type of service action. 3. Initiate service actions based on a pre-defined interval or life. 4. Install back-up or containment systems to circumvent or mitigate the consequences of the threat. 5. Operate the process to the point of failure. 6. Closure of the process.

The strategies that are appropriate for a particular failure mode will depend upon a few basic factors;

• The technical feasibility of each of the strategy options. • Whether the early development of the threat is detectable. • The warning time for detectable threats. • Whether the threat has an Age Related characteristic. • The interval to occurrence for Age Related threats.

• The consequence of the threat (the HSE threat, the direct cost of dealing with the consequences of the threat, and the lost opportunity cost arising from the threat). • The direct and lost opportunity cost to implement the strategy option. The previous task assignments in this process for setting a Service Strategy have provided us with the above data for each of the probable threats related to a process. With this information we can now select the most likely cost effective Service Strategy. For each threat, the Service Strategy that can deliver an HSE consequence rating below the required performance target, and that provides the best NPV for the direct and opportunity cost of adoption, would normally be proposed to evaluate whether it has the potential to meet the required Performance Targets. Identifying the most likely cost effective strategy option can be an iterative process. If the first selected strategy cannot meet the performance targets, a higher cost option may need to be evaluated.

Purpose

To specify the most likely cost effective Service Strategy for each threat.

Quantity

• One Service Strategy, which meets the HSE performance target and has the lowest NPV for implementation, selected for each threat.