3 highlights from FM’s expert webinar on the chemical sector
Chemical manufacturers are facing mounting pressure from a complicated risk landscape. What are effective strategies to help these organizations protect their operations, while reducing loss and business interruption?
FM recently hosted a webinar to explore what’s driving loss severity in the chemical sector and what actionable steps can be taken to strengthen resilience. Claire Cooper, FM operations vice president and chemical operations account engineering manager, and Doug Gurney, FM vice president, chemical operations engineering manager, shared their expertise and real-world scenarios to help identify solutions that reduce risk.
To watch the full presentation, click here.
Here are some highlights from the conversation.
A dynamic risk environment is impacting recovery time
The risks facing chemical organizations are not new, but they are increasingly occurring in combination. Aging assets, energy volatility, supply chain issues and regulatory pressure are all contributing to a more uncertain operating environment.
“Think about it like you're trying to plug all of the holes all at once,” Cooper explained. “Business leaders are facing constraints that are forcing tradeoffs. It is the type of environment where loss prevention can go by the wayside, even unintentionally.”
Recovery is also becoming more challenging. Events that once took weeks to recover from, can now take months, driven in part by longer equipment lead times and more frequent supply chain disruptions.
Gurney added that this can lead to lasting impact. “Customers can't wait anymore. So, when there is a loss, customers are very quickly looking for alternative suppliers. And when you lose that market share, it's just so much harder to get it back.”
The result is that losses are not only becoming more difficult to prevent, but also harder to absorb.
How FM can help: FM's business risk consulting group helps you quantify the financial impact of loss and define what’s critical for business survival.
A consistent set of loss drivers is shaping outcomes
Gurney described how FM has used data to identify the key factors contributing to losses in the chemical sector.
“We’ve been collecting data for centuries and we've got countless data points. Now, with the advent of AI, we’ve been able to overlay those data points with genuine, real losses,” said Gurney.
FM’s data analytics homed in on five core loss drivers that influence the severity of events: process safety gaps, primary containment failures, combustible storage risks such as intermediate bulk containers (IBCs), utility and power interruptions, and gaps in protection systems (most specifically indoors).
Cooper and Gurney then presented two potential loss scenarios for chemical facilities: outdoor and indoor fires. They demonstrated how quickly escalation can happen, and how even the most basic protections can have significant impact.
How FM can help: Find out how FM can use AI and data analytics to deliver deeper insights and more accurate recommendations for your business.
Prioritization is key to improving resilience
Having a strategy in place before a loss occurs is critical for minimizing recovery time and business interruption. But faced with so many competing demands, how do organizations know what to prioritize?
Cooper offered thoughts on where to start.
“Some questions that our FM teams ask clientsin the chemical industry, if this thing fails, how bad is it going to get, and how long before we'll be back?” she said. “That's really the mantra that we have in our mind when we start trying to identify prioritization.”
Gurney continued, “There's so many recommendations, there's so many things that need to be done. You can't do them all. So, it's really about prioritizing things that are going to help your business.”
Cooper suggested bringing together internal stakeholders to align on a clear, long-term strategy.
“When we see companies that have the most effective risk management or loss prevention frameworks, it's those companies that can sit in a group, understand what's important, agree on that prioritized path, and be able to clearly articulate that. Having the same goal echoed throughout your organization is how something really gets done.”
How FM can help: FM's data sheets and standards provide practical guidance to help organizations address the most critical loss drivers.