Phase 0 of the Safety Management Systems (SMS) Pilot Project

1. SMS Phase 0of the Safety ManagementSystems (SMS)Pilot Project Federal Aviation Administration The Beginning!

2. AGENDA • Introductions 5 min • Overview of SMS 45 min • Break 15 min • Use of the SMS Guidebooks 10 min • Summary SMS Audit/Gap Analysis Tool 10 min • Detailed SMS Audit/Gap Analysis Tools 10 min • Pilot Project Implementation Plan 15 min • Open Discussion 40 min

3. INTRODUCTIONS

4. SMS Overview of Safety Management Systems (SMS) Federal Aviation Administration

5. Really? At this airline, safety is our first priority

6. What is the primary objectiveof a business organization?

7. Safety Management – Rationale • In order to achieve its production objectives, the management of any aviation organization requires the management of many business processes. • Managing safety is one such business process. • Safety management is a core business function just as financial management, HR management, etc. • This brings about a potential dilemma for management.

8. Management levels Resources Resources Protection Production The management dilemma

9. Resources Management levels Resources Protection Production Catastrophe The management dilemma

10. Resources Management levels Resources Production Protection Bankruptcy The management dilemma

11. Safety Space Bankruptcy Protection Catastrophe Production Source: James Reason

12. Safety Management –The response to the dilemma • Safety issues are a byproduct of activities related to production/services delivery. • An analysis of an organization's resources and goals allows for a balanced and realistic allocation of resources between protection and production goals, which supports the needs of the organization. • The product/service provided by any aviation organization must be delivered safely (i.e. protecting users and stakeholders).

13. What is safety? • Safety is not equivalent to risk free (U.S. Supreme Court, 1980) • Carelessness and overconfidence are more dangerous than deliberately accepted risk (Wilbur Wright, 1901) • Practical safety is risk management

14. Mitigating to “Acceptable Risk” “Safety in a system may be defined as a quality of a system that allows the system to function under predetermined conditions with an acceptable minimum of accidental loss.” • System Safety Engineering & Management, 2nd Edition, John Wiley & Sons 1990 ISBN 0471618160

15. Baseline performance System design Operational performance Operational deployment Why SMS? An imperfect system “Practical drift”

16. Risk Management is…. New Info? Tracking ….a continuous process ….a closed loop process ….cross discipline

17. A Risk Assessment Matrix Example Risk severity Risk probability Catastrophic Hazardous Major Minor Negligible A B B C D E 5A 5B 5C 5 5D 5E Frequent 4A 4B 4C 4D 4E 4 Occasional 3A 3E 3 3B 3C 3D Remote 2A 2D 2E 2B 2C 2 Improbable Extremely improbable 1C 1D 1E 1 1A 1B

18. Risk Acceptance • Risk is inherent in aviation operations • Risk results from aspects of the environment and byproducts of operational activities • Operator is responsible for risk management (Title 49 – FA Act) • A fundamental concept of risk management is acceptance of risk • Risk management is fundamental to the SMS

19. Four “Pillars” of SMS Policy: (Structure) Risk Mgmt. Safety Assurance Safety Promotion: (Culture)

20. SMSis the toolbox for… • Policies & management practices • Risk Management processes • Safety Assurance processes • Confidential reporting processes/employee involvement

21. What is the Regulator’s Duty? • It is NOT safety achievement …or “management” • It IS safety “oversight”

22. What is the Provider’s Duty? • Safety achievement is the responsibility of the “provider” The FAA’s resources are best applied in assisting / enabling safety management by the business or operation

23. Is ATOS the same as SMS? • ATOS: An Oversight System used to fulfill FAA safety responsibilities • SMS: A Management System used to fulfill operator safety responsibilities

24. DA PA FAA’s Safety Management System (SMS-O) S A SRM Outputs are Products / Services Operator’s Safety Management System (SMS-P) Inputs Process ATOS and SMS Production Protection FAA (ATOS) Oversight Program Management (8 Modules) Objective: Public Safety Direct sampling (e.g. surveillance) Objective: Serve customer requirements Air Carrier’s SRM/SA Objective: Manage safety actions as part of “business” processes

25. SMS for “Providers”is… … a top-down program starting with “Top Management”

26. A SMS Organization… Develops a “Just Culture” or “Safety Culture” to: Capture the operational knowledge and experience of the employees Involve the employees in the safety achievement process

27. A Positive “Safety” Culture is… …An informed culture where People understand hazards and risks. • Staff work continuously to identify and overcome threats …A reporting culture where • People are encouraged to voice safety concerns • Those concerns are analyzed and appropriate action is taken • The workforce knows and agrees on what is acceptable and unacceptable (shared values) Dr. James Reason

28. A Positive “Safety” Culture is… …A learning culture where: • People are encouraged to develop and apply their skills and knowledge to enhance organizational safety • Management updates staff on safety issues • Safety reports are fed back to staff so everyone learns …A just culture where: • The workforce knows and agrees on what isacceptable and unacceptable (shared values) • Errors are understoodbut willful violationsare not tolerated

29. What’s in a “Just Culture?” • The immediate response is to find “what happened and why,” not “who to blame and punish” • Acceptance that more can be learned through full reporting and detailed investigation than by blame and punishment • Partnership in identifying hazards and root causes

30. SMS…emphasizes Risk Management …It integrates safety with Line Management

31. The International Picture ICAO safety management requirements • Annex 11 - Air Traffic Services • Annex 14 - Aerodromes • Annex 6 - Operation of Aircraft • Annex 6 - Maintenance of Aircraft

32. ICAO Annex 6 Requirements • “…a safety management system acceptable to the State of the Operator that, as a minimum: • identifies safety hazards; • ensures that remedial action necessary to maintain an acceptable level of safety is implemented; and • provides for continuous monitoring and regular assessment of the safety level achieved.” • …and, aims to make continuous improvement to the overall level of safety (proposed amendment)

33. Annex 6 requirements (cont.) • “An accepted safety management system shall clearly define lines of safetyaccountability throughout the operator’s organization, including a direct accountability for safety on the part of senior management.”

34. An Industry Answer? ICAO, FAA, overseas Regulators, Air Carriers, ALPA, IATA, IBAC SMS Launching a common idea and a new approach:

35. FAA Support of the SMS Concept • U.S. Response to the Annex 6 proposal endorsed the SMS concept • Prior U.S. implementation of system safety-based oversight systems • ATOS • SASO • FAA (AVS) will also apply safety management concepts to oversight activities

36. The SMS Standard • First FAA SMS standard was delivered onJune 22, 2006 in Advisory Circular AC 120-92. • SMSs are currently voluntary in the United States • The standard is organized around the “four pillars” • The standard is based on an extensive review of existing SMSs around the world • The format of the SMS standard is similar to that of the ISO standards

37. Rulemaking Effort • Part 121 Rulemaking Project Record (RPR) opened Nov. 2006 • Project cancelled Jan. 2008 • Project team commissioned to create integrated SMS Rule for all CFR parts • Objective: harmonization of requirements • Strategy is being formulated • ARC is a possibility

38. Testimonials – • “Why didn’t TC do this years ago?” (705 Operator) • “We are now much more aware of our safety responsibilities and liabilities.” (AMO) • “My employees are involved in developing the SMS processes. They tell me they feel safer at work.” (small AMO) • “It is too early to realize all the benefits of SMS, but already employees and customers have an increased confidence in the company. (AMO) • “Already we are seeing the benefits of recording and tracking incidents and hazards” (FTU) • “The idea of SMS is much scarier than the actuality.” (702,703 Helicopter Operator).

39. Others • Air Transat initially saved over $1 million per month • Skyservice saved $5 million in first year of SMS operation

40. BREAK

41. SMS SMS Implementationand Tools Federal Aviation Administration

42. SMS Guidebooks The purpose of the Guidebooks is to provide a framework and offer developmental guidance to aid organizations in defining their organizational safety structure.

43. Format of the Guidebook • (OBJ) are objectives. This information describes or outlines what you will be expected to develop in this specific area of your Safety Management System documentation, in order to meet an SMS standard. • (STD) are standards.This is the specific language of the standard that the organization will be held to in order to meet the statement of requirements conveyed in the policy/procedure section. • (DG) is developmental guidance This provides instruction regarding how you can develop your policy, procedures, and controls to address each specific requirement of the Safety Management System.

44. (STD) - FAA Advisory Circular AC 120-92 Appendix 1 • 4.4. Safety Planning • The organization shall establish and maintain a safety management plan to meet the safety objectives described in its safety policy. Example Section of the Guidebook • 4.4 Safety Planning (OBJ) The expectation of this section is that you describe your safety management plan to meet the objectives described by your above stated safety policy. (DG) Management has historically been defined as planning, organizing, directing, and controlling. Therefore a Safety Management System will start with a plan to meet the Safety Objectives. A plan should be set by Top Management that will direct and sequence the implementation of the Safety Management System. Planning at one level becomes direction at the next level. The first thing to plan is how much and on what time table the various portions of the Safety Management System will be created, who will be responsible for the overall system and the various portions of it.

45. Summary Audit/Gap Analysis Tool • High level assessment tool • To be utilized for initial screening or audit summary • Questions at the objective level • Evaluates the organization’s existing systems to determine conformance to the SMS standards

46. Summary Audit/Gap Analysis Tool • Evaluate Objectives utilizing assessment scales • Measure the level of development for each objective • 0 – No action • 1 – Action initiated • 2 – Implemented • 3 – Integrated • 4 – Evaluated and Sustained • 5 – State of Art

47. Summary Audit/Gap Analysis Tool • No action = 0 • Action initiated=1 • Implemented=2 • Integrated=3 • Evaluated and Sustained=4 • State of Art=5

48. Audit/Gap Analysis Tools • Detailed assessment of the organization’s existing systems to determine conformance to the SMS standards • Used to determine what needs to be developed • After implementation, to assess continued performance of the system • Final gap analysis prior to implementation planning must be based on the full set of tools to ensure that all of the standard's requirements are included in the system design

49. Audit/Gap Analysis Tools System 8.0 of the Air Transportation Oversight System (ATOS): • Includes the SMS pillars as subsystems 8.1 Policy 8.2 Safety Risk Management 8.3 Safety Risk Assessment 8.4 Safety • 13 Design Assessment Tools based on majorsub-clauses of the Standard

50. Audit/Gap Analysis Tools 8.1.1 Organizational Management 8.1.2 Documentation and Records Management 8.1.3 Emergency Preparedness and Response 8.2.1 System and Task Analysis 8.2.2 Hazard Identification 8.2.3 Safety Risk Analysis and Assessment 8.2.4 Safety Risk Controls 8.3.1 Data Acquisition 8.3.2 Data Analysis and System Assessment 8.3.3 Corrective and Preventive Action 8.4.1 Communication and Awareness 8.4.2 Personnel Qualifications and Training