Accepting the Risk of a Derailment

According to an article in The Wall Street Journal, based on documents from the National Transportation Safety Board investigation into the 2014 crude oil train derailment in Lynchburg, Virginia, CSX Corp. knew of a flaw in the section of track where the derailment occurred.
On April 29, 2014, a track inspection had revealed the flaw, and CSX decided to replace a 40-foot piece of track on May 1.  The accident, which caused an estimated $1 million in damage, occurred on Wednesday, April 30.

The track inspection indicates that CSX was monitoring the risk of a derailment, and their decision to replace the track segment (given the inspection result) shows that they were reacting to the increased risk (indicated by the precursor: the internal flaw).

Until the NTSB releases its final report, we can propose scenarios that illustrate the difficulty of risk management:  The decision to continue using that line before the replacement was done suggests that someone at CSX was willing to accept the derailment risk.  Risk mitigation has costs, and greater risk aversion costs more.  Perhaps the cost of closing that line (with the consequent disruption to shipping and revenue) for two days was too large.

Another possibility is that those who detected the flaw and scheduled the track replacement failed to communicate the increased risk to the those responsible for the operations on that track.

Deciding to Save New Orleans

Ten years after Hurricane Katrina, the city of New Orleans has done much to mitigate the risk of a hurricane.  The August 22 issue of The Washington Post included an article by Chris Mooney (http://www.washingtonpost.com/sf/national/2015/08/21/the-next-big-one/) about an important decision that remains to be made: whether to use sediment diversion to protect the wetlands that protect New Orleans.  In addition to slowing the loss of wetlands, the advantages include a relatively low one-time cost and a potential economic value from sportsmen and tourists who would enjoy the wetlands.  The key disadvantage is the disruption to the local fishing industry.  A key uncertainties are whether the diversions will actually work because there are many factors that influence wetland restoration and the impact of the wetlands on the storm surge may be limited.

The decision-making process appears to be an analytic-deliberative one: a state advisory board has scientific experts, while fishermen have organized a group to oppose the diversions and (if necessary) block construction, and a state agency needs to make a decision before the end of the year.

Mitigating the Risk of Equipment Maintenance

Earlier this month I led a course on engineering risk management for a group of engineers and managers at a manufacturing firm that does sheet metal work and makes a variety of air distribution systems and components.  They have numerous machines that use multiple sources of power, which makes equipment maintenance more challenging.  They use lockout and tagout (LOTO) procedures (https://www.osha.gov/SLTC/controlhazardousenergy/index.html) but were interested in a systematic procedure for managing the risk associated with equipment maintenance.  While covering the process of risk management, the associated activities, and the fundamentals of decision making, we discussed how they could apply these steps to make their equipment maintenance operations safer.  The discussion included the potential problems of their current lockout procedures.

The bottom line: establishing and documenting lockout and tagout (LOTO) procedures are useful steps, but they don't replace a systematic risk management process that assesses, analyzes, evaluates, mitigates, and monitors the risks of equipment maintenance.  Look for the potential problems, identify the root causes, put in place safeguards that prevent them, and have contingency plans that can react promptly to keep a problem from getting worse.

P.S. I would like to thank the IIE Training Center (http://www.iienet2.org/IIETrainingCenter/Default.aspx) for the opportunity to lead this course.  Please contact them if you're interested in a short course on engineering decision making and risk management.