Page 63 - Root Cause Failure Analysis

54 Root Cause Failure Analysis

4. Capacity losses due to poor equipment condition, improper operation,
inadequate maintenance, and the like.
5. Fines and penalties caused by spills, releases, or other nonconformance to
regulatory requirements.

Cost-Benefit Comparison
Once the costs and the projected benefits have been quantified, the final step is to
compare them to determine the value (either positive or negative) of the recom-
mended improvement. If the recommended change is valid, the value of the benefits
should far outweigh the costs.

The actual differential required to justify a modification or upgrade to management
varies from company to company. Most require a payback period of three years maxi-
mum, but some require a one-year payback. Regardless of the time line, the projected
benefits derived as part of the cost-benefit analysis must clearly show that the recom-
mended corrective action will offset all incurred costs and generate a measurable
improvement in one or more of the cost categories.

As a general guideline, the cost history and projected savings or gains should include
a three- to five-year time period. In other words, the cost portion should include three
to five years of historical costs, and the benefits should be projected over an equal
period. This method provides a more accurate picture of the real improvement that
will result from the recommended change.

REPORT AND RECOMMENDATIONS
The next task required in the RCFA is a report that includes a complete description of
the incident or event, identification of the specific cause(s), and recommendations for
its correction. The report should include the following information:

Incident summary,
Initial plant condition,
Initiating event,
Incident description,
Immediate corrective actions,
Causes and long-term corrective actions,
External reports filed,
Lessons learned,
References and attachments,
Investigator or investigating team description,
Review and approval team description, and
Distribution list.