Contractor and supplier management: mitigating risk by better decision making
Global industry trends show increased outsourcing of non-core business activities (i.e. construction, maintenance, engineering, etc.) to third-party contractors. Data from several industries show that contractors face 1.5–3 times higher incident rates than in-house employees. This extended abstract covers leading-edge approaches for managing contractor risk, presently implemented by organisations in the oil and gas, mining and manufacturing industries. Using a database of more than 35,000 contracting companies and 220 owner/operator companies, this extended abstract accumulates more than six years of extensive health and safety data to show trends associated with health and safety management and performance improvement. Using statistical analysis methods, actionable leading indicators and insightful trends are discussed. Best practices of contractor management and decision-making tools based on a comprehensive management-system approach to contractor-risk management are also examined. Discussed is a practical model to address the following key elements: Gathering, reviewing and verifying contractor information as part of the due-diligence process. Analysing leading and lagging performance indicators. Driving safety through feedback, benchmarking, and continual improvement.