Risk Management for New Process Technology Implementation – Some Key Components

As The Dow Chemical Company continues to increase our emphasis on innovation to meet customer needs, more and more of our capital projects incorporate new process technology, new product technology, or both. Although all capital projects include some degree of risk, we’ve determined that projects involving new process technology face more significant risks. For example, building a new polyethylene manufacturing facility using previously-demonstrated technology may face risks related to material and labor costs, scheduling and/or Environmental, Health and Safety (EH&S) issues. But building a facility to make a new pesticide, the process for which has not been fully demonstrated at the lab scale, and doing it in time to meet the seasonally-driven launch date, poses the same potential cost, schedule and EH&S risks, but also includes operability risks, risks associated with the overlap of process development and process design, a compressed project schedule, limited understanding of the relationship between process variables and product performance, etc. Because our capital project work processes, and, to some extent, our culture, were developed around building commodity chemical manufacturing facilities, we treat projects involving new process technology (NPT) differently than we do those implementing demonstrated technology. One area that we focus on is risk assessment and risk management. Some of the key aspects of dealing effectively with new process technology implementation that we will share are the following:

• 1. Incorporate inherently low-risk approaches
• 2. Fill and support the Risk Manager role
• 3. Develop and implement a formal Risk Management Plan
• 4. Develop and maintain a detailed plan for Technology Development
• 5. Practice quantitative risk assessment
• 6. Prepare for problems