4.1 — Fundamentals of SMS

4.1 Fundamentals of SMS

Either as the result of necessity or regulation, many industries have come to employ SMS as a tool for promoting safety. Domestic and international industries such as nuclear power, healthcare, spaceflight, and transportation use SMS. Regulatory agencies, such as the FAA, have also internally adopted SMS as a framework within their own organizations. 129 SMS is well understood and well documented.

SMS allows for an organization’s safety culture to be reflected day-to-day from operations in the field to decisions in the board room. In its 2009 report on the derailment of a Canadian National Railway Company (CN) freight train in Cherry Valley, Illinois involving a fatality, injuries, and $7.9M of damage, the NTSB defined SMS as,

“a systematic approach to managing safety, including the necessary organizational structures, accountabilities, policies, and procedures. An effective safety management system program can help companies reduce and prevent accidents and accident-related loss of lives, time, and resources.”130

Regardless of the industry, definitions of SMS remain largely consistent with that put forward nearly a decade ago by NTSB.

SMS normally exists within the context of performance-based regulation. This type of regulation defines desired outcomes instead of specifying prescriptive procedures to follow. How these outcomes are achieved is left to the regulated party to determine. For example, Federal Motor Vehicle Safety Standard (FMVSS) No. 208, requires a vehicle shall have “a seatbelt warning system.” Rather than specifying how it should be designed, the law “permits vehicle manufacturers to choose different compliance options for different performance tests and is technology neutral with regard to how a vehicle complies.”131

Performance-based regulations do not provide regulated parties unlimited discretionary power in the pursuit of compliance. Rather, regulators monitor compliance through collection and analysis of data provided by the regulated party, auditing sample business processes, and requiring submittal of methods that will be employed as a means of compliance. SMS and performance-based regulation are linked in that SMS is often relied on to create and sustain the business processes tied to compliance. Normally, performance-based regulations place a higher administrative burden on the regulated party.

Beyond being useful for compliance, SMS serves as a decision-making tool to enhance organizational performance around safety. It does so by providing an organization with