An operator SMS adheres to the basic regulation and as part of the program is required to undertake an evaluation of SMS program effectiveness to the business. Safety KPIs are used to ensure safety goals and objectives are met, monitor and track continuous improvement, monitor safety performance and identify areas of inadequate performance.

There are principally two types of SPIs, reactive or lagging (output-orientated) and Proactive or leading (input-related). Lagging Indicators are measures of safety occurrences, in particular the negative outcomes that the organisation is aiming to prevent. Lagging indicators are mainly used for aggregate, long-term trending, either at a high level or for specific occurrence types or locations. Because they measure safety outcomes, they can be used to assess the effectiveness of safety measures, actions, or initiatives and are a way of validating the safety performance of the system.

Leading indicators should measure both: things that have the potential to become or contribute to a negative outcome in the future (‘negative’ indicators), and things that contribute to safety (‘positive’ indicators). From a safety management perspective, it is important to provide sufficient focus on monitoring positive indicators to enable the strengthening of those positive factors that make up your company’s safety management capability.

Leading indicators, which are particularly relevant from a management perspective, may be used to influence safety management priorities and the determination of actions for safety improvement.

Safety performance measurement should ideally consider a combination of leading and lagging indicators. The main focus should be to measure and act upon the presence of those systemic and operational attributes that enable effective safety management.

At the systemic level:

• Whether the elements that constitute enablers of effective safety management are present, suitable, and effective
• The elements that are still missing for effective safety management
• Whether the elements are sufficiently integrated with each other and with the core management and operational processes of your organisation
• The weaknesses and vulnerabilities in the organisation

At the operational level:

• The main risks in operations that need to be addressed (the things that may cause ‘the next accident’)
• This will form the basis for reviewing the adequacy of the safety policy, defining or adapting the safety objectives, and deriving the safety performance indicators
• A hierarchical framework for SPIs should be defined to reflect the different processes and subsystems within an operator’s organisational structure. While some indicators for assessing systemic issues may be common to different processes and subsystems, indicators for assessing operational issues will need to be specific. This underlines the importance of having performed an accurate system analysis identifying all system components and subsystems as a prerequisite for implementing SMS

The insurance process is increasingly looking more closely at operator risk management practices and safety performance as a way of differentiating between client airlines in the market. In particular, reviewing performance monitoring in place with client airlines used to ensure goals and objectives are met, monitoring and tracking of continuous improvement, and the monitoring of safety performance and identifying areas of inadequate performance. In short, operator risk-informed governance that focuses on safety delivery and reducing risk exposure and risk signature.