business case safety 20050621

7/23/2019 Business Case Safety 20050621

1/70

THE BUSINESS CASETHE BUSINESS CASE

FOR SAFETYFOR SAFETYAdding Value and Competitive AdvantageAdding Value and Competitive Advantage

A Joint Initiative of OSHA, Abbott, andA Joint Initiative of OSHA, Abbott, and

The Center for Business and Public PolicyThe Center for Business and Public Policy

at Georgeton !niversityat Georgeton !niversity

"arch #$$%"arch #$$%


2/70

WHY BE CONCERNED WITH SAFETY?

& Saet! i" good #u"ine"" Right thing to do

'()loyee (orale * )rotection of (ost

valuable resourceControl costs +direct and indirect

Safety and health excellence correlate !ith"#ine excellence+-uality, efficiency,

)rofitability


3/70

E$CE%%ENCE IN SAFETY & HEA%THAdd" Bu"ine"" Value and Competitive Advantage '

Safety andHealth

Ability tocompete

Access toGlobal Markets

Cost and RiskReduction

EnhancedReputation

Employee

morale

Improved

quality

Improvedefficiency

Improvedproductivity


4/70

INTE(RATED INTO THE B)SINESS'

usiness!alue

"inkin#steps

Safety is a corevalue of thecompany$s culture

A systemsapproach is takento%ard safety

Safety isinte#ratedthrou#hout thecompany

Employeesparticipate at alllevels

Corporate Ima#e

Ability to Compete

Access to Global

Markets Employee Morale

Efficiency and

&roductivity

&roduct and

Service 'uality

Cost and RiskReduction

Senior mana#ementcommitment andinvolvement

Employee activeparticipation

Shared #oals andaccountability

(efined roles andresponsibilities

Common lan#ua#e

Effective communication

Ri#ht resources

alanced performancemeasures

)no%led#e sharin# and

information transfer

Safety and Health&rinciples


5/70

BARRIERS TO INTE(RATION

Too often.

"anage(ent has a reactive rather than )roactivefocus

/ac0 of understanding +vocabulary 1is0s 2 ha3ards are )oorly co((unicated

Safety is considered a cost 4 not an invest(ent

Cost*benefit analysis is rarely a))lied to 5ustify the

safety case 1etrofitting is never as cost6effective as designing it

right initially


6/70

VA%)E CHAIN I*+ACTSBu"ine"" +,o-e""

&rocurement&rocurement (esi#n(esi#n Manufacturin#Manufacturin# ServiceService End of "ifeEnd of "ife

"evera#esupplier

relationships

Safe ander#onomicprocesses

Hi#h qualityand

productivity

Customer#ood*%ill

+uture assets


7/70

SAFETY IN THE VA%)E CHAIN

Safety and Health issues (ust be (anaged

throughout the )roduct life6cycle7 The return on invest(ent for Safety 2 Health

decisions is greatest hen the decisions are

(ade early in the life6cycle7


8/70

SAFETY E$CE%%ENCE *ODE% ,e.ui,e"'

ManagementManagement

CommitmentCommitment

SystemsSystems

Safety and HealthSafety and Health

Site LeadershipSite Leadership

EmployeeEmployee

InvolvementInvolvement


9/70

*ANA(E*ENT CO**IT*ENT *EANS'

8aluing and caring for hu(an resources

9e(onstrating a visible co((it(ent ithcontinuous involve(ent

Setting high e:)ectations and accountability forsafety

"otivating )ro)er behaviors through leadershi)

Walk the Talk

Providing resources to affect change

'ncouraging e()loyee involve(ent


10/70

E*+%OYEE INVO%VE*ENT *EANS'

Shared onershi) of and co((it(ent to the)rogra(

Active su))ort of the )rogra(

Accountability for one;s )ersonal safety andthat of his*her co6or0ers


11/70

WAYS TO INVO%VE E*+%OYEES'

1egular co((unication ith e()loyees on thesub5ect of safety, ris0, and ha3ards

Provide access to infor(ation Provide ays to )artici)ate in the )rogra(

e7g7, or0site self ins)ections, safety and healthannual evaluation )rocess, incident investigation

Provide ays to re)ort ha3ards, in5uries and(a0e reco((endations to control ha3ards


12/70

SAFETY AND HEA%TH SITE %EADERSHI+/e! C,ite,ia

"ulti)le 1oles/eader,


13/70

SYSTE*S+,o-e""e"0 +,og,am" and +,o-edu,e"

RE$U%ATORYISSUE

&ANA$E&ENT

E'TERNA%AU(ITS

INTERNA%AU(ITS

HU&ANRESOURCES

(E)E%O*&ENT

STRATE$IC*%ANNIN$

I(ENTIFICATIONOF

BEST *RACTICES

ASSURANCEASSURANCE&ANA$E&ENT&ANA$E&ENT

SYSTE&SSYSTE&S*%ANNIN$*%ANNIN$

INFOR&ATIONINFOR&ATION

TRANSFERTRANSFERCONSU%TIN$CONSU%TIN$

NET+OR,CO&&UNICATIONS

COR*ORATERE*ORTIN$-&ETRICS

-BENCH&AR,IN$

TRAININ$AN(

(E%I)ERY

H.S *O%ICY(E)E%O*&ENT

/(IRECT0

IN*UT INTO OTHER*O%ICIES .STAN(AR(S/IN(IRECT0

ISSUE&ANA$E&ENT

TOO%1*ROCE(URE(E)E%O*&ENT

-Incident in2etiaton-Correcti2e Action

(IRECTSER)ICE

A##ott Envi,onmental0 Healt1 & Saet!


14/70

SYSTE*S+e,o,man-e *et,i-"

Attitudes,set up conditions-

behavior.&ro#ramElements

&hysicalconditions

ehavior,action.

* &erceptionsurveys

* &erceptionsurveys

- /rainin#- Accountability- Communications- &lannin# 0Evaluation

- Roles 0&rocedures

- IncidentInvesti#ations

- /rainin#- Accountability

- Communications- &lannin# 0Evaluation

- Roles 0&rocedures

- IncidentInvesti#ations

*Inspections*Audits*Riskassessments

*&revention 0control

*Inspections*Audits

*Riskassessments

*&revention 0control

*1bservations*+eedbackloops

*1bservations*+eedback

loops

Incidentor 2ear

Miss

- 1SHARecordables

- "ost3orkdays

- Restricted3orkdays

- 1SHARecordables

- "ost3orkdays

- Restricted3orkdays

"eadin#metrics /railin#metrics

ORC Wo,ld2ide *et,i-" Ta"3o,-eORC Wo,ld2ide *et,i-" Ta"3o,-e


15/70

*ETRICS 4 TRAI%IN( INDICATORSDomestic Safety PerformanceInjury / Illness 1998 2003

34333453

6433

6453

7433

7453

8433

8453

OSHA Total

Recorda"le Cae Incident Rate

7338 *eer Co9:any (ata

34

;34

;5

64

664

7 64

64

>64

;

74

B C ( E F A $ H I ? , % & N O *

Co()any A > #$$? Perfor(ance

OSHA Total

Recorda"le Rate

Co9:any A

74

@

74

7

64

;

64

;

64

=

64

;; 33 36 37 38

O CC S COS O ?


16/70

WHAT DO ACCIDENTS COST YO)?WHAT DO ACCIDENTS COST YO)?

(irect -In#red Cot

56u"t t1e tip o t1e i-e#e,gUneen cotcan in the

hi:

Indirect - Unin#redD hidden Cot - O#t of :ocetExa9:le

64 Ti9e lot fro9 !or "y in#red e9:loyee4

74 %ot ti9e "y fello! e9:loyee484 %o of efficiency d#e to "rea-#: of cre!4


17/70

AccidentCosts

@ Profit

# Profit

? Profit

@,$$$ @$$,$$$ %$,$$$ ??,$$$

%,$$$ %$$,$$$ #%$,$$$ @D,$$$

@$,$$$ @,$$$,$$$ %$$,$$$ ???,$$$

#%,$$$ #,%$$,$$$ @,#%$,$$$ E??,$$$

@$$,$$$ @$,$$$,$$$ %,$$$,$$$ ?,???,$$$

SA%ES TO COVER COSTS:

It i neceary to ell an additionalJ753D333 in :rod#ct or er2ice to:ay the cot of J5D333 ann#al loe

:Sou,-e; OSHA


18/70

I*+%E*ENTIN( SAFETY E$CE%%ENCE

Assu(e all incidents are )reventable

Assu(e all e:)osures*ris0s can be controlled

Hold (anage(ent res)onsible and accountablefor )reventing in5uries

Involve e()loyees

"a0e or0ing safely a condition of e()loy(ent

Train e()loyees to or0 safely

Pro(ote off6the65ob safety

Audit safetyAdapted ,om 5*anaging Saet!; Te-1ni.ue" t1at Wo,3 o, t1e Saet! +,o0 Du+ont


19/70

SAFETY


20/70

SAFETY


21/70

SAFETY


22/70

& Saet! mu"t #e -on"ide,ed at eve,! "tepinthe value chain

& De"igning "aet! into a p,o-e""is chea)er than

retrofitting for safety later7& To be able to effectively (anage a )rogra(

and i()rove safety4 mea"u,ement"(ustinclude.

& Both %eading and T,ailing Indi-ato,"

& /eading indicators should -o,,elateith trailingones7

SAFETY


23/70

SAFETY


24/70

SAFETY


25/70

RE*E*BER'

ou ill achieve the level of

Safety ':cellence4t1at YO)demon"t,ate !ou 2ant to

a-1ieve


26/70

Final T1oug1t"'

K E"ta#li"1ing a "aet! and 1ealt1 -ultu,e t1at lead" to"upe,io, pe,o,man-e i" not onl! t1e ,ig1t t1ing to do o,t1e "o-iall! ,e"pon"i#le t1ing to do'

It i" al"o t1e ,ig1t e-onomi- app,oa-1

Redu-ing 2o,3pla-e in@u,ie" and illne""e" -on"e,ve"-,iti-al ,e"ou,-e" and imp,ove" t1e u"e o t1o"e,e"ou,-e" It "ave" mone!0 avoid" unne-e""a,! -o"t"

and ultimatel! maimie" ,etu,n" on #u"ine""inve"tment"

6o1n Hen"1a20 A""i"tant Se-,eta,! o %a#o,0 OSHA


27/70

CASE STU(IESCASE STU(IES


28/70

CASE ST)DIES

1evie the impa-t o "aet! p,og,am" ont1e 5#ottom linein several industries.

Construction


29/70

STADI)* CONSTR)CTION CASE ST)DIES

A num#e, o"tadium" 2e,e #uiltin t1e pa"t e2!ea," in Region


30/70

*I%%ER +AR/ STADI)*

6ul! 7 -,ane -ollap"e -au"ed t1e deat1" o G-on"t,u-tion 2o,3e,"

Hours before collase of !"# !lue $fter collase of !"# !lue

The destruction as e:tensive


31/70

The destruction as e:tensive

Th S d 1 lt


32/70

The Sad 1esults

9elayed the o)ening for One ear @$$ "illion in re)airs Three construction or0ers 0illed, several

others in5ured On 9ec7 @, #$$$, a "ilau0ee County 5uryaarded KL (illion in )unitive da(ages and%7#% (illion in co()ensatory da(ages to thefa(ilies of three ironor0ers 0illed in the

accident7 Although the fa(ilies have been)aid #D (illion for their loss, the issue of thelarge )unitive da(age aard is under a))ealand in the nes every fe ee0s7

Thi did t t t thi


33/70

This did not start this ay

Prior to A)ril of @KKK the "iller Par0 )ro5ectas at #D of )re(iu( dollars for in5uries atthe site7

As the need to accelerate the )roduction to(a0e the o)ening day deadline, a dis)uteover site arose and the then safety directorleft7

In the ne:t fe (onths there ere seriousfalls, dro))ed loads and the death of threeor0ers7

*I%%ER +AR/ STADI)*


34/70

*I%%ER +AR/ STADI)*RES)%TS

Original budget ?##"

53&L

& L@?7K" +construction

& @$$" +re)airs& #D6KK" +5ury aards

& ??$7E" +interest onbonds

/itigation is ongoing ith over a Hundred "illion 9ollarsin clai(s still unresolved7

Oth St di C t ti 9 th


35/70

Other Stadiu( Construction 9eaths

"ilau0ee +MI County Stadiu( & @K%?

& ? or0ers 0illed

1ose(ont +I/ Hori3on Arena & @KDK& % or0ers 0illed

Seattle +MA =ingdo(e & @KKL

or0ers 0illed

Oly()ic Stadiu( & Atlanta +GA 6 @KK%

& @ or0er 0illed



36/70


Ban0 One Ball)ar0 & Phoeni: +AN 6 @KK

& @ or0er 0illed

Phili);s Arena & Atlanta +GA 6 @KKE

& # or0ers 0illed

!niversity of


37/70

It is not 5ust in the !SA

@K or0ersdied buildingthe Oly()ic


38/70

+A)% BROWN STADI)*

OSHA Partnershi)

& /abor*"anage(ent Partnershi)

Con"t,u-tiontoo3 =47= !ea,"and -o"t >Gmillion

+A)% BROWN STADI)*


39/70

RES)%TS

Significant decrease in e:)ected in5uries.& $7K% lost ti(e rate v7 L7$ for construction

Significant )rogra( savings& L7 (illion less in or0ers co() and liability

cost than ould be e:)ected7

o fatalities& Only one fall in5ury

:A @o#4lo"t time ,ate o 8 i" dete,mined i,"t #! dividing t1e num#e, o @o#4lo"t time in-ident" #! t1enum#e, o emplo!ee man41ou," and t1en #! -onve,ting it to an annual ,ate o, 788 ull4time emplo!ee"T1e ,e-o,da#le ,ate o > i" dete,mined in a "imila, 2a! #ut -on"ide," t1e total num#e, o OSHA

,e-o,da#le in-ident"

(REAT A*ERICAN BA%%+AR/


40/70


OSHA Partnershi)

E"timated "aving",om O2ne, Cont,olIn"u,an-e +,og,am2a" ove, G million

J74=88G9



41/70

RES)%TS

&After @7# (illion construction hours, a 5ob6lostti(e rate of $7E

& 'sti(ated savings fro( Oner Control Insurance

Progra( +July @KKK6"ay #$$? as ?7@#%(illion +)ro5ect is on6going until July #$$%

Soldier


42/70

Soldier


43/70

1esults

The 9ays aay fro( or0 cases ere at@7D )er @$$ )erson years, the nationalaverage as ?7L7

This )artnershi) has de(onstrated thecoo)erative effort that can e:ist beteenlabor unions, construction (anage(ent,

state consultation, insurancecarriers*bro0ers and OSHA7

Ca() 1andal 1enovation


44/70

)!niversity of Misconsin "adison

The results at Ca() 1andall


45/70

The results at Ca() 1andall

The first year analysis of the OSHA)artnershi) shoed a very lo rate of in5uryith a $7$ lost ti(e incident rate, ell belothe national average of ?7E )er @$$e()loyees7

The total case incidence rate of L7% )er @$$e()loyees belo the national average of D7@)er @$$ e()loyees7

The insurance carrier indicates that the costsare ell belo half of those e:)ected for theindustry7

/a(beau


46/70

':)ansion ofthe e:istingStadiu(,co()leted onti(e ithconstructionand football

coe:isting forto seasons7

Costs of /a(beau Stadiu( In5uries


47/70

Costs of /a(beau Stadiu( In5uries

Pro5ected @7E"illion

Actual incurred costs

including reserves @7#D "illion

A savings of over a

half a (illion dollars

This fall could have been a fatality


48/70

This fall could have been a fatality

WISCONSIN A%)*IN)* FO)NDRYW 3 C ti % S


49/70

Wo,3e," Compen"ation %o"" Summa,!

7333 7336 7337 7338

$

%$

@$$

@%$

#$$

$

@$$,$$$

#$$,$$$

?$$,$$$

L$$,$$$

%$$,$$$

6@@

>>;>D;=3

663D367;6D35;

68D>6-67 9onth

BENEFITS Eli9inated train fro9 re:etitionD 2i"ration and :oor:ot#reD and increaed :rod#cti2ity and reco2ery rate4

BEFORE AFTER

N)RSIN( HO*E CASE ST)DIES


53/70

) S ( O C S S ) S

& Historically, nursing ho(es have high in5uryrates7

& Seriousin5uries are causedby lifting residents7

WYANDOT CO)NTY OHIO N)RSIN( HO*E


54/70

WYANDOT CO)NTY0 OHIO N)RSIN( HO*E

& History& /ift e-ui)(ent installed @KKD

& o6lift )olicy instituted October #$$$

WYANDOT CO)NTY N)RSIN( HO*E


55/70

RES)%TS

& Outco(e& o bac0 in5uries since @KKD

& 9ecreased or0ers co()ensation

& /ess turnover

A total inve"tment o70888 ,e"ulted in no#a-3 in@u,ie" du,ing t1e

pa"t !ea,"

I%%INOIS N)RSIN( HO*E IN6)RY E$+ERIENCE


56/70

Ca#e of In#ry*ercent of I%%INOIS

+orer Co9: Clai9A2erage Clai9

Reident Tranfer /i4e4D "acD ho#lderDother 9#c#loeletal0 8@ J8D;>< :er clai9

Contract !ith1tr#c "y o"ect /i4e4Dc#t and a"raion0

78 J6D@@> :er clai9

Sli:1Tri:1Fall /e4g4D nee and li9"fro9 fall0

6; J@D


57/70

N)RSIN( HO*E

&Addressed resident handling in5uries& #L,$$$ for lifting devices

& 'nforce(ent of rules

& Outco(es& #$$#. D clai(s. @@%= )aid out in co()

& #$$?. L clai(s. L= )aid out in co()

A)TO +ROD)CTS *AN)FACT)RIN( JA+*9COR+ORATION


58/70

COR+ORATION

& @KEE6@KKL. co()any groing ra)idly

& ?%$6L$$ of the L#% e()loyees ere te()or0ers

& OSHA referral fro( local hos)ital 6 treating#6 in5uries fro( )lant daily

A+*; OSHA RECORDAB%ES FOR 7G


59/70

A*&?#t-In-Ti9e

%a"orCo9"ined

%+(IQ Incident %+(I Incident %+(I Incident

Recorda"le = 5= @7 >> @= 6@3

Rate 64> 6 6@46 774> 6=4<


60/70

RES)%TS

& OSHA ins)ection conducted in @KK%& Co9:any fined J647&

& +illf#l 2iolation

& !nder ne (anage(ent in @KKD

& Incident rate. K7E versus L@7% +@KK?

& @#6(onth )eriod ith no loss ti(e in5uries

B%)E CROSS B%)E SHIE%D R1ode I"landOFFICE ER(ONO*ICS


61/70

&According to OSHA;s statistics, "S9s +car)altunnel syndro(e, tendonitis, and bac0 in5uriesare fre-uent and e:)ensive

& ?L of all lost or0day incidents

& @ of every ? of or0ers co()

& I()roved ergono(ics )rogra(

& Increased evaluations

& Mor0ed ith every de)art(ent internally& Mor0ed ith furniture vendors and MC

carrier

B%)E CROSS B%)E SHIE%D RIRES)%TS


62/70

RES)%TS

ear'rgo

'valuations

"S9 MCCases */ost 9ays

/ost Mor09ays

@KKK #D$ E ?L%

#$$$ LE$ +QDD +6#% @$L +6D#7%

#$$@ %EL +Q#@7D L +6?? K@ +6@#7

#$$# LKE +6@L7D @ +6D% EK +6#7#

ABBOTTF%EET SAFETY


63/70

6 Sales force e:)osure is high ris0 and lo)rofile6 on6traditional focus area for safety

6 ##,$$$ sales re)resentatives orldide L,%$$ sales re)resentatives in Phar(aceutical

Products 9ivision +/argest 9o(estic 9ivision

& Progra( targeted ne hires, (id6level

(anagers, and high6ris0 drivers& One6day training )rovided +(orning in class,afternoon behind6the6heel

ABBOTTF%EET SAFETY RES)%TS


64/70

Trained 24 Untrained

BT+ P Behind-the-+heel

ABBOTT

F%EET SAFETY RES)%TS


65/70

F%EET SAFETY RES)%TS8rd*arty %ia"ility . +orer Co9:enation Ex:ene

Cot *er E9:loyee - 6;;5-7336

B$

B#$$

BL$$

BC$$

BE$$

B@,$$$

@KK% @KKC @KKD @KKE @KKK #$$$ #$$@

Cot

0

500

1000

1500

2000

2500

3000

3500

4000

E9:loyee

Actual Expense Employees

ABBOTTER(ONO*IC I*+ROVE*ENTS IN *AN)FACT)RIN(


66/70

& e )roduct line +A )u() si(ilar to old )roduct +R)u()

& Chea)est alternative is to design ne line si(ilar toold line

& Ca)ital costs for A6)u() line. @$$,$$$& Additional invest(ents in 'rgono(ic (aterial handling

controls. #$,$$$

& Portable lifting tables, )roduct handling turntables,single shelf )roduct carts, conveyor syste(s, footrests, ergono(ic chairs, auto(ated )resses, toolfi:turing, and gri) enhance(ents

ABBOTT RES)%TS


67/70

& R )u() line (anually intensive& #$$$. L MC incidents @##7$ = +total

& #$$@. @ MC incident ##7$ =

& #$$#. @ MC incident $7E =& #$$?. @ MC incident #7% =

& 'rgono(ics ere in-o,po,ated in at t1ede"ign p1a"eof the )ro5ect

ABBOTTIND)STRIA% HY(IENE IN +ROCESS DESI(N


68/70

& Previously outsourced )rocess ste) for active)har(aceutical ingredient +API to Third Party"anufacturer +TP"

& Production unit lac0ed a))ro)riate )rocess contain(ent

e-ui)(ent& Industrial hygiene analysis financially 5ustified )urchaseof )otent API )rocess e-ui)(ent

& TP". L%$ = annually

& In6house.@$$ = in ca)ital& @%$ = annual savings

& Indu"t,ial H!giene p,og,am 2a" 3e! in ou, a#ilit! tota3e advantage o t1i" "t,ategi- oppo,tunit!


69/70

is s%ide intenti#na%%y

%e(t $%an.


70/70

SAFETY IS NOT AN

E$+ENSE --IT IS AN INVEST*ENT

business case safety 20050621

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