- OIL & GAS
Risk is the “raison d’etre” for occupational safety and health (OSH) professionals. Our jobs are all about anticipating, recognizing, evaluating, preventing, and controlling risk, so as to keep people from harm while they work. This is a good thing.
So why do we become vulnerable during hard economic times?
Cracking the “inner circle”
OSH professionals have not been good at connecting what we do with the essence of what our organizations are doing. Oh yes, we talk about how reducing workers’ compensation costs helps profitability, and that reducing injuries and illnesses saves money and improves productivity. We have talked about these things for decades, but this hasn’t gotten us into the “inner circle” â€” the place where only those who are seen as essential can enter.
How can we go from being regarded as expendable to valued as essential?
One way is to connect risk control and elimination to the central mission and goals of the organization â€” to show that our work to minimize or eliminate risk contributes directly to the accomplishment of the purpose and objectives of primary business processes.
Risks as red flags
Risks should be seen as indicators that something is wrong in an organizational process. Anything that takes away from process efficiency adds delay, increases the possibility of mistakes, potentially impairs quality, and adds cost overall. When people are injured or sickened because of an inadequately controlled risk, add pain and suffering and regulatory noncompliance to the list.
Eliminating or minimizing risk often has a multiple effect: solving the immediate problem produces benefits through injury prevention, and the changes made to address the risk result in process improvements that create downstream benefits.
Case in point
Women clipping leads by hand on an electronic circuit board assembly line were experiencing a high incidence of carpal tunnel syndrome, in addition to hand and arm pain. The process required them to hold the circuit boards in their left hands and clip the component leads with their right hands (or vice versa if they were left-handed). The women were required to complete a specific number of circuit boards in a day. After several hours of repeating this activity, their left hands were quite painful and the women required rest and treatment. Some required carpal tunnel surgery after months of performing this task. Injuries slowed down the process significantly, and the pain endured produced a high rate of defects and rejects. The process was ripe for re-design.
Adding up the benefits
Adding a simple fixture that supported the board relieved the pain and also allowed the women to complete their work faster and more accurately. The rate of injuries was reduced by 95 percent. Quality problems were reduced significantly and the reject rate dropped by 85 percent. Because products could be completed and delivered more quickly, customer satisfaction increased and more orders came in. For a total cost of the fixtures of about $1,000, the company saw a reduction in workers’ compensation medical and indemnity costs of about $75,000 per year.
Far greater was the value of the improvement to the business process itself. Rejected circuit boards could not be re-worked because of the nature of the materials. Defective boards were a complete loss, costing about $100 each in raw materials and labor. With a reject rate of about five per day, the yearly loss added up to about $1,000,000, so the benefit from improved quality was $850,000.
Tools to create value
OSH professionals must use tools that will enable them to create practical alternatives to risks and identify the value of doing so. Here’s how:
Think of risk as our opportunity to contribute value to the organization’s primary goals and objectives: Risk is expensive to manage; don’t think of it as something that is “part of the job.” It adds cost and detracts from the primary mission of the organization. We must make it our mission to continually seek better ways to prevent injury and illness, as well as to improve the business process.
Practice creativity: Don’t go it alone! Use the power of teams. Involve key stakeholders in helping to develop practical alternatives that will eliminate the risk. Rely on buy-in.
Understand the process. Map it. Interview the process operators to gain as much detail about what is really happening.
Think outside the box. Begin with the end in mind. Brainstorm. Seek inherently safe design.
Listen to those who know most about the process and its risks.
Apply the hierarchy of controls: Start at the top and work down. Start with risk elimination and work hard to achieve it. The potential for financial return as well as injury/illness prevention is likely to be greater by eliminating the hazard altogether. Seek the greatest practical control.
Re-examine the standard controls for common risks, and focus on finding better ones that rely less on the human being to provide control. Think about how the process can be made to accommodate the capabilities and limitations of the person operating it. This is the best approach to eliminate error and thus injury.
Don’t prescribe solutions â€” PPE usually is not the cheapest control, nor is it the most reliable â€” it’s temporary at best.
Assess all the value gained from applying the hierarchy of controls: Look for all improvements and benefits â€” injury and illness prevention; process efficiency; cost reduction; revenue generation; increased market share;
Consult with key stakeholders â€” operations, finance, marketing, etc. and gain their agreement as to true value.
Use standard financial assessment methods to calculate value: Work together with the organization’s financial experts to develop a credible case based on its way of measuring financial performance. Consider using a financial calculator to help develop the information and augment your credibility.
Communicate to those who control the purse strings: They want to know what OSH has contributed to the bottom line, including how it helped the company meet its primary objectives. Compare results to specific, written, organizational objectives and draw connections. Take as much credit as you can reasonably get away with â€” don’t overdo it!
With these ideas and tools in OSH professionals’ toolkits, we have better equipment to help us and our organizations win the fight to survive in tough times.