Living in a world beyond OSHA
May 11, 2000
Feeling vulnerable? Your department is viewed as overhead, and most of your costs relate to labor,making you an inviting target for accountants. Meanwhile, you're a victim of your own success: The more effective you are, the harder it is to justify your existence. "Why do we need to keep spending money on safety when our injuries are so far below the industry average?" asks the boss. You try to document a return on investment, but how do you prove safety training actually increases productivity? Many safety and health pros have lived with this sense of insecurity for years. Their out has been OSHA,there's a reason they said, "Our Savior Has Arrived" when the agency came on the scene in 1970. "We've always been viewed as a regulatory shield," says one pro. But now OSHA isn't the driving force it once was. What do you do when your shield isn't needed? "In the last ten years, I bet our 60 facilities haven't received $100,000 total in OSHA penalties," says an industrial hygienist. "We seldom get hit with a fine over $20,000, and OSHA will knock it down to $10,000. That's not going to get management's attention." Today, most businesses across the U.S. see OSHA as weak, muzzled,basically not an issue. Only small employers still seem intimidated. Republicans in Congress and powerful industry groups have effectively blocked new standards. OSHA's two regulatory priorities,setting rules for ergonomics and basic safety and health programs,are years from becoming law. Inspections, meanwhile, hover around 35,000 annually,half the number conducted in OSHA's go-go years of the 1970s. Complicating matters is the fact that injury and illness rates have never been better for many safety and health pros. Across U.S. industry, in 1996, (the most recent year reported) the total incidence rate of injuries and illnesses reached an all-time low,7.4 cases per 100 full-time workers,according to the Bureau of Labor Statistics. Only seven percent of readers responding to Industrial Safety & Hygiene New's most recent 'White Paper' survey said their rates deteriorated in 1997. These rates are often the only measuring stick used by plant managers to assess safety and health activity. When rates are low, it's tempting for harried managers to cross safety off the long list of agenda items to worry about. Workers' compensation costs will get management's attention, too. But here again, good news is a mixed blessing. After escalating an average of 15 percent every year from 1985 to 1992, comp costs decreased three percent annually from 1992 to 1995. "Our workers' comp costs are just not that significant," says the industrial hygienist. "It's tough to convince managers to invest in safety and health when comp costs are running $7,000 to $10,000 a year. Especially when they need to hire people for production." So how do you convince managers to maintain or increase safety and health budgets when other priorities are more pressing, and no new standards loom on the horizon? The question may be less urgent at the moment because six straight years of economic growth in the 1990s have allowed many safety and health departments to be bankrolled without great scrutiny. But what happens when business slows, as it inevitably does, and the hard questions start coming? Living in a world beyond OSHA requires you to ask tough financial questions before someone else does. To deal with your fears and prejudices about business realities. To learn the language of accountants. And to perhaps think of safety and health work as you never have before. The remainder of this report offers five specific steps to help you survive and thrive, and three case studies show how savvy professionals are adjusting to safety and health's "new world order."
Case Study Imagine a safety and health specialist solving a manufacturing problem and saving his company $500,000 a year. That's what Stephen Gutmann did for 3M Corporation. Gutmann, senior ergonomics specialist in 3M's industrial hygiene services group, and his staff applied their expertise,and some business sense,to a tape coating operation. Employees begin the process by picking up and inserting metal shafts weighing up to 70 pounds into huge rolls of film. The six-foot wide, four-foot in diameter rolls, each weighing 2,000 pounds, are then hoisted mechanically and moved through a coating and drying process. Gutmann's staff was concerned that one employee lifted the metal shaft and inserted it in the roll. NIOSH's lifting guide indicated that 70-pound loads could lead to back and shoulder injuries. But they also noticed that the aging steering mechanism did not maneuver the film through the process evenly, leaving much of the film uncovered and wasting thousands of rolls of tape. That discovery turned into a key selling point for ergonomic improvements. Gutmann told management that a new steering mechanism would eliminate tape waste and save money, in addition to reducing ergonomic injuries and saving workers' compensation costs. Management bought the idea, and a new steering mechanism for $30,000. 3M is now saving $500,000 a year in tape waste. Gutmann suggests backing up your ideas with a second opinion from others in the company, such as an engineer. For example, if Gutmann wanted management to buy a lifting table for workers setting boxes of 3M products on pallets, he says, "I would tell execs, 'A company engineer agrees with the safety staff that if you eliminate this productivity problem [by purchasing a lift table], workers' comp costs will decrease'." Gutmann uses productivity, quality, and customer satisfaction issues when he can. The lift table, for example, would make lifting and packing tasks easier for workers, especially new ones, he says. "It would also cut down on shipping errors because of a simplified packing process." Finally, Gutmann would tell 3M management that the new lift table could help workers lighten loads of products in boxes, which customers would appreciate.
Case Study "We track our accident rates by Sigma levels to which engineers can relate," says Leslie Peterson, manager of safety and industrial hygiene for Motorola's Land Mobile Products Sector in Schaumburg, Ill. In tying the information to the company's 6 Sigma quality initiative, her department taps into the corporate culture to convey health and safety messages to management. "You can have only 3.4 defects per million opportunities, and we see every accident as a defect," she explains. By 1999, Peterson's department aims to achieve a ten-fold reduction in the facility's accident rate, compared to a 1994 baseline. Despite the fact that the safety performance has been 70 percent below the industry average over the past four years, according to OSHA statistics, Peterson and her staff are striving to reduce overall incidents of accidents by another 65 percent. Their work is aided by 100 small-group safety committees that conduct inspections, review accident statistics, discuss safety issues, and recognize coworkers who have done something to improve safety awareness. Peterson's department prepares Total Environmental Management charts that use Motorola's performance measurement system. TEM metrics cover recordable incidents, that is OSHA 200 log cases, hazardous waste generation, landfill waste disposal, and hazardous material usage. It's another way of expressing health and safety issues in engineering and statistical terms, which can then be linked to Motorola's quality-oriented culture.
Case Study You won't find environmental health and safety performance metrics tied to the bottom line at ITT Industries. "We are beyond it," says Usha Wright, vice president and associate general counsel, environmental, safety and health at ITT in White Plains, N.Y. "Top management is already persuaded that [EHS] makes good business sense. Our CEO believes that the cost of preventing problems is cheaper than correcting them." That's not to say ITT isn't interested in measuring performance. Six metrics are used to evaluate environmental health and safety program initiatives: the frequency and severity of injuries and illnesses; workers' compensation costs; volume of hazardous materials used, including chemicals; reduction of waste; and tracking corrective measures. "We especially track corrective measures to find out whether they have been done or not done on time," Wright says. "And we do measure the delinquency rate of corrective measures because our ultimate goal is zero." Each plant sets its own goals for injury and illness frequency and severity, and evaluates its performance against all six metrics on a quarterly basis. Once every two to three years all manufacturing plants undergo internal audits to ensure that they are in compliance with regulations and with the company's own requirements and standards. But Wright doesn't track audit findings. "I want the plant managers to open up their plants to audits so that we can find the problem and fix it internally," she says.