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Cost of accidents, by B C Das, bimal chandra das

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it is sharing of knowledge. By Bimal Chandra Das, Rtd. AGM (Safety), Bokaro Steel Plant,/ Bokaro. Kolkata

it is sharing of knowledge. By Bimal Chandra Das, Rtd. AGM (Safety), Bokaro Steel Plant,/ Bokaro. Kolkata


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  • 1. Cost of AccidentsCost of Accident is a valuable tool to measure safety performance. Lord Kelvin had said“When you can measure, what you are speaking about, and express it in numbers, youknow something about it ; when you cannot measure it, when you cannot measure it innumbers, your knowledge is of a meagre and unsatisfactory kind . “ Having a standardmethod of calculation helps in many ways. Even if the standard is not foolproof it equates allperformance on a common ground for comparison. In SAIL, SSO or SAIL Safety Organisation,had taken the lead in developing a system of calculation of the cost of accidents. Based on ajoint study by OHS, BGH & SED the present system has been developed. If applied only toindividual cases there may be errors but if it is done for departments over a period of time like amonth, the result is a fair indicator of how much the accidents in a department are costing thecompany. Certain pitfalls are present in the system. One major one is the desire of departments tosuppress accident data. To avoid this the data is taken from SED’s record of >48 hrs casesreported in OHS or BGH. It is also seen that in many cases persons “carry injuries” , that meansthey either do not avail of injury leave or join before they are fully fit. This paints a rosy picturebut the actual situation is different, as persons are on duty and working below their fullpotential. To some extent this covered in indirect costs. The basic methodology involves two parts ie. Direct cost and Indirect cost. The Directcosts have three factors 1. Medical costs 2. Man day wages lost costs 3. Compensation costs Medical costs involves cost of treatment, medicines, investigations, in patient bed costetc. After studying data of 6 months it was simplified and standardised into three groups, Firstaid (1 day), Minor (less than 20 days) and Serious (more than 20 days. The per day cost hasbeen worked out as Rs.90/- for First aid , Rs.240/- for minor cases and Rs.400/- for Serious orMajor cases. It is assumed that in First aid treatment is for one day only, for minor cases 11days and 21 days for serious cases. This is based on actual statistical analysis and this system isapplied. The man days cost is based on the wages cost for the number of days a person is absenton medical leave. The Compensation cost of course decided on fatal cases and partial or fulldisability by a medical board. Indirect costs involve a whole range of factors :  Break down maintenance  Production loss  Upstream/down stream production loss  Loss of property  Working hours lost (IR)  Accident investigation  Administrative cost  Drop in morale or momentum (apprehension, fear or psychological factors) Earlier it had been believed that indirect cost is two or three times the direct costs.However statistics show that it may range from 4 times to 9 times. At SAIL the factor is fivetimes. Some data have been showed during the session. The yearly, half-yearly and monthlycost gives a wake up call to department senior managers to start serious efforts to control thetrend. It can also give an indication of the effectiveness of the present safety managementdrives and coupled with other accident statistics, help in identifying areas or groups of peopleneeding special attention.