Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

Safety As A Competitve Advantage

on

  • 3,722 views

This presentation was delivered at the 2008 National Safety Council's National Conference and Expo in Anaheim California, by Phil La Duke (Director, Performance Improvement--O/E) Daryl James ...

This presentation was delivered at the 2008 National Safety Council's National Conference and Expo in Anaheim California, by Phil La Duke (Director, Performance Improvement--O/E) Daryl James (retired--Chrysler) and George Drexel (Local 3520 President---UAW)

Statistics

Views

Total Views
3,722
Views on SlideShare
3,710
Embed Views
12

Actions

Likes
0
Downloads
132
Comments
1

3 Embeds 12

http://www.slideshare.net 10
http://localhost 1
http://blackboard.brenau.edu 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • If you enjoyed this presentation you might want to check out my worker safety blog:
    www.philladuke.wordpress.com
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Safety As A Competitve Advantage Presentation Transcript

  • 1. Using Safety As A Competitive Advantage National Safety Council 2008
  • 2. Presented By
    • George Drexel, President, UAW Local 3520
    • Daryl James, Senior Manager, DaimlerChrysler (Retired)
    • Phil La Duke, Director, Performance Improvement; O/E
  • 3. Competitive Advantage
    • Additional Revenue
    • Increased Efficiency
  • 4. Real Cost of Worker Injuries
    • Worker’s Compensation
    • Insurance Premiums
    • Fines
    • Loss of Productivity
    • Loss of Inventory
    • Wages of first responders
    • Paperwork and administrative costs
    • Hidden Costs
    • Direct Costs
    • Drop in Employee Morale
    • Absenteeism
    • Loss of Customer Confidence
    • Legal Fees
    • Public Relations Fallout
    • Disruption of Productivity
    • Work Stoppages
    • Turnover
    • Lower Quality
    • Property Damage
    • Scrap
  • 5. Calculating the Cost of Injuries
    • Direct Costs Can Be Difficult to Quantify
    • Indirect Costs Are Impossible
  • 6. The Case for Safety As An Element in Competitive Advantage
    • Case Study 1: Chicken Processing
    • Case Study 2: Tire Manufacturing
    • Case Study 3: Heavy Truck Manufacturing
  • 7. How We Figured…
    • Bureau of Labor Statistics Survey of Occupational Injuries and Illnesses, 1995
    • Manufacturer’s News North Carolina Manufacturer’s Directory, 2007
    • Sundry industry websites
    • http://finance.yahoo.com/search
    • www.census.gov
    • http://www.osha.gov/SLTC/etools/safetyhealth/mod1_estimating_costs.html
    • www.safety-impact.com
  • 8. Assumptions and Disclaimers
    • For the purposes of these cases :
    • We assumed the companies had a safety record that was roughly the average for their SIC code as calculated by the U.S. Department of Labor and the companies worked 2,080 hours per employee
    • the sales volumes were roughly the mid-point of the range reported to Manufacturer’s directory
    • No companies suffered any fatalities during the time period (unless you count chickens which were getting killed right and left)
    • Where gaps in the data existed the authors made educated guesses as to the most likely data, endeavoring to provide the most accurate picture of the industries involved.
    • The costs of injuries were computed using the etool for calculating injuries available from their website
  • 9. Industry Overview: Chicken Processing 2.0% 4.6 7.4 $25 B 2,365,000 2015 Poultry Processing Average Profit Margin Average DART Average IR Annual Revenue # Employed SIC Code Industry
  • 10. Chicken Processing: Market Share
  • 11. Example 1: Poultry Processing
    • Company A
    • # of Employees: 1,200
    • SIC Code: 2015
    • IR: 7.4
    • DART: 4.6
    • Injuries: 131
    • DART Injuries: 81
    • Annual Sales: $380,000,000
    • Price Per Unit: $.16 lb
  • 12. Example 1: Poultry Processing
    • Company B
    • # of Employees: 1,000
    • SIC Code: 2015
    • IR: 6.9
    • DART: 5.3
    • Injuries: 72
    • DART Injuries: 55
    • Annual Sales: $40 M
    • Price Per Unit: $.16 lb
  • 13. Competitive Analysis 778,462 lbs 15,177,884,612 lbs Additional Production $103,409,000 $2,426,461,538 Additional Revenue >1% 31.83% Additional Market Share 6,071.2% 27.2% Injury Costs as a % of Profit $3,185,000 $1,883,000 Injury Cost $11,704,000 $52,000 Profit 3.08% .13% Profit Margin $380,000,000 $40,000,000 Annual Profits Company B Company A
  • 14. Competitive Analysis Required Increase in Revenue 0 $100,000 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $ Company A $4,000,000 Company B $4,500,000 $5,000,000 $5,500,000 $6,000,000 $6,500,000 $2,500,000,000 0 $100,000 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $ Company A $4,000,000 Company B $4,500,000 $5,000,000 $5,500,000 $6,000,000 $6,500,000 $2,500,000,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 $ Company A 900,000 Company B 1,000,000 1,100,000 1,200,000 1,300,000 1,400,000 $2.5B
  • 15. Competitive Analysis Required Increase In Market Share 0 5 10 15 20 25 30 35 40 Company A Company B <1% 31.83% %
  • 16. Chicken Processing: Market Share
  • 17. Tire Industry Overview 2.0% 3.9 6.3 $12 B 64,000 3011 Tire Manufacturing Average Profit Margin Average LWDI Average IR Annual Revenue # Employed SIC Code Industry
  • 18. Tire Industry Market Share
  • 19. Example 2: Tire Manufacturer
    • Company A
    • # of Employees: 2,800
    • SIC Code: 3211
    • IR: 7.0
    • DART: 4.5
    • Injuries: 134
    • DART Injuries: 109
    • Annual Sales: $380 M
    • Price Per Unit: $81
  • 20. Example 2: Tire Manufacturer
    • Company B
    • # of Employees: 2,200
    • SIC Code: 3211
    • IR: 7.0
    • DART: 4.6
    • Injuries: 35
    • DART Injuries: 106
    • Annual Sales: $350 M
    • Price Per Unit: $98
  • 21. Competitive Analysis 109,936,842 1,066,218 Additional Production $104,440,000 $86,363,636 Additional Revenue .87% .72% Additional Market Share 29.8% 22.7% Injury Costs as a % of Profit $5,220,000 $3,990,000 Injury Cost $17,500,000 $17,556,000 Profit 5% 4.62% Profit Margin $350,000,000 $380,000,000 Annual Profits Company B Company A
  • 22. Competitive Analysis: Required Increase in Revenue 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 $ Company A 90,000,000 Company B 100,000,000 110,000,000 120,000,000 130,000,000 140,000,000 $104M $86.3 M
  • 23. Competitive Analysis: Required Increase in Market Share 0 .10 .20 .30 .40 .50 .60 .70 .80 Company A Company B .72% .87% % .90
  • 24. Tire Industry Market Share
  • 25. Industry Overview 3.3% 5.0 11.1 $21 B 669,000 3713 Heavy Truck Manufacturing Average Profit Margin Average DART Average IR Annual Revenue # Employed SIC Code Industry
  • 26. Industry Overview Heavy Truck Manufacturing Kenworth Peterbilt
  • 27. Example 3: Heavy Truck Manufacturing
    • Company A
    • # of Employees: 4,500
    • SIC Code: 3713
    • IR: 13.1
    • DART: 4.4
    • Injuries: 613
    • DART Injuries: 346
    • Annual Sales: $380 M
    • Price Per Unit: $98,500
  • 28. Example 3: Heavy Truck Manufacturer
    • Company B
    • # of Employees: 4,800
    • SIC Code: 3011
    • IR: 7.0
    • DART: 4.6
    • Injuries: 654
    • DART Injuries: 370
    • Annual Sales: $450 M
    • Price Per Unit: $118,000
  • 29. Competitive Analysis 4,779 4,061 Additional Production $597,520,000 $400,000,000 Additional Revenue 2.85% .55% Additional Market Share 79.7% 105.3% Injury Costs as a % of Profit $17,500,000 $14,000,000 Injury Cost $18,750,000 $13,356,000 Profit 2.5% 3.5% Profit Margin $750,000,000 $380,000,000 Annual Profits Company B Company A
  • 30. Competitive Analysis: Required Increase in Revenue 0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,0000,000 700,000,000 800,000,000 $ Company A Company B $597 M $400 M
  • 31. Competitive Analysis: Required Increase in Market Share 0 .50 .1.0 1.5 2.o 2.5 Company A Company B .55% 2.85% % 3.0
  • 32. Industry Overview Heavy Truck Manufacturing Kenworth Peterbilt
  • 33. Secrets to Improving Work Place Safety
    • Treat All Injuries As Predictable and Preventable
    • Understand that Compliance is not enough
    • Be Proactive
    • Instill Operations Ownership
    • Reinforce that Safety is Everyone’s Job
    • Treat Safety As a Strategic Business Element
  • 34. All Injuries Are Predictable and Preventable
    • Injuries are system failures.
    • FMEA and Root Cause Analysis can be used to predict system failures.
    • Job Safety Analysis helps to determine likely failure modes.
    • No-blame incident investigation.
    • Standard Work is key to preventing injuries.
  • 35. Compliance Is Not Enough
    • Industry average is a dangerous and misleading metric.
    • There is no cause-and-effect relationship between compliance and lower injury rates.
    • Compliance-driven safety is not good business.
    • Compliance-driven approaches tend to be reactive.
    • Prevention-driven approaches seek to reduce risk irrespective of regulation.
  • 36. Be Proactive
    • Balanced Scorecard Approach
    • Monthly Strategy Sessions
    • Leading Indicators
    • Analyze and Understand Industry Trends and Take Appropriate Action
  • 37. Safety Is Owned by Operations
    • Goal Alignment
    • Leadership-driven
    • First-line Accountability for Safety
    • Forced Accountability
    • Safety Personnel as Coaches and Consultants
  • 38. Safety Is Everyone’s Job
    • Defined in each worker’s job description.
    • Identified as a criteria for successful job performance during annual reviews/compensation.
    • Safety is hardwired into Operations.
  • 39. Safety Is a Strategic Business Element
    • Injuries are inefficient and cost money and productivity.
    • Understanding the true cost of injuries.
      • Obvious costs
      • Hidden costs
    • Policies and processes are reviewed and changed to reflect changes in the business environment.
  • 40. Push Back
    • “We’re already doing this.”
    • “We can’t afford it right now.”
    • “We’re already ahead of industry average—that’s good enough.”
    • “Safety Culture Change?---Isn’t that why I hired you?”
  • 41. Conclusion
    • Companies spend significant sums of money hurting workers
    • Preventing Injuries has the same effect as boosting revenue
    • By seeing safety as a business element companies can have a competitive advantage
    • Questions?
  • 42. Thank You!
  • 43.
    • Phil La Duke
    • Director, Performance Improvement
    • O/E
    • 2125 Butterfield, Suite 300N
    • Troy, MI 48084
    • 248-860-1086
    For Additional Information Contact: