Safety As A Competitve Advantage

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  • Safety As A Competitve Advantage

    1. 1. Using Safety As A Competitive Advantage National Safety Council 2008
    2. 2. Presented By <ul><li>George Drexel, President, UAW Local 3520 </li></ul><ul><li>Douglas Therrien, Manager Corporate Health and Safety, Daimler Truck North America </li></ul><ul><li>Phil La Duke, Director, Performance Improvement; O/E </li></ul>
    3. 3. Competitive Advantage <ul><li>Additional Revenue </li></ul><ul><li>Reduced Cost </li></ul>
    4. 4. Real Cost of Worker Injuries <ul><li>Direct Costs </li></ul><ul><li>Worker’s Compensation </li></ul><ul><li>Insurance Premiums </li></ul><ul><li>Fines and Legal Fees </li></ul><ul><li>Loss of Productivity </li></ul><ul><li>Loss of Inventory </li></ul><ul><li>Wages of first responders </li></ul><ul><li>Paperwork and administrative costs </li></ul><ul><li>Hidden Costs </li></ul><ul><li>Drop in Employee Morale </li></ul><ul><li>Absenteeism </li></ul><ul><li>Loss of Customer Confidence </li></ul><ul><li>Legal Fees </li></ul><ul><li>Public Relations Fallout </li></ul><ul><li>Disruption of Productivity </li></ul><ul><li>Work Stoppages </li></ul><ul><li>Turnover </li></ul><ul><li>Lower Quality </li></ul><ul><li>Property Damage </li></ul><ul><li>Scrap </li></ul>
    5. 5. Calculating the Cost of Injuries <ul><li>Direct Costs Can Be Difficult to Quantify </li></ul><ul><li>Indirect Costs Are Impossible </li></ul>
    6. 6. Example 1: Tire Manufacturer <ul><li>Company A </li></ul><ul><li># of Employees: 370 </li></ul><ul><li>SIC Code: 3315 </li></ul><ul><li>IR: 9.0 </li></ul><ul><li>DART: 5.0 </li></ul><ul><li>Injuries: 35 </li></ul><ul><li>DART Injuries: 19 </li></ul><ul><li>Annual Sales: $20 M </li></ul><ul><li>Price Per Unit: $425 </li></ul>
    7. 7. Example 1: Tire Manufacturer <ul><li>Sales Volume: $150,000,000 </li></ul><ul><li>Profit Margin: 5% </li></ul><ul><li>Annual Profits: $100,000 </li></ul><ul><li>Injury Costs: $693, </li></ul><ul><li>Injury Costs as a % of Profits: 385% </li></ul><ul><li>Additional Sales Needed $7,700,000 </li></ul><ul><li>% Increase Needed in Sales: 28% </li></ul><ul><li>Additional Tires Sales Needed 18,118 </li></ul>
    8. 8. Example 1: Tire Manufacturer <ul><li>Company B </li></ul><ul><li># of Employees: 370 </li></ul><ul><li>SIC Code: 3011 </li></ul><ul><li>IR: 9.0 </li></ul><ul><li>DART: 5.0 </li></ul><ul><li>Injuries: 35 </li></ul><ul><li>DART Injuries: 19 </li></ul><ul><li>Annual Sales: $20 M </li></ul><ul><li>Price Per Unit: $425 </li></ul>
    9. 9. Example 1: Tire Manufacturer <ul><li>Sales Volume: $20,000,000 </li></ul><ul><li>Profit Margin: 5% </li></ul><ul><li>Annual Profits: $100,000 </li></ul><ul><li>Injury Costs: $385,000 </li></ul><ul><li>Injury Costs as a % of Profits: 385% </li></ul><ul><li>Additional Sales Needed $7,700,000 </li></ul><ul><li>% Increase Needed in Sales: 28% </li></ul><ul><li>Additional Tires Sales Needed 18,118 </li></ul>
    10. 10. Competitive Analysis Good
    11. 11. Trend Analysis: Injuries
    12. 12. Trend Analysis: Hazards Found
    13. 13. Trend Analysis: Hazards & Injuries
    14. 14. Safety Is Owned by Operations <ul><li>Legal Liabilities </li></ul><ul><li>Leadership-driven </li></ul><ul><li>First-line Accountability for Safety </li></ul><ul><li>Forced Accountability </li></ul><ul><li>Safety Personnel as Coaches and Consultants </li></ul>
    15. 15. Safety Is Everyone’s Job <ul><li>Defined in each worker’s job description. </li></ul><ul><li>Identified as a criteria for successful job performance during annual reviews/compensation. </li></ul><ul><li>Safety is hardwired into Operations. </li></ul>
    16. 16. Safety Is a Strategic Business Element <ul><li>Injuries are inefficient and cost money and productivity. </li></ul><ul><li>Understanding the true cost of injuries. </li></ul><ul><ul><li>Obvious costs </li></ul></ul><ul><ul><li>Hidden costs </li></ul></ul><ul><li>Policies are reviewed and changed to reflect changes in the business environment. </li></ul>
    17. 17. Living in Denial <ul><li>“We’re already doing this.” </li></ul><ul><li>“We can’t afford it right now.” </li></ul><ul><li>“We’re already ahead of industry average—that’s good enough.” </li></ul><ul><li>“We can do it alone.” </li></ul><ul><li>“Changing our safety culture is our Safety Department’s job.” </li></ul>
    18. 18. Conclusion <ul><li>All injuries are predictable and preventable </li></ul><ul><li>Compliance is not enough </li></ul><ul><li>Be proactive </li></ul><ul><li>Safety is everybody’s job </li></ul><ul><li>Safety is owned by operations </li></ul><ul><li>Safety is a strategic business element </li></ul><ul><li>Questions? </li></ul>
    19. 19. Thank You!
    20. 20. <ul><li>Phil La Duke </li></ul><ul><li>Director, Performance Improvement </li></ul><ul><li>O/E </li></ul><ul><li>2125 Butterfield, Suite 300N </li></ul><ul><li>Troy, MI 48084 </li></ul><ul><li>248-860-1086 </li></ul>

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