National Safety Month is upon us. It's worth a few minutes to reflect on how your firm measures up in this area of business.
There are a couple of important ways to look at safety. We will look at people, and then at business that supports people with their incomes from their work. Pavlov always said the basis of survival starts with the individual feeling safe.
Before we go there, here are the key areas of focus from the National Safety Council to boost awareness:
Each of these represents the areas of greatest potential for improvement. Safety starts with an attitude, a way of prioritizing prevention. It helps to first understand the impact of the lack of prioritization.
First. let's think about worker safety.
Safe environment, safe equipment, and safe conditions all begin with safety attitude. When you make safety the top priority and all employees from the CEO down to the janitor start their conversations with zero lost days, you know you have the right attitude. If you are missing this approach, you are leaving safety up to chance and accidents will happen where humans are involved. The main concern is that all accidents are preventable. Injury and loss of life are costly in so many ways, not to mention productivity, operations cost, and reputation.
In contrast, an employee who sees the commitment to safety first will go the extra mile for you every day, productivity gains! I once saw a brick manufacturing business of some 60 years of operation go out of business because a worker at the feedstock front end of the process was working alone, fell asleep and fell into the crusher, coming out later in the bricks mold downstream in the process. That company was forced out of business because of this incident that was 100 percent preventable.
According to OSHA, the meat industry reported 23,500 nonfatal worker incidents in 2018, and most involved injuries. That averages out to about 64 cases a day nationwide. Illness and injury rates have fallen 85 percent in the past 20 years, labor data show. In 2008, the meatpacking incident rate was 10.3 per 100 workers, more than double the national average of 3.9. Before that, it was 29.3, higher than any other industry category, in 1998.
According to The Guardian and the Bureau of Investigative Journalism, two amputations a week result from accidents at U.S. meat plants result in two amputations every week, as well as fractured fingers, second-degree burns, and head trauma. U.S, meat workers are three times more likely to suffer serious injury than the average American worker, and pork and beef workers nearly seven times more likely to suffer repetitive strain injuries.
Let's compare that to other careers.
Data from the Bureau of Labor Statistics (BLS), the rate of fatal work injuries for police officers in 2014 was 13.5 per 100,000 full-time equivalent workers, compared to 3.4 for all occupations. Similarly, the rate of nonfatal occupational injuries and illnesses involving days away from work among police officers was 485.8 cases per 10,000 full-time workers in 2014; the rate was 107.1 cases for all occupations.
Employer-reported injury and illness rate unchanged in 2018 at 2.8 cases per 100 workers, according to BLS data. The largest area of injury is manufacturing, with meat processing being a huge contributor, then materials movers, followed by transportation.
Clearly, we are seeing a lot of profits going down the drain and lost productivity where there is a lack of prioritization. And all this is coupled to loss of income for workers and their families. Taking a different approach, being ready to invest into better systems, training and a culture prioritizing zero lost days translates directly to efforts to reduce lost time incidents in our business. It's just good for the bottom line as well as for workers and of course.
At $170 billion a year nationwide, the direct and indirect costs of work injuries and illnesses equal those of cancer, according to the National Institute for Occupational Safety and Health. Employers can save $4 to $6 for every dollar spent on safety and health programs. Workplaces with successful safety and health management systems reduce injury and illness costs 20 to 40 percent, according to OSHA.
It's important to recognize, this area of cost control being directly within the control of management, this would seem to be a no-brainer. But change takes time. And governments don't always support positive change when regulations oversight goes unfunded or legislation makes it more challenging. A smart business leader will be proactive when it is clearly good for everyone and the bottom line.
Next let's think about business safety in terms of sustainability. Or another phrase is business continuity. This is safety about business processes. Security in the sense that a safe place to work equates to a business that plans ahead for the long term, to be profitable. To make work safe reduces the risk of the brick factory incident where they went out of business because of the accident. Add to that IP protection, communications, and business networks sharing of data followed by risk reduction and management of the supply chain, including partners.
Business systems are a main source of risk where intrusions can cripple a business. Data shows that when a SME (small to medium-sized enterprise) encounters a denial of service attack, they are generally not financially or physically prepared to deal with this. The result is more than 25 percent will go out of business with probably another 50 percent unable to respond quickly leaving their supply chain exposed to competitors to swoop in and take market share unchallenged only to never be regained. Hopefully, you do not do business with one of these or you are shut down, too.
Achieving this protection -- mitigating the downside -- requires a proactive approach to risk management at the corporate level, because it affects many areas of your business, telescoping to procurement and supplier management. Like protecting the worker in their job, protecting your business processes begins with supplier selection in terms of having the right supplier with the right fit for your business. This makes it easier to leverage alignment on common objectives, such as protection of IP, of managing supply chain risks proactively, reliable capacity coverage and continuity of supply with fewest surprises plus having a strong backbone of business processes to deal with the completely unexpected disruptions that will happen. If a firm has little proactive planning experience, they leave themselves open to disruption which usually becomes a troupe of circus clowns all trying to get into the phone booth together at once. Having to design and implement new processes during a crisis, like trying to design new steering for your race car while the race car is out on the track. Not very effective. Witness the American government's response to the novel coronavirus as an example. Better to have a "standard process" already designed, tested, and deployed, ingrained into the culture that works easily regardless of how good or bad the monthly news may be.
Years ago, a firm I worked for had a very strong proactive planning approach. We called this the monthly "President's Report" where we constantly updated plans, status, forecasts, and risk assessments. We thought we were doing a great job, especially compared to some competitors. Then one day a phone call came informing us that one of our two suppliers of specialty steel tubing experienced an earthquake shutting down production. Not just a delay of a few days, but months, this would have crippled most firms. We were already in a cadence for a monthly review, so we were able to quickly make large scale adjustments to our production plans using feedback from our supply chain partners and customers. They were more than willing to work with us to work through this catastrophe.
Within about 10 months, we were back to normal, having shipped the product that we could during the supplier gap time and then switching production to quickly build all that we could not for maybe six months. It worked because we were skilled and disciplined in planning proactively. We had our hands firmly on the control stick. Redirecting was painful but very "doable." We quickly adjusted because we were not as reactionary in our replanning.
With COVID-19 still staring us in the face, we now recognize we cannot lock into one path without risking exposure that may be unnecessary. People seem to feel that major disruptions happen infrequently, but the reality is we tend to experience global supply chain disruptions approximately every two years. We need to plan accordingly.
To be effective in safety, both worker safety and business safety, we need an approach that includes risk profiling and analyzing, followed by prioritizing according to the expected response approach. Both are necessary. The following is to help companies see the big picture and to set the right plans in place supporting that. Beginning with awareness and analysis.
We then must understand our own abilities or tolerance for risks of several kinds so we can prioritize. Zero lost days is more than a goal. And it is achievable with the right preparation.
The last step is to evaluate and plan the response based on impact and probability. From that point, we can choose a response that best fits the economic value and time frame of exposure.
To recap, we need to think first about the human factor, the more immediate assets we have. Then to focus on the long game, the sustainability by considering the risks and having a proactive approach to managing the changing landscape.
Bob Forshay is consultant and master instructor of supply chain and operations best practices with more than 35 years of experience in multiple industries and environments. Reach him at firstname.lastname@example.org.