Quezada Imports - 2013

Fierro, Russell & Zsako Corp.

Work Place Safety and Prevention 4805 North Glen Blvd., El Paso, Texas 79938 Phone: (915) 888-0000 Fax: (915) 888-0001

November 10, 2013 Ms. Maria Torres Human Resources Director Quezada Imports 1583 Old Highway 70 Austin, TX 78251 Subject: Safety Program for Quezada Imports Dear Ms. Torres:

We are very pleased to present this proposal for your review. It will be a pleasure for Fierro, Russell & Zsako Corporation to serve your needs and would like to thank you for this opportunity in advance. Striving for your success is our priority; making your goals our goals by leading you to the path of success with the right tools. Our proposal describes the necessary steps to avoid any safety issues and implement a standard safety program. This project will begin by changing your assembly line, innovating logistics in your company; therefore reducing injuries to employees and minimizing compensation expenses. The new assembly line will meet all your current capabilities and will prepare you for future expansion and growth. Because this will be a major change in your operations, we have included a Cost Benefit Analysis report which includes detailed information of the equipment to be acquired. Training manuals will be provided to you as well as live training to your employees; following the correct procedures is a must to succeed. We appreciate your time, and again thank you for choosing Fierro, Russell & Zsako Corporation for your business needs. We look forward to working together; any comments or concerns are always welcome. We want to hear from you, please feel free to express any issues you are currently experiencing. Thank you. Sincerely,

Joel Fierro
Chief Operations Officer Fierro, Russell & Zsako Corporation 4805 North Glen Blvd. El Paso, Texas 79938 Enclosed: Fierro, Russell & Zsako Proposal

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Safety Program for Quezada Imports

November 19, 2013

Prepared by Joel Fierro, Jasmin Russell, Ali Zsako

Fierro, Russell & Zsako Corp.

Report Distributed November 21, 2013

Prepared for Maria Torres, Human Resources Director for Quezada Imports

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Table of Contents
Executive Summaryii Agency Overview..iii-iv Introduction...1 By the Numbers..2-3 Observations..4 Recommendations.5 The Bottom Line.6-9 Total Cost..10 Results....11 References...12

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Executive summary
As work place injuries increase, productivity will be greatly impacted. Our comprehensive report on the health of your company for your employees safety wil l go in great depth concerning all areas of your operation exposing hazards found in and around your operation. Our investigation will identify any situations which may be a major contributor to work place injuries. As perceived by the necessity of this report; worker compensation claims are cutting at your profit and therefore establishing a counterproductive operation. Another area of concern will be areas within your operation which make false claims easy to initiate due to the lack of safe working conditions. Our report will push Quezada Imports to be a top performer. Our findings will explore options concerning how business is handled and way to improve efficiency while implementing much safer areas of operation. We will detail all aspects of your business from the receiving to the shipping and all the areas in between. Included with this submission will be educational objectives to enhance employee knowledge of proper techniques in performing operations. Training for first, second and upper level management will also be provided in order to facilitate ongoing training for staff members. Supervisors will be identified and will be certified in accordance with OSHA to properly implement training and comprehension to the most current standards for the industry. Recommendations to the companys policy and procedures manual will have amendments suggested in order to solidify the new provisions concerning work site safety and its implementation. Areas to be evaluated will start with the shipping and receiving areas of the warehouse and will include but limited too are the lighting, floor warning markers, trailer ICC locks and its indicator lamps, Material handling equipment, area layout and emergency response equipment and its accessibility. Additionally we will evaluate un-natural positions such as having to reach and or repetitive motions. Actions as such create fatigue and can be a major contributor to injuries. Merchandise transfer operations, how merchandise is stored, opened, sorted and repacked. Review of the tools used in the operation and the materials employees are exposed too while performing the operations. The racks will be evaluated for integrity and position in respect to heights and ease of access. Conveyor belts and other apparatuses used to move merchandise around the warehouse will be evaluated for maintenance and function, pinch points and tolerances and most importantly the safety mechanisms used to maintain safe operation. In our efforts to provide a service to make your operation safer and more productive we will provide a very detailed and comprehensive report covering many areas along with our recommendations. Our report will cover the cost benefit of upgrading and retrofit of some of the older equipment along with third party training for staff. An overall heath rating for the company will help determine the best course of action in transforming the operation into a far more safer and profitable company.
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Agency Overview
Fierro, Russell & Zsako have been taking care of any work place needs for an about a decade now, and will continue to do so for many years to come. We have an advanced group that is specialized and trained themselves to help search and identify any problems in the work place environment. We focus on saving you money all the time, while helping your employees prevent injuries. Our understanding in this industry will make the work days a lot smoother. DHL and overstock are a few examples of the companies that we have helped in the past. We know that you want experience, and that is just what we have. Company commitment The company motto is We will help contain, train, and reduce injuries by any means. Our mission statement Strive to improve our clients area of operation, and to train to reduce any work place inju ries. Our services We have a wide range of services to offer the most comprehensive evaluation to ensure results. Rest assured that one or more of our services will suit your company needs and provide the guidance to exceed expectations in all areas of job site safety; from construction, general industry to include manufacturing and industrial applications, maritime, logistics, and disaster relief site operations are just some of the training services that we have to offer. Quezada Imports in particular will be using the general industry training set which covers logistics, receiving, and shipping operations and is amongst the top rated consultations that we offer. Keep in mind that our goal is to help you reach 100 percent Occupational Safety and Health Administration certified, and in doing so will propel Quezada Imports to be a top performer in the import/export market.

Company Experience

With a long proven and performance based track record you find that in fact we have propelled the operations of many well-known and distinguished companies. From detailed reports that highlight areas of opportunities to full scale investigations as to events that led to near devastating events. We make every effort to identify and prevent through our wealth of experience in proactively placing the operation back on track. With diligence and commitment we have been able to provide some of the best in-depth consultations in the industry. We stand committed to seeing Quezada Imports succeed and become a model for which to become an industry standard.

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Agency Overview continued

Below is a list of some of the companies that we have worked for. A lot of these companies are in fact 100 percent Occupational Safety and Health Administration certified. I can assure you that all of the companies listed had a great experience with Fierro, Russell, & Zsako. All of them have taken away great lessons that will make the work place environment a lot safer. It would be with great appreciation on our half to add Quezada Imports to the list.
DHL Resta International Overstock Kmart Best Buy University of Texas at El Paso Barnes and Noble UPS FedEx www.dhl.com www.restaint.com www.overstock.com www.kmart.com www.bestbuy.com www.utep.edu www.barnesandnoble.com www.ups.com www.fedex.com

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INTRODUCTION
The preliminary report Quezada Imports provided clearly identifies issues related to Workers Compensation, affecting your productivity and increasing your compensation expenses. This in depth report examines all aspects of the operation of your company, making suggestions that will greatly reduce the potential hazards. Our plan is to identify the cause of all injury related claims and ultimately develop a hazard free and OSHA Certified environment for your employees therefore reducing workers compensation costs and increasing your productivity. The Occupational Safety and Health Administration (OSHA) Certification helps to ensure workers are well-informed on how to reduce occupational hazards. OSHA training is important as it ensures that workers have the necessary information required to maintain a safe environment. This not only helps to reduce accidents within the workplace, but also minimize the cost resulting from such accidents (Harris, 2010). There are several types of safety training programs provided by OSHA, which are listed as follows: Construction, General Industry, Maritime, and Disaster Site. Online retailing which is your companys expertise will fall under The General Industry Program. Through this program, workers can attend 10-hour or 30-hour classes delivered by OSHA-authorized trainers, in this case Fierro, Russell & Zsako Corp will provide you with the classes. The 10-hour class is intended for entry level workers, while the 30-hour class is more appropriate for supervisors or workers with some safety responsibility (2013). One of the goals of Fierro, Russell & Zsako is to turn your company into a 100 percent OSHA Certified Company. From previous experience, please understand that this process is lengthy in time but will produce great benefits. As mentioned above, 30-hour classes are intended for supervisors and others with higher levels of responsibility and 10-hour classes are intended for entry level workers; therefore the process will begin at the top of the chain of command. Managers and supervisors will lead your employees by setting the example following correct procedures and assuring new procedures are being followed strictly to the maximum. Below you will find list of main topics covered in The General Industry Program, we have bolded a few which are key to reduce workplace related injuries and we will focus more on. Main Topics Covered: Personal Protective Equipment Fire Detection and Prevention Flammable and Combustible Liquids Machine Guarding Industrial Hygiene Lockout Tag-out Procedures
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By The Numbers
Quezada Imports Injury Percentage
Puncture 5% Foot 7% Head 9% Burn 10% Back 50%

Hand 19%

Back injuries account for nearly half of the injuries received at Quezada Imports and the major cause of these injuries could have been prevented. Our findings have discovered that the following actions contributed to the high number of back injuries received Lifting objects from the floor in excess of 25lbs. without a back support Lifting objects from the floor in excess of 50lbs. without utilizing a two man lift Transport of heavy packages by foot

Injuries to the hand were the second largest contributing factor to job site injuries Hands caught in the mechanisms of the conveyer belts Fingers crushed by oddly placed racks Fingers can get caught in access panels

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By The Numbers continued

Head injuries although not as common possess a significant and sometimes more severe and permanent injury. Trauma to the head by having to reach deep into storage racks Packages falling on an individual while placing in overhead racks Head trauma from crawling around and under machinery during maintenance

Foot injuries occurred while dropping heavy packages which were either too heavy and or awkward to grab, there is also heavy equipment being operated throughout the building posing a crush hazard. Loaded pallet jack can easily roll onto someones foot Material falling either from racks or employees grasp Kicking machinery

Although puncture wounds are minimal they do occur and often times go unreported by employees due to the fact that they may be deemed insignificant. Some puncture wounds can lead to infections due to the object being dirty or contaminated. Protruding staples can easily puncture an employees hand Splinters from pallets and crates can often have large splinters Sharp edges on machinery also present a puncture hazard

Hot surfaces are found everywhere and are not often easily seen. The friction from machinery operating for long hours can develop high heat areas which can at times cause severe burns. Exhaust from gas powered forklifts Friction on the conveyor belt Electrical boards can overheat

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Observations

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Our insight concerning the hazards associated with the business of receiving, handling, and distribution have afforded our firm with vast knowledge in the prevention of costly incidents. Incident which can and in many cases have already cost your company large sums of capitol which would be better spent on improvements and refining. Many incidents are not readily visible and may require the trained eye of a separate individual to identify and stop before allowing the accident to occur. What can seemingly be thought of as harmless or low risk has the potential to cause catastrophic injuries. Observe the supervisor documenting the transfer of goods. Although he may not feel as if he is in a dangerous predicament a great deal of scenarios can be carried out. Standing too close gives the individual no time to move in the event of a shift in the load. Not wearing a hard hat can result in a head injury due to an unseen package falling. A foot being run over by the vehicle is a very real possibility. Catching a box that might be falling or slipping trying to elude the mishap can result in a strained back. We have identified a great deal of procedures and operations which lead themselves to laying the groundwork to cause injury or even death. The underlying causes and the remediation to such will be detailed in every aspect by our comprehensive report. Our report will offer guidelines in training programs to better educate your employees; other functions will offer a train the trainer plan to further solidify our teachings. We have helped numerous companies like your become more streamlined and much healthier operation.
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Recommendations
Quezada Imports has the potential to dramatically reduce its number of work related injuries therefore reducing the amount of liability being paid to worker-comp cases. Allowing us to detail and implement a restructuring agenda which will not only provide a healthier working environment for the workforce but will intuitively bolster revenue. We have a proven track record in not only finding dangerous scenarios but also develop a course of action to eliminate or greatly reduce the risks associated with this line of work. The cost benefit of utilizing an outside company as to perform this task has additional advantages. Advantages include but are not limited to a non-biased comprehensive report, there are no connections with any employees between our firm and Quezada Imports so you can be assured that there will be no hiding of incident. Our experience is long and distinguished and has a proven track record. We have the resources at our disposal to facilitate an effective report.

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The Bottom Line

The costs associated to this certification can vary depending on your decision of being partially or 100 percent OSHA Certified. We will provide you with an estimate of both considering our training will be live compared to others online training prices. Please keep in mind this is a massive project were not only are we certifying your company, but examining the causes of injuries and implementing new operation procedures. Below you will find two alternative estimates. Alternative 1 (100% OSHA Certified) Upper Level Employees 200 Entry Level Employees 4,800 Company Name: 10hr Class Price Per Employee 30hr Class Price Per Employee Total Cost
UC San Diego (ISEI) Summit Training Source Fierro, Russell & Zsako

$89 $189 $465,000

$92 $159 $473,000

$75 $135 $387,000

Alternative 2 (Upper Level Employees ONLY) Upper Level Employees 200 Company Name: 30hr Class Price Per Employee Total cost:
UC San Diego (ISEI) Summit Training Source Fierro, Russell & Zsako

$189 $37,800

$159 $31,800

$135 $27,000

Disclaimer: Please keep in mind that we have provided you with an approximate 15% discount off the lowest price of the two compared companies. Price may vary from UC San Diego & Summit Training Source therefore is subject to change. Price is based on individual 100% online training as of November 19, 2013. Both companies may also offer Volume Pricing. Prices for Summit Training Source are based on Member Price. Fierro, Russell & Zsako will provide live training with online tests and evaluations.

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The Bottom Line continued

Now that we have discussed the costs and alternatives of being OSHA Certified, this leads us to the movement of materials in your warehouse and how safe your procedures are. From your reports, it seems that your employees are not using the correct equipment, not following procedures, or simply are not aware of the proper use of machinery. From the research done at your company, we have found that you will need two types of moving equipment machinery which are described below. Forklift Truck: is a power industrial truck used to lift and transport materials, and its operation requires a forklift licensed driver. License fee- $30.00 per driver. Price: $5,999 each

Using a forklift to unload and load heavy equipment will get the job done safely. The forklift includes an overhead guard that will guarantee you that no falling object will land on your employees head. The vehicle itself can be dangerous if not handled by a licensed individual. There will be a designated area where the vehicle will only be driven, that is on the shipping and receiving deck. Electric Pallet Truck: This mini truck will be used to move equipment throughout the warehouse. This will be replacing your conventional Pallet truck that requires human force to be operated. The vehicle will be electronically operated which will require the push of a button to move forward or in reverse. The vehicle will have an option to unload and load equipment, but will reduce the danger of using a forklift throughout the warehouse. Price: $2,999 each Licensing is not required to be operated.

Disclaimer: Prices on Forklifts and Electric Pallet Trucks are final and non-negotiable. We do not have any other pricing options. You may purchase your equipment separately only with our consent.

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The Bottom Line continued

We have anticipated the number of forklifts and electric pallet trucks you will be requiring based on your warehouse capacity and moving of equipment requirements. Moving Equipment Costs: Truck: Forklift Truck Electric Pallet Truck Total cost: Price per truck: $5,999 $2,999 # Trucks required 10 50 Cost: $59,990 $149,950 $209,940

Forklift License Costs: Type: Forklift Certification Course Price per Employee $30.00 # of Employees 200 Total: $6,000

Total Cost of Employee Certification and Moving Equipment: Machinery: Licensing: Total: $209,940 6,000 $215,940

One of the main goals is to have employees who are cross trained and know how to operate several machines efficiently and correctly. The cost depends on how many employees you want to achieve this performance. The useful life of the Forklift Truck and Electric Pallet truck depends on the usage, but will usually last you approximately five years. Fact obtained from prior experience using your trucks more than 2,000 hours a year.

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The Bottom Line continued

Additional Safety Equipment Needed & Costs Equipment: Back Support Belts Hard Hats Orange Vests Fire Extinguisher Safety Glasses PVC Dot Gloves Padlocks MSDA Sheets Total: Cost Per Item $25.00 $11.00 $3.60 $49.00 $1.50 $.85 $12.50 $70 # of Items 4000 4000 4000 200 4000 4000 200 100 Total $100,000 $44,000 $14,400 $9,800 $6,000 $3,400 $2,500 $7,000 $187,100

*Steel Toe Boots* Will be required, but will not be provided in our estimate therefore to be purchased separately by the employee. Equipment costs are based off a 2000 employee count. Not only are we preparing for expansion by purchasing more than necessary, but this will also guarantee your employees will always have the proper equipment needed. Wear and tear of equipment has also been considered. Please take into consideration we are providing bulk prices, reducing the amount of items purchased can shift the price.

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Total Cost
Proposal Costs: OSHA Certification (100%) Moving Equipment Safety Equipment Other Costs Total: $387,000 215,940 187,100 75,000 $865,040

*This amount will be paid in quarterly payments of $216,260. *Other costs are associated to travel expenses associated with Research and Development

Current Costs: Injuries: Open Claims: Total: 3.5 Million 8.2 Million 11.7 Million

As you can above, our costs to turn your company around are only 7.39% of your current compensation expenses including open and possible liable claims. Fierro, Russell & Zsako guarantees reducing the number of injuries related to equipment operation and production process by 35% within the first two years, which means reducing your compensation expense by 4.09 million. Saving approximately 4.09 million using our services will increase your possibilities for expansion, therefore increasing your profits and reducing compensation expenses.

*Disclaimer: Total costs and savings are subject to change due to unknown internal issues in your plant.

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Results
Companies that utilize our services typically see returns on their investments within two years which makes this not only a cost worthy opportunity but you can bolster investor confidence allowing more capital to use for growth and not have it tied up in claims.

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References
Harris, Daniel. (2010). Benefits of OSHA Certification. Retrieved from http://benefitof.net/benefitof-osha-certification/ Occupational Safety & Health Administration. (2013). Retrieved from http://www.osha.gov/dte /outreach/generalindustry/index.html Osha 10- and 30-Hour training. (2012). Retrieved from http://www.nsc.org/products_training /documents/OSHA%2010&20and%2030%20Hour%20online.pdf Osha 30-Hour Online Training. (2013). Retrieved from http://www.oshaeducationcenter.com /osha-30-hour-training.aspx Osha 10-Hour Online Training. (2013). Retrieved from http://www.oshaeducationcenter.com /osha-10-hour-training.aspx

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