Health and safety management.

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Health and safety matters are important to many companies
which have both moral and ethical responsibilities to their
associates. In addition, health and safety programs and
activities contribute to the protection of assets necessary for
orderly and efficient production, insurance cost control,
operational cost reduction and regulatory compliance. Health and
safety management is also an important factor in the
protection of the bottom line. Every accident results in costs, both
in human and business terms, which can be classified as
either direct or indirect. Direct costs include medical expenses,
indemnity payments and insurance. Indirect costs, or
nonbillable costs, may include wage cost of injured workers,
wage cost of others, property or equipment damage,
administrative costs, production downtime, off-quality goods,
consultant fees, as well as legal fees.
The cost of an accident is much like an iceberg. Many
costs of an accident are not visible on the surface, but they
are there just the same. As with an iceberg, only 20% of the
ice is above the water and easy to see, while die majority of
the iceberg is below water level. This is a good example of
how indirect costs can escalate in an accident.
On the average, indirect costs exceed direct costs by a
ratio of about 4:1. This has been documented by the National
Safety Council and a number of other safety organizations in

the past few years. It has been reported that indirect costs can
be as high as 8:1 compared to direct costs. For example, if an
associate working on a high pressure steam line sustains a
burn, a hospital visit generally ensues with associated time
off from work, possible physical therapy, etc. Direct costs,
such as medical and workers compensation, may be as much
as $50,000. Indirect costs using the 4:1 ratio may add another
$200,000 to the overall expense. For the sake of argument,
let's use only two (2) as the multiplier. Indirect cost of the

$50,000 accident, using the 2:1 ratio, which is half of the

National Safety Council's average, would add another
$100,000 to this sum. The total cost of the accident, including
direct and indirect costs could be as much as $150,000.
Assuming a company has a profit margin of approximately
15%, a business would have to sell approximately
$1,000,000 more product to compensate for this occurrence.
In addition, this money would have to come out of new sales
not existing sales.
To use a real world example, assume the following is true:
Compounded or mixed rubber sells for an average of about
$1/lb. with a typical batch size of 600 lbs., valued at $600
and a profit margin of 15%. It will require the mixing of
1,667 batches to cover the cost of the accident. This
potentially could be at least one week's worth of production on a
mixer.

Other factors in health and safety management include the

consideration of dealing with workers compensation and the
insurance experience modification factor. This means if a
facility or company has a significantly high worker's
compensation cost, the experience modification factor may be
equally high. If the experience modification factor is above
one (1), which would be considered the national average,
then this facility or the company would be required to pay
more in workers compensation cost and insurance than the
average for that business.
There are also legal implications of dealing with poor
health and safety practices. The Occupational Safety and
Health Administration (OSHA) regulates health, safety and
some medical issues in industry. OSHA is able to visit any
facility without notice and issue a citation for not complying
with the multiple standards known as the General Industry
Standards (29CFR1910). OSHA can, however, go one step
further. If OSHA determines, after their investigation of an
accident, that a fatality or serious injury occurred by willful
neglect, or by negligence per se, criminal referrals can be
made to the Department of Justice (DoJ) or the U.S.
Attorney's office. Figure 1 shows a fairly alarming trend in
this area.
[FIGURE 1, GRAPH OMITTED]
In the years 1970-1977, three referrals were made to the
Doj for criminal sanctions. In 1978-1982, some 23 referrals

were made. In the years 1989-1993, 48 referrals were made

to the DoJ or the U.S. Attorney. Projections for 1994-1998
are somewhere in the neighborhood of 100 referrals by
OSHA to the DoJ or the U.S. Attorney's office. This means
the management of a company is responsible for good health
and safety practices. There is also an element of personal
liability related to knowledge of inconsistencies with the OSHA
standard and if someone is seriously hurt or a fatality occurs.
Companies must develop approaches to health and safety
issues as they do all other management duties. There are
several different ways to handle health and safety management.
Most companies start out with a fire fighter approach -- no
structured program, response to accidents as they occur,
incremental improvement to health and safety. Another
approach is one that is classified by a staff manager. A
company hires a health and safety manager or coordinator who
has the responsibility for all health and safety at that facility
or within that company. The sole responsibility of this
individual is to health and safety policies and procedures. The
next level is referred to as the operations manager approach.

This pushes the health and safety responsibilities to line

management, supervisors and related staff. An interesting part of
this approach is that operations managers have fewer
professional health and safety individuals on staff because the
function has become an integral part of day-to-day business.
Everyone is involved in health and safety activities with
responsibility and accountability assigned at management,
supervisory and staff levels.
In order to start at the fire fighter approach and to
ultimately rise to the integrated manager level, it could take a
company committed to this improvement a minimum of 5-7
years. To move up along the four stages of safety
management programs, the core tenets are:
* Consistent values;
* mission;

* and a vision of the company's management philosophy.

This is a significant learning process. Techniques learned
at one stage are carried to the next and improved upon.
Cultural changes must be assimilated at each stage. The old
approach to health and safety management at the fire fighting
level was based on reaction to an incident, instead of accident
prevention. Heinrich showed that for every serious accident,
29 minor injuries occur. If a company reacts to only major
injury accidents, approximately 99.7% of all accidents or
near misses will be ignored.
Health and safety represent the control of recognized
hazards to attain an acceptable degree of risk. We all understand
the concept of risk, because most of us have gotten into a car
and driven from point A to point B. We judge the risk, as we
drive to be acceptable because we know the probability is
very good that we are going to arrive at our destination and
that we have some degree of control over our safe arrival.
Safety resources must be designed to match the safety
management approach and culture of an organization. Staff
and operations manager organizations require extensive
resources. This includes detailed safety procedures and
standards, manuals, safety responsibilities written for each job
description, a detailed audit requirement, health and safety
professionals, as well as health and safety specialists.
High-end operations and integrated manager organizations
combine safety with other processes as an example of one way

business is done. A company would not make a product

without utilizing various health and safety procedures, in this
process, specialist knowledge must be passed to other staff
members. Health and safety is integrated into the business in
this way. All staff members are knowledgeable, and their has
been a cultural change not driven by fear of government
intervention, but by good proactive management where
health and safety are considered standard practice.
First, any health and safety program is doomed to failure
if management is not 100% in support of the program and
philosophy. This support has to be visible. It cannot be a
passive delegation of responsibilities by a CEO, president or
vice president. Top management must be visible, active and
involved. In addition, a company must have a mission
statement that includes not only quality and production, but also
appropriate health and safety language and direction. In order
for a company to go from a fire fighter to staff member
approach, it must develop safety procedures and plans, and
adopt these as standard operating procedures. These written
plans must include OSHA and administrative requirements,

with designated responsibilities, accountability and

procedures on how departments and facilities are rated,
improvements measured and achieved.
Once this has been done, accountability and responsibility
must go from the top to the bottom. Fundamental to this

approach is the premise that health and safety is a basic line

management responsibility. Management establishes and
maintains acceptable health and safety standards based on
corporate policy and guidelines. Supervisory health and
safety standards must be achieved in the same manner as
responsibility for production, costs, quality and human resources.
Management duties and responsibilities must be assigned not
only to the president, facility manager, department manager,
supervisors and other line management, but also to staff
members and others in management positions. Each of these
duties must be accountable and have a disciplined, integrated
approach. Without discipline, no program. Whether it is
health, safety, environmental or quality can succeed. In order
to develop a health and safety organization, the purpose and
policy of this organization, along with the structure, must be
clearly understood at all levels in a company
Some businesses are currently experimenting with a
central health and safety committee. This committee typically
has about eight action teams responsible for fire and
emergency, housekeeping, awards, accident investigations, health
and safety rules, and a number of other health and safety
related issues. A central safety committee which can include
facility managers, health and safety staff, environmental
coordinators, department managers, nurses, plant engineers,
training managers, human resource managers, industrial
engineers and others are responsible for providing overall

control of the program. The action teams report to the central

health and safety committee, which eventually runs the
overall program. These action teams have very basic team
fundamentals that should be written into the health and safety plan
in order to clearly state their responsibilities.
In general, each team has team fundamentals, critical

elements, suggested activities, requirements for

membership
and basic objectives, Before beginning, employees may
need
some basic management, health and safety training.
Unsafe acts account for approximately 80% of all
accidents. Unsafe conditions account for 20% of accidents. Other
causes may include lack of guarding, poor maintenance,
defective equipment or tools, improper material storage, slips
and falls. This type of incident accounts for approximately
20% of accidents. In order to recognize the accident cause(s),
there must be a distinction between symptoms and causes.
Symptoms can be carelessness: oil on the floor, climbing
improperly or inadequate personal protective equipment.
Causes may include inadequate personal protective
equipment, low motivation, lack of accountability or discipline,
lack of policies or procedures, insufficient training, poor
management support and many more.
Let's discuss an accident in general and then look at the
parameters involved in an accident. Generally it takes many

unsafe acts before a fatality occurs. Unsafe acts, near misses,

minor and severe injuries are all indicators of the level of
implementation of a safety program. If a company only looks
at injuries and fatalities, it is focusing on a small part of the
overall pyramid. Near misses and unsafe acts are by far the
largest part of the equation.
Training supervisors and associates is a critical element in
any health and safety program. The Cone of Learning diagram
in figure 2 indicates that passive learning, i.e., listening,
seeing, watching, but not actively participating, results in
employees learning less than 50% of the desired information.
Employees who are expected to maintain or understand 90%
or better of the material presented must be actively involved
in the training process. This includes participation, discussion
and hands-on training where employees are given the chance
to make mistakes and learn from them. An ancient proverb
sums up this process: "Tell me and I will forget, show me
and I will remember, but involve me and I will understand."
Another critical element involves accident investigations,
with fact finding to determine the root cause of an accident.
The results of an accident investigation and knowledge
gained sometimes can be used to improve or prevent that
same type of accident from occurring in the future. This is
proactive thinking. Implementing corrective action is a
necessity.
[FIGURE 2, ILLUSTRATION OMITTED]

Creating a health and safety culture is the basic objective

to develop awareness, recognition, top management support,
accountability and discipline. Albert Einstein once said
"Concern for man himself and his fate must always form the
chief interest of all technical endeavors -- never forget this in
the midst of your diagrams and equations." If you develop a
good health and safety management program, your company
will be a more profitable business, you will have better work
morale and a better product, not to mention protecting
someone's father, mother, son or daughter from harm. That is a
real, and important, bottom line.
Dr. Ron Read, divisional manager, environmental health for
M.A. Hanna Rubber Compounding, has more than a
decade of experience in the occupational health, safety and
environmental disciplines. He is board certified in the
Comprehensive Practice of Industrial Hygiene.
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