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Friday, July 25, 2014

Safety Research: The Best-in-Class Don’t Wait Until It’s Too Late

Credit: Sailom at FreeDigitalPhotos.net

Credit: Sailom at FreeDigitalPhotos.net

Safety affects all levels of an organization, from plant manager to CEO, but companies that are most successful with implementing safety programs or safety technology are those that an enterprise-wide approach in its management. Best-in-class organizations also see safety technology not as a productivity hindrance but proactively as a cost-avoidance measure, curbing negative-publicity events and hikes in insurance premiums, and as an operational performance enhancer.

Those were two of the key takeaways from a briefing on safety and safety technology by Aberdeen Group. The research firm bench-marked best-in-class organizations, industry-average ones, and laggards using four key performance indicators (KPIs), and it also quantified the key drivers of safety technology adoption, as well as challenges for implementation and best-in-class approaches. Best-in-class companies were those that scored in the top 20 percent with their aggregate performance scores based on the four KPIs, the industry average companies were the middle 50 percent, and the laggards were the bottom 30 percent.

Aberdeen Group found that risk reduction and compliance with safety regulations were, naturally, the two biggest drivers to safety technology investment, at 80 percent and 76 percent of 169 survey respondents, respectively. Brand reputation factors and minimizing the cost of avoidance (fines, medical cost, litigation, insurance) trailed significantly as drivers, at 37 percent and 32 percent, respectively. The poll was conducted last December.

“It isn’t surprising in light of recent high-profile events in offshore drilling, mining, and power production, that organizations fear another high-profile adverse event in their facilities,” the research firm wrote. “Due to these events, executives are increasingly pressured to stay on top of compliance issues and ensure the safety of their employees. Non-compliances can lead to not only brand image issues, but also penalties, plant shut downs, and potential injury.”

Best-in-class companies “have a proactive mentality, while their competition are reactive,” while the laggards “rely almost solely on internal safety incidents to put focus on what change is needed in their safety strategy,” wrote Aberdeen Group, in determining that the structure and culture of an organization plays a big role in its safety implementation. (Click on the graph to enlarge.)

Aberdeen safety technology graph 1

Credit: Aberdeen Group

But the biggest hindrance to safety system implementation was, naturally again, a lack of resources and funding. “In an unsure economy, it can be hard to justify to management that the safety systems need to be bolstered, especially if there is no perceived problem because there have not been any incidents yet,” Aberdeen Group concluded.

This was especially the case, the researcher found, with laggard companies, as 35 percent of them cited the current economic climate has pushed off capital expenditures aimed at improving safety. In comparison, only 7 percent of best-in-class companies cited this reason as an implementation challenge.

Although “limited resources with necessary skills and experience” was a hurdle that was cited almost evenly among best-in-class, industry-average, and laggard companies (57, 60, and 60 percent, respectively), the top safety organizations have overcome it and made investments in integrated, single-platform safety systems, which have improved their operational performance by being interconnected and working more closely with their other plant systems.

Another element that Aberdeen Group says differentiates the best safety organizations from others is that their engineers eliminate safety hazards through design. With safety considerations ingrained in the design phase, “designing out the hazard is the most effective way to ensure safe production,” it wrote. “If there is no hazard, there is no adverse event. The best-in-class realize this and are 21 percent more likely than their competition to utilize ‘elimination through design.’ ”

The last point of differentiation that the consultancy makes between best organizations and those that trail is that they consult outside safety experts to validate their systems and to learn how to seamlessly integrate them into their plants.

Aberdeen safety 2

Credit: Aberdeen Group

So how did best-in-class safety companies score? They had a mean 0.07 recordable injury frequency rate,which is the average number of recordable injuries per 100 full-time employees per year; a 94 percent overall equipment effectiveness (OEE), measured as a percentage by multiplying availability times performance times quality; 2 percent unscheduled asset downtime, which is the offline time as measured against total asset availability; and -6 percent total cost of ownership (TCO), which is the percent change in TCO to manage the safety system over the last 12 months. (Click on the table to enlarge.)

Aberdeen Group recommends these four practices in implementing an effective safety program:

1. Determine if safety investments are needed. “Safety is one of those issues that you normally do not know there is a problem until it is too late.”

2. Break the thinking that safety and productivity do not mix.

3. Leverage subject matter experts.

4. Design out the hazards on new equipment.

 

 

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