Using Safety As A Competitive Advantage

National Safety Council

2008

Presented By

• George Drexel, President, UAW Local 3520

• Douglas Therrien, Manager Corporate Health and Safety, Daimler Truck North America

• Phil La Duke, Director, Performance Improvement; O/E

Competitive Advantage

• Additional Revenue

• Reduced Cost

Real Cost of Worker Injuries

Direct Costs• Worker’s Compensation• Insurance Premiums• Fines and Legal Fees• Loss of Productivity• Loss of Inventory• Wages of first responders• Paperwork and administrative

costs

Hidden Costs• Drop in Employee Morale• Absenteeism • Loss of Customer Confidence• Legal Fees• Public Relations Fallout• Disruption of Productivity• Work Stoppages• Turnover• Lower Quality• Property Damage• Scrap

Calculating the Cost of Injuries

Direct Costs Can Be Difficult to Quantify

Indirect Costs Are Impossible

Example 1: Tire Manufacturer

Company A# of Employees: 370SIC Code: 3315IR: 9.0DART: 5.0Injuries: 35DART Injuries: 19Annual Sales: $20 MPrice Per Unit: $425

Example 1: Tire Manufacturer

Sales Volume: $150,000,000Profit Margin: 5%Annual Profits: $100,000Injury Costs: $693,Injury Costs as a % of Profits: 385%Additional Sales Needed $7,700,000% Increase Needed in Sales: 28%Additional Tires Sales Needed 18,118

Example 1: Tire Manufacturer

Company B# of Employees: 370SIC Code: 3011IR: 9.0DART: 5.0Injuries: 35DART Injuries: 19Annual Sales: $20 MPrice Per Unit: $425

Example 1: Tire Manufacturer

Sales Volume: $20,000,000Profit Margin: 5%Annual Profits: $100,000Injury Costs: $385,000Injury Costs as a % of Profits: 385%Additional Sales Needed $7,700,000% Increase Needed in Sales: 28%Additional Tires Sales Needed 18,118

Competitive Analysis

Go

od

Trend Analysis: Injuries

Trend Analysis: Hazards Found

Trend Analysis: Hazards & Injuries

Safety Is Owned by Operations

Legal Liabilities

Leadership-driven

First-line Accountability for Safety

Forced Accountability

Safety Personnel as Coaches and Consultants

Safety Is Everyone’s Job

Defined in each worker’s job description.

Identified as a criteria for successful job performance during annual reviews/compensation.

Safety is hardwired into Operations.

Safety Is a Strategic Business Element

Injuries are inefficient and cost money and productivity.

Understanding the true cost of injuries.• Obvious costs• Hidden costs

Policies are reviewed and changed to reflect changes in the business environment.

Living in Denial

“We’re already doing this.”

“We can’t afford it right now.”

“We’re already ahead of industry average—that’s good enough.”

“We can do it alone.”

“Changing our safety culture is our Safety Department’s job.”

Conclusion

All injuries are predictable and preventableCompliance is not enoughBe proactiveSafety is everybody’s jobSafety is owned by operationsSafety is a strategic business elementQuestions?

Thank You!

Phil La Duke

Director, Performance Improvement

O/E

2125 Butterfield, Suite 300N

Troy, MI 48084

248-860-1086