OSHA 10 Adding Value and Competitive Advantage Project started as an outgrowth of our work together on Illinois Healthcare Initiative. Needed a way to explain to Business Community – Business Owners -- Answer Questions Why should I care about safety? What does Safety Excellence look like? Why is it important to me? How does it add value and provide me with competitive advantage. Real Business Cases (short case studies) Tool to use a variety of ways Presentation to Managers / Business Leaders, Chamber of Commerce, etc. Case study for internal use/workshop for larger companies Business School – interject into material MBA students Executive Education Phase II We hope to continue to add more cases to build our portfolio in different industries on difference subjects. An suggestions --- let me know ---- James Walker KAR Auction Services Sr. Dir. EH&S

Workplace Statistics FACT Nearly 50 workers are injured every minute of the 40-hour work week. FACT Almost 17 of these workers die each day.

OSHA’s Continuing Mission More than 4,400 Americans die from workplace injuries every year. Perhaps as many as 50,000 workers die from illnesses in which workplace exposures were a contributing factor. More than 3 million workers suffer a serious non fatal injury or illness annually.

Rate of Fatal Workplace Injuries

Financial Impact Workplace injuries and fatalities cost our economy $198.2 billion a year. — National Safety Council “Injury Facts” 2014

Direct Vs Indirect Costs of Accidents Safety Iceberg Theory Direct Vs Indirect Costs of Accidents Medical (doctor visits, physical therapy, medicine, etc.) Reduced productivity Accident investigation Administrative costs Lost time by supervisor Costs of training replacement worker Overtime Legal fees Equipment repair Negative publicity Damage to customer relations

Benefits of Effective Safety and Health Programs OSHA 10 can help: Reduce work related injuries and illnesses Improve morale and productivity Reduce workers’ compensation costs Help avoid litigation and costly incident claims Employ a safe working atmosphere

OSHA 10 Training Topics Mandatory – 7 hours Introduction to OSHA – 2 hours Workers, employer responsibilities Walking and Working Surfaces – 1 hour Exit Routes, Emergency Action Plans, Fire Prevention Plans and Fire Protection – 1 hour Electrical – 1 hour Personal Protective Equipment – 1 hour Hazardous Communication – 1 hour Elective – 2 hours Hazardous Materials Bloodborne Pathogens Safety and Health Programs Ergonomics Materials Handling

Customized OSHA 10 Training Customized training to auto auction industry Relates each topic to actual working conditions Able to adjust hours to be more auction, region or industry specific Coordinate each OSHA topic to action based scenarios Education on each topic and demonstrate how to integrate into operations

Barriers to Integration Too often: We have a focus on reactive rather than proactive focus Lack of understanding (vocabulary) Risks & hazards are poorly communicated Safety is considered a cost … not an investment Cost/benefit analysis is rarely applied to justify the safety case These are common barrier we encounter in trying to integrate a culture of safety into a business –

Safety Excellence Model Requires… Management Commitment Employee Involvement Systems Excellence in Safety adds value and provides competitive advantage – What does Excellence in Safety look like? High quality safety programs have four key aspects common to them all – Management Commitment EE Involvement Safety & Health site leadership Strong Systems (Policies, Processes, Programs, Procedures) Safety and Health Site Leadership

Management Commitment Means… Valuing and caring for human resources Demonstrating a visible commitment with continuous involvement Setting high expectations and accountability for safety Motivating proper behaviors through leadership “Walk the Talk” Providing resources to affect change Encouraging employee involvement Describing what we mean by Management Commitment (All about “Leadership”)

Employee Involvement Means… Shared ownership of and commitment to the program Active support of the program Accountability for one’s personal safety and that of his/her co-workers EE involvement and “Shared Ownership” of the program is fundamental to it’s success – Without EE’s direct and continued involvement in the safety effort – the Best Processes, Programs, and Procedures are worthless –

Ways to Involve Employees… Regular communication with employees on the subject of safety, risk, and hazards Provide access to information Provide ways to participate in the program e.g., worksite self inspections, safety and health annual evaluation process, incident investigation Provide ways to report hazards, injuries and make recommendations to control hazards Many ways to involve EE’s in the safety effort.

Most frequently cited OSHA standards during FY 2016 inspections OSHA Top 10 Citation 2016 1. Fall Protection 2. Hazard Communication 3. Scaffolding 4. Respiratory Protection 5. Lockout/Tagout 6. Powered Industrial Trucks 7. Ladders 8. Machine Guarding 9. Electrical Wiring 10. Electrical – General Requirements Top Ten Violations Most frequently cited OSHA standards during FY 2016 inspections This is a list of the top 10 most frequently cited standards following inspections of worksites by federal OSHA. OSHA publishes this list to alert employers about these commonly cited standards so they can take steps to find and fix recognized hazards addressed in these and other standards before OSHA shows up. The following slides show the top 5 sub-sections that OSHA cites for each of these standards.

OSHA Increased Citations and Penalties Type of Violation 2015 Maximum Penalty 2016 Maximum Penalty Serious $7,000 per violation $12,471 per violation Failure to Abate $7,000 per day $12,471 per day Willful or Repeated $70,000 per violation $124,709 per violation

OSHA Inspections OSHA will inspect if: Imminent danger Serious incidents Employee complaints Agency referrals Targeted inspections Follow-up inspections

Recordkeeping Modernization As of January 1, 2015, all employers must report to their local OSHA Area Office, or 1-800-321-6742 the following: All work-related fatalities within 8 hours All work-related inpatient hospitalizations All amputations Physical losses of an eye (not eyesight)within 24 hours. *On-line reporting capability is available.

Protecting Temporary Workers: A Joint Responsibility Both host employers and staffing agencies have roles in complying with workplace health and safety requirements and they share responsibility for ensuring worker safety and health. Legally, both the host employer and the staffing agency are employers of the temporary worker. Shared control over worker = Shared responsibility for worker

Temporary Employee Statistics… 3 million people are employed by staffing companies every week. 11 million temporary and contract employees are hired by U.S. staffing firms over the course of a year.

Temporary Worker Initiative In all inspections, OSHA’s inspectors ask about the presence of temp workers, the hazards to which they are exposed, and the training they have received. Auto Auctions are seeing an impact.

Safety’s Role Within Operations Safety must be considered at every step in the value chain Designing safety into a process is cheaper than retrofitting for safety later. To be able to effectively manage a program and improve safety… measurements must include: Both Leading and Trailing Indicators Leading indicators should correlate with trailing ones.

Safety’s Role Management / Organizational Behavior Leadership and employee empowerment are keys to creating a proactive safety culture. Senior management commitment is critical to improving safety Promote program results both internally and externally Management directed but employee driven.

Implementing Safety Excellence Assume all incidents are preventable Assume all exposures/risks can be controlled Involve employees Make working safely a condition of employment Train employees to work safely Promote off-the-job safety Audit safety Companies that have demonstrated excellence in safety performance generally have done these things.

Questions??? James Walker Sr. Dir. KAR Auction Services James.walker@karauctionservices.com