SAFETY & QUALITY MANAGEMENT IMPROVE SAFETY WITH QUALITY & PRODUCTIVITY BENEFITS Dave Copley, Matt Pierce.

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Presentation transcript:

SAFETY & QUALITY MANAGEMENT IMPROVE SAFETY WITH QUALITY & PRODUCTIVITY BENEFITS Dave Copley, Matt Pierce

SAFETY & QUALITY MANAGEMENT Who Are We?

SAFETY & QUALITY MANAGEMENT Pirates Log Accident Trend

SAFETY & QUALITY MANAGEMENT Pirate Safety Management “Performance based” goal setting Compliance based Focus on retraining for corrective action Single dimensional Lack of risk based analysis Management involved but not committed

SAFETY & QUALITY MANAGEMENT Quality and Safety Combined in 2003 Changed arbitrary goal setting process Introduced a zero accident program Benchmarked total cost of accidents Started to measure safety process capability Partnered with stakeholders Decisions and actions based on risk Developed methods to engage management

SAFETY & QUALITY MANAGEMENT Changed the Goal Setting Process Previous goal setting process was arbitrary –The more accidents an operation had, the lower the goal for the following year A new goal was set, the same for all – ZERO This changed the the way everyone thought about safety and required a new approach

SAFETY & QUALITY MANAGEMENT Introduced A Zero Accident Program Focus changed from compliance and correction to prevention We changed the way we work Management and Safety leaders educated in zero accident principles* Zero accident tool kit distributed New technology tools implemented *Construction Industry Institute (CII) findings Aug. 2001

SAFETY & QUALITY MANAGEMENT Benchmark the “True” Cost of Accidents Models developed to calculate the true cost of accidents at group and Operating Company level Soft costs are in the range of $2 - $20 for every $1 of direct costs Business development cost included - estimated in rage of 2% - 8% of revenue Burden per hour calculated in Operating Company model for comparison

SAFETY & QUALITY MANAGEMENT The “True” Total Cost of Accidents Workers Comp. Cost Benchmark Model* This example represents $90 million in unbudgeted costs on the low end of the range. Costs could be >4x higher. *Numbers are used for illustrative purposes only and represent the cost of claims exclusive of the cost of insurance premiums. Actual numbers are unique to all organizations and situations. Workers Comp Cost (WCC) $15 Mil. x 5 (to calculate other incurred losses) New Business Required to fund WCC $75 Mil. x 10 (Assuming 10% margin) Cost of Funding New Business $750 Mil. x 0.02 (2% business development) Total Cost of Accidents $75 Mil. + $15M $75 Mil.$750 Mil.$15 Mil.$90 Mil.

SAFETY & QUALITY MANAGEMENT Cost Calculator Model OSHA Rate: 3.2

SAFETY & QUALITY MANAGEMENT Measure Safety Process Capability Introduced Control Charts and plotted our Safety Process capability Process Capability: 64 – 93 accidents per month (1 , 68%)

SAFETY & QUALITY MANAGEMENT Partner With Other Stakeholders Insurance Carriers External Consultants Product Suppliers Internal Interests

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration Insurance Carriers: Identification of key risks: Leading Accident Types by Cost 2003: Average Cost Per Accident: $12,417

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration Insurance Carriers: Current trends and future risks related to our industry: Percent of U.S. Workforce Aged Source: 2000 US Census, workforce includes ages 18-64

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration External Consultants: Future challenges based on industry knowledge and research: Source: US Bureau of Labor Statistics, US Department of Commerce

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration Product Suppliers: Innovative products and practices affecting our industry:

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration Product Suppliers: Innovative products and practices affecting our industry:

SAFETY & QUALITY MANAGEMENT Outcome of Stakeholder Collaboration Internal Interests: Identified that management is more receptive to sharing practical work methods than standardization of work procedures Peer to peer communication unreliable The relationship between safety and productivity was not fully developed, communicated or understood Although most thought that productivity could be improved very few had a plan or knew how to go about it

SAFETY & QUALITY MANAGEMENT Resulting Successful Strategy Engaging Management through: Visitation –Refocusing of compliance efforts to selected Operating Company locations based on risk Communication –Introduction of an array of professionally produced publications with an integrated message, targeting specific influencers in the organization Education –Produced a presentation (road show) directed at key managers to be delivered at their location by the EMCOR road show team

SAFETY & QUALITY MANAGEMENT Visitation Deployed new scheduling and reporting tool Number of visits based on risk and performance

SAFETY & QUALITY MANAGEMENT Communication Specifically Targeted Communities –Management –Financial –Safety –Quality –Purchasing –Fleet & Driver –Business Continuity Planning –Field

SAFETY & QUALITY MANAGEMENT Education Packaged message into a 3 hr. road show presented to top management Started April locations visited to date 18 return visits by request 1,000’s of key people educated

SAFETY & QUALITY MANAGEMENT Road Show Content Safety Business Case Motion is Money Productivity Plus

SAFETY & QUALITY MANAGEMENT Results – Fewer Accidents Every Year

SAFETY & QUALITY MANAGEMENT Results – Better Safety Process New Process Capability: 56 – 76 accidents per month (1 , 68%)

SAFETY & QUALITY MANAGEMENT Results – Improving Rates Incident Rates and DART Rates are Falling *Calculated figure based on YTD performance

SAFETY & QUALITY MANAGEMENT Results – Better Production Capacity – 20,954 Days Returned to Production 2003 (51.9M hrs.) 2004 (50.9M hrs.) 2005 (55.5M hrs.) 14,06914,8277, (Est.) (56.5M hrs.)

SAFETY & QUALITY MANAGEMENT Conclusion Relationship between safety, quality and productivity better understood across the organization Peer to peer communication platform established Focus changed from corrective to preventive action We have started to change the way we work: –Safety performance is improving –Production capacity is increasing –Workers compensation cost is declining –Purchasing for productivity is improving

SAFETY & QUALITY MANAGEMENT Results – Reversing The Trend

SAFETY & QUALITY MANAGEMENT The Future – Working Together

SAFETY & QUALITY MANAGEMENT The End