The Balanced Scorecard Approach
April 1, 2003 By Pulp & Paper Canada
Imagine for a minute that a group of the pulp and paper industry’s illustrious leaders got a touch of ‘innovation’ (God forbid!)! In a sudden moment of creative inspiration (excuse me?) they decide th…
Imagine for a minute that a group of the pulp and paper industry’s illustrious leaders got a touch of ‘innovation’ (God forbid!)! In a sudden moment of creative inspiration (excuse me?) they decide they need a much more realistic, comprehensive method than the current one for measuring mill safety and selecting the Safest Mill(s) in Canada.
“Lost time injury (LTI) statistics don’t come close to telling the whole story!” someone cries. “They only encourage recourse to extensive and intensive use of restricted work to improve our ‘safety record’. And they’re limited in the information they provide to prevent future accidents. If we had any brains we’d be looking for safety performance indicators that measure how well we did, what we did, is it working, why is it working — or not working — and how we can improve it.” Much grumbling and gnashing of teeth, followed by pregnant silence.
Lagging or Trailing Indicator
“I have it!” shouts one. “We’ll broaden our view of past safety performance by looking at more statistics, including all restricted work and medical aid cases, not just fatalities and lost time cases. It will include all contractor and construction incidents! As treating doctors record them all, they’re the most reliable. We’ll call it the Total Recordable Incident Rate (TRIR) like OSHA uses. It will be based on 200,000 hours worked (100 employees, 2000 hours each/year). It will be classed as a Lagging or Trailing Indicator as it is produced after an incident occurs!” He leans back and smiles, feeling very good about himself.
“O.K.”, says another, “But we need to measure how well we are preventing accidents before they happen as another measure of how safe a mill is.” He thinks, (really, he does!!) “I have it! Let’s get an external safety management expert to perform an unbiased review of how well we are doing at identifying and controlling all unsafe situations in a mill.
“We’ll call it an OHS Management System Audit, similar to a financial audit. He/she will show us how to continually improve. The audit result, expressed in %, will be called a Leading Indicator of safety as it focuses on systems/activities that stop accidents before they happen. Maybe we can adopt the BSI Occupational Health and Safety Assessment Series (OHSAS) 18002 guidelines for implementing occupational health and safety management systems (OHSAS 18001:1999).”
With a consensus reached, they all agree (It can happen!).
“We’ll combine these two indicators (equally weighted) as a Balanced Scorecard and truly select our Safest Mill(s) in Canada while also being able to share much more information between mills on best safety practices and comparing indicator benchmarks. The goal will be the best possible combined safety performance! We’ll also be much better informed to explain safety performance with employees, shareholders, Workmen’s Compensation authorities and Government.” “All for one, and one for all!” someone murmurs.
John E. Little is a risk management consultant specializing in optimizing safety management systems. Contact him at: email@example.com
NT: The above future scenario outlines a suggestion for improving P&PC’s “Safest Mill in Canada Contest” concept. The goal is to make it as objective as possible, a more useful exercise, and a benchmarking tool for all mills. We need your feedback and suggestions! Please advise J.E.Little as soon as possible at firstname.lastname@example.org or 1-514-286-4233. Thank you!#text2#
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