What constitutes safety excellence? Most safety experts would probably agree that a sustained Lost Workday Case (LWC) rate of less than one would be considered high performance. Combine that with a si…
What constitutes safety excellence? Most safety experts would probably agree that a sustained Lost Workday Case (LWC) rate of less than one would be considered high performance. Combine that with a similarly sustained Total Cost of OHS Risk (TCOR) under $1/hour worked and you have top cost-effective safety performance. Top bang for the buck! This article looks at both metrics and suggests some high impact initiatives to achieve them. Compare your plant performance with these numbers, since it these are probably the best measures of safety program performance success or failure. These figures are known as lagging or result-based indicators because they are after-the-fact measures compiled after all the numbers are in.
OSHA (U.S.) LWC:
LWCs, the measure used in the chart below, are defined as cases that involve days away from work and/or days of restricted work activity (no fatalities or medical aids are included). LWCs are measured in terms of exposure hours in the work environment — 200,000 employee hours, which is the equivalent of 100 full-time employees working for one year. Survey data is collected from U.S. private industry and the survey sample size is about 250,000 units.
Notice the exceptional performance by DuPont, which continually improves, and the U.S. pulp and paper industry rate of 3.2.
P&PC statistics, which do not include restricted work cases, indicate that at least 10 to 20 Canadian mills likely achieved LWC rates of 1 or better in 2001 and 2002. No Total Cost of OHS Risk numbers are available from P&PC.
Total cost of OHS risk (TCOR):
TCORs are defined as the sum of:
1. Employees’ compensation insurance premiums after surcharge or rebate.
2. Retained (uninsured) losses absorbed by the enterprise, such as fines, legal costs, production losses, damage, overtime, etc.
3. Risk control costs (safety program operation, safety work order costs, including all employee/management man hours spent on safety).
4. Safety administration costs (safety specialist, office overhead).
The objective is to achieve an LWC rate of 1 or better while continually reducing the TCOR every year to under $1/hour worked.
Good performance in items 3 and 4 leads to cost reductions in 1 and 2.
In the calculation of the TCOR, items 2 and 3 will probably be the most difficult to obtain as they are not all ledger-costed in most mills. Estimates may be the next best option in the short term.
The TCOR presents a much better tool for making the business case for safety management as it looks at the total cost to the enterprise of accidental losses and prevention efforts. Any reduction in TCOR while maintaining an effective program and LWC rate of less than one is a saving that goes directly to the bottom line, increasing enterprise profitability.
High impact initiatives:
1. HAZARD IDENTIFICATION, reporting & control, by all employees, not just management & specialists, is the core of the safety management process. Management must reinforce and support it.
2. TASK-RELATED HAZARD IDENTIFICATION: Controlling human error is the next big frontier in safety. Much more training is needed to improve employee ability, motivation and the discipline to identify residual task-related risks that other safety system activity has not picked up. Employee pre-task planning is a start. This pre-task planning process instills the good habit of reviewing the task steps, related residual and/or any new, last-minute hazards, the employee’s mental and physical readiness, and the necessary associated controls prior to executing the task.
John E. Little is a risk management consultant specializing in safety management optimization technologies. (jelittle@solabs.com)
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