June 25, 2014 / best practices, Cost Management, Employee Morale, human capital, KPIs, LIT, operator training, productivity, Safety, strategic planning
While most managers would list safety as a top concern and maybe even a priority, only a select few would list it as a strategy. A growing number of industrial metal-cutting companies are finding, however, that building their operations around this critical business area offer benefits that can improve the bottom line.
As we stated in an earlier blog post, safety has a direct impact on operations. Put simply, injured operators can’t be productive. The concept seems basic, but even leading manufacturers often fail to realize this. In a recent IndustryWeek (IW) article, Craig Long, a vice president at Milliken & Company, admits that this was something Milliken failed to do in its early years. While the manufacturer had always worked hard on safety, it was doing so in a silo. “We saw no connection between safety and operations. We were in survival mode,” Long writes in the IW article.
Long goes on to describe the safety journey of another leading manufacturer, Alcoa, and how its intentional safety efforts improved profitability to record-setting levels. Following the lead of Alcoa and other leading manufacturers, Long states in IW that Milliken spent several years repositioning its operations around safety and, as a result, has seen tremendous financial benefits, including doubling the S&P 500’s rate of earnings growth.
An increasing number of leading-edge forges are also using plant safety as a strategic lever. Every year, the Forging Industry Association (FIA) recognizes three forges for their exceptional safety efforts, and this year’s winners all stressed that safety is at the core of their company’s success. However, as one winner emphasized, the top goal should be ensuring that every employee goes home without an injury. “To us, the impact of an employee being injured, regardless of where it happens, has a negative impact on the injured individual, his/her family, and to our company, in that order of importance,” John P. McGillivray, Safety & Environmental manager at Scot Forge Co., told Forging Magazine.
So how do you build your forge around safety so that both your employees and business benefit? Below are a few tips we gathered to help you begin a safety-first journey:
- Start at the Top. In the IW article, Long lists nine keys to safety, but he starts with the most important—executive buy-in. Like any company-wide value, safety needs to have top-level commitment and support. Long even suggests that companies appoint a chief safety officer. “This moves safety from just another program to an uncompromised value within the organization,” he states in IW article. You can read the entire article and its safety suggestions here.
- Look at the Numbers. If you need proof that safety has bottom-line implications, take a look at the facts. A recent editorial from The Fabricator says that managers should start by evaluating workers’ compensation costs, lost time related to injuries, time spent in incident investigations and follow-up, and direct medical costs. These numbers will quickly demonstrate the cost of poor safety. The article also encourages manufacturers to be proactive with safety actions and develop key performance indicators (KPIs). TheFabricator.com provides a list of possible safety KPIs here.
- Communicate, communicate, communicate. The only way to encourage a safety-first environment is to make sure that everyone—from the top down—hears the message loud and clear and often. Safety reporting sets the tone of an organization by reminding operators that 1. Their safety is important to you and 2. You are serious about it. Structural Steel of California, a leading industrial metal-cutting company featured in a series of case studies from the LENOX Institute of Technology, is intentional about making sure that employees know that safety is a critical aspect of the metal products it fabricates, and that mindset has evolved into an overall culture of safety within the company’s two North Carolina facilities. The manager holds a safety meeting every morning with the operators and a safety committee meeting every month. In addition to enforcing the safety message, this constant communication provides ample opportunities for the manager to discuss any other production issues that need to be addressed.
Best-in-class forges know that a tactical approach to plant safety provides benefits beyond meeting OSHA requirements or winning awards. Today’s managers need to value safety because it actually holds value that can positively—or negatively—impact their workforce and, in the end, the bottom line.