Plant Safety / Plant Maintenance / Process and Operations / Regulatory Compliance

Worker Safety Goes Beyond Cost Avoidance to Include Productivity Improvements

Plenty of penalties are meted out when on-the-job injuries occur, but beyond the penalties, there’s a real upside to a proactive approach that creates a safety culture.

By Kevin T. Higgins, Managing Editor

Today’s production environment is a pressure cooker, with many demands unrelated to daily order-filling and throughput requirements. Food & beverage manufacturing in particular is under the gun, with the stringent documentation and verification required for food safety adding to stress levels.

Those pressures provide a partial explanation of the high ratio of recordable injury rates in food manufacturing: 5.3 cases per 100 full-time employees, compared to 4.2 for all manufacturing, according to the Bureau of Labor Statistics. Beverage production is even higher, at 6.5, paced by soft drink manufacturing at 8.1, a rate exceeded only by beet sugar manufacturing and animal slaughter in the industry.

Numerous factors are at play. Cold and wet conditions can create a particularly harsh production environment; equipment is frequently disassembled for cleaning and sanitization; older machinery not designed with worker safety in mind often lacks guarding; relatively low prices for finished goods requires high throughput. Mitigating circumstances aside, the human and financial costs are significant.

Financial penalties are going up. In August, OSHA increased the maximum fines for serious and repeated violations by 78 percent. OSHA fines contribute to the indirect costs of injuries, which easily surpass the direct cost of worker compensation. Indirect costs of minor injuries are 4.5 times higher than direct costs, according to the agency.

Bobby Lewis, vice president with Hellman & Associates (www.ehscompliance.com), estimates the average cost of a recordable injury at $30,000. In the event of a death, it’s $1.4 million. “Plant managers are all about production, but there needs to be safety training, and it needs to be embraced from senior management all the way down to the guy on the line,” the Wheat Ridge, Colo.-based consultant says. Unfortunately, “everybody is trying to do more with fewer resources,” and that can result in inadequate funding for training, personal protective equipment (PPE) and prevention initiatives.

Behavior-based training and safety committees drawn from multiple departments and job functions are helping established food companies reduce accidents. A disciplined approach to improvement often is lacking at newer firms, however. As an example, Lewis cites craft brewing: thousands of start-ups have cropped up in the last decade, often operated by friends intent on producing as much product as possible. “Safety is the last thing on their minds,” he says. Over-exposure to carbon dioxide is a fairly common problem, a danger easily remedied by installing a CO2 detector.

Automation is shifting the nature of injuries from repetitive motion and slips and falls to electrical shocks and amputations. Unguarded machinery was the biggest contributor last year to severe injuries in food manufacturing, points out Sally Smart, a technical safety specialist at W.W. Grainger Inc. (www.grainger.com), Lake Forest, Ill.

“There are some unique conditions in the food industry, such as the frequent need for access to the equipment and being able to sometimes clean it when production is running,” she says. “Quick, safe access has to be part of normal operations, and guarding often needs to be hinged so that it can be removed.”

Stringent machine guarding requirements, particularly for OEMs selling to European processors, is gradually enhancing safety, but older equipment dominates the inventory in most plants, and many food companies lack the financial wherewithal to upgrade their machinery in the short term.

Analysis of OSHA fines and enforcement actions in a recent four-month period indicates food companies were the target of 14 percent, second only to the construction industry. Training deficiencies were the most frequently cited failure, closely followed by machine guarding issues, failure to provide adequate PPE and electric hazards. Five amputations and two deaths occurred at food plants in that period.

“The Business Case for Investment in Safety,” a report issued two years ago by the National Safety Council, suggests each $1 invested in injury prevention results in savings of $2-6. Most of the ROI is in the form of avoidance of indirect costs, such as downtime, training a replacement worker, higher insurance premiums and attorney fees. But two in five CFOs surveyed indicated the greatest benefit from safety programs comes in the form of increased productivity.

Safety ROI calculations are necessarily conservative and fail to account for the many residual benefits, such as higher level of productivity and job satisfaction, Grainger’s Smart points out. It’s tempting to dismiss efficiency gains as a soft benefit, but she believes it should be just as much an objective as risk management, injury avoidance and lower OSHA penalties.

The proactive approach

Productivity improvements and greater efficiency are the metrics food and beverage companies should focus on when addressing workplace safety, suggests William Jones, senior consultant to food & beverage clients for DuPont Sustainable Solutions (www.dupont.com), the management consultancy of the Wilmington, Del., multinational. Focusing on injury rates and cost avoidance is a reactive approach, he adds; instead, manufacturers need to engage personnel and give them the skills needed to avoid injury.

A preventive approach is the focus of OSHA’s Voluntary Protection Programs (VPP), regarded by some as the gold standard in workplace safety. The Ben & Jerry’s facility in St. Albans, Vt., is one of 65 VPP food plants. Every five years since 2007, seven OSHA inspectors take up a one-week residency to review safety practices and interview workers as part of a comprehensive evaluation. Sharing best practices with other VPP participants is another element in the continuous improvement effort, according to Roy Cook, safety, health & environmental supervisor at the ice cream plant (www.benjerry.com).

Involvement is the essential ingredient, says Cook. Involvement is fostered by thorough investigations of every near-miss incident and deviation from safety rules. If a staffer sees an infraction, the protocol is to talk to the rule bender and produce a written report that triggers an investigation. Standard operating procedures for machine changeovers and cleaning are designed around safety, and while that initially reduced uptime, the ultimate impact was to reduce material waste and downtime, according to Cook.

“Management commitment is a big part of moving from a safety program to a safety culture,” he adds, though continuous improvement “is pushed by the people on the floor.” The improvements they suggest are often creative and actionable: one worker mounted a video camera on a radio-controlled car to capture images of hoses on the floor and other trip hazards in the plant.

Like Ben & Jerry’s, Mt. Olive Pickle Co. in Mt. Olive, N.C. (www.mtolivepickles.com), participates in its state's version of VPP, known as Carolina Star. Also like Ben & Jerry’s, managers concluded greater employee involvement was critical to reducing an incident rate that remained stubbornly high.

While even seasoned workers can become complacent, new employees are at the highest risk of injury. Mentoring is a common element of both companies’ approaches to worker safety.

At Mt. Olive, three mentors reinforce instructional training and procedural rules like lock out/tag out. “It’s a matter of everyone being their brother’s keeper,” says Gordon Bennett, safety & security coordinator. “It’s not a big issue for someone to say something if a worker isn’t using a PPE. And if there is an injury, no matter how minor, we want it reported.”

During the local cucumber harvest, Mt. Olive’s 600-employee workforce swells with an additional 300-350 temporary workers, many of whom only speak Spanish. “That’s been a particular challenge for us,” Bennett allows, but it can be addressed with job-specific training, clearly explaining company rules and emphasizing that they are not intended to be punitive.
Workplace accidents in North America are declining, both in the food and beverage sector and in industry overall, says DuPont’s Jones, who puts the overall rate incident rate at 5. “By and large, we are doing better, but 5 is still to high,” adding that 1 would be world class.

When VPP participation began in 2003, Mt. Olive had a 3.2 incident rate. A goal of 1 was set, and while it has inched above that, the rate has been as low as 0.45. Cook declines to cite Ben & Jerry’s rate, but it was higher than the industry segment average when VPP began and now is below it. The ice cream manufacturer is striving for world-class status.

“Manufacturers tend to be reactive,” Jones reflects. They also sometimes undermine their commitment to safety by sending mixed messages, like the beverage client who put a premium on speed to market and meeting demand. “Corporate leaders inadvertently rewarded rushing,” Jones says. “That sent a message that cutting corners was OK.”

According to one broker of workman’s compensation insurance, premium costs are trending downward, a positive development that Parker Rains, vice president with Jackson, Miss.-based Fisher Brown Bottrell Insurance Inc., may well accelerate at food plants thanks in part to the procedural discipline required for compliance with the Food Safety Modernization Act. Unless management is able to share details of training programs and preventive steps, however, premium reductions won’t be forthcoming.

A focus on managing the direct costs of injuries can distract from the full cost of workplace accidents. “For every dollar that an insurance spends on your claim, the employer will pay $1.10 additional in indirect costs,” says Rains. “Indirect costs can be a killer to a company.”

Employee involvement in safety committees and a comprehensive plan to reduce on-the-job injuries can result in lower insurance premiums and reduced costs, but injury rates are trailing indicators and a symptom of a reactive approach.

Building a safety culture, on the other hand, is a proactive approach that can lead to production improvements that may be hard to quantify but contribute even more to a manufacturer’s bottom line. Sending workers home with all their body parts intact is more than a feel-good goal; it’s central to production optimization.