SAFETY & QUALITY MANAGEMENT

IMPROVE SAFETY WITH

QUALITY & PRODUCTIVITY
BENEFITS

Dave Copley, Matt Pierce

 Who Are We?
SAFETY & QUALITY MANAGEMENT
 Pirates Log
SAFETY & QUALITY MANAGEMENT

Hours and Accidents

70 1600

60 Hours (Millions)
52 1400
Accidents
50 Accident Trend 1200
Hours (Mil.)

Accidents
40 35
31 1000
28
30 24
18 800
20 16

10 600

0 400
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
 Pirate Safety Management
SAFETY & QUALITY 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
 Quality and Safety Combined in 2003
SAFETY & QUALITY MANAGEMENT

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
 Changed the Goal Setting Process
SAFETY & QUALITY MANAGEMENT

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
 Introduced A Zero Accident Program
SAFETY & QUALITY MANAGEMENT

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

 Benchmark the True Cost of Accidents
SAFETY & QUALITY MANAGEMENT

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
 The True Total Cost of Accidents
SAFETY & QUALITY MANAGEMENT

Workers Comp. Cost Benchmark Model*

Workers Comp New Business Cost of Total Cost of
Cost (WCC) Required to Funding New Accidents
fund WCC Business
$15 Mil. x 5 $75 Mil. +
(to calculate
$75 Mil. x 10 $750 Mil. x 0.02 $15M
other incurred (Assuming 10% (2% business
losses) margin) development)
$75 Mil. $750 Mil. $15 Mil. $90 Mil.
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.
 Cost Calculator Model
SAFETY & QUALITY MANAGEMENT

Your Company
Margin 10.0%
Business Development Cost 2.0%
Soft Cost Multiplier $ 5.00
Previous Year's Loss Run $ 100,000
Total Workers Compensation Cost $ 500,000
New Business Required to Fund WCC $ 5,000,000
Cost of Funding New Business $ 100,000
Total Cost of Accidents $ 600,000
OSHA
Total Labor Hours Rate: 3.2 500,000
Total Cost Per Labor Hour $ 1.20
Effect on Gross Profit $ (600,000)
 Measure Safety Process Capability
SAFETY & QUALITY MANAGEMENT

Introduced Control Charts and plotted our

Safety Process capability
120

100
Accidents

80

60
Jan 2003 - Jun 2005
40
Nov

Nov

Nov
Jul

Jul

Jul
Jan

Sep

Jan

Sep

Jan

Sep

Jan
May

May

May

May
Mar

Mar

Mar

Mar
Process Capability: 64 93 accidents per month (1s, 68%)
 Partner With Other Stakeholders
SAFETY & QUALITY MANAGEMENT

Insurance Carriers
External Consultants
Product Suppliers
Internal Interests
 Outcome of Stakeholder Collaboration
SAFETY & QUALITY MANAGEMENT

Insurance Carriers:
Identification of key risks:
Leading Accident Types by Cost 2003:
40% Average Cost Per Accident: $12,417 100%
Average Cost: 90%
% of Total Direct Accident Cost

35%
$14,539

% of Total Accident Count

80%
30%
70%
Average Cost:
25%
$50,229 60%
Average Cost:
20% 50%
$19,430 Average Cost:
$5,232 Average Cost: 40%
15%
$22,976 30%
10%
20%
5% 10%
0% 0%
Overexertion Falls - Elevation Slip, Trip, Fall Struck Against Caught In, On,
Between
 Outcome of Stakeholder Collaboration
SAFETY & QUALITY MANAGEMENT

Insurance Carriers:
Current trends and future risks related to our
industry:
50% Percent of U.S. Workforce Aged 45-64
42% 42% 42%
39%
40%
36%

30%
30%

20%

10%
1980 2000 2005 2010 2015 2020
Source: 2000 US Census, workforce includes ages 18-64
 Outcome of Stakeholder Collaboration
SAFETY & QUALITY MANAGEMENT

External Consultants:
Future challenges based on industry
knowledge and research:

Source: US Bureau of Labor Statistics, US Department of Commerce

 Outcome of Stakeholder Collaboration
SAFETY & QUALITY MANAGEMENT

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

Product Suppliers:
Innovative products and practices affecting
our industry:
Effect of Fatigue on Productivity
100%
Productivity Level

80%
60% Productivity
40% Fatigue

20%
0%
1:00 PM 2:00 PM 3:00 PM 4:00 PM
 Outcome of Stakeholder Collaboration
SAFETY & QUALITY MANAGEMENT

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
 Resulting Successful Strategy
SAFETY & QUALITY MANAGEMENT

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
 Visitation
SAFETY & QUALITY MANAGEMENT

Deployed new scheduling and reporting tool

Number of visits based on risk and
performance
 Communication
SAFETY & QUALITY MANAGEMENT

Specifically Targeted Communities

Management
Financial
Safety
Quality
Purchasing
Fleet & Driver
Business Continuity Planning
Field
 Education
SAFETY & QUALITY MANAGEMENT

Packaged message into a 3 hr. road show

presented to top management
Started April 2005
45 locations visited to date
18 return visits by request
1,000s of key people educated
 Road Show Content
SAFETY & QUALITY MANAGEMENT

Safety Business Case

Motion is Money
Productivity Plus
 Results Fewer Accidents Every Year
SAFETY & QUALITY MANAGEMENT

39% reduction in OSHA Recordable Cases

1300

1197
1100

900

734
700
2003 2004 2005 2006 (Est.)
 Results Better Safety Process
SAFETY & QUALITY MANAGEMENT

120

100
Accidents

80

60
Jan 2003 - Jun 2006
40
Nov

Nov

Nov
Jul

Jul

Jul
Jan

Sep

Jan

Sep

Jan

Sep

Jan
May

May

May

May
Mar

Mar

Mar

Mar
New Process Capability: 56 76 accidents per month (1s, 68%)
 Results Improving Rates
SAFETY & QUALITY MANAGEMENT

Incident Rates and DART Rates are Falling

Recordable Incident Rate DART Incident Rate
7
5.97
6
4.61
5
4 3.78
2.85 2.47 3.23
3 2.45
2 1.85 1.60
1.14
1
0
2002 2003 2004 2005 2006
*Calculated figure based on YTD performance
 Results Better Production Capacity
SAFETY & QUALITY MANAGEMENT

2004-2006 20,954 Days Returned to Production

Days Away / Returned to Production
15,000

10,000 11,526
5,000
5,093 4,335
0
19,162
14,069 14,827 7,636
-5,000

-10,000

-15,000

-20,000
2003 2004 2005 2006 (Est.)
(51.9M hrs.) (50.9M hrs.) (55.5M hrs.) (56.5M hrs.)
 Conclusion
SAFETY & QUALITY MANAGEMENT

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
 Results Reversing The Trend
SAFETY & QUALITY MANAGEMENT

Hours and Accidents

70 1600

60 Hours (Millions) 56 57
52 1400
Accidents 51
50
1200
Hours (Mil.)

Accidents
40 35
31 1000
28
30 24
16 18 800
20

10 600

0 400
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
 The Future Working Together
SAFETY & QUALITY MANAGEMENT
SAFETY & QUALITY MANAGEMENT

The End