The Global Manufacturer
The Global Manufacturer: Workplace Safety: Small Failures and the Occasional Catastrophe

The Global Manufacturer: Workplace Safety: Small Failures and the Occasional Catastrophe

Safety injury and fatality rates have dropped significantly. Cleaner, better organized plants account for some of the improvement A company's culture and ethics, not money, ultimately determines safety performance

In 2012, the latest year for which we have data, there were 502,800 nonfatal injuries and illnesses in a U.S. manufacturing workforce of 11,268,906 -- a rate just under one per minute. According to the U.S. Bureau of Labor Statistics, 314 manufacturing employees died in  work-related incidents that year.

If you say that is too many, you would be right. But 20 years ago, there were 2,232,600 nonfatal injuries and illnesses in manufacturing. In 1994, the manufacturing population was much larger -- 18,321,000. That year, 789 workers died in manufacturing from occupational injuries. So in less than 20 years, the injury rate in manufacturing has been cut by about two-thirds and the fatality rate almost in half.

What accounts for this improvement in safety? Some is due to the changing manufacturing environment. Many plants today are cleaner, brighter, better organized and more automated than they were 20 years ago. Thousands and thousands of kaizens each year have resulted not just in more efficient plants but also safer ones.

But much of this improvement may also be due to changes in attitudes about workplace safety, according to a global survey of more than 3,860 professionals by DNV GL, a leading certification firm. Companies are shifting "from a reactive attitude to a conscious management of operational issues, a prelude to the development of a real corporate culture of occupational health & safety," DNV found.

More than 90% of the business managers surveyed said managing health and safety had become an integrated part of their corporate culture. Just over three out of four surveyed said their company went beyond the requirements of government laws and regulations. While more extensive safety management was more prevalent among larger companies, 70% of the small businesses said they take additional actions to improve safety.

The DNV survey shows a predilection for focusing on operational issues rather than a more strategic view of safety. Asked about the most effective actions they could take, 48% cited regular site maintenance while only 37% picked assessment of all safety and health risks.

Lack of financial resources (31%) and focus on short-term results (26%) were the main reasons given for a lack of progress in improving safety and health. The former is hardly ever true; the latter, all too frequently.

Just think about the oil and gas industry, an immensely profitable industry whose top five companies had more than $1 trillion in profits in the past decade. From 1974 to 2013, the 100 largest losses in the hydrocarbon industry topped $34 billion, according to a new publication by insurance broker Marsh.

Those big losses from process safety incidents don't begin to offer a complete picture. "In reality, the financial loss is even greater with 10,000 incidents recorded by Marsh over the past 40 years," noted Andrew Furlong, director of policy and communications with the Institution of Chemical Engineers. Spin the safety roulette wheel enough times and these small failures eventually result in catastrophe.

Heading Marsh's list was the Piper Alpha disaster in the North Sea, which had an estimated loss of $1.8 billion. On July 6, 1988, the oil and gas production platform exploded, killing 167 workers. Reading about reports on the disaster, the elements leading to the explosion sound hauntingly familiar to occupational safety experts -- a facility not operating according to its original specifications, production continuing while equipment upgrades and maintenance were being performed, poor planning that did not factor in the impact of facility changes on safety systems. Does any of that sound like an actual lack of money or was it tragic short-sightedness?

Ultimately, it is the governing force of a company's culture and ethics, not money, that determines safety performance. So it should come as no surprise that when you look through the 2014 list of the World's Most Ethical Companies by the Ethisphere Institute, you find a heavy emphasis on workplace safety.

For more on safety in manufacturing, visit IW.com/operations/safety.

"We believe that in the long term, it costs companies less to be safe but we don't do it because it costs less," Joe Salley, the CEO of Milliken & Co., told me recently. Milliken is one of seven companies that have won the ethics award each year since its inception in 2007. "We do it because we care about and respect our associates, our customers and the world that we share."

 

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