By Reid Paquin, Research Associate, Manufacturing ([email protected])
Safety affects all levels of an organization, from plant manager to CEO. Safety has become increasingly important in the workplace in recent years. Employee injuries, illnesses, and accidents are an ethical, legal, and financial responsibility everyone must deal with. In December 2012, Aberdeen delved into the psyche behind the implementation of a safety program or safety technology at 169 manufacturing organizations. Was there a specific incident that has caused this new focus on safety? Was there some shift in the culture or environment that convinced these companies that a safety strategy was needed?
Aberdeen used four key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations. These metrics measure the success of an organization's safety program not only in terms of how it has limited incidents, but also how successful these programs have been for improving plant operations.
Respondents were divided into three categories based on their aggregate performance in these four metrics: the top 20% of performers (Best-in-Class), the middle 50% (Industry Average), and the bottom 30% of performers (Laggards). Table 1 displays the aggregated performance of Best-in-Class, Industry Average, and Laggard organizations.
Table 1: Top Performers Earn Best-in-Class Status
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Definition of Maturity Class
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Mean Class Performance
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Best-in-Class: Top 20%
of aggregate performance scorers |
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Industry Average: Middle 50% of aggregate performance scorers
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Laggard: Bottom 30% of aggregate performance scorers
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Source: Aberdeen Group, December 2012
| Definition for the Key Performance Indicators |
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Performance on the four metrics above links directly to the success of a company's safety endeavors. The numbers speak for themselves, the Best-in-Class are clearly doing something right when it comes to safety and safety technology. Is there some area where Best-in-Class are focusing more on that causes this improved performance?
Pressures Causing the Change
When polled, at the highest level, everyone is pressured to reduce the risk of an adverse event and be in compliance to regulations. These two were by far the most identified, 80% and 76% respectively, among All Respondents. However when you split these pressure based upon company performance, some trends emerge among these companies (Figure 1).
Figure 1: Drivers to Invest in Safety Technology?
Source: Aberdeen Group, December 2012
The biggest difference between the maturity classes concerns costs. Both the Industry Average and Laggards are more than five times as likely as the Best-in-Class to have insurance premiums as the driver behind their safety investments. It is true that safety technology is a great way to combat rising insurance costs, help reduce adverse events, and stay in compliance, but if that is all the technology is being used for a company is not fully utilizing their safety program.
Best-in-Class manufacturers realize that safety technology can also be used to improve their manufacturing efficiency. They already see the link between safety and performance and use that as justification to make these investments. Another differentiating driver among the top companies is the need to improve or maintain brand image. It takes only one incident or event to irreversibly tarnish your company’s image, this can affect customer loyalty, public perception, and overall profits for years.
As shown in past Aberdeen safety reports , the structure, or culture, of an organization plays a big role in the effectiveness of their safety program. Figure 2 shows there are some obvious splits between groups, but basically what it comes down to is Best-in-Class manufacturers have a proactive mentality, while their competition are reactive. The poor performing companies rely almost solely on internal safety incidents to put focus on what change is needed in their safety strategy, especially the laggards. The Best-in-Class are more than two times as likely to look at their peers and learn from their mistakes (the mistakes Industry Average and Laggards make).
They also look out in the market and see how some companies position their superior safety performance as a competitive differentiator and try to emulate the position themselves. The Best-in-Class change their company’s environment or culture proactively before incidents occur.
Figure 2: A Shift in Culture
Source: Aberdeen Group, December 2012
With the tightening of budgets, managers are asked to do more with less. Because of this, it is not easy to procure funding to start, or improve upon, a safety program. But, Best-in-Class organizations realize an investment in safety technology is not only a cost avoidance measure, there are also tangible operational benefits. Instead of reacting to events and insurance premiums like their competitors, the Best-in-Class take the initiative and are proactive when handling their safety. By realizing that safety technology does more than just prevent adverse events, companies will be able to increase brand reputation, improve efficiency, and ultimately save money.
Employees must return home the same “healthy way” that they came in, and companies need to realize that zero incidents is a very possible goal. To find out more about how the Best-in-Class successfully implement an effective safety program as well as other topics affecting manufacturers today, go to Aberdeen’s Manufacturing Homepage and stayed tuned for a more in-depth report on the subject publishing in March 2013.