- By Nuris Ismail and Matthew Littlefield
- December 26, 2010
Safety has always been a critical measure of success for industrial organizations. Companies that are not able to comply with safety regulations and procedures in an effective fashion are putting their people, assets, and market position at risk.
Pressures Driving Companies to Focus on Safety
In today's economic environment, it is unfortunately far too easy for many manufacturers to become singularly focused on cost cutting and increasing throughput. These are critical areas but can not be at the sacrifice of employee and process safety. Aberdeen Group’s October 2010 study finds that the top pressures driving manufacturers to focus on safety was the need to be in compliance with safety mandates as well as mitigate the risks of an adverse event.
Figure 1: Pressures
Source: Aberdeen Group, October 2010
Compliance to safety regulations is an important business concern and should not be overlooked. As new regulations evolve, internal and external stakeholders are increasingly directing their business to stay ahead of these regulations. Companies that are unable to stay ahead of these regulations can face some serious consequences such as: penalties, fines, damage to brand image, plant shutdowns, and even in some cases fatalities. Indeed, an adverse event, not only threatens an organization’s employees, but also its bottom line.
In order to better understand how companies are addressing these top level pressures, Aberdeen used four Key Performance Indicators (KPIs) to distinguish the performance between the Best-in-Class (top 20% performances) from the Industry Average and Laggard Organizations. The four KPI's used to determine Best-in-Class performance are critical to measure the success of the safety program and plant safety. These KPIs not only take into consideration the metrics around safety of the workforce and workplace, but also consider metrics that distinguish organizations that are performing as leaders in operational metrics, including availability, productivity and throughput. Table 1 displays the average performance of Best-in-Class, Industry Average and Laggard organization:
Table 1: Top Performers Earn Best-in-Class Status
Source: Aberdeen Group, October 2010
The Best-in-Class are better equipped to create a safer working environment for their employees but are also able to gain a competitive edge in the market place. In fact, across the board, Best-in-Class manufacturers were able to effectively manage safety incidents by realizing a 0.05 injury frequency rate, while at the same time performing at 90% OEE. These manufacturers were also able to achieve a 2% unscheduled asset downtime rate, while their peers in contrast experienced a 14% rate. In short, these industry leaders are able to provide a safer working environment for their employees, while simultaneously improving productivity and achieve higher operational efficiencies. What exactly are these leaders doing differently from their peers?
Differentiating Capabilities for Best-in-Class Performance
Aberdeen finds that Best-in-Class companies are differentiating themselves in three major ways (Table 2). First, Best-in-Class companies recognize that an effective organizational structure is a key capability for improving plant safety. To enable real change in the company culture, an organization needs to have a long term vision for safety, and therefore needs to appoint an executive to execute this vision. Our research uncovered that Best-in-Class companies are 28% more likely than their peers to have an executive sponsor driving the safety initiatives.
Table 2: Business Capabilities
Source: Aberdeen Group, October 2010
Although having executive sponsorship is important, manufacturers also need to ensure that the strategies established in the boardrooms are implemented across the complete network of industrial facilities. To accomplish this, Best-in-Class manufacturers are establishing roles and responsibilities across functional teams to align not only safety goals, but also maintenance, production and corporate goals. Indeed, these manufacturers understand that safety needs to be ingrained from the shop floor to the top floor. Plant safety cannot be managed in a silo-ed and independent manner, but rather in a holistic manner. These manufacturers are ensuring that all functional heads (safety, maintenance, production, corporate) get a seat at the table when it comes to strategic decisions with improving safety on the manufacturing floor and are sharing best practices across the different departments.
Finally, to effectively manage all the safety issues in manufacturing operations, organizations need to equip their employees with visibility to safety data. Best-in-Class manufacturers are 43% more likely to have a centralized view of the data from the safety system and plant automation system. Many manufactures use two separate monitoring interfaces to view the data from their safety system and plant automation system. This forces operators to manage two disparate systems, therefore making it harder for operators to predict and obtain real-time visibility into unsafe operating conditions. By having a centralized view of the data, machine operators are more alert to pending hazards on the manufacturing floor. In addition, 47% of Best-in-Class companies are being progressive and are integrating their safety system with their plant automation system onto a single platform. A single platform means lower hardware costs, and reduced software and support costs, because the same software can be used and the operator can control both systems through a centralized portal. Also, this single platform yields the ability to perform defined safety functions while simultaneously efficiently operating the plant. As a result of this capability, Best-in-Class manufacturers are able to react more quickly before an adverse event were to occur, and therefore minimizing safety incidents and improve plant productivity.
Companies that are performing below Best-in-Class performance should use this research to understand the performance, strategies and execution capabilities of some of the most mature and successful manufacturers when it comes to plant safety. In order to close the performance gap, Aberdeen recommends manufacturers performing below Best-in-Class performance to do the following:
- Establish executive leadership: The vision of safety needs to be developed at the top level. By getting the plan endorsed by senior management, appropriate resources can be allocated for the success of safety program. It is extremely difficult to make changes to the processes, collaboration and culture without the buy in and support of true authority holders.
- Establish a cross-functional team: Best-in-Class manufacturers understand that safety needs to be ingrained from the top floor to the plant floor and are establishing cross functional teams to execute this vision. In addition, Best-in-Class are ensuring that all functional heads get a seat at the table when it comes to strategic decisions with improving safety on the manufacturing floor and are sharing best practices across the different departments.
- Invest in technology: Best-in-Class manufacturers have invested in the latest technology which integrates the safety system with the plant automation system onto a single platform. This single platform allows centralized view of safety data and enables the operator to control both systems through a centralized portal. In addition, a single platform yields the ability to perform safety functions while simultaneously operating the plant and therefore improving productivity and minimizing accidents.
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