Calculator Provides ROI for Safety Automation

  • December 20, 2011
  • Rockwell Automation
  • Rockwell Automation
  • News

December 20, 2011 - Engineers, plant managers and environmental health and safety (EH&S) professionals now have a tool to calculate the potential annual return they’ll receive if they invest in an integrated safety automation system. Rockwell Automation developed the free Safety Return on Investment (ROI) Tool with J.B. Titus, a machine safety consultant and owner of J.B. Titus & Associates. The Web-based tool addresses manufacturers’ need for a tool to help quantify potential savings and productivity gains from new investments in safety. “An upfront investment in safety programs and safeguarding systems can help significantly reduce the financial and employee impact of incidents in a manufacturing facility,” said Mark Eitzman, safety market development manager, Rockwell Automation. “Still, engineers, plant managers and EH&S professionals have struggled to accurately cost-justify investments in safety. With the new Safety ROI Tool, they can calculate the costs of an incident and see the financial benefits of implementing a proactive safety program.” At its core, the Safety ROI Tool relies on a basic calculation: benefits divided by costs equals ROI. To help simplify the previously complicated process of assessing those costs and benefits, the tool combines injury and productivity data and collects input from users in five categories:

  • Estimated project amount, i.e., cost of controls, software, installation and training.
  • Overall equipment effectiveness, based on increases in machine availability because of reduced unscheduled downtime and increases in manufacturing output.
  • Increased capital-asset depreciation.
  • Direct injury costs, such as medical expenses, wages and worker’s compensation costs.
  • Indirect injury costs, e.g., regulatory noncompliance fines and repair costs.

The tool also allows users to adjust the ratio of indirect-to-direct injury costs from 1:1 to 14:1, or to enter zeros for indirect and direct injury costs, based on company requirements. Rockwell Automation aims to continuously update the tool to keep it relevant for users and plans to add a category for quality improvement. “Machine safety is fast becoming a core function of an automation system that delivers significant business and economic value while boosting productivity and the bottom line,” said J.B. Titus, machine safety consultant and owner, J.B. Titus and Associates. “The ROI Tool is easy to use and quickly delivers credible proof that safety investments can help protect workers and yield financial benefits.” “Rockwell Automation has been in the safety business for decades, and that gives them a detailed understanding of their customers’ need to improve safety while also improving productivity,” said Nuris Ismail, senior research associate, Aberdeen Group. “The Safety ROI Tool is unique because few tools are available for a manufacturer to use to calculate the best course of action to protect their workers and also their bottom line.” Rockwell Automation, Inc. (NYSE: ROK), the world’s largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Headquartered in Milwaukee, Wis., Rockwell Automation employs about 21,000 people serving customers in more than 80 countries.  

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