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Tuesday, 11 February 2014 20:20

Health & Safety management system or a cost saving methodology.

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Cust RiskCust RiskHealth and Safety Management systems focus on procedures and management systems that ensure production operations or business  activities are undertaken in a safe manner. The management of the risk of accidents or incidents arising out of work activities form part of Risk Assessments within Environmental, Health & Safety Systems (EHS) systems, which in essence sum up the potential risks and sets out methods to reduce the risks or the probability of a series of events occurring that lead to an accident.

Safety Risk Reduction Programs for the most part fall under the remit of EHS systems. Risk Assessments are part of this process that sets out the risk and identifies risk reduction measures. There are of course numerous types of risk reduction programs and one of the most common is a hot work permit. A hot work permit system requires persons conducting welding (work likely to create an ignition source) to acknowledge the risk and set out measures to reduce that risk such as having a fire extinguisher to hand.

Another type of risk reduction program is a work safety committee who are a group of like-minded people in a work place that have an interest in Health and Safety along with the a desire to improve safety in the work place.

There is another way of looking at Risk Reduction Programs and that is to look at Risk Reduction Program from a business perspective. This involves including stakeholders who are outside the immediate workforce. By using business costs to identify the true costs of accidents from beginning to end it creates an awareness of hidden costs. It follows the simple rule of business which is “If you cannot measure it you cannot manage it” or more importantly it can refocus a business to review operations. Now a lot of EHS departments can provide information as to the number of man hours worked and the number of lost time accidents or near misses.

This is only one part of the equation. How many financial controllers within a business can tell you down to the last penny how much an accident costs or how much a near miss cost a company? The fact is that most Companies will not know the true costs over one accounting period. Even if an accounts department wanted to measure the true costs of accidents they will not have all the data immediately available to know the true costs. This is because unlike road traffic accidents work place accidents take longer to work through the litigation system and the true costs may not be known for a period of 3 years or more. In the majority of cases, the financial accountant may have changed within this period or the priorities of the financial division will change as more immediate business risks emerge over that 3 years period.

If safety risk reduction programs are to work more effectively they should look at risks much earlier in the process. In the majority of cases this is not always possible as projects are well under way by the time the blueprints are out. The alternative is to change the orientation of the Risk Reduction Program to a Business Risk Reduction Program that has a safety module. The beginning of such a program should not be at the concept stage of a new project but rather at the end of the previous project.

Data gained from the life cycle of a previous project allows a company to learn from its history. It should involve stakeholders external to the core business such as Insurance professionals, project managers and financial director along with the safety professionals.

The data available for a project that has run its course will allow the stakeholders identify the costs of each safety incident. In almost all cases, the prevention costs far outweigh the costs of the accident. The key is to identify routes for early investment in preventative measures in the life cycle of a project. The investment at this stage will yield production savings because a safe place of work is a productive place.

The key to the Risk Reduction Program is to bring home to the high level stakeholders in a project the costs that can be saved by reviewing safety systems at an early stage of a project and learning from past events. Even at the concept stage, where a company is in the process of preparing the business plan, business managers can gain experience from wins and mistakes of the past. All business managers know that business in not an exact science because the market place is a changing environment. This is what safety in the work place personnel deal with every day - a changing environment that is managed by Risk Assessments.

The application of a business model to a Risk Reduction Safety Program has a number of key benefits.

  • It creates the conditions for the business managers to use safety tools as a mechanism of reducing the operating costs of a project.
  • It creates the conditions for business managers to apply safety tools from safety systems to business projects. There are a number of business models that can be adopted to run a business. How many of these were developed by Scientists or Engineers or Health and Safety professionals.

The science of reducing risk can be applied to projects but as viewed through the eyes of a business manager who normally focus on EBITA (earnings before interest, taxes and amortisation) or RONA (return on net assets).

The process seeks to apply weightings to the operational risks and in return forces the focus on safety systems at the concept stage of a project where more bang for your buck can be achieved by designing out safety issues at an early stage in the process and learning from previous projects.

EHS managers need to improve their business skills in much the same way a new Director of Operations will ensure that he understands the Safety risks of his business in order to comply with the law. The meeting of the two is what in essence leads to safe places of work.

Read 3106 times Last modified on Tuesday, 04 March 2014 12:56
Richard D'Arcy

Richard has an MSc in Health and Safety Management and has over 20 years’ experience in implementing Environmental Management, Health & Safety Systems and Quality Management Systems both in Ireland and the UK. 

As an Environmental Health & Safety Manager, he managed large and small environmental projects. An example of one involved reducing the spend on an Odour abatement plant from €1.3m to €700k. 

Richard has managed many safety projects and an example of a safety project is an €8m investment in plant and equipment that automated a production process to reduce unsafe exposure to employees and assisted the attainment of increased production orders for the company.

He is also highly experienced at dealing with legal issues, courts and regulatory authorities, in addition to securing grant aid for manufacturing.

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