Supporting Prevention through Design (PtD) Solutions Using a Business Case

Transcription

1 Session No. 611 Supporting Prevention through Design (PtD) Solutions Using a Business Case Elyce Anne Biddle, PhD West Virginia University Morgantown, WV Georgi Popov, PhD, QEP, CMC University of Central Missouri Warrensburg, MO Introduction Over the years, practitioners and researchers have suggested that one of the best ways to prevent and control occupational injuries, illnesses, and fatalities is to design out or minimize hazards and risks early in the design process. The most current demonstration of this belief lies in the development and approval of a voluntary national consensus standard ANSI/ASSE Z , Prevention through Design Guidelines for Addressing Occupational Hazards and Risks in Design and Redesign Processes. This standard was conceived to provide consistent procedures for addressing occupational hazards and risks in the design and redesign processes and incorporated key concepts from prior efforts, such as the National Safety Council s Institute for Safety by Design, and other existing standards (ANSI/ASSE 2011). Despite the attention to ensuring the safety and health of workers through the application of prevention through design (PtD) concepts, too many promising control technologies (engineering design solutions) those grounded in PtD have not been transferred from research into practice. Although proof of preventing occupational injury, illness, or fatality alone has often driven industry to make changes, the lack of adoption of these effective solutions has clearly demonstrated that there were others reasons behind safety, health and environmental (SH&E) business decisions. Organizations continually face increased global competition, rapidly changing technology, and decreased access to scarce resources. Under these conditions, SH&E efforts to insure a safe and healthful work environment must compete with other organizational needs. Without compelling information about the value of SH&E efforts to the organization, management may view these programs and activities as a lower priority than projects that have established a clearer connection to their bottom line. The challenge for occupational safety and health professionals is to describe the value of SH&E efforts in terms that are understood and accepted within the business community. A business case addresses that challenge.

2 A business case in occupational safety and health can be defined as a method that captures the effects of implementing programs or activities on employee health (injury or illness), risk management, and the business process. Capturing detailed cost data through the use of a business case generates customary financial business metrics, such as net present value (NPV), internal rate of return (IRR), return on investment (ROI) and discounted payback period (DPP), which are meaningful to business management. Additionally, the business case provides a mechanism for capturing non-financial impacts, those that cannot be directly or easily monetized, such as changes in customer satisfaction, corporate social responsibility, product defects, presenteeism, and corporate reputation. In reality, the business case answers the question: What s in it for the company? Or, in this instance: Why should the company implement programs and practices grounded in PtD? The Business Case Development Tool There are a number of general business case guidelines, but few that address the needs of the occupational safety and health field in general, let alone PtD. Additionally, there are a limited number of models that include a strategy, descriptive or analytic tools, and instructional documentation to capture the benefits and costs to the business of implementing occupational SH&E solutions (Biddle et al. 2011). Finally, an easy-to-use computerized tool to develop the business case did not exist. Building on the collaborative efforts of NIOSH and ORC, supported by the American Industrial Hygiene Association (AIHA) and the American Conference of Governmental Industrial Hygienists (ACGIH) (AIHA 2009) to determine the value of the industrial hygiene profession, and using the wisdom contained in ANSI/ASSE Z and ISO (ISO 2009; ANSI/ASSE/ISO n.d.), a business case developmental tool was designed. Specifically, this tool can be used to generate a business case to demonstrate the value of PtD efforts to an employer integrated into the occupational safety and health management systems. The Business Case Development Tool was designed to ease development of the business case by SH&E professionals for use in making decisions or for presentation to the organizational managers charged with making resource decisions. The tool can be used to select among alternative solutions or demonstrate the wisdom of a solution already selected. The information provided by the tool is expressed in the language understood by all management, not just those in occupational safety and health. Yet the tool includes the critical components that define the SH&E profession risk management. The tool consists of a five-step process and individual descriptive or analytic tools or instruments to complete each of the steps. Exhibit 1 illustrates the major components of the tool, while Exhibit 2 provides an illustration of the selection of tools or instruments available for use in performing Step 1 when Show Tools has been selected by the analyst.

3 Business Case Developer Introductory sentence: Use this tool.. About the Business Case Tool What? Why? When? How? Step 1. Describe the Current Situation Show Tools? Identify Hazards and Step 2. Assess Risk to Health and Safety of Worker and Business Show Tools? Step 3. Identify Changes from Current State Show Tools? Step 4. Determine Value Show Tools? Step 5. Develop the Value Proposition Show Tools? Glossary Exhibit 1. This opening page of the Business Case Developer Tool provides the user with easy access to all steps and help screens. Step 1. Describe the Current Situation Tool 1a Identify Problem and Desired Outcomes Tool 1b Draft List of Key Business and EHS Objectives Tool 1c Draft Business Case Project Assumptions Exhibit 2. The Business Case Developer Tool also provides easy access to tools for implementing each step to create the business case. Steps of the Tool The first step of the process represents the formative phase providing the background for determining the value of SH&E activities in current and future time frames. Assessing the current situation involves identifying the health protection problem(s), describing what actions are currently in place to address the problem(s), and determining the business objectives and their importance to the successful operation of the business. Understanding the current situation provides critical baseline information needed to identify interventions or solutions that could be implemented, continued, or revised to improve the current state of safety and health. The second step of the development takes an in-depth look at the environmental, safety, and health hazards and risks within the business process at the current time. More specifically, hazards are identified first so that the risks arising from those hazards can be evaluated and determined if they are tolerable or not. Hazards include all aspects of technology and activity that produce risk. Hazards can be physical, biological, chemical, mechanical or psychosocial; risks can be focused on the health and safety of the worker or the business. In the end, these are three main issues that must be addressed: 1. What can go wrong? (the hazard) 2. How bad could it be? (the consequences of the hazard) 3. How often might it happen? (the likelihood of the consequences) The next step begins by identifying the solution(s) to hazard(s) recognized in Step 2. Consideration of PtD concepts, including the hierarchy of controls is used to evaluate and select

4 possible solutions for continued analysis. The business processes identified in Step 2 are revisited to determine what changes to those business processes result from the intervention or solution being considered. These changes again include both the risk of business loss or interruption and the risk of adverse worker health outcomes or environmental risks. A second risk analysis is performed, considering the effect of implementing the solution(s) being considered. The relationship of hazard and consequences is evaluated using tools recommended in ISO/IEC 31010:2009. This step ends with providing a final risk measure, one that calculates the remaining business and SH&E risk, providing the decision-maker a full understanding of the effect on risk of implementing the solution to mitigate or eliminate the hazard. Step 4 determines the costs and benefits of the changes from the current state that were pinpointed in Step 3. The costs and benefits can be captured in dollars, percent, numbers, or in simple narrative phrases. These costs and benefits are used to compute the metrics commonly used to evaluate business investments within a corporation or commercial enterprise setting. Financial metrics, the effects that an investment has on profit and financial condition of the company, use the costs and benefits associated with the solution or intervention being analyzed expressed in dollars. Net present value (NPV), return on investment (ROI), and discounted payback period (DPP) are some of the more meaningful metrics to business management. Additionally, those costs and benefits that are not expressed in dollars, such as contributions to business objectives, are summarized and presented in specific terms. Step 5 is the last step, but by no means the least important step, in developing a business case. The final report integrates all the previous steps into a language and form that is understood and appreciated by those in the decision-making team. The report can be a lengthy written document that includes all the findings from the hazards identified, to changes in risk measures, and financial and non-financial metrics sources of the information used, and the members of the working team. It can also take the form of an executive summary or a PowerPoint presentation. The content and format is strongly dependent on the desires of those receiving the report. In addition to the Business Case Development Tool being easy to use by analysts that are not trained in finance or economics, it is also flexible, as it can be used under a variety of situations or conditions. It can be used in any of the stages of implementing solutions pre-operational, operational, post-operational, or post-incident, as defined in ANSI/ASSE Z (ANSI/SSE 2011). Business Case Examples The following business case examples help illustrate the flexibility of the tool and the benefits it provides when fully utilized.

5 Case Example One: Post Incident Exhibit 3. This is the stadium within hours before collapse. In July 1999, three workers were killed in a crane collapse during the construction of a stadium. A crane was lifting a section of the roof weighing over 450 tons when it collapsed. OSHA s investigation revealed that crane's rated load was exceeded when the roof section was first lifted off the ground; workers were not kept clear of the suspended 450 ton load during the morning of the lift; and personnel platforms were used to lift workers during dangerous weather conditions. On the day of the collapse winds gusted up to 26 miles per hour, and workers indicated that it was too dangerous to operate that crane. Unfortunately, following a dispute over accelerating production to ensure meeting the opening day, the safety director left the company. It was decided that work would proceed as originally planned. (OSHA, Abbott Laboratories, and Georgetown University 2005) Exhibit 4. This photo shows the extensive damage to the stadium after collapse. The following is the financial information that was derived as part of the analysis. In the end, the project was over a year behind schedule and more than $620 million over budget. Cost Categories Expenses (in millions of dollars)

6 Construction costs Interest paid on bonds Repairs Jury a,wards 99.0 TOTAL Table 1. These are the costs that were incurred as a result of the stadium collapse. Despite the importance and the impact that these costs provided when discussing the lessons learned from this case, use of the Business Case Development Tool could have added the financial metrics and non-financial losses associated with the project. Perhaps even more important would be the addition of the exploration of risk management, including defining the work processes in the construction project which should have led to the adoption of PtD methodologies. Case Example Two: Operational The University of California, Davis Agricultural Ergonomics Research Center, AgSafe (a nonprofit occupational safety and health organization), and NIOSH worked collaboratively in two separate efforts to reduce or eliminate ergonomics risks factors for grape harvest workers in the wine grape industry in northern California (Myers et al. 2002). The initial effort conducted the risk assessment, which began with the description of the following work process, illustrated in Exhibit 5. The grape pickers rapidly move down a row, reaching to grasp and cut grape clusters, and dropping them into plastic containers. These containers are pushed down the row with the worker s legs moving sideways. When the worker determines that the container or tub is full, he lifts, carries, and leans his body against the vine, lifting the tub over his head, to finally dump the grapes into a larger container. The worker returns to the vine where the last grape was picked and the cycle begins again. The grape tub held an average of 57 pounds, but weights of up to 80 pounds have been recorded in the field. A robust risk assessment led to recommending a smaller size tub to minimize injuries from lifting and carrying cut grapes in the original study. Table 2 provides the changes in risk assessment associated with implementing this simple PtD solution (Myers, et al. 2006).

7 Stoop Slide load Reach Carry load Repetitive hand cutting Lift load Exhibit 5. The wine grape harvest process consists of six basic tasks. Large Tub Small Tub Lifting force 57lbs (season average) 46 lbs (season average) Sliding force lbs (terrain differences) lbs (terrain differences) NIOSH Lifting Equation Energy expenditure 47.7% of aerobic capacity 45% of aerobic capacity Back injury probability Table 2. This is the risk factor comparison discovered presented by Myers et al. (2006) In addition to the hazard identification and associated risk assessment, the team measured the reduction in pain and injury. The financial metric measuring the return on investment for this engineering control was calculated, but not made available. A second project was designed, using the original team s expertise to determine if the smaller tubs were still being used by those who had originally adopted them, and to identify the reasons for the continued use. Financial data was requested from the participating companies, but none was provided. However, local suppliers provided cost estimates for the small and large tub, $13 and $11 respectively. Tub handles were modified by adding grips at an additional cost of $.50 per tub, resulting in an additional expense of $2.50 per tub for each smaller one purchased. Using the estimated maximum number of tubs purchased annually, use of the smaller tub required an investment of $1,250. The companies did not track the injury and illness cases specifically

8 attributable to lifting wine grape tubs, so a return on investment metric could not be calculated. However, using the average cost of one back injury in California of $56, 874, a total of 22,000 smaller tubs could be purchased without a negative return on investment. However, using the principles of the tool, it became clear that the decision to continue using the smaller tubs was based on the non-financial benefits. The companies in the study indicated that the most important business objectives included reducing worker turnover rates, improving worker morale, decreasing worker aches, pains and injuries, meeting harvest timeframe, and improving or maintaining wine grape quality. The initial study highlighted the decreased worker aches, pains, and injuries. Interviews and surveys included in the second study demonstrated that workers were very pleased with the smaller tubs and, as a result, the labor turnover rate was substantially reduced; many workers remained in their jobs for over 15 years, and one company had maintained the same workforce since adoption of the smaller tubs. With maintaining the same skilled tradesman during the harvest season, meeting the timeframe for harvest is far more certain. Furthermore, the smaller tubs maintained the quality of the grape because there were fewer layers of grapes to cause crushing. This analysis described the human risk reduction, provided some financial measures, and provided a qualitative assessment of business objectives. If the tool had been used to develop the business case, it could have added the unique ability to identify and quantify the reduction in business risk. Case Example Three: Post-operational Management of a large not-for-profit hospital planned to replace all existing soiled linen and trash collection receptacles with new containers of a single size and shape. This provided an opportunity for the risk management authority responsible for the safety and health of workers to explore alternative trash bags with the goal of reducing occupational injury and illnesses associated with lifting and carrying bags containing linen and trash. The following is a description of the first steps in an on-going business case development project. The decision was to evaluate the differences of Litelift ergonomic bags compared to the current bags being used in linen collection and disposal. Litelift bags are designed with a handle in the bottom of the bag, and as the employees tie the top of the bag, the tie becomes a second handle. Use of two handles allows the carriers to balance the load while lifting and carrying. The project began by establishing a team of staff who had either interest in the project, were safety and health professionals, or had resource allocation authority or understanding. The risk assessment of the conventional linen bags began with the description of the following work process, illustrated in Exhibits 6 and 7.

9 Exhibit 6. The current process for the collection through disposal of soiled linen. The next step in developing a business case is to identify the main safety and health hazards. Although the safety and health professionals track the hazards, completing the form found in the tool provided the opportunity to maintain specific records of this project. Three main ergonomic hazards were identified and recorded in the form below. Exhibit 7. Hazards and their potential effects are recorded on a tool-provided instrument. With the hazards identified, the next step involved determining the risk factor (RF) for each of the three potential effects. RF is the number resulting from multiplying the probability of the potential effect occurring by a number used to measure the severity of the expected loss in case of the occurrence of the potential effect. There is a large variety of risk assessment methods, but for this project, the ergonomics risk assessment of the current process was conducted utilizing the simple risk assessment matrix described in the PtD standard (ANSI/ASSE 2011). The risk to human health is not the only risk associated with workplace hazards. The risk to the continuity of business operations should also be considered. A similar risk assessment matrix was utilized to estimate that risk. Exhibits 8 and 9 present the risk assessment results for both types of risk.

10 Exhibit 8. The risk of health effects is determined and entered in this instrument. Exhibit 9. The risk of business continuity loss is determined and entered in this instrument. To present a 30,000 ft. view of the current state, hazards and consequences are then presented utilizing a modified bow-tie risk assessment methodology. The RF numbers are transferred to the modified bow-tie risk assessment diagram. Exhibit 10. The modified bow-tie diagram provides an overview of the risk assessment process. As was the case in recording the hazards associated with the current process, consideration of PtD concepts, including the hierarchy of controls, should be discussed and documented even though the solution had already been selected. This works to insure that the identified solution was selected using established criteria, and no other solution would be preferred at this stage of analysis. The team provided their expertise and input into identifying the barriers and preventive actions that are included in the analysis.

11 Exhibit 11. The PtD hierarchy of controls helps select the best solution. With the agreed-upon solution, the project continued with a pilot test using the Litelift to lift, carry, and dispose of soiled linens. The same risk assessment methodology was utilized to evaluate hazards and consequences after the substitution of the bags. Hazards and consequences for the new bags are presented, again utilizing a modified bow-tie risk assessment methodology. Exhibit 12. The modified bow-tie diagram is used again to provide an overview of new risk assessment associated with the solution Calculating the residual risk and risk reduction scores was the final step in the risk assessment. The calculations showed a 37% risk reduction. The results of this analysis are presented in Exhibit 13 below. However, management acceptance of a PtD solution is not always based on risk assessment (RA) alone. As a result, the more detailed financial/non-financial analysis is often necessary.

12 Exhibit 13. Entering the risk reduction in the instrument provided by the tool will help the analyst keep record of results. Completion of the pilot test and the risk assessment portion found in the tool led to numerous recommendations. It was determined by the team that smaller size bags would better control the weight of the bag. It was also determined that the unique handle on the lower end of the bag allows lifting with two hands with equal weight distribution. Therefore, they decided to modify their training to include two-handed lifting techniques using the Litelift bags to further reduce the risk of injury or illness. For the manufacturer, the team recommended that a fill line, preferably yellow, should be added to the bag design. Having an easily visible fill line would allow the employees to avoid overfilling the bags and lifting heavy bags. The next steps in this ongoing project will be to determine the changes and impacts on worker health, risk management activities, and the overall business operations upstream and downstream. Change measurements will serve as the basis to derive the financial and nonfinancial benefits of modifying the work process by substituting the Litelift bags. Conclusion Safety and health professionals agree that PtD concepts should be employed to insure the best outcomes for the health and safety of workers. However, demonstrating the business value that a PtD solution contributes can be challenging for SH&E professionals who do not have the expertise or experience in such efforts. They must learn the world of business and corporate speak, and make the case to executive management that PtD concepts are not only necessary, they re good business investments. Whether you have a large corporate program, a small department, or single SH&E professional or technician, the Business Case Development Tool makes deriving the business case a simple, logical, and easy-to-understand process. Bibliography American Industrial Hygiene Association (AIHA) Strategy to Demonstrate the Value of Industrial Hygiene.

13 American National Standards Institute/American Society of Safety Engineers (ANSI/ASSE) Z , Prevention through Design: Guidelines for Addressing Occupational Hazards & Risks in Design & Redesign Processes. American National Standards Institute/American Society of Safety Engineers/ International Organization for Standardization (ANSI/ASSE/ISO). n. d. Z690, Risk Management Standards Package. Biddle E., V. Carande-Kulis, D. Woodhull, S. Newell and R. Shroff The Business Case for Occupational Safety, Health, and Environment and Beyond. In S.Clark, R.J. Burke and C.L. Cooper., eds.. Occupational Health and Safety. Famham, England: Ashgate Publishing Ltd. International Organization for Standardization (ISO) ISO 31000:2009, Risk management Principles and guidelines. International Organization for Standardization /International Electrotechnical Commission (ISO/IEC) :2009, Risk management Risk assessment techniques. Myers, J.M., J.A. Miles, D.G. Tejada, J. Faucett, I. Janowitz, E. Weber, R. Smith, and L. Garcia Priority risk factors for back injury in agricultural field work: Vineyard ergonomics. Journal of Agromedicine, 8(1), Myers, J.M., J.A. Miles, J. Faucett, F. Fathallah, I. Janowitz, R, Smith, and E.A. Weber Smaller loads reduce risk of back injuries during wine grape harvest. California Agriculture, 60(1), Occupational Safety and Health Administration, Abbott Laboratories, and Georgetown University The Business Case for Safety: Adding Value and Competitive Advantage. Presentation at The Center for Business and Public Policy. index.html