cae flightscape user’s conference the business value of safety october 2, 2012
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CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012. THE VALUE OF SAFETY. Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings. THE VALUE OF SAFETY. Macro Sales Stock Price - PowerPoint PPT PresentationTRANSCRIPT
SIKORSKY
CAE Flightscape User’s Conference
The Business Value of Safety
October 2, 2012
SIKORSKY
MacroSalesStock Price
Market Cap
Right-to-Operate
TacticalCost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
MacroSalesStock Price
Market Cap
Right-to-Operate
TacticalCost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
MacroSalesStock Price
Market Cap
Right-to-Operate
TacticalCost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
MacroSalesStock Price
Market Cap
Right-to-Operate
TacticalCost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
LEARNING OBJECTIVES
Can Safety yield cultural gains and financial value?
Is SMS the correct roadmap?
Sikorsky’s legacy:Does it actually lower risk
and earn money?
Should this all be considered by
our customers and their insurers?
SIKORSKY
PATHOLOGICAL
REACTIVE
CALCULATIVE
PROACTIVE
GENERATIVEChronic uneaseSafety seen as a profit centreNew ideas are welcomed
We are serious, but why don’t they do what they’re told?Endless discussions to re-classify accidentsSafety is high on the agenda after an accident
The lawyers said it was OKOf course we have accidents, it’s a dangerous businessSack the idiot who had the accident
Resources are available to fix things before an accidentManagement is open but still obsessed with statisticsProcedures are “owned” by the workforce
We cracked it!Lots and lots of auditsHSE advisers chasing statistics
Presentation by Patrick Hudson of Leiden University toBristow Safety Conference, Lagos Nigeria, Feb 2011
SAFETY CULTURE INDICATORS
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LEADERSHIP
Treat every accident as our accident
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SMS
Basic Principles Leadership
Risk Mgmt
Assurance
People
Culture & Value
CULTURE COMES FROM REPETITION
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Safety
CULTUREStarts at the top
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HIGH RELIABILITY ORGANIZATION
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By protecting its employees and remaining dedicated to “doing the right thing”, Sikorsky has reduced its accident rates, workers’ comp costs and carbon footprint to become a company synonymous with strong environmental leadership, safety and environmental responsibility.
COMPETITIVE EDGE
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We pioneer flight solutions that bring people home
everywhere…every time™
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And we know it makes business sense…
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BRIDGING FINANCE & SAFETY
Safety
Accident rates
Property loss
Insurance premiums
Fines and citations
No. of people trained
Exposure Assessments
Near misses
Behavioral Observations
Audit findings
ROHSEIBridgesthe Gap
Finance/Operations
Earnings/EPS
ROI
Payback
PVRR
Internal Rate of Return
Production rates
Earnings/employee
Net Present Value
Cost Benefit
BUSINESS TALK
SIKORSKY
1. Build an accepted business tool.
2. Apply an easy to use process.
3. Communicate value of Safety investments.
4. Improve performance by encouraging better decisions.
The ROHSEI Task Force Objectives:
In 1995, a taskforce of fifteen Fortune 500 companies sponsored the development of a process and supporting tool set to determine the financial value of Safety investments:
SIKORSKY
Examples of ROHSEI Projects
1. Sprinkler Protection2. Onsite Primary Healthare3. Disability (STD/LTD) c Mgmt4. Disposable Coverall Recycling5. Soil Remediation6. HSE Websites7. Behavior Based Safety Programs8. Primary Healthcare in Europe9. Epidemiology Studies and Software10. PPE vs Engineering Controls11. Ergonomics Programs (Lower back)12. Ergonomics Programs (Work Station)13. Fleet Safety Programs14. Electronic MSDS Systems15. PSM16. Integrated Health and Wellness17. IH for the FDA18. FDM19. EGPWS20. SMS21. Sim Training22. FOQA
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The ROHSEI Navigation Screen
Process – Horizontal
Tools – Vertical
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Return on Investment (ROI): This is calculated by dividing the net present value by the present value of the project costs. The net present value is calculated by subtracting the present value of project costs from the present value of project benefits. The model calculates ROI based on costs, benefits, and the discount rate that are entered by the user.
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What the hell do you know about finance?
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20
Fleet Safety Pays Back
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Develop and document the focus of the opportunity:ROHSEI Analysis of SMS
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Determine assumptions:
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Estimate and enter the costs of implementation:
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Research/document relative numbers of accidents:
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Determine financial cost of an accident:
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Hit the calculations button:
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Present results to your management:
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ROHSEI Analysis of Sim Training
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David Eherts PhDVP and Chief Safety OfficerSikorsky Aircraft CorporationStratford, CT USA
Office: +1 203 386 8666Cell: +1 203 895 0410 ( GMT – 5 )email: [email protected]
MY CONCLUSIONS
1. Safety yields value.
2. This value can be calculated.
3. It should be considered
by our customers and the
insurance industry.
4. We’d love to work with you on this.
Jill BrowningManager, A&PS - SMCCSikorsky Aircraft CorporationHorseheads, NY USA
Office: +1 607 378 4635Cell: +1 607 377 9962 ( GMT – 5 )email: [email protected]