Transcript LEARNING OBJECTIVES

CAE Flightscape User’s Conference
The Business Value of
Safety
October 2, 2012
SIKORSKY
THE VALUE OF SAFETY
SIKORSKY
Macro
Sales
Stock Price
Market Cap
Right-to-Operate
Tactical
Cost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
Macro
Sales
Stock Price
Market Cap
Right-to-Operate
Tactical
Cost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
Macro
Sales
Stock Price
Market Cap
Right-to-Operate
Tactical
Cost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
THE VALUE OF SAFETY
SIKORSKY
Macro
Sales
Stock Price
Market Cap
Right-to-Operate
Tactical
Cost-Benefit Analysis
ROI, NPV or DPP…
Cumulative Savings
LEARNING OBJECTIVES
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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?
SAFETY CULTURE INDICATORS
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GENERATIVE
Chronic unease
Safety seen as a profit centre
New ideas are welcomed
PROACTIVE
Resources are available to fix things before an accident
Management is open but still obsessed with statistics
Procedures are “owned” by the workforce
CALCULATIVE
REACTIVE
PATHOLOGICAL
We cracked it!
Lots and lots of audits
HSE advisers chasing statistics
We are serious, but why don’t they do what they’re told?
Endless discussions to re-classify accidents
Safety is high on the agenda after an accident
The lawyers said it was OK
Of course we have accidents, it’s a dangerous business
Sack the idiot who had the accident
Presentation by Patrick Hudson of Leiden University to
Bristow Safety Conference, Lagos Nigeria, Feb 2011
LEADERSHIP
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Treat every accident as our accident
CULTURE COMES FROM REPETITION
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SMS
Basic Principles
Leadership
Risk Mgmt
Assurance
People
Culture & Value
CULTURE
Starts at the top
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Safety
HIGH RELIABILITY ORGANIZATION
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COMPETITIVE EDGE
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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.
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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…
BRIDGING FINANCE & SAFETY
BUSINESS TALK
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Finance/Operations
Safety
Earnings/EPS
Accident rates
ROI
Property loss
Payback
Insurance premiums
PVRR
Fines and citations
Internal Rate of Return
No. of people trained
Production rates
Exposure Assessments
Earnings/employee
Net Present Value
Cost Benefit
ROHSEI
Bridges
the Gap
Near misses
Behavioral Observations
Audit findings
The ROHSEI Task Force Objectives:
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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:
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.
Examples of ROHSEI Projects
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1. Sprinkler Protection
2. Onsite Primary Healthare
3. Disability (STD/LTD) c Mgmt
4. Disposable Coverall Recycling
5. Soil Remediation
6. HSE Websites
7. Behavior Based Safety Programs
8. Primary Healthcare in Europe
9. Epidemiology Studies and Software
10. PPE vs Engineering Controls
11. Ergonomics Programs (Lower back)
12. Ergonomics Programs (Work Station)
13. Fleet Safety Programs
14. Electronic MSDS Systems
15. PSM
16. Integrated Health and Wellness
17. IH for the FDA
18. FDM
19. EGPWS
20. SMS
21. Sim Training
22. FOQA
The ROHSEI Navigation Screen
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Process – Horizontal
Tools – Vertical
What the hell do you know about finance?
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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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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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MY CONCLUSIONS
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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.
David Eherts PhD
VP and Chief Safety Officer
Sikorsky Aircraft Corporation
Stratford, CT USA
Jill Browning
Manager, A&PS - SMCC
Sikorsky Aircraft Corporation
Horseheads, NY USA
Office: +1 203 386 8666
Cell: +1 203 895 0410 ( GMT – 5 )
email: [email protected]
Office: +1 607 378 4635
Cell: +1 607 377 9962 ( GMT – 5 )
email: [email protected]