How to perform (or at least try) LOSS CONTROL

How to perform (or at least try) LOSS CONTROL

Ph.D.Stefan KovacsE-mail: [email protected]

2014-2015

mailto:[email protected]

A short presentation of basic elements regarding loss control

Categories of losses

• People

• Motivation/Morale

• Material/Property Damage

• Environment

• Image

• Market

• Management

Categories of losses-People

• Are accountable as:

– Injuries (first aid and doctor cases)

– Days away from Work injuries;

– Loss of body parts or functions;

– Fatalities;

– Occupational illnesses;

– Disability.

Categories of losses-Motivations

• Work motivation is one of the basis for a good functioning of every enterprise. The diminishing of the motivation and the moral of the personnel due to too many undesired events is a loss that can lead to less production, less quality, more absenteeism, higher risk behavior, etc.

Ccategories of losses-Materials, Property and Environment

• Material

– Loss of material: raw materials, products, contamination of materials and end products, lower production quota,…

• Property

– Property damage, material cost of repair and replacement of parts, expenditures of equipment, …

• Environment

– Losses due to the accidental burdening of the environment.

Categories of losses-Image,Market, Management

• Image – Loss of business an goodwill, adverse publicity, Legal suits and

expenses, …

• Market – Loss of orders, clients or market share due to loss of image or product

damage or product liability.

• Management – Loss due to the damage of the image of management. Loss of goodwill

of management at all levels.

Loss Control Goal

• To develop and continuously measure effectiveness of controls .

– Engineering

– PPE

– Administrative in order to:

• Eliminate;

• Minimize;

• Reduce;

• Control loss at work.

Loss Control Goal

• Inform,Commit,Communicate and Train (ICCT) the employees regarding the necessity to continously reduce loss taking into account identified hazards and exposures to all affected individuals, entities, stakeholders

Loss Control Goal

• Develop standards for loss, hazards and exposures.

• Audit and monitor the performance effectiveness of standards.

• Upgrade and implement

standards and controls as

may be required

WHY ?

• “THE FIRST DUTY OF BUSINESS IS TO SURVIVE AND THE GUIDING PRINCIPAL OF BUSINESS ECONOMICS IS NOT THE MAXIMIZATION OF PROFIT BUT THE AVOIDANCE OF LOSS TO PEOPLE, PROPERTY, PROFIT, PROCESS, PRODUCTS, MATERIALS, ENVIRONMENT AND THE COMMUNITY THEY EXIST WITHIN…”

• ©Dominic J. Brignola F.A/C.F.E., A.S.A

WHY ?

• Uncontrolled loss is turning into damage to facilities and other property.

WHY ?

• Uncontrolled loss is turning into occupational incidents and accidents.

WHY ?

• Uncontrolled loss is turning into a major loss of profit from the business.

WHY ?

• To take care of the workplaces, showing employees and clients that you are improving continously;

• To reduce loss and undesired expenses with loss;

• To prevent occupational incidents and accidents;

• To involve workers ;

• To involve management;

• To involve third parties;

How much means loss ?

• The total costs should include minimally :– The replacement value of all equipment and

property damaged or lost

– Total claims expenditures, including legal expenditures;

– The costs of loss prevention and control measures;

– The costs of insurance premiums;

– Lost productivity;

– Administrative and overhead

costs.

So, Loss affects:

• Business;

• Processes and activities;

• People;

• Properties;

• Products or services resulted;

• Environment;

• The surrounding community;

Followed objectives for loss control:

– Minimize exposures to financial losses

– Protect physical assets

– Reduce the frequency and severity of accidents

– Provide a safe environment for employees and the public

– Minimize interruptions of services provided to the public.

– Empower the employees together with the employers;

– Make them accountable;

Loss control will prevent the damage of the property inside the facilities

Loss control will end the ”let it function anyway” situations

Loss control will end the ”let it function anyway” situations

Loss control will prevent de damage of facilities

Loss control could prevent significant incidents and accidents

Loss control could prevent significant incidents and accidents

Loss can be controled

• 1. In the best cases- the loss sources can be eliminated- so a specific loss (not all) can also be eliminated.

• 2. With the necessary resources loss can be minimized- if there is no possibility to eliminate it. However, it must be seen if the costs to minimize loss are not owerhelming the value of loss by itself.

Loss can be controled

• 3. The real best thing regarding loss is to control it. Losses can be controled and keept below a reasonable threshold. Loss control implies understanding, commitment and cooperation.

Loss can be controledGeneric schema for loss control

Loss can be controled in order to:

• IMPROVE EFFICIENCY;• KEEP BUDGET ON TRACK;• MAINTAIN PROFITABILITY;• MAINTAIN MARKET SHARE;• PREVENT ACCIDENTS;• PREVENT INCIDENTS;• REDUCE DOWN TIME;• IMPROVE MORALE;• REDUCE DAMAGE;

Loss should be controled

• Loss control is essentially a pro-active move.

MAIN PLAYERS IN LOSS

CONTROL

WORKPLACEOperatorTechniqueOrganisation

Workplace

• Typical workplace:

– A lot of loss

– No incidents/accidents or few

Incidents/accidents;

Workplace

• Loss is a common thing at the workplace;

• Accidents are punished by the corporate culture;

• Loss is generally accepted as long as it is not passing over a certain threshold;

Workplace

• Loss affects:

– Primary components and sub-products used in the production process- by over-consume, under-consume and then not retrieving and using the remains, deterioration under the environmnetal conditions, etc.

Workplace

• Loss affects:

– Tools that are used in the process;

– Machines that are used in the process (unusual damage of the machine could be also considered as a loss result).

– Time, quality and productivity

Operators (Human Operators)

• From day one employees (operators) should be commited to the loss reduction objective. This comittment is generally done by:

– The training received by the operator in order to perform at the workplace;

– The example given by the others employees at the workplace;

– Supervision and control done by the line management;

Operators (Human Operators)

• From day one employees (operators) should be involved in attaining the loss reduction objective. They should uderstand that:

– -loss control could simplify their work;

– Loss control would reduce risks regarding their health and well being at work;

– A job well done implies loss control;

Technique

• Machines at the workplace should be designed so to eliminate/minimize loss;

• All the technique should be properly checked before the work so that no defective machines are started;

• There should be complete and regular maintenance processes;

• The employees should know their tools

Organisation

• A better organisation at the workplace would mean a better loss control.

• Organisation should focus on the way consumables are stored towards the processing and also on the way finite products are stored for deliverance.

Related causes

• Experience shows that most accidents involve

substandard behaviour (practices, condition and a organization). And these are

only the seen part.

Behind there are the basic causes

that are connected with the

organisational culture and the general

image about the enterprise.

Model *

THE RISKS AND THE CAUSES OF ACCIDENTS

Main loss causes

• Risks in relationships with the O-T-O triad (Operator- Technique- Organisation).

Main loss causes

• Operator

– Insufficient or incomplete training;

– Dangerous behavior;

– Lack of involvement, lack of commitment;

– Inexistent best practice procedures;

– Lack of optimal experience;

Operator related factors

• Capability (Physical, Physiological, Mental and Psychological);

• Stress (Physical, Physiological, Mental and Psychological);

• Knowledge;

• Skill;

• Motivation;

Main loss causes

• Technique

– Old machines;

– Machines without proper maintenance;

– Machines with wrong processing regimes;

– Lack of control;

Technique related factors

• Engineering

• Purchasing

• Maintenance

• Inspection

• Tools and Equipment

• Excessive Wear and Tear

• Technical Hazard Analyze Process

Main loss causes

• Organization

– Lack of involvement concerning loss;

– Lack of involvement (at the managerial level) concerning loss;

– Lack of information (similar organisations) concerning loss;

– Improper organisational training and culture;

Organization related factors

• Leadership• Safety System• Contract Review• Document Control• Procedures/Instructions/Standards• Control of Undesired Events• Human Resources Management• Accident Analysis System• Technical Information System

Loss root causes

• Lack of involvementNot interested (it is not mine)Lack of proper trainingHazardous behaviourLoss

• Lack of resourcesNot significant problemNot important problem

Loss causes

• Raw materials and products (toxic products, combustibles, explosives, radioactive components, …)that are entering into an unwanted contact or ar degraded by unproper handling;

• Energies (electricity, steam, thermal fluids, pressurevessels, kinetic energy, …) that are out of control

• Undesired or dangerous behaviour at work (strikes, absenteeism, vandalism, alcoholism, theft, …)

• Things that are out of control and are leading towards unexpected events at the workplace;

Loss causes

• There is a right (standard) way of doing things, right (standard) physical conditions and a right(standard) organization of the workplace, so that the work can be done without problems or undesired events – other than the ‘accepted’ ones.

Loss causes

• Traditionally the substandard behavior identified was the behavior of those who where directly involved in the coming intobeing of the undesired event. This was - in case of an injury -most of the times the victim.

SUBSTANDARD ACTIONS THAT ARE LEADING TO LOSS

• 1.OPERATING EQUIPMENT WITHOUT AUTHORITY

• 2. FAILURE TO WARN

• 3. FAILURE TO SECURE

• 4. OPERATING AT IMPROPER SPEED

• 5. MAKING SAFETY DEVICES INOPERATIVE

• 6. USING DEFECTIVE EQUIPMENT


• 7.USING (SAFE) EQUIPMENT IMPROPERLY

• 8. FAILING TO USE PPE PROPERLY

• 9. IMPROPER LOADING AND PLACEMENT

• 10. IMPROPER LIFTING

• 11. IMPROPER POSITION FOR TASK


• 12. SERVICING EQUIPMENT IN OPERATION

• 13. NOT RECOGNIZING OR IMPROPER ASSESSMENT OF A RISK

• 14. HORSEPLAY

• 15. UNDER INFLUENCE OF ALCOHOL AND/OR OTHER DRUGS

SUBSTANDARD TECHNICAL CONDITIONS LEADING TO LOSS

• 1.INADEQUATE GUARDS OR BARRIERS

• 2. INADEQUATE OR IMPROPER PERSONAL PROTECTIVE EQUIPMENT

• 3. INADEQUATE OR IMPROPER COLLECTIVE PROTECTIVE EQUIPMENT

• 4. DEFECTIVE TOOLS, EQUIPMENT OR MATERIALS


• 5.INADEQUATE ERGONOMIC ASPECTS OF THE WORKPLACE (lay-out)

• 6. INADEQUATE WARNING SYSTEM

• 7. POOR HOUSEKEEPING DISORDER (piles of materials, housekeeping,...)

• 8. USED MATERIALS (chemicals)

• 9. FIRE AND EXPLOSION HAZARDS

• 10. NOISE EXPOSURE


• 11.RADIATION EXPOSURE

• 12. TEMPERATURE, MOISTURE EXTREMES

• 13. INADEQUATE OR EXCESS ILLUMINATION

• 14. INADEQUATE VENTILATION

• 15. HAZARDOUS ENVIRONMENTAL CONDITIONS (gasses, fumes, dust, smoke, ...)

SUBSTANDARD ORGANIZATION LEADING TO LOSS

• 1.LACK OF REFERENCE MANUAL ON THE WORKPLACE

• 2. INCOMPLETE PROCEDURES, INSTRUCTIONS, STANDARDS (P.I.S.)

• 3. INCORRECT P.I.S. (contradictions, inadequate sequence of steps,...)

• 4. LACK OF CORRECT RULES AND REGULATIONS


• 5.LACK OF VISIBLE PRESENCE OF SUPERVISION

• 6. SUBSTANDARD CONTROL OF WORKPLACE (measurement, evaluation and support of P.I.S.)

• 7. PLANNED INSPECTIONS NOT EXECUTED ACCORDING STANDARDS

• 8. TASK ANALYSIS AND PROCEDURES NOT EXECUTED ACCORDING STANDARDS

• 9. ACCIDENT/INCIDENT ANALYSIS NOT EXECUTED ACCORDING STANDARDS


• 10.IMPROPER CONTROL OF COMPLIANCE OF AGREEMENTS

• 11. LACK OF MOTIVATION/COACHING BY MANAGEMENT

• 12. PERSONAL PROTECTIVE EQUIPMENT NOT

• AVAILABLE

• 13. COLLECTIVE PROTECTIVE EQUIPMENT NOT

• AVAILABLE

• 14. CORRECT EQUIPMENT NOT AVAILABLE

SUBSTANDARD ATTRIBUTES

• Those three are interconnected. A substandard behavior, dismounting the machine protection cover, can lead to another substandard behavior: working at a non-protected machine.

ENERGY TRANSFERS THAT COULD LEAD TO LOSS

• Struck against (running or bumping into)

• Struck by (hit by moving object)

• Caught in (pinch and nip points)

• Fall to same or lower level (slip and fall, tip over)

• Contact with (electricity, heat, cold, radiation, caustics, toxic, noise)

• Overstress/overexertion/overload

Re-active aspects- Operator

• Reporting of accidents

• Adequate reaction of people at the moment of the accident

• Quality of the rescue operations and first aid

• Adequate use of the equipment and resources

• Adequate transportation of the injured

• Human aspects of the medical treatment

• Rehabilitation of the injured

Re-active aspects Technique

• Quality of the equipment and tools

• Distance between the scene of the accident and the First Aid Room

• Speed of the reaction

• Technical quality of the medical treatment

• Functioning of the technical safety devices in order to minimize losses

• Repair and replacement of the damaged equipment and other property damage

Re-active aspects Organization

• Internal Communication Plan

• External Communication Plan

• Rescue Plan

• Medical Service Plan

• Procedure Restricted Work, adapted work

• Insurance’s

Loss Control

Operator

Technique

Organization

Loss Control

• REQUIRES WELL THOUGHTOUT PLANNING• Needs EFFECTIVE BUDGETING,ACCOUNTABILITY AND

RESPONSIBILITY• Involves performant ORGANIZATIONAL

DEVELOPMENT,LEADING AND COORDINATION• Implies ORIENTATION, COMMUNICATION, TRAINING• Implies CONTROLING OPERATIONAL SUCCESS

THROUGH DEVELOPING OBJECTIVES• Implies GOAL SETTING • PLANNED, SCHEDULED AND FOCUSED AUDITING OF

CAPABILITIES TO HANDLE LOSS CONTROL

Steps

Loss evidence

Loss evidence

• There must be evidenced:

– Any loss that is out of the normal process;

– Any loss that is significant (depending on the process there could be considered loss tolerances);

Loss model

Loss control system

• An effective loss control system includes:– the establishment of a an effective loss control

policy;

– assignment of responsibilities;

– ongoing review of claims data, periodic loss;

– control audits and inspections;

– accident reporting ,communication and investigation

– development and regular review of emergency and contingency plans

A MINIMAL PLAN FOR A LOSS CONTROL PROGRAM

• A. MANAGEMENT STATEMENT• B. GENERAL REQUIREMENTS

– Place of loss control into company policy;– Procedures;

• C. LOSS CONTROL CONSULTANTS/FIELD REPRESENTATIVES

• D. LOSS CONTROL SURVEYS/CONSULTATIONS• E. RECOMMENDATIONS• F. SAFETY TRAINING• G. ACCIDENT/CLAIMS ANALYSIS


• A. MANAGEMENT STATEMENT

Just as you would expect your

policyholders to have a management

committed to loss control and the

company's safety program, we expect to have a management statement and commitment to provide loss control information/services to its policyholders. This statement should be directive in nature.


• B. GENERAL REQUIREMENTS

-Position of loss control into

the company's organizational structure;

-Support provided by loss control

to regional offices, branch offices or field representatives, i.e., technical bulletins, loss control brochures, safety/loss control posters, training videos, analytical support, etc.



-Position of loss control into

the company's organizational structure;

-Support provided by loss control

to regional offices, branch offices or field representatives, i.e., technical bulletins, loss control brochures, safety/loss control posters, training videos, analytical support, etc.



-Someone from the management still

has to be in charge of loss control.

Who is this person, and what are his duties regarding loss control? A written document enouncing these aspects would be usefull for the company.


• B. GENERAL REQUIREMENTSProcedures

-Employees should be made aware

on the loss control data and procedures

developed specially for this purpose.

-Requests regarding loss control should be recorded, analyzed and transformed into best practice procedures. If this is not possible- these requests should be available for various inquiries and further developments.



Procedures

-Need for Loss Control, based upon existing

risks, exposures, loss experience and

other considerations should be determined.

-Need for Loss Control should be discussed with the employees and fine tunned with them and the management so as to keep a proper balance.



Procedures

InvestmentsResults

Effort

Loss Control



Procedures

InvestmentsResults

Effort

Loss Control


• C. LOSS CONTROL CONSULTANTS

– Qualification of loss control experts: how are they trained; what quality control measures are in effect; what provisions have been made for continuing education and professional development?

– If there are third party companies used how are the qualifications of their loss control servicing personnel verified ?


• C. LOSS CONTROL CONSULTANTS/FIELD REPRESENTATIVES

– What is the nature/scope of the service expected to be performed by the contractor loss control field personnel?

– What quality control measures are in effective over contractor work?


• LOSS CONTROL SURVEYS/ AUDITS/ CONSULTATIONS– Loss control audit/survey should involve the nature of

the business, exposures, prior loss experience, Best's hazard index, premium amount or other factors-What is the criteria for a follow-up survey/consultation? Are the same factors taken into consideration as for an initial survey/consultation or do others also supply?

– What is the criteria/determining factors for placing an account on regular, scheduled service?


• LOSS CONTROL SURVEYS/ AUDITS/ CONSULTATIONS– The information that should be followed includes:

• Loss control program development or status.

•• Safety committees and meetings

•• Loss control/safety training.

•• Management controls in place and their effectiveness.

•• Accident analysis, accountability, responsibility.

•• Specific hazard exposures and unsafe work procedures.

•• Additional loss control services to be provided by your company.


• E.RECOMANDATIONS

– All the recomandations should be presented in writing so as to act as a reference document;

ISSUES FOR A LOSS CONTROL PROGRAM

• A Loss Control Program should contain:– Declaration of management policy and leadership.– Assignment of responsibility, authority, and

accountability.– Maintenance of safe working conditions.– Establishment of loss control training.– Establishment of a system for significant loss/damage

reporting and investigation before incident and accident reporting.

– Creation of medical and first aid programs.– Employees’ acceptance of personal accountability for

their own and others’ safety.

Management

• Management has to create its Loss Control System and the standards of it. Management not only plans and organizes the work to be done to meet those standards, it also evaluates results and needs, commends and corrects performance. This is the essence of Management Control.

Management

• Management should incorporate these basic elements into a formal written loss control program.

• The program should address both general and department specific issues and should be broadenough to include worker safety as well as other important areas, such as:– Completed operations (the services you provide or

functions you fulfill)– Vehicles– Equipment– Property– The general public

Management

• Management can implement the loss control program by taking the following steps:– Developing and communicating to employees the organization’s

safety and loss prevention policy.– Conducting regular inspections to identify potential hazards on

all physical properties, vehicles, and operations.– Developing and applying safety standards and procedures for all

departments and facilities.– Educating and training employees on general loss control and

safe work procedures.– Reviewing accidents to determine causes and to formulate

measures to prevent recurrences.– Establishing effective means to measure employee performance

in the area of safety and to correct deficiencies.

Management

• This means too that management is responsible of continual improving of the Loss Control System by adding system activities and by specifying adapted standards or criteria.

• Adequate standards are essential for adequate control. Lack of compliance to those standards is a common reason for lack of control.

• Developing an adequate Loss Control System and standards is an executive function, aided by supervisors. Maintaining compliance with those standards is a supervisory function, aided by executives.

Management

• Loss Control managerial actions are most effective when focused at the point where planned objectives and goal tasks/responsibilities/account-abilities are being performed…

Management

• PLOAC– Plan for, Lead, Organize, Analyze and Control the

Risk Potential within each hazard and exposure regarding people, property, process, material, product, equipment, in the environment and community they operate and exist within

Method for Loss Control

• We have developed a method that does:

– Evidence the loss at the workplace, considering:

• Materials;

• Lost time;

• Organizational and managerial problems that are affecting loss;



– Develop a model for specific loss at the workplace, considering all the main attributes together with the loss action mechanism;

– Assess the loss considering the daily turnover of the workplace/facility/enterprise: we are considering:

• Serious loss- that should be immediately stopped;

• Significant loss – that should be taken care of;

• Moderate loss- that should be monitorized;

• Not significant loss;



– Evaluate the capability to control loss inside the enterprise/facility or workplace;

– Give specific solutions for the loss control plan and its implementation;

Thanks,

Further details and the developed method could be obtained by request at [email protected]