The relationship between business process efficiencies and safety can be quite marked.  A key component of business process efficiency is elimination of waste, which is often in the form of motion that creates ergonomic stress.  Elimination or reduction of these forms of waste eliminates or minimizes the potential for costly injuries.  Work related back strain is one such significant and costly efficiency related risk¹:”The average back injury (sprain/strain) can cost more than $10,000 in direct costs (NSC Statistics) and anywhere from $30,000 up to $100,000 in indirect costs.” (Text box pg. 2)                                    

 A second significant risk that is among the highest costs of all injuries or illness is carpal tunnel syndrome (CTS) ² resulting from repetitive motion waste.  Washington State Department of Labor and Industries (2009, pgs. 3-4)³ describes sources of CTS risk as follows:

Work-related CTS is most often associated with activities requiring extensive, forceful, repeated, or prolonged use of the hands and wrists, particularly if these potential risk factors are present in combination (e.g., force and repetition or force and posture). Usually, one or more of the following work conditions occurs on a regular basis to support work-relatedness:

1. Forceful use, particularly if repeated

2. Repetitive hand use combined with some element of force, especially for prolonged periods

3. Constant firm gripping of objects

4. Moving or using the hand and wrist against resistance or with

force

5. Exposing the hand and wrist to strong regular vibrations

6. Regular or intermittent pressure on the wrist 

Prevent Costly Workplace Injuries – Call or email Business Efficiency Consulting to schedule a review of your business efficiencies!

¹Gagne, R. (2011). What Does a Workplace Injury Cost? Direct Versus Indirect Costs and Their Affect to the Bottom Line. Fit2WRK.  Retrieved from: http://www.fit2wrk.com/clinics/fit2wrk/_forms/ARTICLE_Fit2wrk_ClinicalEd_vol1-16.pdf

²Sharp. Economic Burden of Carpal Tunnel Syndrome. Washington State Department of Labor and Industries. Retrieved from: http://www.lni.wa.gov/Safety/Research/OccHealth/Reports/CtsBurden/default.asp

³Franklin, G., Jvaher, S., Kearney, R.  (2009). Medical Treatment Guidelines. Washington State Department of Labor and Industries. Retrieved from:  http://www.lni.wa.gov/ClaimsIns/Files/OMD/CTSGuidelineFINAL.pdf

One might ask:

Why is Business Efficiency Consulting concerned with

Business Continuity Planning?

The short answer is that Business Continuity Planning is Business Efficiency at the Survival Level.  The Insurance Information Institute¹ cites surveys noting that:

• Less than a third (31 percent) of business owners said their businesses are “extremely” or “very prepared” for disasters
• Over half (54 percent) indicated they were not concerned about a disaster impacting their business
• Only 37 percent of business owners surveyed said they had a defined and practiced emergency plan at work
• As many as 40 percent of small businesses hit directly by a serious natural disaster perish

Given the importance of preparing a Business Continuity Plan for an external threat event, it is recommended to use an All Hazards Approach as defined by NFPA 1600 (National Fire Protection Association).  FEMA² has posted an excellent site to assist businesses prepare their programs.  This site notes the following key elements for a plan:

• Program Management
  • Organize, develop and administer your preparedness program
  • Identify regulations that establish minimum requirements for your program
• Planning
  • Gather information about hazards and assess risks
  • Conduct a business impact analysis (BIA)
  • Examine ways to prevent hazards and reduce risks
• Implementation
  Write a preparedness plan addressing:
  • Resource management
  • Emergency response
  • Crisis communications
  • Business continuity
  • Information technology
  • Employee assistance
  • Incident management
  • Training
• Testing and Exercises
  • Test and evaluate your plan
  • Define different types of exercises
  • Learn how to conduct exercises
  • Use exercise results to evaluate the effectiveness of the plan
• Program Improvement
  • Identify when the preparedness program needs to be reviewed
  • Discover methods to evaluate the preparedness program
  • Utilize the review to make necessary changes and plan improvements

For Assistance in preparing and/or testing your program, call Business Efficiency Consulting! (NIBCM CCM Certification No. 20130120-01).

Sources:

¹Insurance Information Institute, retrieved from: http://www2.iii.org/small-business-guide/risk-management/disaster-response-and-recovery-planning.html

²FEMA, retrieved from:  http://www.ready.gov/business

I recently encountered a situation that is not so uncommon when implementing lean.  Working with a client, we found some quickly implementable process changes that resulted in a 60% increase in capacity (production rate).  Since the company was meeting current demand with only slight constraints during infrequent peak demand periods (one employee would come in on a weekend to meet the excess demand requirement), the question was posed – what is the value of improving efficiencies in excess of demand?

Three possible alternatives quickly come to mind:

1)      An obvious solution that I do not think advisable is to reduce total costs by eliminating staff based on the newly decreased labor requirement.  This tempting solution is not advisable since lean implementation is an ongoing process.  Once employees see that implementation of lean results in lost jobs, implementation becomes difficult, if at all possible.  With potential risk of job loss in future lean implementation, employees have incentive to passively or aggressively sabotage ongoing efforts.

2)      Reallocate labor if employee capacity can be diverted to other areas that may be capacity constrained.  The reduction of labor cost in the impacted product (or a percentage of the decrease in labor cost for that product) can be passed on to the consumer; raising barriers to entry for potential new competition and improving your competitive position relative to current competitors, thereby improving your competitive edge in the marketplace potentially creating increased demand which your newly increased capacity can meet.

3)      My preferred recommendation (perhaps in conjunction with Item 2) is to utilize the freed up labor capacity to continue your process improvement objectives:  improvement in quality; improvement in capacity; improvement in safety; improvement in design; cross training to improve labor skill sets and build redundancy into your system for business continuity planning; exploration of new products and markets.  This may require additional training and changing skill sets for employees, but what a great way to increase the quality of your labor force using the gains from your lean implementation.  Bringing your employees into the process, improving theirs skill sets, and empowering them to help make positive change can only lead to a stronger presence in the marketplace.

The final thought — use your gains in efficiency wisely and reinvest in your continued improvement.

Technical competence does not necessarily translate to good management skills. The importance of selecting, promoting, and training good management staff cannot be overstated, as highlighted by the following true story:

A young factory production worker with a number of years’ experience felt he had been slighted by management.  Though he was responsible for a growing family, he became a poor performing worker — management was looking for a reason to terminate his employment.  One day, right before lunch, a supervisor from a different department talked to the individual about his attitude.  Because of this brief 15 minute conversation with a “good” manager: 1) The young employee went from being a poor performer before lunch to being a top producer after lunch (capability was not the problem, attitude was); 2) Within 3 years he was reporting directly to the owner of the company; and 3) The company paid for his MBA and reaped the rewards of having a technically competent, company vested employee for many years.

In this case, a supervisor with poor management skills created an environment resulting in a poor performance attitude, while a supervisor with good management skills turned that attitude into top performance and years of increased benefit for the company.  Following is a list of characteristics to look for when selecting managers:

• Can think strategically, engage in flexible problem solving, and work effectively with higher management.
• Has perseverance and focus in the face of obstacles.
• Quickly masters new technical and business knowledge.
• Knows how to build and maintain working relationships with coworkers and external parties.
• Delegates to subordinates effectively, broadens their opportunities, and acts with fairness toward them.
• Shows genuine interest in others and sensitivity to subordinates’ needs.
• Is honorable and steadfast.
• Provides a challenging climate to encourage subordinates’ development.
• Acts decisively and fairly when dealing with problem subordinates.
• Accomplishes tasks through managing others.
• Balances work priorities with personal life so that neither is neglected.
• Prefers quick and approximate actions to slow and precise ones in many management situations.
• Has an accurate picture of strengths and weaknesses and is willing to improve.
• Hires talented people for his/her team.
• Displays warmth and a good sense of humor.
• Can behave in ways that are often seen as opposites.

Characteristics selected from:  C. D. McCauley, M. M. Lombardo, and C. J. Usher. (1989). Diagnosing Management Development Needs: An Instrument Based on How Managers Develop, Journal of Management, 15(3), 389–403.

Observing change in cultural perspective over a short period of time is exciting.  Watching employees transition from a feeling of helplessness, battling a system over which they have no control, to one of hope and participation, imbuing the business with a source of energy and unlimited suggestions for improvement is a rewarding experience.  An organization is like an organism, a living breathing entity.  If the employees are the heart of the company, the culture is the life force.   Let employees participate, give them hope, and take action to maintain that energy and reap the rewards.

This research tests for correlation between corporate performance and use of financial measures, nonfinancial measures, and number of balanced scorecard categories used. Literature notes a preference for managing by nonfinancial measures because financial measures are lagging indicators, but little empirical evidence is available on the relationship between nonfinancial measures and financial performance, and few companies are found to realize the benefits of nonfinancial measurements. The balanced scorecard has been studied to find the impact of diversity of performance measures, and anecdotal improvements have been reported, but there is a paucity of empirical evidence regarding how the use of a balanced scorecard impacts organizational performance.

These issues are investigated in this research with a web based survey distributed to a sample of publicly traded companies using a systematic selection process based on randomly selected numbers generated for each 3-digit NAICS category. The dependent variable is a rank of high, medium or low performance based on 12-month rolling average stock price comparisons from January 2005 to January 2009. These averages are analyzed as a percent change for each company, with performance standardized by 3-digit NAICS category to eliminate cross industry variance in performance ranking. Kruskal-Wallis one-way ANOVA is used to test for correlation.

High performers show greatest utilization of both financial and nonfinancial measures, followed by medium performers, with low performers utilizing both measures the least. Nonfinancial performance measures are more correlated to firm value than financial measures with the high performers’ mean score for nonfinancial measures being higher than for financial measures. By contrast, medium and low performers exhibit the opposite: higher mean scores for financial measures than for nonfinancial measures [p ≤ 0.05 for nonfinancial measures and p ≤ 0.1 for financial measures]. Correlation is found to be borderline significant (p = 0.06) for the number of balanced scorecard categories used with high performers utilizing the highest number of categories and low performers utilizing the lowest number of categories [p = 0.009 with inclusion of two respondents reporting no usage of balanced scorecard categories].

Fowke, R. A. (2011). Performance Measures for Managerial Decision Making: Performance Measurement Synergies in Multi-Attribute Performance Measurement Systems. (Doctoral dissertation, Portland State University, 2010). ProQuest CSA, LLC., Ann Arbor.