Business Insurance

Seeing risk differently to make manufacturers stronger

By Brian Roberts, CSP, CIE, RRE, Director of Risk Control, CNA


Manufacturer Risk

The manufacturing industry has changed, while to some it conjures visions of dirty shop floors, physically taxing manual work and low pay. In reality, the manufacturing industry today could not be more different.

Manufacturing increasingly utilizes sophisticated computer technology, demanding technical skills and requiring specialized knowledge. Many manufacturing jobs today provide high pay and benefits, across a broad spectrum of company sizes and geographies. A challenge for most industries, and especially manufacturing, is finding skilled workers.

It may surprise some people to learn that manufacturing today is much less risky for workers than it used to be. As manufacturers adopt state-of-the-art equipment that increases automation and reduces manual handling, the risk of injury is dropping dramatically.

Workplace injuries, property loss and litigation are not the only risks that manufacturers face. Unnecessary and redundant tasks, such as excessive bending, reaching and walking to retrieve tools or materials, can increase injury risk factors, impair productivity and decrease quality – all of which hurt manufacturers’ businesses. Such motions add up (see sidebar).

Motion equals money

To understand how time and expense from simple but unnecessary tasks can mount, consider that it takes approximately three seconds for a worker to bend over and pick up material from the floor or a four-inch-high pallet. The average distribution worker will bend over tens of thousands of times a year. In a typical manufacturing operation with 50 employees, working 260 days a year at an average loaded rate of $20 per hour (meaning base salary plus benefits and other fixed costs), 40,000 bends translates into 33.33 hours of bending each year for each employee. Multiplying 33.33 hours by 50 employees equals 1,667 hours. At the loaded rate of $20, just the act of bending costs the manufacturer $33,340.

Motion is Money®, a workflow process program that CNA has used for more than 20 years with its manufacturing customers, examines the relationship between employees and how they interact with materials, parts, tools and equipment. Most ergonomic solutions stop with addressing risk factors. CNA probes further to understanding the interface of the employee with a tool, material, part or equipment. This approach leads to solutions that impact human motion, workflow and improve productivity, efficiency and bottom-line profitability of a manufacturing company.

Consider just a few examples of how this approach has made a difference, not just for manufacturing companies but also the communities they serve:

  • A wire manufacturer had a production bottleneck related to its reuse of the spools and bobbins that hold wire of different gauges. Sorting and cleaning the spools and bobbins was requiring 12 employees working three different shifts – resources that could be shifted to more productive work. CNA came up with a unique idea to eliminate the bottleneck.

    This allowed the company to train nine individuals in spool sorting and cleaning, under a state program that encourages employers to provide jobs to people with developmental disabilities and pays their wages. This solution saved the manufacturer 5,000 hours of employee time and generated $432,000 in annual financial benefits, while giving the disabled an opportunity to perform productive work. Many jobs in manufacturing settings can be safely and effectively done by people with developmental disabilities.

  • One manufacturing facility was experiencing 125% turnover in three jobs. The manufacturer was constantly spending money to recruit, replace and train new employees to perform those jobs. CNA’s specialists analyzed the situation and found a way to reduce turnover to 14%, which equated to a savings of $415,000 on the three jobs alone.

    But the benefits didn’t stop there. Changes that improved turnover also enabled the manufacturer to nearly double production to 3,000 units per day from 1,700. CNA conducted about 140 projects for the manufacturer, and the five largest saved the manufacturer $1.3 million in a single year. Afterward, the plant manager told CNA, “We really appreciate what you’ve done. The owner was intending to shut the plant down, but you saved it.”

  • Workflow process analysis also can make manufacturers more competitive by identifying new ways to accomplish tasks. For example, one company fulfilling a metalworking contract was paid $3 per pound, but the job itself cost $6 per pound. CNA specialists found that 10 workers doing metal grinding after laser cutting were costing the manufacturer $890,000 per year. It turned out that the grinding was necessary because the laser cutter was not allowing the metal to cool. Switching to a different laser cutter eliminated the need for excess grinding, which saved $514,000 a year. The overall cost per pound not only dropped dramatically; profit increased by 30%. Total savings exceeded $1.3 million.

  • Another manufacturer employed two people working eight-hour shifts to manually load bags onto pallets. CNA specialists recommended using a lift table, so that one person could perform the manual work. That translated into a savings of 693 hours per year, or nearly $28,000. There also is an opportunity cost in workflow process improvement. The manufacturer did not lay off the second worker but transitioned him to another area, which saved an additional $10,000. A $3,000 investment saved the company $37,000.

The savings of time and money from examining manufacturing settings’ workflows are substantial, with the added benefit of reduced risk factors. Creating a safer, more productive and more profitable workplace has a positive impact on all concerned: the manufacturer, its employees, its customers, business partners and community. That’s truly a winning idea.

 
Wearable Technology
Brian Roberts
 

Brian Roberts is National Director, Manufacturing and Ergonomic Services, at CNA Risk Control Services. His major areas of responsibility are the development, direction and guidance of the Manufacturing and Ergonomic processes of CNA Risk Control.