How Increasing Safety Standards Actually Reduces Operating Cost

In a challenge to conventional wisdom that increasing safety adds cost, new research and evidence reveals the opposite.

In a recent survey conducted by Aberdeen Group, best-in-class companies created a safer working environment for their employees, and in doing so were able to gain a competitive edge in the marketplace by improving productivity and achieving higher operational efficiencies.

Separately, IMS Research reported that global revenues for discrete machine safety components would increase by more than 43 percent between 2010 and 2015, exceeding $2.5 billion in 2015, up from $1.5 billion.1 Changes in machine safety laws are one reason the analyst cited for the growth, but also that end users increasingly see machine safety as a way to increase productivity, rather than being a cost.

Tallying Revenues, Not Costs

Companies that implement safety functions, perform functional safety evaluations, and implement safety in manufacturing processes are finding benefits where few expected to—on the bottom line. Where companies once saw up-front costs, downstream revenues are being tallied.

According to Aberdeen, best-in-class manufacturers were able to effectively manage safety incidents by realizing a 0.05 injury frequency rate while performing at a 90 percent overall equipment effectiveness (OEE). These manufacturers were also able to achieve a 2 percent unscheduled asset downtime rate while their peers experienced a 14 percent rate.2 Such advantages ultimately accrue to the bottom line.

“When safety equipment is put into place, it increases the potential for manufacturing processes to change in a more efficient and effective way,” says Anura Fernando, research engineer, predictive modeling and risk analysis, at UL.

For example, if you have the potential for greater human interaction with the automated equipment, you can improve productivity. Consider the need to supply parts to a robot. The robot is picking parts from two locations to populate a product on a production line. Currently, without safety systems in place, if one of those two batches of parts were to run out, the robot would need to be completely turned off for a human to enter and restock that part supply. With safety requirements such as “safely-limited speed” and other ones that allow for closer human/machine interaction, the robot can continue operation from the remaining batch of parts while the empty batch is replenished.

Additionally, when downtime and maintenance issues are looked at from a safety perspective, in terms of safety-related reliability, things may be put in place that decrease the system downtime from a production perspective. “An example of this is the calculations that are done to support how often the equipment needs to be tested to ensure certain failure rates can be factored into the equipment from a productivity perspective as well as a safety perspective,” says Fernando.

The IMS report echoes Fernando’s point: if suppliers can provide safety components that can be easily integrated with control components, then overall system performance will increase. Machine safety should be marketed as a benefit because operators are protected from hazards and machine downtime is minimized.

Sometimes the results from a simple change are remarkable: by installing a new safety system in its body shop, Kia Motors (Slovakia) was able to cut downtime and increase productivity dramatically.3 A safety system with safety-related programmable controllers and a network, instead of traditional safety relays, helped create lean, quick, adaptable manufacturing processes to help keep operators safe. The ability to identify failures and solve problems quickly has increased productivity by reducing up to 70 percent of the safety breakdown time.

The Power of the Mark

The dual nature of UL’s Functional Safety Mark can be a key contributor for those companies leveraging top-end safety for bottom-line benefits. “The mark covers both traditional fire and shock assessment as well as functional safety requirements,” says Thomas Maier, principal engineer, functional safety, at UL.

“From the installation and commissioning perspective of a factory, that aspect of the mark allows the organization to get through the AHJ (Authority Having Jurisdiction) inspection faster and more cost efficiently. From the traditional perspective of equipment installation, the mark speeds the process of getting assets up and running by addressing safety issues related to the equipment.” The functional safety aspects are layered on top of this.

Many plants have not only loss prevention issues to consider but also things like union requirements for safety of workers. The UL Functional Safety Mark provides a quick means of verifying that a third party has been involved in ensuring that these requirements have been met. The mark itself can be used to minimize the time necessary to evaluate the equipment, system design, and so on in detail.

“Another reason it makes sense to have third-party evaluation of safety relates to the nature of the process,” continues Maier. “To think about safety and to design safety into your systems means to go about things in a different way. You have to think about what can go wrong, what can fail, and so on. You have to ask “what if…?”, and “could it ever happen that…?” in a systematic way, applying techniques such as FMEA (Failure Modes Effects Analysis) and FTA (Fault Tree Analysis). In its essence, it is about assuming a kind of ‘negative view’ on these systems that you have built. This is why it is important to have an independent third party to help you do this—and to make sure that the safety thoughts are present throughout the whole life cycle of system design and machine design. That’s the role of UL. Basically, it is also what the UL Functional Safety Mark represents: that safety, and functional safety, has been thought about from the very start of system development.”

Final Considerations

Two other financial benefits of implementing safety standards should be mentioned. First and most importantly, is that safety compliance opens up markets or keeps them open. Manufacturers can use data used to attain the UL Functional Safety Mark to support their case for compliance with the EU’s Machinery Directive. EN/ISO 13849-1 (“Safety of machinery – Safety-related parts of control systems – Part 1 General principles for design”) has been harmonized under the EU Machinery Directive as the successor to EN 954-1. The deadline for compliance with EN/ISO 13849-1 is December 31, 2011, and those who fail to meet the new requirements will have the European market effectively closed to them.

Second, insurance companies are inclined to look favorably on enterprises that have implemented safety products and processes, and may lower premiums or discount rates accordingly.

“I’ve worked with manufacturers under the ATEX directive, where employers that implement gas detection equipment for ships’ hold workers receive reduced workers’ compensation insurance premiums,” notes Fernando. (The ATEX directive consists of two EU directives describing what equipment and work environment is allowed in an environment with an explosive atmosphere. ATEX derives its name from the French title of the 94/9/EC directive: Appareils destinés à être utilisés en atmosphères explosibles). The employers used handheld gas detectors that were evaluated for functional safety as part of their ATEX certification.”

For further information on how safety can have a positive impact on your bottom line, please contact Kevin Connelly at UL: call 631-546-2691 or e-mail kevin.connelly@us.ul.com

© 2011 Underwriters Laboratories Inc.  All rights reserved.

NOTES

1.    Hoske, Mark T., “Cover Story: Machine Safety Integration,” Control Engineering, April 12, 2011

2.    Ismail, Nuris and Littlefield, Matthew, “A Roadmap for a Safe and Productive Plant,” December 2010, http://www.automation.com/resources-tools/articles-white-papers/machine-process-safe-guarding/a-roadmap-for-a-safe-and-productive-plant

3.    Hoske, Mark T., ibid

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