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This presentation contains no technical data subject to EAR or ITAR Brian B. Bethel, CIH Sikorsky Aircraft.

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Presentation on theme: "This presentation contains no technical data subject to EAR or ITAR Brian B. Bethel, CIH Sikorsky Aircraft."— Presentation transcript:

1 This presentation contains no technical data subject to EAR or ITAR Brian B. Bethel, CIH Sikorsky Aircraft

2 This presentation contains no technical data subject to EAR or ITAR

3  Management commitment  Employee engagement Making employees agents of change not change responders  Effective risk engineering Recognition Evaluation Control - The SCIENCE - The ART - The TRICK

4 This presentation contains no technical data subject to EAR or ITAR

5  Decisions to move forward with EHS projects are no longer based solely on sound technical judgment Why Are We Here?

6 This presentation contains no technical data subject to EAR or ITAR Our LanguageTheir Language

7 This presentation contains no technical data subject to EAR or ITAR  Decisions to move forward with EHS projects are no longer based solely on sound technical judgment  What do we need to Change? It is time to start thinking more like businessmen and less like scientists

8 This presentation contains no technical data subject to EAR or ITAR

9  A measure used to describe the efficiency of an investment over a set period of time Often 7 or 10 years In may corporations the time frame is 3 years  A tool used to compare the relative efficiency of investment choices

10 This presentation contains no technical data subject to EAR or ITAR  Every organization emphasized their own set of financial metrics  Learn which financial metrics are important in your corporation  Common financial metrics include: Return on Investment Net Present Value Internal Rate of Return (Discounted) Payback Period  Meet with Finance / Cost Accounting / IE

11 This presentation contains no technical data subject to EAR or ITAR  Ratio of money gained to money invested  An ROI of 100% would mean you recovered all the money you invested   An ROI >100% would mean you gained MORE than you spent

12 This presentation contains no technical data subject to EAR or ITAR  Measures how long something takes to "pay for itself"  For example a $1000 investment which returned $500 per year would have a two year payback period  The time value of money is not taken into account  Payback period is widely used because of its ease of use despite recognized limitations

13 This presentation contains no technical data subject to EAR or ITAR  Similar to payback period in that it measures how long something takes to "pay for itself“… BUT:  Takes into account: The time value of money (inflation) The cost to borrow the money to make the investment The loss of income you would have had if you invested in a very secure security (Think T bills)  DPP is a VERY common financial metric

14 This presentation contains no technical data subject to EAR or ITAR  IRR is an indicator of the efficiency, quality and yield of an investment  Used to measure and compare the profitability of investments  An IRR of 100% would mean you recovered all the money you invested   An ROI >100% would mean you gained MORE than you spent  IRR is a VERY common financial metric

15 This presentation contains no technical data subject to EAR or ITAR  NPV compares the value of a dollar today to the value of the same dollar in the future  Takes into account inflation and the increased revenue gained through the investment  Reduced by the financial benefit gained by investing that same money in a stable investment (like T Bills)  Reported in $

16 This presentation contains no technical data subject to EAR or ITAR “Does your boss know those numbers” “Which one of us wouldn’t invest in a 90% payback” “That’s the case you have to make” Jeff Pino President, Sikorsky Aircraft 2008 AIHce - Minneapolis

17 This presentation contains no technical data subject to EAR or ITAR  Learn how to mine cost data Direct costs are important But Indirect & hidden costs usually are the make or break data

18 This presentation contains no technical data subject to EAR or ITAR  Cost that are easily identified Injury costs (work comp loss data) PPE Costs (Procurement) Cost to purchase and install controls Consultant fees On and on

19 This presentation contains no technical data subject to EAR or ITAR  Medical costs Medical Lab fees  Employee time  Medical screening Fit testing Training  IH sampling costs Labor (in house) Lab

20 This presentation contains no technical data subject to EAR or ITAR  Time to administer a program  Time to administer a medical program  Time for supervisors to schedule medical monitoring / training / fit testing  Time of employee covering when employee is undergoing medical screening Often at overtime rates - Hidden costs in spades!!! Cost to operate local exhaust ventilation costs  Power to run the fans  Energy to condition makeup and exhausted air  Labor for housekeeping

21 This presentation contains no technical data subject to EAR or ITAR  Quality & labor improvements? – Cost or benefit Review process with  Industrial engineering  Cost accounting  Quality engineering  Time study data  Monitor material costs  Cost of Poor Quality (COPQ) data  Indirect time charging (DOI)  Rework reduction (quality engineering)

22 This presentation contains no technical data subject to EAR or ITAR  Learn how to calculate the financial metrics that are important to your organization

23 This presentation contains no technical data subject to EAR or ITAR  Incorporate a financial person on your teams Buy them coffee Order them plush “ergonomic” office chairs  ….Go to the internet

24 This presentation contains no technical data subject to EAR or ITAR  Various IH / EHS specific tools are available  ROHSEI – ORC Product  AIHA Value Proposition Tool Or not!  Chances are your organization has a program or a tool to do these calculations for you  Enlist financial or IE resources

25 This presentation contains no technical data subject to EAR or ITAR  Two hearing conservation cases  Why hearing conservation case studies??  Because hearing conservation programs don’t work!

26 This presentation contains no technical data subject to EAR or ITAR

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29  Machine shop environment  Dosimetery Indicates That Exposures Ranged From 84 – 87 dB(A) For A Majority Of The Employees As A Result, This HEP Was Enrolled In The Hearing Conservation Program  Sound Mapping Indicated That Most Point Noise Sources Were < 83 dB(A)

30 This presentation contains no technical data subject to EAR or ITAR DO NOT UNDERESTIMATE THE CONTRIBUTION OF COMPRESSED AIR NOISE TO THE NOISE PROFILE OF A MACHINIST

31 This presentation contains no technical data subject to EAR or ITAR  Substitute low noise air nozzles where possible  Reductions ranged from 8 – 15 dB(A)  Average machinist used compressed air for 8 – 12 min a day  Expect to remove 75 employees from the HCP  Expect an initial investment of $12K for nozzles

32 This presentation contains no technical data subject to EAR or ITAR  $12K Cost Vs  Value

33 This presentation contains no technical data subject to EAR or ITAR  Hearing testing service reduction $1,200  Hearing loss awards At risk of 2 cases @ $25K  Direct cost savings expected - $1.2K  Cost avoidance - $50K  Total savings expected ≈ 52.2K  ?? Why no hearing protection costs savings??

34 This presentation contains no technical data subject to EAR or ITAR  Program administration annual costs savings HCP Program Admin (IH) – 40 Hrs Medical Admin (Medical) – 20 Hrs Supervisors Time – 75 Hrs (1 Hr per employee ) Employee Time – 131.25 Hrs (1.75 Hrs for exam) STS Retests Labor – 9 Hrs  How do we convert hours saved into Dollars???  Simple… multiply by the labor rate… Right?

35 This presentation contains no technical data subject to EAR or ITAR  Hourly Rate That Includes Overhead Costs  Burdened Rate Equals Employee Salary + Cost Of Employee Benefits + Paid Time Off + Insurance Costs + Taxes On Labor + Employees Share Of The Infrastructure Costs Obtain From Your IE Or Cost Accounting Organization Not Uncommon That The Burdened Rate Is 3X Wage

36 This presentation contains no technical data subject to EAR or ITAR  Program administration annual costs savings HCP Program Admin (IH) – 40 Hrs Medical Admin (Medical) – 20 Hrs Supervisors Time – 75 Hrs (1 Hr per employee ) Employee Time – 131.25 Hrs (1.75 Hrs for exam) STS Retests Labor – 9 Hrs Energy Savings ≈ $7600  Indirect Cost Savings Expected ≈ $40 K

37 This presentation contains no technical data subject to EAR or ITAR  Compressed air is the single highest cost utility used in a manufacturing setting 7 – 1 energy ratio  7 HP of electrical power to produce 1 HP of compressed air “work”  Reducing compressed air use will result in Lower noise levels Lower energy costs  Use this as part of your value justification for noise control engineering

38 This presentation contains no technical data subject to EAR or ITAR  Annual saving $41.2 K - HCP  ($1,200 Direct & 40,000 Indirect) $549 Per employee  Expected cost avoidance $50K - Hearing loss awards $666 Per employee  Total savings expected - $91.2K ($1,216 Per employee)

39 This presentation contains no technical data subject to EAR or ITAR  $12 K Initial Investment  ROI – 176%  DPP – 0.2 Months  NPV – $429K  IRR – 665%

40 This presentation contains no technical data subject to EAR or ITAR  Use Two Different Noise Abatement Techniques To Dampen Sound Engineering And Installation Expected To Be $47,970  Expect To Remove 150 Employees From The HCP

41 This presentation contains no technical data subject to EAR or ITAR  $48K Cost Vs  Value

42 This presentation contains no technical data subject to EAR or ITAR  Hearing Testing Service Reduction $7.5K  IH Support $10K  Hearing Loss Awards – No Savings  ? Hearing Protection Costs  Direct Cost Savings Expected - $17.5K

43 This presentation contains no technical data subject to EAR or ITAR  Program Administration Costs Savings HCP Program Admin & Training (EHS) – 120 Hrs Training Admin (EHS) – 40 Hrs Supervisors Time – 150 Hrs Employee Time – Testing 225 Hrs Employee Time – Training 75 Hrs STS Retests Labor – 9 Hrs  Indirect Cost Savings Expected - $62.9K

44 This presentation contains no technical data subject to EAR or ITAR  Annual Saving $70.5K - HCP & Supporting IH Costs $470 Per Employee  Expected Cost Avoidance $0 - Hearing Loss Awards  Total Savings Expected - $70.5K ($470 Per Employee)

45 This presentation contains no technical data subject to EAR or ITAR  $48 K Initial Investment  ROI – 131%  DPP – 1.6 Years  NPV – $327K  IRR – 78%

46 This presentation contains no technical data subject to EAR or ITAR  Two Different Scenarios High Capital – Low Expense (Enclosure) Lower Burdened Rate No History Of Hearing Loss Claims Low Capital – High Expense (Nozzles) Higher Burdened Rate Moderate Hearing Loss Claim Potential

47 This presentation contains no technical data subject to EAR or ITAR

48 Brian B. Bethel, CIH Sikorsky Aircraft brian.bethel@sikorsky.com

49 This presentation contains no technical data subject to EAR or ITAR


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