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SIKORSKY CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012.

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Presentation on theme: "SIKORSKY CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012."— Presentation transcript:

1 SIKORSKY CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012

2 SIKORSKY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings THE VALUE OF SAFETY

3 SIKORSKY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings THE VALUE OF SAFETY

4 SIKORSKY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings THE VALUE OF SAFETY

5 SIKORSKY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings THE VALUE OF SAFETY

6 SIKORSKY LEARNING OBJECTIVES Can Safety yield cultural gains and financial value? Is SMS the correct roadmap? Sikorsky’s legacy: Does it actually lower risk and earn money? Should this all be considered by our customers and their insurers?

7 SIKORSKY PATHOLOGICAL REACTIVE CALCULATIVE PROACTIVE GENERATIVE Chronic unease Safety seen as a profit centre New ideas are welcomed We are serious, but why don’t they do what they’re told? Endless discussions to re-classify accidents Safety is high on the agenda after an accident The lawyers said it was OK Of course we have accidents, it’s a dangerous business Sack the idiot who had the accident Resources are available to fix things before an accident Management is open but still obsessed with statistics Procedures are “owned” by the workforce We cracked it! Lots and lots of audits HSE advisers chasing statistics Presentation by Patrick Hudson of Leiden University to Bristow Safety Conference, Lagos Nigeria, Feb 2011 SAFETY CULTURE INDICATORS

8 SIKORSKY LEADERSHIP Treat every accident as our accident

9 SIKORSKY SMS Basic Principles Leadership Risk Mgmt Assurance People Culture & Value CULTURE COMES FROM REPETITION

10 SIKORSKY Safety CULTURE Starts at the top

11 SIKORSKY HIGH RELIABILITY ORGANIZATION

12 SIKORSKY By protecting its employees and remaining dedicated to “doing the right thing”, Sikorsky has reduced its accident rates, workers’ comp costs and carbon footprint to become a company synonymous with strong environmental leadership, safety and environmental responsibility. COMPETITIVE EDGE

13 SIKORSKY We pioneer flight solutions that bring people home everywhere…every time™

14 SIKORSKY And we know it makes business sense…

15 SIKORSKY BRIDGING FINANCE & SAFETY Safety Accident rates Property loss Insurance premiums Fines and citations No. of people trained Exposure Assessments Near misses Behavioral Observations Audit findings ROHSEI Bridges the Gap Finance/Operations Earnings/EPS ROI Payback PVRR Internal Rate of Return Production rates Earnings/employee Net Present Value Cost Benefit BUSINESS TALK

16 SIKORSKY 1. Build an accepted business tool. 2. Apply an easy to use process. 3. Communicate value of Safety investments. 4. Improve performance by encouraging better decisions. The ROHSEI Task Force Objectives: In 1995, a taskforce of fifteen Fortune 500 companies sponsored the development of a process and supporting tool set to determine the financial value of Safety investments:

17 SIKORSKY Examples of ROHSEI Projects 1. Sprinkler Protection 2. Onsite Primary Healthare 3. Disability (STD/LTD) c Mgmt 4. Disposable Coverall Recycling 5. Soil Remediation 6. HSE Websites 7. Behavior Based Safety Programs 8. Primary Healthcare in Europe 9. Epidemiology Studies and Software 10. PPE vs Engineering Controls 11. Ergonomics Programs (Lower back) 12. Ergonomics Programs (Work Station) 13. Fleet Safety Programs 14. Electronic MSDS Systems 15. PSM 16. Integrated Health and Wellness 17. IH for the FDA 18. FDM 19. EGPWS 20. SMS 21. Sim Training 22. FOQA

18 SIKORSKY The ROHSEI Navigation Screen Process – Horizontal Tools – Vertical

19 SIKORSKY What the hell do you know about finance?

20 SIKORSKY 20 Fleet Safety Pays Back

21 SIKORSKY Develop and document the focus of the opportunity: ROHSEI Analysis of SMS

22 SIKORSKY Determine assumptions:

23 SIKORSKY Estimate and enter the costs of implementation:

24 SIKORSKY Research/document relative numbers of accidents:

25 SIKORSKY Determine financial cost of an accident:

26 SIKORSKY Hit the calculations button:

27 SIKORSKY Present results to your management:

28 SIKORSKY ROHSEI Analysis of Sim Training

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37 David Eherts PhD VP and Chief Safety Officer Sikorsky Aircraft Corporation Stratford, CT USA Office: Cell: ( GMT – 5 ) MY CONCLUSIONS 1. Safety yields value. 2. This value can be calculated. 3. It should be considered by our customers and the insurance industry. 4. We’d love to work with you on this. Jill Browning Manager, A&PS - SMCC Sikorsky Aircraft Corporation Horseheads, NY USA Office: Cell: ( GMT – 5 )


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