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

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

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

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

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

6. 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. SAFETY CULTURE INDICATORS
Chronic unease
Safety seen as a profit centre
New ideas are welcomed
GENERATIVE
PROACTIVE
Resources are available to fix things before an accident
Management is open but still obsessed with statistics
Procedures are “owned” by the workforce
CALCULATIVE
We cracked it!
Lots and lots of audits
HSE advisers chasing statistics
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
REACTIVE
PATHOLOGICAL
The lawyers said it was OK
Of course we have accidents, it’s a dangerous business
Sack the idiot who had the accident
Presentation by Patrick Hudson of Leiden University to
Bristow Safety Conference, Lagos Nigeria, Feb 2011

8. LEADERSHIP Treat every accident as our accident

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

10. CULTURE Starts at the top
Safety

11. HIGH RELIABILITY ORGANIZATION

12. COMPETITIVE EDGE
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.

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

14. And we know it makes business sense…

15. Sikorsky Aircraft Corporation
October 23-24, 2007
BRIDGING FINANCE & SAFETY
BUSINESS TALK
Finance/Operations
Safety
Earnings/EPS
Accident rates
ROI
Property loss
Payback
Insurance premiums
PVRR
Fines and citations
Internal Rate of Return
No. of people trained
Production rates
Exposure Assessments
Earnings/employee
Near misses
ROHSEI
Net Present Value
Bridges
Behavioral Observations
Cost Benefit
the Gap
Audit findings
ROHSEI, Washington, DC 15

16. The ROHSEI Task Force Objectives:
October 23-24, 2007
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:
Build an accepted business tool.
Apply an easy to use process.
Communicate value of Safety investments.
Improve performance by encouraging better decisions.
ROHSEI, Washington, DC

17. Examples of ROHSEI Projects
October 23-24, 2007
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
ROHSEI, Washington, DC

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

19. What the hell do you know about finance?

20. Fleet Safety Pays Back

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

22. Determine assumptions:

23. Estimate and enter the costs of implementation:

24. Research/document relative numbers of accidents:

25. Determine financial cost of an accident:

26. Hit the calculations button:

27. Present results to your management:

28. ROHSEI Analysis of Sim Training

33. Using Lloyd’s of London estimate of loss per accident…

34. Similar calculations to before on cost per year.

35. Same transparency of calculations for the finance geeks.

36. And an even better payback then just an SMS
And an even better payback then just an SMS. Included in this calculation was the cost of a sortie and the profit of each flight which allows a calculation of the savings in terms of additional sorties, the decrease in the cost of each flight ($1028) and the percent saved per flight (20%). Not bad huh?

37. 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.
David Eherts PhD
VP and Chief Safety Officer
Sikorsky Aircraft Corporation
Stratford, CT USA
Office:
Cell: ( GMT – 5 )
Jill Browning
Manager, A&PS - SMCC
Sikorsky Aircraft Corporation
Horseheads, NY USA
Office:
Cell: ( GMT – 5 )