How to Do an Ergonomics Business Case

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					 How to Do an Ergonomics
      Business Case

     Dr. Richard Marklin
     Marquette University

  Patricia Seeley We Energies

National Safety Council Congress
        October 9. 2002
Why we need to do a business case


Injuries are business inefficiencies
(Slavin, 2001)
Justify all business decisions
Walking away does not work
Refute the assumption: ergonomics costs
a lot of money
Prove ergonomics pays off
Ergonomics business case elements

Two kinds: specific and general
Ergonomics awareness education
Systematic ergonomics science
Systematic implementation plan
Cost/benefit analysis for change
Marketing
         Expected results

Productivity gains by keeping workers on
the job healthy
Retain skilled workers longer
Reduce sending the “walking wounded”
back for repeated re-injury
Lower MSD rates/costs
 What about
“the nature of the beast” work?



 We can’t wave a magic wand
 However, model from line workers study
 gives us hope for many low cost,
 feasible interventions
 How do we begin? “Ask the experts”--
 the workers
    Critical components

Employee, leadership training
Sell success
Break down “we’ve always
done it that way”
Dedication of resources--
time and travel for teams
Implementation and follow-up
EPRI Ergonomics Handbook for the Electric
Power Industry : Overhead Distribution Line
Workers Interventions

                         Methodology
                         32 typical tasks
                         Task description,
                         problems, and
                         solutions
                         Laboratory data
                         Business case
                         List of vendors
How to do a specific business case

Decide on an intervention
Collect data
  Get friendly with HR, medical, purchasing,
  engineering
  Injury/illness and cost data
Study ergonomics risk factors
Present cost/benefit data, time
Market it
        Injury /illness data

Strains /sprains (non acute)
MSDs such as CTS
Tie costs to injuries
  Specific occupational groups
  OH nurses can identify
  OSHA log or medical database
Go into individual cases for causes
Sample injuries to line workers
        (1999-2001)


147 total ergonomic (non acute)
cases reviewed
47 cases causing restricted duty
or lost work days
At least 1144 days where a
worker had to be replaced (does
not count sick days)
       Medical cost data

Specific medical and workers
compensation costs for this occupation
Most companies have outside case
management
If not total, use sample cases
Could use average for same diagnoses
     Sample medical/WC 1999-01 costs
rotator cuff (shoulder) surgery            $ 16,898.66
shoulder replacement                       $ 70,821.69
bilateral carpal tunnel surgery            $ 10,851.49
chronic epicondylitis                      $ 3,183.36
back injury                                $ 20,855.60
back surgery                               $ 26,613.60
shoulder tendinitis                        $ 4,485.24
Total annual cost for only these 7 cases   $ 65,000.00
$175 per line worker
  Human resources cost data

Days gone--RD, LWD, sick days
  HR wages and benefits
Training, replacement costs
  Investment in hiring new workers (HR time,
  turnover/year)
  Clerical time
  Training costs (days/ weeks * #)
Retiree data--LW only 10%
Sample annual replacement worker costs

Body part RD LWD Costs          Per
          days days             worker


Upper     416   52   $134,784   $146
extremity
Back     407    90   $143,136   $155
            Skill retention

30-40 new apprentices/year; 3 yr. training
Only 10% replace retirees
Remaining 90% primarily replace injured
workers
  Repeated injuries
  Increasing severity with exposure, age
More work years, fewer sick days
        Productivity losses

Industrial engineering time calculations
  Current work practice time
  Proposed work practice time
  Difference times number of applications
  (purchasing dept)
Sample annual productivity savings


  Installation time savings 3.75min
    Manual--4 min /Auto-.25 min
  Times 20,000/yr. (purchasing)
  Minutes /60= 1250 man-hours
  Times hourly rate plus benefits (HR
  $38/hour)= $47,500 savings
  Doing it easier often saves time
  Often more durable (less
  repair/replacement)
       Quantify exposure

Establish high risk population percentiles
for given work practice
Example: manual compression press can
be used by less than 1% of population
once without high risk of injury
Essentially past limits of human capability
Project % cost reductions
 Sample business case for the purchase of
           2 line worker tools

Battery-operated press and cutter
99 of 152 line mechanics rated the current manual
methods as the most ergonomically stressful
Replacing them would have the biggest effect on
their work and health
$900,000 / 8 months payback
Chapter 4 of EPRI Ergonomics Handbook
         Body posture:
manual vs. battery-operated tools
     Sample savings--battery operated tools
                 As s umptio ns Annual        Pe r     %o f
                                  S aving s   wo rke r to tal
Me d/ WC         1/2              $54,379     $147     33%
                 re duc tio n,
                 UE o nly
Re plac e me nts 1/2 re duc tio n $26,928     $73      16%
                 UE o nly
Ne w hire s      1/10             $43,333     $117     27%
                 re duc tio n
Pro duc tivity   No ne fo r this $0           $0
                 to o l
Unre po rte d    2/ye ar          $40,000     $108     24%
inj c o s t      re duc tio n
To tal                            $164,640 $445        100%
         Assumptions made

Science can define the limits of human
capability
Tie costs to specific work practices
Assign percentage of cost reduction expected
with intervention
Make conservative projections
Payback calculation for cutter with higher
productivity benefits (also cuts ACSR)

 Annual         Annual   Annual     Total
 Benefit/       Cost/    Cost       Cost/
 worker         worker               8 yr.
BOP       x     $ 95     $ 35,000   $280,000
BOC         x   $167     $ 79,000   $632,000
Total $530 $332          $114,000 $912,000
Payback in 8 months
How to do a general business case

                     Present the general
                     occupational or
                     company data
                     In visual format
                     Select sample
                     savings
    Where are the big economies?
                                   20%

               37%




                                          16%

                      17%           10%

  Annualized line worker costs: 47 severe cases; potential
           savings with 32 EPRI interventions
Medical/WC costs        $192,500            20%
Replacement workers     $109,800            16%
Apprentice training     $ 90,000            10%
Unreported injuries     $160,000            17%
Productivity            $370,000                37%
    Total               $922,300            100%
Host utility 2001 gas operations injuries

      Ergonomic
      related
      19%


                                 Clearly Acute
                                 Injuries
                                 48%

   Over
   exertion
   33%
Review of 47 lost time and light duty
  line worker cases (1999-2001)



            Reported
             Injuries
               27%


                        Previously
                        Unreported
                         Injuries
                           73%
Number vs. cost of line worker interventions


        Initial Costs for Line worker ergonomic
                       interventions


       > $1000
   $100 - $1000
      $0- $100
                  0     5        10        15     20
                       Number of interventions
Initial costs vs. productivity for line worker
          ergonomic interventions

      Initial Costs vs. Labor Savings for Line Worker
                  Ergonomic Interventions


     100%
      80%
                                                Substantial
      60%
                                                Moderate to Substantial
      40%                                       Moderate
      20%                                       None to Moderate
       0%                                       None
            $0- $100      $100 -      > $1000
                          $1000

                       Initial Cost
      Take the show on the road




Internally: safety days, leadership training,
executive board; get to everyone; video,
hands on, worker testimonials
Externally: trade shows, conferences,
publications
      Selling it to employees
       and mid management
Deal with the culture issues
Encourage early symptom reporting
Encourage employees to associate
symptoms with specific work practices, tools,
equipment and bring to the ergonomics team
 Selling it to upper management
Aging workforce
Quick payback
Productivity benefits
Track interventions: what gets measured
gets done
Put the tools, materials in their hands/
have them try it!
  What’s next? Nuts and bolts

review of all interventions
adoption of majority within the year
identification of roadblocks and
alternatives
                   Pilots

A wider trial audience
Buyin
Correct choice for the work
Not unanimity
            Vendor successes
Give vendors valuable feedback : we
need it to do……
Vendors compete
  superior products
  expand product base to new worker
  populations
  lower prices
            Team efforts

Budget, safety, work practice oversight
Capitalize expensive purchases
Engineering teams with distributors to
provide samples
    Evaluating team success

Number of concern referrals
Number of interventions/year
Degree of improvement
Reductions in costs/injuries
   Value of a business case

Once done, management will buy in for
future
Momentum, expectation
Data gets easier to assemble, interpret
Credibility of ergonomics science as data
driven
Not easy, but worth the work
Contact information
Patricia Seeley
Principal Consultant-Ergonomics
We Energies
2425 S. 35th St. Mail Code SSC2
Milwaukee, WI 53215
Phone         414.389.4382
FAX           414.389.4439
email patricia.seeley@we-energies.com
More detail: EPRI handbook (1 800 313 3774) or
  upcoming Applied Ergonomics article