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Improved Outcomes from Safety on Profitability and Productivity

Updated May 16, 2021
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Improved Outcomes from Safety on Profitability and Productivity essay

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Introduction

Construction companies have begun to appreciate the benefits of an effective safety program. This paper will look at the affect safety has on productivity and profitability. Safety for quite some time has been viewed as an expensive means to mitigate risk. It has only been in recent years that the focus has changed and firms are beginning to understand the relationship between safety and revenue generation for the business. This is in part because safety alone cannot be directly attributed to revenue. Although, when a safety system fails it can be directly linked to a change in profitability. Therefore, the focus has been as a risk mitigation technique.

The US is a very mature construction market, however, India is projected to lead the number of new opportunities by 2030. The construction industry as a whole has gained a lot of experience regarding safety but what has been learned has not always been implemented.

Studies have been conducted on safety with lots of data suggesting that improved safety has benefits. Unfortunately, they have not focused enough on the difference between sectors and types of contracts. This paper evaluates information across different types of studies as well as current information to draw conclusions about trends. These trends are shaping the industry. Not all companies can be compared against one another because the sector in which they work or country of origin for the business. Determining what set of data is useful from that which is not useful is challenging for international construction.

The construction industry presents a tremendous number of obstacles to a standardized safety program, including, cultural, language, geographic, regulations and company policy. Language barriers present an interesting challenge although technology has made many readily available, however these may not meet your company specific approach. Can zero accidents actually occur? Probably not but how about 100% reporting of injuries? Probably not.

Results

Accidents occur around the world regardless of country. Companies that implement safety programs do it for a number of reasons, however, the number one reason is financial. The cost to implement safety programs is high and increased profitability by increasing the amount of overall work the company obtains. Profitability is not the same as profit margin although the two are sometimes confused.

Discussion

India is seen as one of the most promising areas for growth in construction. The population in India is expected to be larger than China in the near future. Construction safety isn’t always defined as accidents during the project. The Kolkata project was undertaken by an Indian construction firm, IVRCL. The 24.5 million dollar project was awarded in 2008 and had an aggressive completion schedule of 18 months. This was a 2.2-km overpass over a heavily traveled area. The accident took place in March of 2016 on a curve where a section separated and a concrete slab collapsed killing 25 people and injuring over 100. The consequence of this accident left IVRCL unable to gain future work with Indian Railways as well as three other states.(enr, Mathews, 2016)

India has an Occupational Safety and Health (OSH) that is the basis to begin a program similar to OSHA in the US. Unfortunately, this program is extremely inadequate and lacks data that is deemed to be reliable. OSHA has been holding joint European Union and United States conferences since 2007. Additionally, OSHA has signed Alliances with Mexico while in China they have signed Memorandum of Understanding. This tells us that countries are interested in having the conversation about health and safety but that major differences still exist.

Falls

Using engineered controls such as switching from A-Frame to platform ladders. Is it practical for a company to instantly take the move to replace all ladders to make the upgrade or is it reasonable to make a transition by removing older ones and replacing with a-frames. I have found that if the ladder policy is to use platforms but A-Frames are readily available on site it will be impossible to prevent.

The implementation of procedures to prevent injury from falls varies greatly. Unfortunately, the risk to a specific injury from a particular height is not reduced because of the trade. So do we accept a level of risk or is zero tolerance the policy. Most construction companies that I have witnessed make a conscious effort to prevent fall injuries. The proper harnesses and training is provided. Although, the employee that looks to make his or her life easier is usually to blame for these seemingly small accidents. So money was spent on putting the gear and policies in place but was the issue of productivity a pressure created by the work environment.

Preventing falls will not save any time when compared against a task imposing greater risk. However, it does affect profitability if the job gets cancelled, delayed or prevents future work because the accident occurred.

Housekeeping

The cost to keep the work area maintained cannot be understated. It means that the pace of certain activities must progress so that they do not create hazards. An example of this would be the demolition and fit out of a new office space. Beginning the demolition and creating a mess everywhere begins to create several issues including but not limited to slips, trips and fall hazards. The debris from the activity if not paced with the clean-up activities leads to hazards with the potential for personal injury. Keeping a clean and neat worksite has a cost associated with it because it means that work deemed to be productive comes to a halt to prevent hazards.

The processes required to stage work and allow time to manage the site is a cost not effectively built into the job. It may be thought of or considered part of the job but these activities can place a significant burden if not planned as part of the ongoing activities. The housekeeping is one of those items that doesn’t have a productivity rate directly associated to it but clearly one can imagine the barriers it imposes when not done. The task crosses each and every trade and the general logistics plan of any given site.

Drivers and CDL Timeouts

Changes in the Commercial Drivers License (CDL) in the US has caused major issues for companies. The Federal Motor Carrier Safety Administration (FMCSA) has introduced sweeping changes that have mandated electronic data driver logs for all trucks used in hauling although the construction industry may escape this in some cases. Take for example the fact that even a ¾ ton pickup truck with a trailer in tow weighing 10000 lbs requires a cdl drivers license and not just any but a Class A just like a tractor trailer.

Placing a driver in a situation with a trailer in excess of 10,000 lbs and get caught could place you in serious legal trouble. The days of paying for the haul which promoted arriving onsite to be loaded and running as long as possible have come to an end. This has reduced the amount of runs a truck can accomplish within a day which means balancing out the number of trucks to achieve your goals. Perhaps your fleet doesn’t have the number of trucks it will require outsourcing.

The real issue for construction companies came when in 2011 the FMSCA made sweeping revisions to the amount of time a driver could work within a given week. This reduced not only the amount of time per week but also within a given day. The goal was to reduce driver fatigue and make them safer drivers on the road.

Unfortunately, in the construction business the truck drivers usually report to a yard to pick up their truck and begin the day unlike other workers who arrive at the job site to work. The affect is one person that is heavily involved in logistics is on a schedule that can not be synchronized with the other workers. The effect is safety limits activities but may not have an effect on productivity within the time they are running but severely limits the amount of production possible within a day for other employees.

If we look at an example of site work and the use of triaxle trucks to haul soil in and remove excavated debris. The driver starts at 5am but can only drive a maximum of 11 hours within the day. They may only be able to make three rounds but the operator running the loader will be without the ability to load trucks for some period at the end of his work day. Making the operator and the piece of equipment falling short of maximum productivity. Therefore, solutions to look at this assembly are necessary to see the systemic nature of our business. Without looking at what else is affected it is impossible to make safety a priority for one group without understanding the affect employing such a measure will have on others.

Cranes

Crane accidents continue to be an industry issue. Places like Saudi Arabia are leading the use of cranes on a global basis. In 2015 on September 11th, a crane collapse killed 111 people at a Mosque. While on February 5, 2016, Bay Crane had a lattice boom crane with a 150 foot boom collapse in NY City. India has a recent crane failure in Delhi on October 24, 2018 killing four workers. Recently OSHA began to provide guidance for changes in crane safety standards that specify not only type but tonnage as well.

Top down construction methodology offers opportunities for both productivity and efficiency with improved safety outcomes. The approach was originally invented and patented by David Termohlen in 1973 although today the rights are owned by Charles Thorton and marketed under TGE LLC. In Bangalore, this approach was used to construct 10 story building with a reported labor reduction of 25-35%.(Sawyer, T., 2018, ENR)

The range of this saving has a significant margin of 10% possibly creating some doubts as to where the savings can be directly attributed. Another interesting note is that this same methodology was employed at a site across the street. The ability to construct at ground level and then raise the entire floor is similar to other opportunities for ground floor builds like modular construction.

Data does not exist to compare risks with modular construction which is subsequently lifted with cranes, however, crane safety has come under fire for many accidents over the years. Certainly the number of cranes used to elevate loads far outpaces hoisting in this fashion.

In West Shanghai challenges associated with the deep foundations as a core component for top down construction were reviewed. The challenge was an operating railway above the foundation. This forced a channel solution to remove the excavated soil.(Li, M., (2014), j. of Construction Engineering and Management). Introduction of additional obstacles reduce top down construction, however, underground channels introduce another safety concern. The trade-off becomes feasibility and in the end this improves opportunities for projects to be completed. It may have not directly improved all elements of safety but it proved to be a safe an effective way to complete a project above an underground obstacle.

In India and China subsurface soil conditions present significant challenges for completing deep foundations. Deep foundations have become a major component of construction in many densely populated areas. The need to reduce risk to the adjacent structures is a significant factor in improving geotechnical issues. In 2003 a tunnel collapsed in South Pudong Road Station and Nanpu Bridge Station resulting from air pockets created in air shafts. (Wang, W., (2012), Geotechnical Aspects of Underground Construction in Soft Ground)

Future

The primary focus of safety has been to prevent injuries and although it may be possible to reduce injuries it may be near impossible to eliminate them in their entirety. Safety procedures and engineering controls have been designed to eliminate task related injuries. Building Information Modeling (BIM) has introduced a mechanism to time safety training to specific tasks as they are undertaken.

This may help improve training but reducing human involvement creates the ability to eliminate injury. Artificial Intelligence (AI) is an opportunity for machines to learn from mistakes making them smarter and less prone to mistakes. Significant investment is required to build these machines and put them to use in the field.

This will be the integration and implementation of technologies that are systemic. The focus will be on elimination or reduction of humans performing task. This will reduce the risk for injury but can the cost justify the means? Perhaps in the near term the answer may be no but as the uptake continues it will be necessary to remain competitive.

Companies cannot afford to remain stagnant in their approach to safety. The challenge that they face is at what pace can they undergo transformation. The ability to fit technology into the system has been point solutions and not a complete and total shift from the traditional approaches.

Conclusion

There is a direct correlation between safety and profitability although this is influenced by other factors like wages and job security in countries like India. It is difficult to improve safety when workers have a fear of losing their job. In the United States, OSHA has been educating contractors and companies so that internally these companies can become stewards of identifying issues as a first line of defense.

International construction companies in core industries continue to outpace others in the implementation of safety standards. They have been afforded this luxury by partnering with international companies who understand that their global reputation is just as important in an age where negative media attention has financial consequences. This is especially, true for publicly traded companies.

Safety must be viewed in construction as a complex system. Safety requires a systemic thinking that goes beyond tasks and requires looking at downstream consequences that have feedback loops consistently impacting other steps of the process. The improvements to safety have focused on injury and the resulting impact on businesses. We have demonstrated that safety is systemic in nature and not consequential by action.

References

  1. Petrullo, M. , Morton, B., Laaquidaara-Carr, D., Buckley, B., Logan, K., Barnett, S., (2016). “Building a Safety Culture: Improving Safety and Health Management in the Construction Industry.” Dodge Data & Analytics Smart Market Report, http://www.construction.com
  2. United States Department of Labor, Occupational Safety and Health Administration, “Business Case for Health and Safety” https://www.osha.gov/dcsp/products/topics/businesscase/costs.html
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  4. Dasguota, S., (2014). “Global Practices Vary Greatly in Use of Migrant Construction Workers” Engineering News-Record
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  6. Mathews, N., (2016). “Speculation Abounds on Causes of Kolkata Collapse” Engineering News-Record
  7. Long, J., (2016). “Jobsite Fatalities Drive New Safety Reguations”, Engineering News-Record
  8. Mathews, N., (2013). “After Mumbai Collapse, Thousands of Illegal Buildings Still Stand” Engineering News- Record
  9. Hampton, T., (2014) “Overturns and Falls Lead Aerial-Work Platform Deaths”, Engineering News Record
  10. Kanchana, S., Sivaprakash, P., Joseph, S., (2015) “Studies on Labour Safety in Construction Sites”, Scientific World Journal
  11. Subranmani, T., Lordsonmillar, R., (2014), “Safety Management Analysis In Construction Industry”, Journal of Engineering Research and Applications
  12. Dolage, D., Chan, P., (2013) “Productivity in Construction- A Critical review of Research”, Engineer
  13. Sawyer, T.,(2018) “Top Down Construction Makes Comeback in India”, Engineering, News Record
  14. Li, M., Chen, J., Xu, A., Xia, X., (2014), “Case Study of Innovation Top-Down Construction Method with Channel-Type Excavation”, Journal of Construction Engineering and Management
  15. Wang, W., Xu, Z., (2012) “Design and construction of deep excavations in Shanghai”, Geotechnical Aspects of Underground Construction in Soft Ground
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Improved Outcomes from Safety on Profitability and Productivity. (2021, May 16). Retrieved from https://samploon.com/improved-outcomes-from-safety-on-profitability-and-productivity/

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