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Scafftag identifies £10million safety and maintenance saving for businesses

Jonathan Edwin, business manager of Scafftag, says businesses are haemorrhaging costs due to inefficient equipment safety and maintenance management

The HSE estimates that the cost of health & safety and maintenance incidents in the UK amounts to more than £1 billion a year*. It’s a staggering figure and one which highlights the potential for businesses to make performance improvements.

People and companies often equate the application of health and safety measures with costs, but if we take the HSE’s most conservative estimate and achieve a mere one percent improvement, UK businesses would benefit from savings to the value of over £10 million.

It’s a small improvement which could yield a large return, but it’s made possible by the scale of inefficiencies inherent to many organisations and their current H&S and maintenance systems. To highlight the point one of our clients recently reported a 20 percent reduction in operating costs; mainly as a result of improving their equipment administration processes. Clearly the possibilities are enticing, but they’re only obtainable if there’s a real desire for change.

Introducing Equipment Status Management
At any one time there are many items of equipment on site and the status of assets can alter from an operational (maintenance) perspective, as a result of hazards (safety) or due to a change in location or ownership.

Each item of equipment has one or more stakeholders and these can include inspectors, operators/contractors, maintenance staff, HSE managers or facilities management. Informed decisions are based on getting accurate, relevant and up-to-date information to the right people, on-time and in the right place.

We call it ‘Equipment Status Management’ (ESM) and our clients recognise this as a way to improve asset value and business performance. The way these assets are operated, managed and recorded is essential to generating savings. The value of this goes well beyond physical products to the knowledge and processes, which go into helping clients to review their ESM systems.

Cost savings in all areas
The danger of assumption is that it leads to damaging decisions for individuals and business performance. Users can be exposed to accident and injury, which results in lost man hours, compensation payouts, insurance costs and burdensome investigations or reporting. Importantly, employee morale can also be badly hit, which is notoriously hard to recover.

Equipment can suffer from downtime and damage or loss, while output is affected by a reduction in the quality of work and service delivery. All this contributes to an organisation’s public image, which is often the most valuable asset of all. The full cost implications require a complete understanding of a business’s exposure and the HSE provides some guidance on this:

Cost categories (Source: HSE 2002)

• Loss of earnings
• Expenditure to cover absence
• Human pain, grief, sufferings costs
• Sick pay
• Compensation
• Company administration
• Recruitment
• Damages from injuries
• Non-injury damages
• Insurance administration
• Loss of output
• Medical treatment
• HSE and LA investigation

Finding the right system
The question for managers at all levels and functions is: are they putting adequate measures in place to inform and protect their team and other equipment stakeholders in their organisation?

Controlling and communicating these measures can be undertaken verbally, visually, through paper or electronic means and through physical access restriction. But, it’s important to ensure these systems are able to remain up-to-date with changes in equipment status.

No one system is fool proof and it is reasonable to predict that one or more could suffer from a communication breakdown or fail to provide the required level of stakeholder coverage and accessibility. Individually, they have their weaknesses, but as a combined force these systems can be highly effective. I strongly believe the one percent reduction in costs I mentioned earlier is achievable by implementing the right equipment management framework.

Developing an Equipment Status Management System
An Equipment Status Management System (ESMS) combines all of the above systems with policies and procedures to ensure all stakeholders share the same up-to-date information.

The ESMS planning cycle revolves around identifying objectives, auditing equipment, analysing requirements, auditing current systems, revisiting objectives and, finally, evaluating and monitoring. Then, the process must start again.

ESMS is a way of pulling together different functions to tackle critical equipment and measure for continuous improvement. However, it’s crucial to have an internal ‘champion’ of the system to ensure it is implemented correctly and there’s an appetite for it within the business.

Scafftag’s ESMS planning cycle:

Stage 1 of the process involves identifying current objectives and looking at how each function is assessed in terms of safety and operational performance. It’s a way of identifying trends and examining which other measurements can be used.

Stage 2 is an equipment audit, which prioritises equipment that is business critical, has a high impact on functional objectives and multiple stakeholders. It considers how much financial cost this impact could cause.

Stage 3 looks at internal and external requirements. Internally it means identifying stakeholders for priority equipment, which core data is needed, how it is enhanced and when, where and what format is needed. Externally, legal requirements are a major factor and this requires an examination of risk assessments, frequency of maintenance and inspection, comprehensive maintenance inspections, inventory keeping, training and reporting.

Stage 4 addresses current systems and audits what types are being used, how they perform and the associated costs.

Stage 5 covers objectives and planning issues and specifically what improvements can be made to objectives set at Stage 1. What systems need to be changed? What new systems can be introduced? What policies and procedures will ensure it is used correctly? What costs can be reduced and how much investment is required for the new plans? Finally, and most importantly, what is the expected return on investment?

Stage 6 is the process of evaluating and monitoring looking at which internal communication channels and tools are needed to establish the systems as well as the training and incentives to reward employees buy-in.

Stage 7 brings the cycle full circle to ensure continuous improvement. At this juncture consideration is given to whether systems can be extended to other types of equipment, what modifications can be made and the potential to leverage the programme at other sites.

Delivering results
Creating an effective ESMS is a proven way to create a safer working environment and a highly motivated workforce. Implemented successfully it can reduce costs, improve operational efficiency and business performance. With this in mind, isn’t it time more businesses assessed the benefits?