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Realistic budgets for safety upgrades: What are the true costs?


February 24, 2010
By Dave Lawson

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When it comes to machine safety, many companies have machinery that does not comply with the current safety standards. Much of this equipment was installed or modified prior to the creation of the current standards of today. With the increased enforcement of employer due diligence in the workplace, many companies do not realize the impact of not developing and implementing realistic budgets and timelines to achieve the desired results.

Increased inspections pressure some companies to skip key steps, leading to cost overruns, interruptions to production and employee resistance.

Establishing a joint health and safety committee (JHSC) is the first — and most overlooked — step when creating a solid foundation for maintaining and improving plant safety. It is responsible for establishing a program that is integrated into the daily activities of the company and is responsible for creating and maintaining its health and safety vision statement through training, audits and detailed record keeping of the group’s ongoing activities. Although some may consider this to be an underlying, or “soft,” cost it certainly is a real cost and should be considered an ongoing overhead cost for safety budgets.

Once the JHSC has been established, its first move will be to audit all plant machinery and machinery processes, which will identify the hazards, improve employee training and provide guidance for management to allocate funds and resources. This internal audit is a necessary activity of the JHSC responsibilities.

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At this point, the company would be required to perform an external audit, which involves a risk assessment or Pre-start Health and Safety Review (PHSR) of each of the machines. A third-party professional engineer conducts this audit to ensure the company is applying the required standards as set out in its provincial health and safety PHSR guidelines. In Ontario, for example, PHSR services are performed in accordance with the interpretation of the most current document. This is outlined in the Occupational Health and Safety Act, Regulation 851, Section 7. Its cost can vary from $1,500 to $5,000 depending on the complexity of the equipment being assessed.

As well as internal and external audit deficiencies, an organization may also have deficiencies identified by Workplace Safety and Insurance Board inspections.

The above-mentioned information is now taken into consideration to create a priority list and implementation schedule. Based on the urgency created by all of the combined audits, budgets now need to be created to address the requirements.

Machinery that does not meet the standards set forth in specific machinery standards, such as CSA Z142-02 Code for Power Press Operations, CSA Z432-04 Safeguarding of Machinery and CSA Z434-03 Industrial Robots, may require any one or combination of physical barriers (guarding), light curtains, safety interlocks and control-reliable safety circuits and/or safety controllers. The identified equipment can now be accounted for as part of your budget development.

However, the costs to install and integrate the mechanical devices and electrical controls are often overlooked. Generally, this cost is 1.5 to two times the cost of the components therefore, it would be fair to say that $10,000 in component costs would be an additional $5,000 to $10,000 to integrate. (These additional costs would be for millwright, electrical and programming services required for any given installation.)

Once you have established the priority, what is required to meet the standards and the actual component budget, you must consider the process and timeline for implementation.

Understandably, the timeline is mainly determined by the priority and the urgency, which is driven by the level at which the machinery is exposing a hazardous condition to the employee. If a machine is presenting a life-threatening hazard, it will usually be immediately tagged out and rendered inoperable until such time as it is brought up to compliance. In other cases, a reasonable time frame will be allotted to implement the required changes prior to a subsequent inspection.

In either case, interruptions to production can be more costly than the safety upgrades and compliance themselves. Part of the implementation schedule should take into consideration planned production down time:

• What is a reasonable time frame to make the changes?
• Can you plan it around scheduled maintenance?
• Can you shift production to another machine?
• Is this machine going to affect production of another machine or process?

In some cases, upgrading safety will change the manufacturing process or workflow. These changes may be as simple as transportation of product from machine to machine or having machine operators perform work tasks differently. No matter the case, new equipment and/or training will need to be provided to integrate the required changes and these costs must also be accounted for.

Of course, any successful upgrades in safety need to have total acceptance by management (the money), the JHSC (the process and compliance) and the employee (the acceptance to change). Harmony between these groups will guarantee a successful implementation and ensure a safe work environment for all.


Dave Lawson is the vice-president and general manager of Advanced Motion & Controls Ltd. in Barrie, Ont. He can be reached at dlawson@advancedmotion.com.