Lean and EHS
Lean management´s core idea is to create more value to customers through a perfect value creation processes while minimizing waste. A lean organization understands customer value and focuses its key processes to continuously increase them. Customers can be also an internal customer such as your employees or internal processes.
Lean management is an approach to running an organization that supports the concept of continuous improvement, a long-term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality. And this is exactly where sound EHS management is also aiming at. The leans´ continuous improvement (kaizen) process basically is the plan, do, check, act (PDCA) cycle which also applies consistently in OHSAS 18001 principles.
Both lean and EHS programs have similar goals. Their aim is to standardize the processes or activities to ensure that they are sustained and share the results with other areas or groups so they can gain from these experiences. They need continuous monitoring and consistency to sustain a culture that has been build. Lean applies in every business and every process, also in EHS management and these similarities make these to convenient value-addings to each other.
Cost of accidents
In addition to their social costs, workplace injuries and illnesses have a major impact on an employer's bottom line. The costs of workplace injuries and illnesses include direct and indirect costs, which are usually over 4 times higher than direct costs. A Finnish study has shown that average total cost of work related injury in Finland was over 6000€ (variation was between 300€ to over 100,000€). To calculate how the total cost of injury affects profitability you can calculate how much money in sales your company must generate to make up for these losses. Using this formula a claim of 6,000€ would require a company with a profit margin of 5 percent to sell 120,000€ worth of product or service to make up for the losses. A 100,000€ claim would take 2 million € in sales to make up the loss. As you can see, there is so much more to workplace incident costs than just workers compensation. Building a culture of safety in your organization is the best way to ensure the reduction of workplace injuries and the costs associated.
Increased productivity
Like successful lean management, the sound EHS management will increase your productivity. Redundancy of absenteeism, healthier employees, better motivation, increased effectiveness, more efficient work environment, improved quality and reliability will enhance your operational performance. Continuous improvement, effective use of resources and value adding processes will increase your profitability through improved productivity.
