Shifting safety to a profit center
Cost avoidance, better networks make better financial sense.
Even though industrial manufacturing companies are realizing greater efficiencies due to the implementation of new Industrial Internet of Things (IIoT) technologies, they are still under immense pressure to improve productivity and operational profitability. Safety has a huge role in that. Today, stricter regulations and the risk of reputational damage that can rapidly cut a company’s share price mean plant managers need to pay even more attention to ensure their people, assets, and operations are continuously safe.
And there’s good reason for that. Even though OSHA reports worker injury and illnesses are down from 10.9 incidents per 100 workers in 1972 to 2.9 per 100 in 2016, the U.S. Department of Labor announced in January 2016 an increase in the maximum penalties for violating OSHA standards. In short, failing to maintain a safe operation could be more costly than ever before.
In response, the manufacturing industry has taken a big step forward. Today’s emerging technology make it possible for plant operators to better detect and prevent unsafe conditions and events from occurring. While more thorough safety programs and procedures help protect organizations from unexpected incidents and downtime, they are just one of the many steps an organization should consider in order to increase the profitability of its operations. To stay ahead in the marketplace, businesses need to reconsider how safety—particularly their investment in safety systems, solutions, and software— actually can help drive operational profitability.
Changing the mindset
Traditionally, safety and profitability have appeared to be diametrically opposed concepts for many manufacturers. Since their primary objective is to drive profitability, protecting the safety of the plant’s people, assets, and the environment is often seen as a necessary cost of doing business. As such, industrial environmental, health, and safety (EH&S) teams are viewed most frequently as adjunct organizations outside of the mainstream business that have made manufacturers’ jobs more challenging unnecessarily.
But we can change this approach because we now understand that the safety of the operation can have a direct, positive impact on the operational profitability of the plant. EH&S can be viewed as a profit center, and new levels of both safety and profitability can result. This is the concept of profitable safety.
Organizations that look at the efficiency and reliability of their industrial processes from a safety perspective can identify more clearly how to keep those processes up and running. By reducing associated downtime, businesses can therefore improve production and, ultimately, the profitability of their operations. This is where technological advancements come into play. With pervasive connectivity across the plant driven by the IIoT, more assets are connected to more assets, more people are connected to those assets, and more people are connected to more people. While safety systems should never be connected to external networks, they can still take advantage of all that plant connectivity to help operators drive better, more timely operating and business decisions.
Faster, more powerful data analysis and sharing means past, present, and even future incidents and operating states can be considered, which enables operators and managers to identify and predict safety issues, like unexpected fires or explosions, before they occur. Real-time control over safety means operators don’t simply react to issues after they occur. Now they have the knowledge and tools to mitigate and avoid risks before any incident is even likely. By moving away from simply managing safety risks to predicting and controlling them in real time, operators can improve the decision-making process and ultimately make a positive impact on the profitability of their assets and operations.
Safety as a profit center
To understand how safety can drive operational profitability, consider the shifting industrial operations landscape. For example, whereas only a few years ago companies could purchase energy, feed stock, and other commodities on long-term, stable-cost contracts, today’s business variables fluctuate almost continually. In the United States, the cost of energy can change every 15 minutes. The profitability of even the most effectively run operations is impacted by these fluctuations. It is therefore time to begin controlling business variables, such as production value, energy cost, and material cost, in real time, since they are real-time components of operational profitability.
This means balancing business and production variables to maximize profitability is really an industrial control problem. Figure 1 shows that controlling operational profitability requires the application of classic real-time control methodologies. Missing, though, is the safety constraint. It should be included in any real-time profitability model given the components of safety also fluctuate in real time and present a similar control problem to that of profitability.
Today’s control and safety offers make it possible for operators to measure accurately the safety risk of individual pieces of equipment, process units, plant areas, and even entire plants in real time, continuously, to determine how hard they can drive production without crossing the safety threshold. With real-time safety risk measures and online condition monitoring, operators accurately can monitor and detect conditions that might lead to a hazardous event, meaning they are in control of their safety risks.
Because they have the right information, in the right context, and at the right time, operators are empowered to make smarter business decisions that minimize the risk of potential hazards and maximize production.
Implementing profitable safety
The IIoT is rapidly transforming how manufacturers control their industrial assets and operations. With this shift comes the need to analyze how safety is managed and how new processes can be put in place to better protect a plant’s people, production, and profits. Advanced safety systems, software, and solutions are no longer simply the cost of doing business. They are investments that, when implemented correctly, show measurable, complete ROI and drive measurable improvements to the profitability of the operations.
To improve plant-floor safety, enterprises should harness the power of IIoT to digitize and connect people and assets across the plant. Advanced safety solutions, such as safety instrumented systems, process hazards analysis software, and safety instrumented functions software, produce a massive amount of usable data.
By leveraging this data and using better data analytics, operators can then determine more accurately how hard they can safely drive their equipment assets and processes to reduce downtime and risk.
In today’s digital world, industrial manufacturers have a great opportunity to control and measurably improve the real-time profitability of their operations, safely.
Ensuring the continuous safety of people, assets, and production is no longer simply the cost of doing business. New technologies and improved levels of connectivity, when applied appropriately across a plant, will stimulate a workforce to make better real-time operating and business decisions that will drive measurable improvements to the profitability of operations, safely. It is time to shift safety from a cost center to a profit center.
Steve Elliott is senior marketing director for Schneider Electric’s process automation control and safety offerings.