Improving Safety is Smart Business at SKF

The firm's initiatives continue to produce performance improvements as the organization approaches its goal of zero accidents.

• By William McGlocklin, Dave Rath, Chuck Roberts
• Jun 01, 2012

The role of corporate EHS management has evolved tremendously during the past decade and will continue to do so at an escalating pace. While the role still involves the development and implementation of policies, programs, and procedures designed to protect employees, the public, and stakeholder interests, proactive safety management is becoming more widely recognized as an integral part of smart business management and sustainability. This has elevated the visibility of EHS leaders at a time when proactive EHS management must be achieved with increasingly limited resources.

One organization that has been very successful in integrating safety performance improvements with other business processes is SKF USA Inc., which is a global supplier of bearings, seals, mechatronics, lubrication systems and related services. The achievement of this integration is a significant accomplishment because SKF has more than 40,000 employees at some 200 manufacturing, distribution, research, and services sites spread across more than 130 countries.

The Approach to Integration
SKF's strategy for integrating the drive for safety improvements with other aspects of business is embodied in the SKF Care program. The program has four components:

• Employee Care is intended to ensure a safe work environment and promote the health, education, and well-being of the firm's employees.
• Environmental Care is designed to reduce adverse impacts on the environment from SKF's and its suppliers' operations.
• Community Care defines how the group makes a positive contribution to the communities in which it operates.
• Business Care has a strong customer focus and is directed at delivering sustainable financial performance and shareholder returns while operating in accordance with high ethical standards.

Initiatives Drive Results
SKF's EHS leadership recognized more than a decade ago that the ability to achieve tangible safety performance improvements that would support the overall program, such as reductions in accidents, risk exposure, and worker's compensation costs, would necessitate a number of targeted, corporate-driven initiatives. Seven initiatives were developed and implemented to drive results:

• Zero Accidents program. In 2000, SKF launched its Zero Accidents program with a commitment to eliminate all workplace accidents companywide. To emphasize the corporate commitment to this program, each facility's safety performance is ranked on a quarterly basis with the results going directly to the CEO. This level of attention underscored that safety performance is a key aspect of routine operational management. By the end of 2009, 120 out of 211 SKF business units worldwide achieved a record of no recordable accidents for a minimum of four consecutive quarters, with a total accident rate of 1.29 (compared with13.7 in 1994, when SKF began monitoring the accident rate).
• Job Safety Analysis program. In 2009, this initiative was implemented for the entire enterprise. It was designed to help complete the shift from a reactive to a proactive mode by facilitating early identification and mitigation of hazards at the job and individual employee levels.
• CLEAN Audit program. In 1990, SKF introduced a compliance assessment program focused on identifying EHS compliance issues in its manufacturing and warehousing operations. Assessments were completed for each site annually. With the implementation of ISO 14001 and OHSAS 18001, these assessments were modified to include all aspects of the management systems. Then, in 2004, a process was added to evaluate compliance with the firm's new code of conduct. The audit process was further improved in 2008 with the addition of a non-financial risk assessment, and audit frequency was varied from one to three years according to risk, placing more emphasis on high-risk and newly acquired units and less on long-established units that had demonstrated good performance.
• Quality Initiative. By 1998, SKF became the first international bearing manufacturer to achieve ISO 14001 certification. This was followed by adding the Occupational Health and Safety Assessment Series (OHSAS) 18001 certification for the company's Occupational Health and Safety Management Systems in 2005. This global certification ensures that SKF facilities maintain and uphold high performance standards regardless of social and economic conditions of the country in which they are located. As of the end of 2011, the certificate covered 103 sites in 30 countries, and newly acquired companies are quickly scheduled for completion of the certification process.
• Chemical Management System. This initiative provides a process for responsibly managing the selection, approval, storage, handing, use, and disposal of all materials used globally in SKF's operations. This system, which addresses more than 11,736 materials, supports employee safety as well as compliance with Right-to-Know and REACH regulatory requirements. Each site has a Materials Approval Board tasked with evaluating EHS issues related to all new chemicals proposed to be introduced into site operations. SKF also adheres to the Global Automotive Declarable Substance List (GADSL) for restricted and prohibited substances. Although the sites have the ability to approve new chemicals, if they include materials located on the GADSL list, final approval has to come from corporate, along with a timeline for replacement of this substance.
• Certified Safety Specialist. In the mid 1990s, SKF recognized that many personnel tasked with health and safety responsibilities at the sites were not equally trained or didn't have competencies to meet the needs of a world-class safety program. An internal certification and training program for SKF Certified Safety Specialist was developed with required participation by at least one person from each site. Each participant who completes the six days of training and passes the required tests is considered a CSS.
• Risk Assessment System. Recognizing that EHS risks originate from a variety of sources, a risk assessment process was established during 2002 to identify, characterize, and prioritize risks. This proactive self-assessment process is performed by a team at each department at every site on an annual basis. During 2011, this self-assessment focused on nine key areas, and more than 500 such assessments were completed. This initiative has helped SKF to engage employees, direct limited resources to the areas in greatest need, and has optimized safety performance results.
• Enterprise EHS Information Management Solution. During 2003, SKF realized it needed an enterprise-wide EHS software platform to support its processes and key initiatives. In 2004, it started rolling out a platform internally known as "Compass." SKF became an early adaptor of this Software-as-a-Service (SaaS) model, with the EHS software platform provided on a subscription-based hosted model. Currently, Compass is utilized globally by more than 2,000 users across all SKF facilities in more than 40 countries.

Key EHS processes supported and managed in the platform include:

1) Incident management to streamline incident (people, property, and environment) reporting, investigation, corrective actions, regulatory recordkeeping (such as OSHA) and analysis
2) Audits management to establish consistency and to manage the entire audit cycle from planning to managing deficiencies/non-conformances to closing out corrective/preventive actions
3) EHS/sustainability metrics management to collect, manage, and analyze a wide range of indicators and support SKF’s annual sustainability reporting
4) Task/calendar to manage compliance activities at each site and track and manage action items through closure
5) Chemicals management to centralize Material Safety Data Sheets (MSDSs) and to support initiatives such as chemicals approval and REACH
6) Risk assessment to facilitate an end-to-end self-assessment process at each site that enhances enterprise-wide transparency, accountability, and performance, and support informed decision making.

Tangible Results
The initiatives listed above have resulted in significant improvements in SKF's EHS performance. For example, with the Zero Accident initiative and implementation of Compass, near-miss reporting increased substantially, driving the development and implementation of preventive actions that have lowered the accident rate. The enterprise’s accident rate for 2011 was 1.05, which is an order of magnitude reduction as compared with 13.78 when SKF began monitoring the rate in 1994. This reduction in the accident rate translates into a tangible and significant reduction in worker's compensation cost with savings above $3 million per year.

Additionally, the programs have provided enhanced employee protection and substantially lowered the firm's risk profile. The program continues to produce further reductions in the accident rate with the target of zero becoming a real possibility. Total worker's compensation costs in 1995 exceeded $4.2 million ($785.49 per employee), whereas in 2011 the costs were less than $600,000 ($123.32 per employee), even though SKF had acquired a number of additional facilities.

SKF continues to grow internally and through acquisition. As companies are acquired, a specific time frame is designated for each new entity to implement SKF Group corporate initiatives. While this gives each new entity time to acclimate to SKF's processes, it places them on an aggressive schedule for performance improvement.

As the role of the corporate EHS leader has evolved, so have SKF's programs. The integration of safety programs with other functional aspects of the enterprise has helped make safety performance a recognized and routine component of operational management and sustainability, and it has helped the organization produce significant and tangible results. The implementation of an enterprise information management and analytical solution has contributed to the firm's ability to manage the vast array of data needed to support good decision-making and leverage the power of the organization’s limited resources to produce optimal results. The firm's initiatives continue to produce performance improvements as the organization approaches its goal of zero accidents.

This article originally appeared in the June 2012 issue of Occupational Health & Safety.