Chapter 5 Safety, Health, and Competition in the Global Marketplace
Major Topics • Competitiveness • Productivity • Quality • How Safety and Health can improve Competitiveness
How can global competition have a negative impact on safety and health in the work place • To survive and prosper in today’s global marketplace, industrial companies must be competitive. • Competing in the global marketplace has been described as the equivalent of running a race that has no finish line. • The need to achieve peak performance levels day after day put intense pressure on companies, and pressure runs downhill. • This means that all employees from executive-level managers to workers on the shop floor feel it. • This can create an atmosphere that can increase the likelihood of accidents, and lead to shortcuts that can increase potential health hazards.
Competitiveness • The Institute for Corporate Competitiveness defines competitiveness as: • The ability to consistently succeed and prosper in the marketplace whether it is local, regional, national, or global.
Characteristics of the most competitive companies • 1. Consistently outperform their competitors in the key areas of quality, productivity, response time, service, cost, and corporate image. • 2. Continually improve all of these areas.
Continual improvement • The two key concepts associated with competitiveness are peak performance and continual improvement (quality, productivity, response time, service, cost, and corporate image). • The process of improvement must be continual. • In order to compete, industrial companies must continually and consistently combine the best people and the best technologies with the best management strategies. • The productivity record of today will be broken tomorrow. What is world class quality today will be mediocre tomorrow.
Productivity and value added • Productivity is the concept of comparing output of goods or services to the input of resources needed to produce or deliver them. • Value added is the difference between what it costs to produce a product and what it costs to purchase it. • The difference represents the value that has been added to the product by the production process. • Value added is increased when productivity is increased.
How to recognize declining productivity • Productivity is declining when: • 1. Output declines, and input is constant, or • 2. Output is constant, but input increases.
How to recognize improving productivity • Productivity is improving when: • 1. Output is constant, but input decreases; or • 2. Output increases, and input is constant.
Relationship between productivity and quality • Nothing has been gained if productivity is improved to the detriment of quality. • When productivity is improved, quality must also improve or at least remain constant.
Quality • Quality is a measure of the extent to which a product or service meets or exceeds customer expectations.
Rebuttal: A safety and health program is just a bunch of bureaucratic regulations that get in the way of profits • Talented people working in a safe and healthy environment will be more competitive than equally talented people who are constantly distracted by concerns for their safety and health. • In addition the most talented employees cannot help a company compete if they are slowed by injuries. • Money that must be diverted to worker’s compensation, medical claims, product liability litigation, and environmental cleanups is money that could have been invested in the company to be more competitive/profitable.
Summary • Competitiveness is the ability to succeed and prosper in the local, regional, national, and global marketplace. • Productivity is a measure of output in goods and services. • Quality is a measure of the extent to which a product meets or exceeds customer expectations. • Safety and health contribute to competitiveness.
Home work • Answer questions 3 and 10 on page 85. • 3. What are the common characteristics of the most competitive companies? • 10. Write a brief rebuttal to the following statement: “A safety and health program is just a bunch of bureaucratic regulations that get in the way of profits.”