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CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012

CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012. THE VALUE OF SAFETY. Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings. THE VALUE OF SAFETY. Macro Sales Stock Price

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CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012

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  1. CAE Flightscape User’s Conference The Business Value of Safety October 2, 2012

  2. THE VALUE OF SAFETY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings

  3. THE VALUE OF SAFETY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings

  4. THE VALUE OF SAFETY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings

  5. THE VALUE OF SAFETY Macro Sales Stock Price Market Cap Right-to-Operate Tactical Cost-Benefit Analysis ROI, NPV or DPP… Cumulative Savings

  6. LEARNING OBJECTIVES Can Safety yield cultural gains and financial value? Is SMS the correct roadmap? Sikorsky’s legacy: Does it actually lower risk and earn money? Should this all be considered by our customers and their insurers?

  7. SAFETY CULTURE INDICATORS Chronic unease Safety seen as a profit centre New ideas are welcomed GENERATIVE Resources are available to fix things before an accident Management is open but still obsessed with statistics Procedures are “owned” by the workforce PROACTIVE CALCULATIVE We cracked it! Lots and lots of audits HSE advisers chasing statistics We are serious, but why don’t they do what they’re told? Endless discussions to re-classify accidents Safety is high on the agenda after an accident REACTIVE PATHOLOGICAL The lawyers said it was OK Of course we have accidents, it’s a dangerous business Sack the idiot who had the accident Presentation by Patrick Hudson of Leiden University to Bristow Safety Conference, Lagos Nigeria, Feb 2011

  8. LEADERSHIPTreat every accident as our accident

  9. CULTURE COMES FROM REPETITION SMS Basic Principles Leadership Risk Mgmt Assurance People Culture & Value

  10. CULTUREStarts at the top Safety

  11. HIGH RELIABILITY ORGANIZATION

  12. COMPETITIVE EDGE By protecting its employees and remaining dedicated to “doing the right thing”, Sikorsky has reduced its accident rates, workers’ comp costs and carbon footprint to become a company synonymous with strong environmental leadership, safety and environmental responsibility.

  13. We pioneer flight solutions that bring people home everywhere…every time™

  14. And we know it makes business sense…

  15. BRIDGING FINANCE & SAFETY BUSINESS TALK Finance/Operations Safety Earnings/EPS Accident rates ROI Property loss Payback Insurance premiums PVRR Fines and citations Internal Rate of Return No. of people trained Production rates Exposure Assessments Earnings/employee Near misses ROHSEI Net Present Value Behavioral Observations Bridges Cost Benefit Audit findings the Gap

  16. The ROHSEI Task Force Objectives: In 1995, a taskforce of fifteen Fortune 500 companies sponsored the development of a process and supporting tool set to determine the financial value of Safety investments: • Build an accepted business tool. • Apply an easy to use process. • Communicate value of Safety investments. • Improve performance by encouraging better decisions.

  17. Examples of ROHSEI Projects 1. Sprinkler Protection 2. Onsite Primary Healthare 3. Disability (STD/LTD) c Mgmt 4. Disposable Coverall Recycling 5. Soil Remediation 6. HSE Websites 7. Behavior Based Safety Programs 8. Primary Healthcare in Europe 9. Epidemiology Studies and Software 10. PPE vs Engineering Controls 11. Ergonomics Programs (Lower back) 12. Ergonomics Programs (Work Station) 13. Fleet Safety Programs 14. Electronic MSDS Systems 15. PSM 16. Integrated Health and Wellness 17. IH for the FDA 18. FDM 19. EGPWS 20. SMS 21. Sim Training 22. FOQA

  18. The ROHSEI Navigation Screen Process – Horizontal Tools – Vertical

  19. What the hell do you know about finance?

  20. Fleet Safety Pays Back

  21. ROHSEI Analysis of SMS Develop and document the focus of the opportunity:

  22. Determine assumptions:

  23. Estimate and enter the costs of implementation:

  24. Research/document relative numbers of accidents:

  25. Determine financial cost of an accident:

  26. Hit the calculations button:

  27. Present results to your management:

  28. ROHSEI Analysis of Sim Training

  29. MY CONCLUSIONS 1. Safety yields value. 2. This value can be calculated. 3. It should be considered by our customers and the insurance industry. 4. We’d love to work with you on this. David Eherts PhD VP and Chief Safety Officer Sikorsky Aircraft Corporation Stratford, CT USA Office: +1 203 386 8666 Cell: +1 203 895 0410 ( GMT – 5 ) email: deherts@sikorsky.com Jill Browning Manager, A&PS - SMCC Sikorsky Aircraft Corporation Horseheads, NY USA Office: +1 607 378 4635 Cell: +1 607 377 9962 ( GMT – 5 ) email: jill.browning@sikorsky.com

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