In the manufacturing and industrial sectors, there are many moving parts, moving humans, and coordination of a million small tasks to make one finished product. With so many factors working in tandem, human awareness is critical to ensuring that products meet quality specifications and that employees go home without injuries at the end of their shifts.
How do you ensure that your employees remain safe? You must prioritize employee training, keeping employees up-to-date on safety and compliance regulations, and regular workspace reminders. These communications have an incredible return on investment for environmental health and safety (EHS), and they can have a massive impact on your bottom line.
In addition to pushing communications out to your employees, you help create a safe environment when you empower associates to anonymously report violations. Often, employees on the front lines of your workforce are the only ones who see a potential violation, so it is critical that they have a path to quickly report issues.
The quicker an issue is remedied, the less likely there will be a fine, recall or injury.
In 2016, OSHA increased the maximum fines for their citations.
As you can see, repeat violations are most heavily penalized . These are also the easiest violations to prevent. A repeat violation is defined as follows:
An employer may be cited for a repeated violation if that employer has been cited previously, within the last five years, for the same or a substantially similar condition or hazard and the citation has become a final order of the Occupational Safety and Health Review Commission (OSHRC).
Repeat violations are so heavily punished because it is assumed you can fix the problem after you have seen it once. How do you keep a violation from happening again and getting hit with a big fine?
Communicate with your employees.
- Notify employees that a violation occurred
- Update training materials to prevent future errors
- Send reminders of the types of violations to be looking for and how to prevent them
- Give employees a way to remedy/report a violation
Without a channel to communicate with your employees about violations and safety, it is much harder to prevent an issue from happening in the future.
Interested in seeing how much violations have cost your company? Give it a search.
Recalls are similar to OSHA violations in that they damage your company, but in this case, the free market is punishing you instead of the government. Food production, automotive, consumer electronic, and pharmaceutical companies produce the most high-profile recalls due to the potential harm to customers.
What causes a recall? Causes may vary, but in most cases, there was a failure in human action or machinery during the manufacturing process.
Recalls can be massively expensive due to both the cost to remove/replace products and the impact to public perception that lowers stock price and negatively affects customer trust and loyalty.
Toyota’s recent stream of gas pedal recalls resulted in a $2 billion loss consisting of repair expenses and lost sales. In conjunction with the financial crisis, Toyota’s stock price dropped more than 20 percent or $35 billion. Likewise, Keurig saw a 2.2 percent fall in stock price in light of their 7.2 million coffee machines recalled.
It has also been shown that Class 1 recalls in the food production industry decrease stock price. 5 days after a Class 1 recall announcement, stock returns decrease an average of 1.15%. The average firm with 472 million shares of stock outstanding and a $20 per share value on the day of a recall announcement could realize a reduced value of approximately $109 million in market equity. [Source]
Although these incidents are less common, the stakes are much higher when it comes to recalls. Employees need a better way to communicate instantly to management when they realize an issue in the manufacturing process. Putting a communication tool in place can save an entire recall.
Damages can also be minimized when companies have the ability to instruct their employees in how to handle the recall process. Imagine a restaurant clerk being able to answer a customer’s question about which locations are affected by an E.coli outbreak rather than saying “I don’t know.” Your front-line employees must be equipped to answer questions to reassure your customers and provide accurate information.
Reach every employee
Do you think your company can benefit from a direct method of communication with your employees and a way for employees to communicate instantly to avoid violations and process failures? Red e App may be your answer.
Schedule a demo and let’s walk through how our customers are using Red e App to ensure safety and quality.
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