COST OF ACCIDENT.ppt
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This document discusses the costs of workplace accidents. It notes that accidents result in direct costs like medical expenses, lost wages, and compensation, as well as indirect costs that are 5 times the direct costs, such as decreased productivity. Accidents cost more than their direct expenses alone due to ripple effects. The document advocates calculating total accident costs using a standard method to understand their full financial impact and take steps to reduce costs by preventing accidents.
COST OF ACCIDENT.ppt
- 2. COST OF ACCIDENTS They Cost More Than You Might Think If an accident took place, workers who witnessed the scene are too shaken up to resume their duties. Prodn. stopped until the damaged eqpt. Is cleaned / replaced with new machinery. Reassignment of the injured worker, called in a replacement, and explained the duties. The supervisor filled out a lengthy accident report and several regulatory forms. The business owner prepared for possible litigation. What are the cost implications of these interrelated events? training modcost 2
- 3. training modcost 3 Why to measure ? “ When you can measure what you are speaking about, and express it in numbers, you know something about it ; when you cannot measure it in numbers, your knowledge is of a meager and unsatisfactory kind “ - Lord Kelvin Judgement : Arrived by weighing or comparison with one another Measurement : Comparison with a standard
- 4. training modcost 4 COST OF ACCIDENT Factors Medical cost Administrative cost Man days wages lost Loss of property Compensation Decreased output Breakdown/Maintenance Working hrs lost Upstream / downstream Retraining cost Acc. Investigation cost Loss of morale
- 5. training modcost 5 COST OF ACCIDENT • Direct costs • Indirect costs = Direct cost x 5 Total Cost = Direct + Indirect cost
- 6. training modcost 6 Calculation Direct costs 1. Medical cost Cost per day Serious >20 days (21) = Rs 440/- Minor <20 days (11 ) = Rs. 264/- First Aid (1 day) = Rs. 100/- 2. Man days lost wages Rs. 500 / day 3. Compensation Paid
- 7. training modcost 7 Direct Cost of Accident Involves • Medical cost : Doctor’s fee, visit to / or by doctor, medicine, hospital charge etc • Man days wages lost • Loss of property : machinery, equipment, job etc • Compensation
- 8. training modcost 8 Direct Cost of Accident Involves • Wages for lost time of uninjured co-workers. • Workers adjacent to the accident scene who stop their work to watch or offer assistance or talk about the accident need to be considered when assessing the financial impact of an accident.
- 9. training modcost 9 Direct Cost of Accident Involves • Repair / replacement of damaged material or equipment. This includes the time to order, deliver, and test the new machine following the accident. • Recruiting and training temporary or permanent workers-and all the costs incurred by administrative personnel.
- 10. training modcost 10 Direct Cost of Accident Involves • Overtime, Extra costs of employee overtime to make up lost production frequently occur after a workplace accident. • Supervisor's diverted activity. Supervisory wages for time attending to the accident.
- 11. training modcost 11 Direct Cost of Accident Involves • The cost of wages for an injured worker's return to a job could also be a factor, if the worker's performance decreases. • Filing accident and investigation reports to statutory agencies, & the expense of accident investigation and recommendations for preventive measures, are to be considered.
- 12. training modcost 12 Indirect Cost of Accident Involves • Administrative cost : Accident investigation, enquiry, reporting, time of enquiry committee members . • Decreased output : loss of efficiency • Breakdown / Maint. : man, m/c, material • Working hrs lost : Upstream / downstream • Retraining cost: deployment of new persons • Loss of morale
- 13. training modcost 13 How To Reduce this Costs? There are a number of steps you can take to reduce the chance of accidents and ill health happening. • STEP 1 : Find out what could cause harm. • STEP 2 : Identify who might be harmed – including your employees, visitors. • STEP 3 : Decide what you should do to prevent anything happening to them. • STEP 4 :Take action in a planned way, recording what you have done. • STEP 5 : Check these actions are still working from time to time.
- 14. training modcost 14 How To Reduce this Costs? • You can cut down on your costs by preventing accidents in the workplace. Saving on the costs of these incidents is an investment in the future of your business. • The costs of accidents only have real meaning when related to your business. You should compare them to your overall operating costs, or annual turnover, or the added work or ‘sales’ needed to cover them. You can then judge how significant they are.
- 15. 15 Compensation Sick pay Damage from injuries (eqpt, goods & materials) Recruitment Admin. Cost Other insurance ( eg, fire, ) Loss of output Damage from non-injury accidents Employers Investigation costs Medical treatment (short and long term)
- 16. 16 Individual Loss earnings Extra expenditure when absent Human costs (pain-agony) grief & suffering) Sick pay Friends / Relatives
- 17. 17 Human costs (pain-agony) grief and suffering) Damage from injuries (eqpt, goods and materials) Admin. Cost Society / Individual Medical treatment (short and long term)
- 18. 18 Individual Loss earnings Extra expenditure when absent Compensation Human costs (pain grief and suffering) Cost Categories. Sick pay Damage from injuries (eqpt, goods and materials) Recruitment Admin. Cost Other insurance ( eg, fire, ) Loss of output Damage from non- injury accidents Employers Society/ Individual Investigation costs Medical treatment (short and long term)
- 19. 19 VISIBLE COSTS •Loss or damage to equipments •Loss of Production •Medical Cost & Compensation •Legal Cost. Insurance •Loss of lives & limbs •Cost of Mandays lost of injured 1. Production Loss . 2. Loss of goodwill. 3. Lowered employees moral. 4. Loss of Public confidence & revenue. 5. Failures and delay to fulfill orders. 6. Loss of earning power of injured. 7. Unfavorable Public Relations. 8. Product spoiled by accident. 9. Lost time by fellow workers. 10. Loss of skilled man power. 11. Recovery & salvage of damaged equipment. 12. Economic loss to injured’s family. 13. Degradation of efficiency due to loss of experienced and trained personnel. 14. Cost of employer for continuing the full wages to the injured employee even his service in not worth. 15. Cost of training to the new employee 16. Rehabilitation of the injured employee
- 20. training modcost 20 Pitfalls • Suppression of accident data • Carrying injuries (no leave or join early) • Not accurate for individual cases • Not useful if too much time spent in data generating
- 21. training modcost 21 COST OF ACCIDENT Looking ahead Towards more accuracy :- Production lost cost Maint./Repair cost Actual wages lost Administrative cost Re-training cost Lost property Dangerous occurrence/near miss cases
- 22. Case Study • Accident : While material was being shifted by Crane, the lifted material swung and hit the Lt. leg • Injury : Causing crush injury. Lt. Leg • Leave : 28 days training modcost 22
- 23. Case Study • Accident : While grinding a tool on Pedestal grinding m/c, the tool slipped and his finger touched the grinding wheel • Injury : causing traumatic amputation of distal end of Rt. index finger. • Leave : 40 days training modcost 23
- 24. Case Study • Accident : While coming out of the Crane Operator’s Cabin, he fell down on Crane Operator’s walkway. • Injury : Blunt injury back • Leave : 15 days training modcost 24
- 25. Having a standard method of calculation helps in many ways. If applied only to individual cases there may be errors but if it is done for departments / unit over a period of time like a month / year, the result is a fair indicator of how much the accidents in a department unit are costing the company. 25