putting performance measurement tools to work at...

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Putting Performance Measurement Tools to

Work at Maple Leaf Foods

Making Metrics MatterAugust 29, 2012 ASSE Virtual Symposium

Bob FrankDirector, Safety & Risk Management

Maple Leaf Foods USA

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Session Objectives

1. Overview of Maple Leaf Foods ◦ Company Overview◦ Past Safety Performance

2. Polling Results3. Performance Tools◦ Safety Balanced Scorecard◦ Safety Business Plan◦ Supervisor Scorecard◦ Manufacturing Excellence

4. Current Performance5. Final Thoughts

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Maple Leaf Foods

Maple Leaf Foods is one of Canada’s leading consumer packaged food companies, specializing in fresh and prepared meats, meals and bakery products. We have three of the top 20 Canadian retail brands as well as leading market positions in North American frozen par-baked bread and specialty bakery products in the United Kingdom.

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Maple Leaf Foods Breakdown

66%

29%5%

ProteinBakeryAgribusiness

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Bakery Products Group•Fresh breads, rolls, ethnic breads

•Bagels, croissants, morning goods

•Premium artisan breads

•Frozen partially & fully baked goods

•Fresh pasta and sauces

Meat Products Group•Processed meats

•Chilled and frozen ready-to-cook products

•Chilled ready-to-serve products

•Value-added fresh pork, poultry and turkey products

Agribusiness Group•Rendering operations

•Biodiesel production

•Hog production

Total Company Sales: $5.2 billionSales by Group:

Frozen Bakery Business Unit

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Maple Leaf Foods Safety PerformanceTRIR 2003 - 2006

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Maple Leaf Bakery Safety PerformanceTRIR 2003 - 2006

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Does your organization incorporate leading indicators and metrics in assessing safety

performance?

81 2 3

69%

3%

28%

1. Yes2. No3. Don’t know

What is the primary leading indicator you use?

91 2 3 4 5 6 7

29%

34%

3%

6%

3%

16%

8%

1. Inspections/Observations2. Audits/Assessments3. Perception Surveys4. Closure Rates5. Near Miss Incidents6. Other7. None of the above

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For those organizations that incorporate leading metrics as a measure of safety

performance, are you able to demonstrate an improvement in lagging indicators?

101 2 3 4

39%

16%16%

29%1. Yes2. No3. Don’t know4. Don’t use

leading metrics

Does your organization hold supervisors and managers accountable for completing

specific safety related tasks?

111 2

50%50%

1. Yes2. No

If so, what is the primary driver of “accountability”?

121 2 3 4 5

28%

9%

28%

11%

24%

1. Performance appraisal process

2. Bonus compensation3. Expectation4. Still working on it5. Not Applicable

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Maple Leaf’s Commitment to Safety

Safe Food Produced In A Safe Environment; No One Gets Hurt!

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Measures Medical Aid Rate

LTA Rate

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SAFETY BALANCED SCORECARD

2007

Trailing Leading

Supv. Safety Scorecard

66% 34%

2008 Measures Medical Aid Rate

LTA Rate


Safety Business Plan

Trailing 50% Leading50%

2012Measures Medical

Aid RateDART Rate

Supv. Safety

Scorecard


Job Safety Chapter

Trailing 40% Leading60%

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Measures

Total Reportable Freq Rate

DART rate

(severity)



Job Safety Chapter

2012 SAFETY BALANCED SCORECARD

Trailing metrics Leading metrics

(40%) (60%)

Category Weighting .20 .20 .15 .25 .20

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Measures


DART rate

(severity)



Job Safety Chapter



(40%) (60%)


Baseline(‘09- ’11 avg) 7.50 80.00 N/A N/A 84%

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Measures


DART rate

(severity)



Job Safety Chapter



(40%) (60%)


Baseline(‘09- ’11 avg) 7.50 80.00 N/A N/A 84%

2012 Plan 6.40 65.00 100% 100% 88%

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Measures


DART rate

(severity)



Job Safety Chapter



(40%) (60%)


Baseline(‘09- ’11 avg) 7.50 80.00 N/A N/A 84

2012 Plan 6.40 65.00 100% 100% 88

2012 Performance

5.95 78.00 110% 90% 80

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Measures


DART rate

(severity)



Job Safety Chapter




Baseline(‘09- ’11 avg) 7.50 80.00 N/A N/A 84

2012 Plan 6.40 65.00 100% 100% 88

2012 Performance

5.95 78.00 110% 90% 80

SCORE 0.18 0.24 0.14 0.28 0.22

Scorecard calculation: Performance divided by Plan multiplied by assigned Weighting Factor.

Supv Safety Scorecard & SBP component calculation: Plan divided by Performance multiplied by assigned Weighting Factor.

1.06

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Quarterly Report Cards

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Metrics

Total Occ. Accidents

Work Comp Cost/Hr

# of Near Misses

Reported

Safety Assessment Conducted

Closure Rate

# of JSA’s Reviewed

# of Front Line Leader One-on-One’s

Category Weighting

.15

.15

.05

.20

.20

.10

.15

As Process Matures . . .Increase Transition to Leading Metrics


(30%) (70%)

Leading Metric – Safety Business Plan

Plant: ________________ Date: ______________

Activity Action Steps Completion Date Responsibility Score

(1) Reduce Ergonomic Risk

(2) Walking/Working Surfaces

(3) Leadership Training

(4) LOCAL ACTIVITY #1:



SCORE TOTAL:

Prepared by:_______________________________ Date:_________________ Approved by Plant Mgr.:_________________________ Date:_________________

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Supervisor’s Safety Scorecard

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Leading Metric – Supv Scorecard

Examples of 20 Activities We Measure:Near Miss incidents reported & investigatedClosure on accident investigation reportsDaily shift safety auditsPre-operational inspectionsSafety Work Orders (prioritized by Risk Grid)JHSC Meetings (schedule, attendance, closure rates, communications)

Safety Crew TalksContractor Observations

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Job Safety Chapter SummaryEXCELLENT ABOVE AVG AVG BELOW AVG NEEDS IMP

4.5 - 5.0 3.5 - 4.4 2.5 - 3.4 1.5 - 2.4 0 - 1.4Sub Elements

LEADERSHIP 1.01.00 Leadership Structure 4.41.02.00 OHS Resources 3.31.03.00 Management Meetings 4.3

TRAINING 2.01.00 New Employee Orientation 4.02.02.00 Employee Training 3.42.03.00 Leadership training - Site Leadership Team 1.6

HAZARD MGT. 3.01.00 Hazard Identification & Response Systems 3.43.02.00 Monthly Plant Inspections 3.73.03.00 Specific Inspections 4.03.04.00 Operator inspections 4.03.05.00 Safety Rules 4.3

TASKS 4.01.00 Task Inventory & Risk Assessment 3.44.02.00 Lock out tag out 3.64.03.00 Confined Space Entry 3.64.04.00 Hot work 3.14.05.00 Working at Heights 2.44.06.00 Standard Operating Procedures 4.34.07.00 Task Observations 2.3

ACCIDENT INVEST 5.01.00 Accident & Incident Investigations 4.9EMERGENCY 6.01.00 Emergency Preparedness & Response Plan 4.6

6.02.00 Emergency Preparedness & Response Procedures 4.1COMMUNICATIONS7.01.00 Joint OHS Committee 4.4

7.02.00 Safety Talks 3.37.03.00 OHS Communications 3.97.04.00 OHS Recognition 3.4

OCC HEALTH 8.01.00 First Aid/CPR 3.78.02.00 Chemical & Hazardous Substances 4.38.03.00 Exposure Monitoring & Control Plan for Chemical, Biological and Physical Hazards 3.6

ENGINEERING 9.01.00 Safeguarding 3.19.02.00 Capital Expenditure Requests 3.69.03.00 Contractor management process 3.69.04.00 Service providers 3.7

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Risk Assessment Grid

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Six Sigma @ The Edge

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How the company listens to the voice of the front-line employee

Improved communication (daily pre-shift meetings by Workgroups)

Management and employees Everyone getsManagement and supervisors the same Supervisors and employees information!Employee to employee

Improved job knowledge (ID the issue, track the issue, propose a project to correct it)

A cleaner, safer, more organized place to work! Less Injuries!!

Instills a sense of pride in what you do!

Consists of ~8 hourly ee’s led by supervisor

S&H Leading IndicatorsEmployees trained in CPR/FA

Number (or %) of managers trained in Safety & Health Leadership

Incident investigations completed within prescribed timeframe

Wellness program participation rates

Resolution of ee suggestions/complaints

Avg. age of outstanding recommendations

EE perception surveys

Percent of internal inspections conducted as scheduled

Number of sr. leadership meetings with safety included on the agenda

Number of safe acts, near misses reported or recognized

Leading Metric: Percent SafeBehaviors

ObservationsSafe At-Risk % Safes Sample

Operator’s driver license displayed above the waist

48 9 84% 57

Forks 6” or less from ground when traveling

24 4 86% 28

Seat belt worn during forklift operation 51 18 74% 69

Sounds horn when exiting trailer 18 4 82% 22

Sets parking brake, puts forks to floor, puts gear in neutral, and shuts off when leaving forklift unattended

30 5 86% 35

Uses approved lift cage when elevating ee’s to high racks

12 2 86% 14

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Recommended Approach to Safety Performance Metrics

Organization Level # of Metrics Metric Balance

Corporate 5 to 8 20% Leading80% Lagging

Division 12 to 15 50% Leading50% Lagging

Location 50 to 60 80% Leading20% Lagging

Rewards For Excellence Program

VP Reg'lDirectors

Plant Mgr

Production Mgr

Maintenance Manager

QA Manager

PltSupv’s

Min Target Max

Direct Costs 15 15 15 15 15 10 15 101 100 99

OH Spend 15 10 15 15 10 10 10 105 100 95

Total Downtime % 5 10 10 10 110 Budget 90

Health and Safety 20 20 20 20 20 20 20 1.10 1.00 0.90

QA Conformance 20 15 15 20 15 20 15 10 15 20

Schedule Compliance 15 20 20 15 15 10 10 85 90 95

Six Sigma 15 20 10 5 5 10Scorecard and Plant

Specific/TBD

Other 10 20 20Scorecard and Plant

Specific/TBD

Illustration Only32

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Linking Safety Baln Score WithOther Initiatives

Corporate Safety Award Programs

At MLFB, 4 Award Programs:1. Best Performance2. Most Improved3. Distinguished Achievement4. MLFB Annual Safety Performance Award

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Linking Safety Baln Score WithOther Initiatives

Corporate Safety Award Programs

Best Performance & Most Improved◦ 25% Lagging Metric (TRIR)◦ 25% Accident Cost (Total Incurred + Other)◦ 50% Balanced Scorecard Score

MLFB Annual Safety Performance Award◦ SBS Score of 1.00 or below◦ Meeting majority of site safety action plans◦ $10,000 stipend

Control Chart: 2007 – 2011

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0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2007 2008 2009 2010 2011 2012 P6

MLFB TRIRIndustry

Maple Leaf Bakery Safety PerformanceTRIR 2007 – 2012 YTD

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0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MLFB TRIRIndustry

Maple Leaf Bakery Safety PerformanceTRIR 2003 – 2012 YTD

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Beginning of shift to leading indicators

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011

MLF TRIR

Industry

Beginning of shift to leading indicators

Maple Leaf Foods Safety PerformanceTRIR 2003 - 2011

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Maple Leaf Foods

Lost Time Incident Rates

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Lost Time Accident Severity

The actual severity of lost time injuries, as measured by “days away from work”, has declined past two years. Contributing factors:• Safety investments and program initiatives (e.g. ergonomics),• Aggressive return-to-work and claims management practices,•Site Leadership expectations and accountabilities (Zero Tolerance, Safe Work Practices, Audits).OPPORTUNITY

Timely reportingReduced attorney involvement

(U.S.)

*# days lost x 200,000/hrs worked

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Collective (United Sates, Canada) workers’ compensation rates per $100 payroll has declined 25% since 2006:◦ 2006 = $3.18/$100◦ 2010 = $2.37/$100

Within the U.S. improved loss experience paved the way for a 44% reduction in fixed premium costs per $100 payroll:◦ 2006 = $1.059◦ 2011 = $0.5890

We have been able to reduce our required letters of credit (collateral) by $1,125,000.

Canadian NEER, COR and Safety Group insurance rebates totaling in excess of $1,000,000

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Financial Impact

Workers Compensation Rates per $100 Payroll

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Present “Dashboard”

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Future DashboardMaple Leaf Foods Company Safety Dashboard

Executive SummaryQ2, 2011

Indicator (with link to definition) MLF Overall MLCF MLCF Pork Rothsay

MLCF Poultry CBCL Fresh ML Frozen Olivieri UK Bakery Agri Farms

Leading IndicatorsW G W G Y G R G W G

Job Safety Chapter W G W W Y G Y Y G Y

Near Misses Y G G Y G Y Y G G R

Supv Scorecards G G G G G R G W W W

Safety Business Plan W Y R G G R G W W Y

Closure Rate Y Y Y R R G Y G Y W

EE Perception Survey Results G Y W W W R W Y Y G

Safety Observations G G G G G Y R G W Y

Lagging Injury IndicatorsW G W G Y G R G W G

# Lost Time Injuries G G G G Y G G G G W

LTA Freq Rate G G W G G G G G Y G

# Medical Aids W G R G Y G G G G W

Medical Aid Freq Rate W G Y G G G Y G W G

# Total Reportables W G W G W G W G W G

Total Reportable Freq Rate G G Y W W W W G W G

Severity Rate Y G G W G W Y W W W

Green: Improving Trend or Superior PerformanceWhite: Acceptable

Yellow: Stable, needs improvement or potential non-improving trend

Red: Unacceptable level 44

RESULTS

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65% frequency reduction

68% severity

reduction

Reduced Cost-of-

RiskImproved

Productivity

Improved Product Quality

MLFB Employer of

Choice

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Actual vs Theoretical Lost Work Days

0

2000

4000

6000

8000

10000

12000

14000

2003 2004 2005 2006 2007 2008 2009 2010 2011Actual LWD's Theoretical LWD's

32,500 LWD’s32,500 LWD’s

Anatomy Of An Accident

Accident Description:◦ 64 year old male forklift operator slipped and fell descending a

ladder, fell approximately 10 to 14 feet. Employed 24 years.Nature Of Injury:

◦ Claimant fractured his left tibia and fibula, left knee medial meniscaltear, lumbar sacral strain superimposed on pre-existing degenerative changes, torn left shoulder rotator cuff.

Medical Treatment:◦ Fractured tibia and fibula surgically repaired by Tri City Medical.◦ Orthopedist conducted surgical repair of rotator cuff 7/6/01.

Injury Outcome:◦ Permanent disability held for no heavy lifting, climbing over uneven

ground, squatting, kneeling, crouching, crawling and pivoting. No use above shoulder.

◦ On Temporary Disability in excess of 365 days.◦ Currently on Permanent Disability.

Anatomy Of An Accident

Paid To Date Reserve Total IncurredMedical $111,204 $5,108 $116,312

Indemnity $28,296 $66,639 $94,935Expense $9,328 $671 $10,000

Accident Costs:

• 12/31/20XX: Paid $6,535 + Reserves $0 = $6,535 Incurred


• 12/31/20XX: Paid $148,828 + Reserves $72,418 = $221,247 Incurred

• Future reserves set for 65% disability rating.


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Additional Sales Needed To Offset Accident Costs Based on Company Gross Margins

Accident

C os ts

1%

G ros s Margin

5%

G ros s Margin

14.8% G ros s

Margin $ 1,000 $ 100,000 $ 20,000 $ 6,700

$ 5,000 $ 500,000 $ 100,000 $ 33,300

$ 10,000 $ 1,000,000 $ 200,000 $ 66,700

$ 25,000 $ 2,500,000 $ 500,000 $ 166,700

$ 100,000 $ 10,000,000 $ 2,000,000 $ 666,700

Sales Perspective:$221,000 Fall Accident

Sell the equivalent of $1,500,000 of a basic salad product to recoup the lost gross margin of this workplace incident.

Find a new customer the size of American XYZ Company who generated $1,500,000 in total sales (#12 in our Food Service channel).

Manufacturing Perspective:$221,000 Fall Accident

XYZ Plant cost to produce and distribute customer product = $0.252/lb.877,000 lbs production needed to recoup DIRECTcost of this incident.

Approx 2 ½ days of production

3,500,000 lbs production needed to recoup INDIRECT cost of this incident.

Approx 9 days of production3.1% of total annual production

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What you measure drives behaviorFocus on managing what is important, not what is easiest to measureAttempt to tie in Financial Indicators (i.e workers comp $$, direct & indirect costs)Metrics (leading & lagging) can be difficult to collect, they can be time consuming, inflexible and may present significant change management issues!

Real Drivers of Safety Performance

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BARRIERSSystems to collect data are problematic◦ Including data validationRestructuring/Reorganization – baselines keep movingReporting Level: How senior?◦ (level of understanding of EHS)Difficult to roll-up due to diversity of operationsDesire to use as a metric for performance –makes them subject to gamingNot supported by senior leadershipExtra work, confusing, subjective

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ConclusionHealth & Safety Performance Metrics are Evolving◦ Going beyond incidents◦ Integrating risk assessment and control

methodologies“Next Level” Performance Metrics complement, and do not replace, outcome (lagging) measures.◦ Focus on how well key elements of our OHS

Management System (Job Safety Chapter) are performing.

“The mix of an organization’s performance indicators tends to reflect the maturity of its EHS process.”

Grace Weaver, Strategic Environmental Management, 1996

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Sources of InformationCommonwealth of Australia (Dept of Employment and Workplace Relations), 2005 “Guidance on the Use of Positive Performance Indicators to Improve Workplace Health & Safety”http://www.safeworkaustralia.gov.au/NR/rdonlyres/596857A7-6390-4263-8915-4689221D01DD/0/ASCCPPIGuidanceBooklet.pdf

Health and Safety Executive (United Kingdom), 2001 “A Guide to Measuring Health & Safety Performance”http://www.hse.gov.uk/opsunit/perfmeas.pdf

“Far better an approximate answer to the right question which may be difficult to frame . . .

. . . than an exact answer to the wrong question which is always easy to ask.”

John W. Tukey, Statistician

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Thank You!

Bob [email protected]

847-655-8140

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