The Role of the Ergonomist as a Business Management Asset; Ergonomists Can Play a Key Role in Changing Our Assumptions about "The Cost of Doing Business."

By Roth, Cynthia L. | Occupational Hazards, September 2004 | Go to article overview

The Role of the Ergonomist as a Business Management Asset; Ergonomists Can Play a Key Role in Changing Our Assumptions about "The Cost of Doing Business."


Roth, Cynthia L., Occupational Hazards


How many times do you think your accounting staff, human resources director, president or CEO have uttered the words, "This is the cost of doing business." But are the costs that are driving down your profits, creating rework, increasing the expense of waste removal, reducing your productivity, increasing quality issues, and creating employee dissatisfaction and turnover really the costs of "doing business?" Or are they the result of a lack of education and understanding that these are manageable or even avoidable costs?

Suppose you are a director of a board for a large corporation. At a board meeting, the presenter is talking about the millions of dollars being spent in workers' compensation and disability costs, the tremendous losses on the part of the company financially and the falling stock prices. How would you react? Would you feel the need to get some additional information to assist the company?

Management can use some direction in response to these issues. As a safety director or ergonomics consultant to any company, you play a role in providing management and the board with an understanding of the cost benefits that can be achieved through ergonomics. Good news travels up the corporate ladder very rapidly. Everyone in the company gets excited about a large new product sale, new product coming to market or next best widget. However, when the news is not so good, the filters are in place to keep those in power from understanding the real truths until sometimes it is too late. That can often be the case with workplace injuries and illnesses.

[ILLUSTRATION OMITTED]

To understand fully how ergonomics can benefit a business, we need to understand knowledge management, intellectual and human capital and some of the other economic buzz words being used today that are very well applied to ergonomics.

Let's begin with an explanation of economics. We first have to have a definition of economics because we are talking dollars and sense (sorry, I couldn't resist).

Economics is the social science that studies the production, distribution, and consumption of goods and services in terms of the trade-offs between competing alternatives as observed through measurable quantities such as input, price and output. The field of economics comprises a number of potentially irreconcilable theories about systems of production and distribution, but as a general rule, economists study human behavior and welfare as a relationship between ends socially required and scarce means which have alternative uses (Lionel Robbins, 1935).

In the late 20th century, one of the areas of study that produced change in economic thinking was the examination of a risk-based rather than price-based model. The study of risk, which viewed variations in price over time as more important than actual price, has been influential. This particularly applies to financial economics in which risk-return tradeoffs are the crucial decisions to be made.

Ergonomics similarly deals with risk-return trade-offs. As ergonomics engineering consultants, we mitigate risk by engineering out a problem. By removing the risk, we end the potential for additional costs and labor problems and can manage and control the expenditure for the solution. Risk can be transferred through means such as insurance coverage. With this method, you are paying the insurance company to assume the risk but you still pay.

Would you be happy to spend $10,000 on a solution to prevent a $100,000 back injury? Would you spend $400,000 on a capital improvement on an assembly line to prevent a recall of insurmountable dollars?

Knowledge Management

Now let's move on to knowledge management and understand where this fits into the picture. Knowledge management is a business activity with two primary aspects:

1) Treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy and practice at all levels of the organization. …

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