Day: September 8, 2015

Part 3: Why Businesses Fail

The business section of the newspaper seems to carry daily notices of failing businesses. Despite tighter requirements, bankruptcies are up. Businesses are succumbing to a combination of the economic slowdown, tighter credit and high fuel costs. Today we continue our series on why businesses fail (see our July 14 and 16 posts).

Most business fail for a combination of reasons, including:

  • Poor collection practices. It’s not enough to make the sale; you have to collect the money. While this should be obvious, many businesses fail to initiate or maintain good collection practices. Just like sales, collections should be a daily task. The biggest mistake many businessmen make is to allow late accounts to go too long before starting the collection process. Many customers will take advantage of the traditional 30-, 60-,  90-day payment schedule. Try aging your accounts receivable by the 15th and month end or even weekly. The sooner you start collections, the better the chance of collecting and the faster your money turns over.
  • Lack of experience in basic business know-how. On-the-job experience is an effective teacher, but the lessons can be costly. Develop an ability to learn from the experiences of others. Education, keeping up with industry journals and publications and attending professional conferences and seminars can offset a lack of personal experience. Meeting with other businessmen through professional organizations or social/community service groups provides a valuable opportunity to discuss common business problems and issues.
  • Poor location. For retail businesses that depend upon walk-in or drive-by trade, poor location can be disastrous. Manufacturing and industrial concerns require easy access to freeways and other transportation routes for both delivery of raw materials and shipment of finished product. Convenience and visibility are key. 

    To be continued

Part 5: Why Businesses Fail

At DJ Products we believe in the value of learning from experience — ours, our customers and the business community at large. It’s not necessary to reinvent the wheel. The savvy businessman will learn from the experiences of others and turn that knowledge to his advantage.

With that in mind, we’ve been talking about why businesses fail (see our posts starting July 14). The economy is down, credit is tight and fuel is up. Times are tough and many businesses are struggling to survive. Taking a look at the most common reasons businesses fail may help us all to avoid the same pitfalls.

Continuing our list of why businesses fail:

  • Unwarranted personal expenses. The news is fully of greedy or sloppy businessmen (and politicians) who now find themselves fired or even jailed for using their business as a personal expense account. Hard-working businessmen deserve to profit from their labors, but they also have a responsibility to set an example of fiscal responsibility for their employees and create a profit for their shareholders. You need to be profitable to earn the perks. Set clear policies for charging expenses to the company that follow IRS guidelines and regulations. Set an example for employees and monitor expenses regularly to curb abuse.
  • Unplanned expansion. Entrepreneurs eager to capitalize on every opportunity may be tempted to expand quickly. However, unplanned expansion is the quickest way to run out of cash fast. Expanding a business should involve careful, long-term planning. Take sufficient time for market analysis to ensure that expansion is warranted and can continue to be supported by future sales. Develop an implementation schedule and don’t cut corners on the implementation process. Proper implementation is pivotal to the success of an expansion plan. A good plan, poorly implemented, will turn out to be a poor plan.

 To be continued

Is OSHA Underreporting Injuries?

At a recent Congressional hearing, critics charged that OSHA is underreporting injuries. In questioning the competence of the federal agency designated to protect the health and safety of American workers, critics cited several independent studies, contending that nearly half of all workplace injuries go unreported to OSHA.

Independent studies cited both reviewed the impact of changes to OSHA’s injury-reporting rules and compared injury data reported to OSHA by employers with that reported to state workers’ compensation plans. In one study, a Michigan State University professor of medicine noted that while workplace fatalities have not declined over the years, reported injuries have declined significantly. He found the data suspect. According to the professor, a decline in injuries should have resulted in a similar decline in fatalities. 

The significant data discrepancies between OSHA and state worker’s compensation plans were attributed to numerous possible causes, including the underreporting of injuries to employers by immigrant workers concerned about job retention, reclassification of workers by employers into non-reporting job descriptions, managers discouraging injury reporting, and several other causes. Reports came just shy of charging employer fraud, criticizing OSHA for relying solely on employer statistics.

OSHA defended its reporting procedures, pointing out that in addition to employer submitted data, each year its agents conduct 250 record-keeping audits of employers. OSHA said audits indicate that 90% of employer-submitted data on injuries and illness is accurate. Defending OSHA before the House Committee on Education and Labor, OSHA assistant secretary Edwin Foulke, Jr. said, “In Fiscal Year 2008, of the almost 57,000 violations issued so far, 80% have been categorized as serious, willful, repeat or failure-to-abate, the highest percentage ever recorded by the agency. We are also effectively targeting our inspections.” While Foulke noted that violations were found on 78% of the construction worksites inspected this year, he contended that OSHA’s diligence is responsible for the lowest workplace injuries, illnesses and fatalities in U.S. history.

Using Ergonomic Equipment to Reduce Injury Rates

In our last post we talked about the challenges of managing a multicultural workforce in material handling, logistics, warehousing, fulfillment and other businesses. OSHA has reported higher than normal injury and on-the-job death rates for foreign-born Hispanic workers who comprise a growing segment of America’s hourly workforce. While language and cultural differences appear to be at the root of the problem, injury and death rates can be cut by using intuitive, ergonomically-designed, powered equipment to meet your material handling needs.

When communication is an issue, equipment that is easy to operate can improve training speed and reduce potential worker operation errors that can lead to injury. When controls are intuitively designed, communication gaps are narrowed further. What might not be grasped or fully remembered in verbal communication can be intuited by gesture or familiarity with similar equipment. This is not to say that a thorough training and safety program is not necessary, only that easy-to-operate equipment shortens the time between initial training and competent operation. Ergonomically-designed equipment is built around the worker, not the task, making it extremely user-friendly and an excellent choice in multicultural work environments.

Ergonomic material handling equipment that is electric or battery powered can further reduce injury and workplace death rates. In material handling situations, most injuries come from pulling, pushing or lifting loads and are the result of over-stretching or over-straining muscles. Powered equipment removes most of the need for heavy physical exertion from pulling, pushing and lifting tasks. By allowing the equipment to do the heavy lifting, so to speak, fewer situations are presented during the workday that might place workers at risk of injury.

To find out more about ergonomically-designed material handling equipment, visit the DJ Products website.

Michigan Proposes Ergonomic Regs to Curb Injuries

In response to concern about workplace injuries, Michigan plans to institute new state regulations targeting repetitive-stress job injuries. Under the proposed rules, employers would be required to offer ergonomic training and work to correct reported injuries. State regulators would have the power to punish employers for repeated worker injuries. Critics are concerned that the rules will place another financial burden on Michigan’s already struggling economy.

California is the only other state with similar regulations, despite the fact that repetitive-stress job injuries are estimated by OSHA to cost America more than $20 billion annually, or about one-third of the total workers’ compensation costs paid by employers. “It’s a significant issue, even though the standard is fairly minimal,” said Doug Kalinowski, director of MIOSHA. “It’s been very contentious.”

In 2001, repetitive-stress injury regulations proposed by federal regulators were estimated to cost employers $5 billion. Those regulations were blocked by Congress. Michigan’s Small Business Association is concerned that the costs of training and reporting procedures will place a significant burden on small businesses and make it harder for them to compete nationally. Larger companies that have ergonomics programs in place would be exempted under the proposed rules.

Manufacturers are similarly concerned. “It’s a pretty broad issue and there are a lot of costs involved,” noted Amy Show of the Michigan Manufacturers Association. “We don’t know what true costs are going to be until we know how strict the department is going to be in enforcing this.”

The proposed rules would only apply to general industry. Construction, agriculture, mining and domestic employment are specifically excluded. But the construction industry and labor representatives believe that if the rules are adopted, it will only be a matter of time before they are expanded to include construction. “There are many within the building trades, or ironworkers, that suffer from repetitive-motion injuries,” said William Borch, president of Ironworkers Local 25 in Saginaw, Michigan and one of the labor representatives who reviewed the proposed rules.

“The problem is that … these types of injuries are not an imminent danger [to life], even though they can be career-ending types of injuries and cause long-term pain and suffering,” Borch said. Considering the risk to workers, Borch felt the proposed rules provided minimum standards. “It doesn’t seem like a lot to ask,” he said.

Advocates of the proposed rules argue that the implementation of ergonomics creates a safer work environment, increases productivity, minimizes downtime and decreases workers’ compensation costs — all formidable inducements to embracing ergonomics.

Proactive Problem Solving Reduces Workplace Injuries

Reducing workplace injuries is every responsible business owner’s goal. Not only do you value your employees’ health and safety, but the cost of ignoring workplace safety — high medical, insurance, workers’ compensation and lost man-hour costs — can be staggering. It pays to be proactive in looking for potential injury-causing problems and coming up with ergonomic solutions that improve the fit between the work and the worker.

Developing a proactive plan to reduce workplace injuries is a four-step process:

  1. Observe and question
  2. Set priorities
  3. Implement improvements
  4. Follow up

1. Observe and question.

Look for clues to possible problem areas in available statistical data. Check injury reports for patterns that indicate higher injury rates for certain tasks or in certain areas. OSHA logs, worker reports and complaints, absence rates, and workers’ compensation reports are good starting points. Ask if your workers’ compensation insurance carrier provides workplace assessment surveys as part of their risk-management services.  

Look at production reports for bottleneck areas. Check quality control reports for poor quality product or service. Problems can indicate areas where workers are having difficulty completing tasks effectively under current conditions. The root cause of such problems is often poorly designed equipment or task procedures.

Spend some time following the entire process of your business from start to finish. Pay particular attention to areas highlighted by the data review. Observe the way workers do their jobs. Watch for risk factors such as awkward postures, repetitive motions, forceful exertions, pressure points or extended periods spent in the same position. Watch for signs of worker discomfort or pain such as self-restricting movements, efforts not to move certain body parts or massaging hands, arms, legs, necks or backs. Pay attention to unnecessary handling and duplication of material or product movement.

Look for ways in which workers have modified standard procedures to make it easier to do their work, including modifications to tools, equipment, workstations or task performance. Talk to managers but also talk to the workers who actually perform the tasks. Ask workers how they would change the work process, operations, tools or equipment to make their jobs less physically demanding and more efficient. You’ll get a clear idea of what isn’t working and may get some excellent suggestions for improvement.

Continued next time

The Cost of Ignoring Ergonomics

Back in industry’s dark ages, equipment was designed to do a task without much thought to the comfort or safety of the worker who would be operating it. Back injuries, tendonitis, carpal tunnel syndrome and other stress and repetitive motion injuries were an aggravating and often debilitating part of the job. The toll wasn’t just on the workers, industry paid a price in decreased productivity, poor product quality, increased medical and workers’ compensation costs, low morale and high absenteeism. The annual price tag for workplace injury and illness is estimated at $171 billion.

That’s a pretty hefty price tag considering that America spends about $170 billion a year on cancer and $164 billion on cardiovascular disease, the country’s two biggest killers. According to an American Medical Association study, each year in America there are 6,500 deaths from workplace injuries and more than 60,000 deaths from workplace-related diseases. Non-fatal workplace injuries number 13.2 million annually with 862,000 illnesses. That’s a staggering price in human suffering and industry dollars. The total cost of workplace injuries is nearly equal to the combined annual profits of America’s 20 largest companies.

But that’s just part of the picture. Workers’ compensation claims already cost American businesses $60 billion annually, according to the U.S. Department of Labor. More than 50% of those claims are for back injuries from lifting, pulling, pushing and straining, says the National Council on Compensation Insurance. In fact, workplace back injuries, which involve lengthy and costly treatment, affect more than 1.75 million workers each year, according to the Bureau of Labor Statistics. Add in the estimated time-lost cost per injury of $26,000 per incident and the prevention of a single injury can result in an immediate savings of $26,000.

This staggering cost and the desire to provide American workers with healthier and safer working conditions gave rise to ergonomics and the beginning of a radical change in the way industry approaches equipment design.

Next time: The rise of ergonomics in industrial design.

ANSI Upholds Construction Ergonomic Standard

The American National Standards Institute recently upheld its adoption of ergonomic standards in the construction industry. Rejecting an appeal by the Construction Industry Employer Coalition to withdraw adoption of the approved voluntary consensus standard on the reduction of musculoskeletal problems (ANSI/ASSE A10.40-2007), ANSI reaffirmed the importance of ergonomic design and safe practices in preventing injuries to construction workers.

The appeal by a coalition of five construction trade associations was the latest attempt to derail the ANSI standard approved last year. The coalition first appealed the ergonomic standard during hearings held in May 2007. An appeals panel found those complaints to be without merit, a decision supported by the American Society of Safety Engineers, and the standard was formally approved on July 23, 2007. Shortly thereafter, the coalition filed the formal appeal that was just rejected.

“We are pleased with ANSI Board of Standards Review’s decision to uphold the approval and publication of the A10.40 standard, said ASSE VP James Smith, CSP.” At ASSE we are committed to the protection of people, property and the environment and this standard is an excellent step in protecting workers from injury and in helping to create safer and more healthy workplaces.”

“National consensus standards, such as A10.40, reflect the insights of the final users and the opinions of professionals who work at all levels of public and private sectors in technology development, safety and health, manufacturing, training, financial analysis, personnel and academia,” said A10 Committee Chair Richard King, CSP, CRSP. “This balanced perspective enables standards to be crafted in a manner that benefits and protects standard users.”

Help Workers Beat the Heat

The dog days of August aren’t here yet but the nationwide heat wave means it’s time to review heat safety tips to prevent heat exhaustion and heat stroke. When workers don’t work in temperature controlled environments, heat can take a toll on workers’ health, cause production to suffer and even be life-threatening when workers and managers do not take proper precautions to manage heat stress.

Sweat is the body’s cooling system. As air passes over the body, it evaporates sweat, cooling the body. But during hot weather, particularly if the humidity is high, sweating can’t keep up. Body temperature rises faster than sweating can cool it down. When body temperatures get too hot, heat illness and even death can occur. Older, overweight and pregnant workers are most at risk of heat illnesses, which include:

  • Heat rash where the skin becomes irritated from excessive sweating. Tightly fitting clothing can exacerbate heat rash and the individual’s discomfort.
  • Heat cramps are painful muscle pains or spasms, generally in the abdomen and legs, brought on by exertion or exercise during prolonged exposure to high temperatures. Heat cramps are often the first sign that the body is not coping with high temperatures.
  • Heat exhaustion occurs when body fluids are lost through heavy sweating and not replaced. In an effort to cool the body, blood flow to the skin is increased, drawing it away from vital organs and causing mild shock. Heat exhaustion is evidenced by extreme lethargy, heavy sweating, rapid breathing and a fast, weak pulse. If not treated, it can lead to dangerous heat stroke.
  • Heat stroke (also called sun stroke) is a life-threatening condition indicating that the body’s natural cooling mechanism has completely broken down and ceased functioning. Body temperatures can rise above 106 degrees Fahrenheit, high enough to cause brain damage. Sweating stops and the skin becomes dry to the touch. The individual’s pulse begins to race, becoming strong and rapid. Heat stroke victims can become dizzy, particularly dangerous if they are operating equipment. If untreated, unconsciousness, permanent brain damage and death can follow.

Next time: Preventing and treating heat injury

Boat and Trailer Sales Made Easier with a Trailer Mover

The most common method for moving a boat or other piece of equipment that requires a trailer is by way of a vehicle with a trailer hitch.  In a confined showroom or on the crowded lot of a dealership, this method of getting a trailer from one location to another isn’t always possible.  In dealerships where the equipment must be moved around in tight quarters, a piece of equipment like the Trailer Mover from DJ Products is essential to increase efficiency and reduce the risk of injury.

The lightest boats and RVs can be far too heavy to safely attempt to maneuver manually.   Even in situations where multiple employees are on hand to try and strong arm a boat or trailer, serious injuries could occur.  The only way to safely get a boat or trailer from one location to another without using a motor vehicle is with a properly designed piece of equipment like the Trailer Mover.

The Trailer Mover is much smaller and easier to maneuver than most other trailer pullers available.  This gives employees the ability to quickly and easily navigate the confines of a crowded showroom without accidents that could cause unnecessary damage to other boats or RVs.

Avoiding workplace injuries and keeping the product in good condition are two of the biggest keys to success in any dealership.  Having a properly designed piece of equipment to move boats and trailers is the perfect solution for keeping employees and the boats and RVs safe in a high volume, fast paced dealership.  The Trailer Mover is an affordable and easy to use piece of equipment that can help dealership owners save money on worker’s compensation claims and repair costs for damaged equipment.