Ergonomics Solutions - Cost Analysis

 In this day of downsizing and budget cuts it’s easy for any organization to be penny wise and pound foolish.  We all know that management is under a great deal of pressure to cut costs and save money where ever possible.  Perform a Cost Analysis/Return on Investment.

We know that many jobs and tasks we perform are not designed safely or efficiently and must be improved.  We must be able to justify our requests for ergonomic improvements in terms that management can understand.  That’s right - dollars and cents.

Here is a simple formula that can be used to decide how to intervene.  It is useful to justify the ergonomics intervention either when significant resources are involved or when little or no resources are required.  This formula will help prioritize your ergonomics project list.

ROI = Total Estimated Benefit/Total Cost of Intervention

Return of investment (ROI) is the primary calculation in this formula.  It requires the following information.

Costs of Intervention:

• Material/Hardware Costs

• Labor cost for installation

• Training costs

• Any other cost related to the intervention

Benefits of Intervention:

• Reduced labor costs

• Productivity gains

• Lower injury/illness costs

 Indirect Benefits:

• Quality improvements

• Reduced scrap/rework

• Improved morale

• Improved idea sharing and problem solving

• Improved team work/owner-ship

• Reduced absenteeism