The State of the Union on Best Practices

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The State of the Union on Best Practices
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Role of best practices

• background perspectives -How this got started?
  
• beyond preliminaries What weve learned?
• best practices What best practices are and
  arent?
• basic points Assumptions, concerns and myths
• building profit How will you make more money?
• becoming participants How to get involved?

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background perspectivesHow this got started

• 2003 - NFSA Insurance Subcommittee
• Improve Insurability
• Search for more cost effective insurance
• Meetings with many prominent insurance carriers
• Feedback from the insurance industry
• Perception not enough being done to
• ensure quality,
• avoid mistakes,
• keep employees from getting injured, etc.
• Too many manual processes
• not state of the art, more likely to injure
  workers
• Unflattering comparisons
• more risky than roofers and plumbers!
• Urged to raise standards and embrace best
  practices

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background perspectivesHow this all got started?
! ? Insurers think of us like this.
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background perspectivesHow this got started

• best practices controlling insurance costs
  influenced by insurance feedback
• best practices decision by manufacturers to
  invest
• best practices creation of industry-wide
  Steering Committee (NFSA, AFSA, CASA) and
  insurance professionals
• best practices Began documenting first phase
  (since the fall of 2004)

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beyond preliminaries What weve learned by
talking with industry pros?

• Give me information I can use
• Give me good quality information
• Keep it practical
• Make it easy
• To access
• To find information
• To use
• Continuous improvement

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beyond preliminaries What weve learned How
weve grown

• Give me information I can use
• Content Plans Contracts, Safety, Operations,
  People
• Keep it practical
• Review Process Industry experts review all work
  and make certain it is practical in the industry
• Make it easily available
• Internet Based Web-based resourcesallow me to
  use this resource no matter where I am
• Make what Im looking for easy to find
• Smart Design Information experts at work to make
  the answers to your questions easy to find

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beyond preliminaries What weve learned, How
weve grown
Web-based resourceswill allow you to use this
resource like a virtual office no matter where
you are located
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A Closer Look at best practices design.
Safety
Practical Content Focused on the practical topics
that make a profitable difference.
Operations
People
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A Closer Look at best practices design.
Contracts with Owners or General Managers This
section will help you profit by providing
information and tools to help you review Requests
for Proposals and prepare contracts that protect
your interests and help you maximize profit.
Managing Insurance Requirements in Contracts
This section will help you profit by providing
information and tools to help you review Requests
for Proposals and prepare contracts that protect
your interests and help you maximize profit.
Understanding OCIPs (Owner Controlled
Insurance Programs) Many owners and general
managers now require subcontractors to
participate in OCIPs, their own insurance
programs. This section will help you understand
and manage your participation in OCIPs.
Logical Layout Quick access to the topics you
need to know about
Operations
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A Closer Look at best practices design.
Search the Site _______________
SITE SEARCH Fast access to information of
interest
?POINT Check your current knowledge Get
pointers about where to look.
NEW! Recently Updated content.
Fast Access Guides to aids and tools
IDEAS Suggestionsespecially for unfamiliar
situations.
CAUTION! Warnings or cautions about overlooked
matters.
REAL WORLD best practices in action.
TOOLKIT Forms, templates and job aids you can
use.
TALK TO US SuggestionsDirect contact with best
practices developers.
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A Closer Look at best practices design

• At Friday Sessions
• Prototype demonstration
• Additional Ideas for Future best practices
• Information about getting involved
• After Bermuda
• Updates via email
• Mailing List for key dates and announcements

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beyond preliminaries What weve learned, How
weve grown

• Get my input
• Field Tests Pilots Prove that this works in
  the Real World Commitment to quality and
  usability
• Keep up with changes
• Content Updates Keep it current provide
  real-time changes
• Collaborate with the best
• Partnerships Industry wide effort working
  closely with the best of the best from the NFSA,
  AFSA, CASA, insurance carriers, and industry
  leaders in an collaborative community

!? Its not just having best practices its
having employees use best practices
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best practicesWhat best practices are and
arent

• best practices are
• Focused on current challenges that impact profit
• Proven approaches to difficult issues
• Developed by industry professionals, not
  professors
• Supported by tools, tips and resources
• Ideas for innovative organizations

• best practices arent
• Mandates or rules
• Trade and business secrets
• Requirements from government agencies
• Standards from insurance companies
• Mandatory
• Too expensive

Key TakeAway? best practices are not theory they
are about being more efficient and effective!
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basic points Straight talk about assumptions,
concerns and myths

• Why should my competitors know what I do?
• Its too much work!
• Its too much reading!
• My people will never do it!
• My customers dont care!quality and reputation
  are important
• It costs too much!depends on how you look at the
  worldbuilding profit

! ?You are not giving away proprietary
information. The way you put it together is up to
you
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building profitYou do want to make more money,
right?

• bp impacts on drivers
• Win rate
• Service quality
• Employee morale
• Labor effectiveness
• Customer satisfaction
• Avoiding Adverse Consequences

• bp impacts on hard
• Margin
• Recurring costs
• Overheads
• Cost avoidance
• Labor productivity
• Risk mitigation

!? best practices applies to how you make money.
It does not matter how you account for the
dollars, but there is cost to be saved and
incremental profit to be made
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building profitThe Case for Best Practices The
Problem

• Who Average Contractor Co.
• What Sprinkler system modification
• Two additional sprinklers to an existing system
• Small storage room upper floor of a residential
  condominium
• How Fitter goes to work
• Makes a cut-in into a 1.5 CPVC pipe
• Adds a new tee, piping
• Adds two new sprinklers in the storage area
• Waits 3 hours for glue to set, turns water on
• Restores system into service
• A half hour after leaving the site the 1.5 joint
  let go, causing the fire pump to start.
• By the time the system was turned off there was
  550,000 in water damage!

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building profitThe Case for Best Practices The
Profit Impacts

• What went wrong?
• Training Insufficient training to cut pipe
  squarely and remove moisture and debris
• Cure Time - The fitter did not take into
  consideration that cure time charts need to be
  adjusted for variables like temperature,
  humidity, system pressure, and the actual
  temperature of the pipe and fittings would impact
  the time needed to cure the joint
• The fitter was using solvent cement that had aged
• Solvent content had been reduced from past uses
• Solvent cement shelf life was made it less
  effective
• Fitter not currently and properly trained on the
  installation of CPVC pipe and fittings
• Had not read the installation instructions
  published by manufacturer

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building profitThe Case for Best Practices The
Plot Unfolds

• Adopting best practices would have reduced this
  loss by
• Standardized procedures for CPVC cut-in work for
  employees
• Work procedures for the field with an active
  checklist of activities to be completed for this
  of job
• Installers having current training for cut-in
  activities
• Refresher training on the use and installation of
  CPVC systems.
• Documentation that the employees are proficient
  after the training
• Company policy clearly stating the age and
  condition of the solvent cement to be used for
  joining CPVC pipe and fittings

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building profitThe Case for Best Practices The
Plot Unfolds

• What was the true cost of not utilizing best
  practices?
• Insurance deductible for the loss 25,000
• Soft costs encountered by the contractor
  175,000
• soft costs range from between 7 and 50 times the
  loss in management time, morale, reputation,
  opportunity costs, etc.
• Incremental insurance premium assessed contractor
  in following policy period 45,000
• 300,000 annual premium x 15 increase
• Total estimated cost of the loss is 245,000 to
  the contractor and 525,000 to the insurance
  carrier

Key TakeAway? Ask yourself, can you really afford
not to adopt best practices in your company?
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becoming participantsHow to get involved?

• Ask yourself How much more profitable can we
  become?
• Talk to best practices Steering Committee
  members, leading users and early adopters
• Learn more - best practices NFSA interactive
  workshops and idea sharing
• Get info become a best practices beta site
  participant

Key TakeAway?best practices is about creating a
community of users that freely share ideas to
improve the business and increase profits
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becoming participantsParting thought

What do these have in common?