Company Insurance Premium Reduced 400K by using SPC!
Control plus $ led me to write this post!
We recently worked with a company to help take control of some of
their processes. It turned out that the company was already using some of the
Statistical Process Control, SPC, techniques we teach in our classes to monitor selected processes. These
processes provided some excellent data that allowed the company to initiate
“SPC Control Charts.”
Why would the companies Insurance carrier reduce premiums?
When you apply Statistical Control Limits to process outputs, you now have a
systems that reacts to variation in the process rather than failure or hazards.
This application of SPC now gives that
process a predictive indicator which , of course, will reduce the probability
of accidents based on “Out of Control” events.
Since the Insurance companies have used Statistics to
establish their “Risk” in insuring companies, they understand the “Power” of
Statistical Control and therefore encourage, monetarily, the use of these
predictive methods.
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I am identifying an “Out of Control” section in a process
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All processes can be “quantified” either using “Attribute”
or “Variable” data. Once you apply control limits to this data, you have now a
“PREDICTIVE” system of monitoring processes. Remember, control charts do not
tell you if a process is producing a “Good” or “Bad” output. I simply tells you
that something in that process is “NOT NORMAL.” Your system is now performing
Corrective Action on “Variation” rather than a Hazard or incident.
Using and understanding the Statistical “Control” system of monitoring processes WILL MAKE YOUR
COMPANY SAFER! And now the Insurance industry has recognized this and will
LOWER YOUR INSURANCE COSTS!.
“Your system is now performing
Corrective Action on ‘Variation’ rather than a Hazard or incident.”
I should also note that the use of SPC for Control of
processes, is the basis for the extremely popular “Lean” enterprise
system that is widely used in all industries. So, in addition to the Insurance
premium benefit, your company will automatically run in a leaner financial
state as efficiency is increased due to the added “Control.”
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Lean Enterprise is based on SPC.
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I recently Spoke on "Predictive SMS" at the International Society of Safety Professional, ISSP, annual SMS and Human Factors Symposium in Dallas Texas. I will have a Youtube presentation on the concepts of using Statistical Control to predict hazards and incidents.
