Presentation by David Forte, J.C. Penney Catalog Fulfillment
MR. JENKINS: Our next speaker is Dave Forte, and Dave is the Catalog Division, Ergonomics and Methods Engineering Manager for the J. C. Penney Company. Dave has a B.S. degree in Industrial Engineering from Columbia University and has 18 years experience in his career, including assignments at Colt Industry, TRW, Stanley Works and now J. C. Penney. Dave joined Penney as the industrial engineer at the Manchester, Connecticut Catalog Fulfillment Center, and he has held positions as Senior Industrial Engineer, Assistant Industrial Engineering Manager, Division Materials Handling Manager and now in his current responsibilities includes the Catalog Ergonomics Program, Capital Program, Methods and Cost Benefits Study Program and productivity improvement and simulation studies. Dave.
MR. FORTE: Thanks, Mike. Good morning. As Mike mentioned, my name is Dave Forte, and I work for the J. C. Penney Company. We are very happy to be here today. Jennifer and Margo, if you are out there, thanks for inviting us.
This morning I would like to share a little bit of information with you all about an ergonomics program that we currently have in place in our Catalog Division. But let me first start by giving you a little bit of a background on our company as a whole.
The J. C. Penney Company is a Fortune 500 firm with annual sales of about $23 billion. These revenues are generated from sales in our retail stores, our catalog operations, drug store sales and insurance and banking services. Now, of course, the Catalog Division is just one part of our organization. The Catalog Division operates six fulfillment centers at various locations around the country. We have a total of about 12 million square feet, and we employee approximately 5,500 people or as we refer to them, Associates. Our Associates perform a variety of activities, which include material handling, production activities, as well as office support functions.
Now, going back to about the end of 1990, we did some research at that time, and we started to become aware that there was an increasing trend in the number of CTD injuries. We did an in-depth study of the situation, and we came to the conclusion that we needed to implement an Ergonomics Program. Now, we had never done this before. This would be our first time. So we did two things. We went out and we tried to learn as much as we could about ergonomics right away. And we went out and we hired an ergonomics consultant. We worked with this consultant for about a year, and at the end of that year, we felt we were in a position to be able to conceptualize what this program would look like.
What I would like to do now is cover this four point program with you and then talk a little bit about how we implemented each of these different aspects of the program. I know you have heard this a few times already in this conference, but I need to say it one more time. A good Ergonomics Program, and a complete Ergonomics Program, consists of four basic elements: ergonomics training, work site analysis, medical management and a formal communication process.
Now, with regard to ergonomics training, the first commitment we made was that everybody was going to receive training. We didn't want anybody to get missed in this process, and because it is a team effort, it really is important that everybody receive ergonomics training in our facilities. We decided to implement a four layer training process from the top down.
The very first training we initiated was our Ergonomics Engineering Training. This was a three-day seminar, and we gave it to all of our Engineering, Loss Prevention, Personnel and Medical Managers. The purpose of this training was to cover ergonomic principles, risk factors, medical management; and it also contained a workshop on how to perform an ergonomic job analysis. We gave this training to people that would be involved in coordinating the program, and people that would be involved in performing studies and making recommendations on how to improve the workplace. This was a three-day seminar, and it was intensive training.
The second level of training was our General Management Ergonomics training. All of our management associates received this training, and this was a one day, eight hour class. This class covered ergonomic principles, risk factors, medical management, but it did not involve the workshop on how to perform an ergonomic job analysis. This was designed primarily for first line Supervisors.
Our third layer of training was our Associate Ergonomic Orientation training. This was a one hour training class that we gave to all 5,500 associates. The purpose of this class was to create awareness about ergonomics, the importance of it, risk factors in the workplace, symptoms of CTDs, so they could be recognized if they were experienced, and the importance of reporting immediately.
Our final layer of training was what we call Job Specific Training. We did a lot of studies in our Centers, and once the studies were completed, we made improvements to these jobs. Many times we ended up with new methods. So what we would do is put together a job specific training video and outline, which was about one hour long, and we would retrain all of our people so that they would understand the new method that was to be used and the importance of working correctly.
So as you can see, we have a four point training process, and we train from a three day seminar all the way down to one hour, and we train all of our Associates. We found this approach to be very effective.
The second very important component in an Ergonomic Program is work site analysis, or often it is referred to as ergonomic job analysis. Now, the size of your company will pretty much determine how you approach this process. We had a lot of activities in our facilities, and we have a lot of people. So what we decided to do is to create two lists. We had a primary list and then a secondary list. On the primary list we put the activities that offer the greatest opportunity for improvement, and then on the secondary list we put the activities that offered opportunity for improvement but not quite as great as the first list. Then all the other activities that never made it on either of these two lists were activities that were in pretty good shape and didn't offer really any real opportunity at that time.
Once we completed our two lists, we proceeded to go down the first list, the primary list, and perform an ergonomic job analysis on every activity, make recommendations, install the improvements and give job specific training. When that process was completed we went to the second list. We did exactly the same thing. We did an ergonomic job analysis. We made recommendations. We implemented the improvements, and we gave job specific training.
Now just to give you an idea of the scope of these two lists, there were about 13 activities on the primary list, and there were nine jobs on the secondary list, for a total of 22. These 22 activities represented about 75 percent of our work force.
The third important aspect of an Ergonomics Program is a Medical Management Plan. There are a lot of different things you can do in the way of medical management. One of the very first things that we did was to get a handle on our CTD statistics. We developed our statistics, and now we monitor them on an ongoing basis. Some of the other things that we did included initiating workplace walk-throughs. We do this on a weekly basis. We put together teams of trained professionals, and they go out into our Fulfillment Centers and they meet with people, they look at activities, they evaluate and they make recommendations for improvements. We found this to be a very effective process.
We developed an alternate duty plan for people that have injuries and are recovering. We were very surprised to find out that often times they recover faster while they stay at work and work, rather than simply stay at home. So we came up with a list of jobs where they could work on light duty and still remain in the same schedule and still remain productive.
We came up with a list of classes that our trained medical professionals could attend so that they could get additional training in the treatment of CTDs. We stressed the open communication process and the importance of reporting early to all of our Associates. We want to treat these injuries when they are simple cases of tendinitis, rather than full blown cases of carpal tunnel.
Finally, one of the most important things, I think, that we did was to put down in writing our medical management plan, which includes all of the items that I just mentioned, along with the procedure for examinations, for CTD treatment and for follow-ups.
The fourth and final important part of an Ergonomics Program is a communication process. Now, again, like medical management, here there are a lot of things that you can do in the way of developing good communication. One of the very first things that we did was to establish an Ergonomics Committee in each facility. This committee consists of approximately 10 to 15 associates at all layers of the work force. We have the Center Manager on this Committee, and we have individuals from the loading dock on this Committee. The purpose of this Committee is to coordinate the program in that facility, to give feedback and input into the process, and we are very happy to say that this is a very successful tool. We weren't sure how this would work at first. It was something new for us, but we found that it is very effective. We get a lot of useful feedback from our people and a lot of good representation from all levels and areas of our facilities.
Some of the other things that we did in the way of communication include setting up an ergonomics hotline. We realized that we have a lot of associates that might be reserved in giving their comments. So we set up this hotline where they could call in and make suggestions and would not have to identify themselves. We also set up a formal suggestion program where people could put their ideas on paper and then we could follow-up with them later and talk to them. We also have extensive refresher training courses with question and answer sessions where people can talk and give feedback.
Again, we really stress the open door policy. Our people understand that at any time they can walk into their supervisor's office and talk about an ache or a pain that they are experiencing. They can talk about ideas that they have to improve the workplace or anything of that nature. So as you can see, our program is a four point program, and it includes training, work site analysis, medical management and communication.
Now, for those of you that have yet to start an Ergonomics Program but are thinking about it and you are yet to take that leap, this next slide is for you. Depending on the size of your company, an Ergonomics Program can be a major project. It certainly was for us. So what I have done here is I have laid our project out as if you are a Project Manager starting a new major project. I have done this for a couple of reasons. I think it is important to see the steps that are involved and to note that we didn't do everything at once; and I think it is important to see the timeframe here and to know that some of these things take place over a long period of time.
So starting from the top down, our program development took about a year, and we did that through 1991. Training began immediately, and when we finally began training our 5500 Associates, that took us eight months. So it took a long time.
Work site analysis and improvements took place over a three and a half year period. That primary list that I mentioned took a year and a half to get through, and then the secondary list took another year and a half. So that didn't happen overnight.
Medical management we hit very early in the game and worked on intensively for about a year and a half. Now it is a relatively routine thing, and we do it on an ongoing basis.
Finally, communication, we hit intensively for one year to develop our different programs, and now it is a routine thing and we do it on an ongoing basis. But, you can see looking at this major project, it took us about four and a half years to get to the point where we are comfortably at now.
Okay, I have talked a little bit about our four point program, and I have shown you what this picture looks like as a major project. The last thing that I would like to talk to you about today is our Program results. For those of you that are yet to start a Program, I think you will be interested in this. I have divided the results into two categories: reduced CTD injuries and cost savings. Although I am probably sure that some of you are more interested in hearing about cost savings first, I am going to review the CTD injuries first.
Back in 1992, our incident rate for the division was 12.0, and that is shown on the bar chart on the right-hand side. By the end of 1995 our incident rate for the division was 6.02. We had reduced the injury rate by 50 percent. Now, the bar charts on the left-hand side represent our five major processing areas in our Fulfillment Centers. You can see some departments were a little bit better off than others. By the end of 1992, we had reduced injury rates by 20 to 25 percent. By the end of 1993, we had reduced injury rates by another 20 percent, and then by the end of '95 we had injuries down by about 50 percent in total. So we feel this was a very successful process for us. We are very happy to see these results.
Now, let's talk about cost savings. When we started our program we really weren't thinking at all about cost savings. Our initial goal -- and it should be the goal of every program -- is to reduce injuries in the workplace, not to gain productivity improvements or cost savings. But to our surprise, there were some nice benefits associated in the way of cost savings.
What I have shown here on this chart are three graphs. I have one graph here that represents expense, and in the category of expenses I have included the cost of training, which includes the cost to train and the cost to be in training, and also the cost of our managers to coordinate the program. The second graph I have on here represents our capital investments, which is the cost to make improvements in the workplace; and the third line, the one at the top is cost savings, and these were the dollars that were returned to us in two of three categories. They were reduced hours due to CTD injuries, and they include non-redundant reduced Workers' Compensation claim costs.
Now, I have not included under cost savings productivity improvements for a couple of reasons. One, because that is not the goal of the Program, and number two, because I wanted to show you here today that there are significant benefits associated with the program, even when not considering productivity improvements.
Now, as you would suspect in the beginning years of the program, our expenses were high and our capital investments were high. By the time we got to 1995, we had already invested a million and a half to two million dollars in this program. But something interesting happened. Our cost savings also started to increase at that time. By the time we hit the middle of 1995, we arrived at a break-even point. We had saved back all of the money that we had put into the Program, and now with this Program on an ongoing basis, we save about a half a million dollars a year, net, on this program.
Now, we are very happy with these results. We feel the program was a success, and just to quickly summarize here, going back to the very beginning, it is very important to have a complete ergonomics program. That includes training, work site analysis, medical management and some kind of a formal communication process. Sometimes it has to be laid out as a major project, but you have to understand that if it is a major project, it doesn't happen overnight and everything doesn't happen at once. The best advice we can give you is to take it one step at a time.
Finally, if you have a good Program, you will see results. I don't know if you will see the kind of results that we saw because every company is different in scope and the nature of the business and the size of the company, but I am pretty sure you will see benefits. You will see benefits in reduced dollars due to CTD injuries, reduced Workers' Compensation claims and productivity improvements. At some point you will hit that break even point and probably see a net positive cost savings. Thank you.
