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2015 Risk All Star: Tim Kirsch

Keeping the Budweiser Moving, Safely

By the time owner Herbert Schilling of LaFayette, La.-based Schilling Distributing Co. called on Tim Kirsch to overhaul the company’s safety and risk management programs, the company faced a warehouse full of longstanding problems on those fronts.

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Tim Kirsch, Safety Director, Schilling Distributing Co.

On Jan. 1, 2014, Kirsch was named safety director, reporting directly to Schilling. The most immediate and daunting challenge for Kirsch was to reduce the large number of fleet accidents that had been occurring annually among the company’s 100 vehicles.

“Driver evaluations and observations are something that I created,” Kirsch said.

“Whenever we hire someone in a driving position, they have to be evaluated by myself before we turn them loose to drive a company car,” said Kirsch, who previously had been human resources director.

“Whenever the trucks are on the road, I randomly find someone and follow them and observe their driving, of course without them knowing.”

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Between April 2014 and April 2015, fleet accidents declined by 70 percent at the company, which distributes Anheuser-Busch products, along with soft drinks and water.

Another Kirsch initiative has him riding in vehicles with company drivers.
Kirsch also instituted a rigorous policy banning cellphone usage in company vehicles, in warehouses or in customers’ facilities.

Under Kirsch’s leadership, newly rewritten safety and risk management goals were implemented:

  • Stick to core values; safety is at the forefront.
  • Achieve zero incidents.
  • Become an industry leader in safety.
  • Continue to be a good steward and partner to the LaFayette community.
  • Adopt an “It Starts With Me” attitude.

“It’s all about the employee and being safe. In just about every conversation or meeting that we have, we mention safety,” Kirsch said.

The new multi-faceted plan of action included safety training, safety meetings, new employee orientation, driver evaluation, distracted driving programs and defensive driving training. This was done with help from Schilling’s broker (HUB International) and insurance company (Travelers).

“Whenever the trucks are on the road, I randomly find someone and follow them and observe their driving, of course without them knowing.” — Tim Kirsch, Safety Director, Schilling Distributing Co.

Positive results were felt within a year. In addition to the dramatic drop in fleet accidents, insurance costs decreased by over $500,000. Fuel costs dropped due to taking some vehicles out of action.
Miles driven decreased and workers’ compensation claims were cut by 85 percent.

A new corporate safety mission was rolled out corporate-wide.

“From an actionable items standpoint, all new hires were oriented before starting work,” Kirsch said.

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“A formal, standardized and documented orientation is now used.”
When Kirsch took over the safety and risk management functions, access to insurance markets was shrinking.

“The markets that were willing to underwrite were issuing large premium increases and unappealing large deductibles on both occurrence and aggregate levels,” said Harper Johnson, New Orleans-based vice-president and senior risk consultant for HUB International.

But as Schilling’s safety and risk management dramatically improved, so did its insurance condition.

Johnson said Kirsch is extremely hard-working and perseverant, with the ability catch small details while also keeping the big picture in view.

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R9-15-15p26_Intro_Allstar4-2.inddRisk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and/or passion.

See the complete list of 2015 Risk All Stars.

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Manufacturing

More Robots Enter Into Manufacturing Industry

With more jobs utilizing technology advancements, manufacturing turns to cobots to help ease talent gaps.
By: | May 1, 2018 • 6 min read

The U.S. manufacturing industry is at a crossroads.

Faced with a shortfall of as many as two million workers between now and 2025, the sector needs to either reinvent itself by making it a more attractive career choice for college and high school graduates or face extinction. It also needs to shed its image as a dull, unfashionable place to work, where employees are stuck in dead-end repetitive jobs.

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Added to that are the multiple risks caused by the increasing use of automation, sensors and collaborative robots (cobots) in the manufacturing process, including product defects and worker injuries. That’s not to mention the increased exposure to cyber attacks as manufacturers and their facilities become more globally interconnected through the use of smart technology.

If the industry wishes to continue to move forward at its current rapid pace, then manufacturers need to work with schools, governments and the community to provide educational outreach and apprenticeship programs. They must change the perception of the industry and attract new talent. They also need to understand and to mitigate the risks presented by the increased use of technology in the manufacturing process.

“Loss of knowledge due to movement of experienced workers, negative perception of the manufacturing industry and shortages of STEM (science, technology, engineering and math) and skilled production workers are driving the talent gap,” said Ben Dollar, principal, Deloitte Consulting.

“The risks associated with this are broad and span the entire value chain — [including]  limitations to innovation, product development, meeting production goals, developing suppliers, meeting customer demand and quality.”

The Talent Gap

Manufacturing companies are rapidly expanding. With too few skilled workers coming in to fill newly created positions, the talent gap is widening. That has been exacerbated by the gradual drain of knowledge and expertise as baby boomers retire and a decline in technical education programs in public high schools.

Ben Dollar, principal, Deloitte Consulting

“Most of the millennials want to work for an Amazon, Google or Yahoo, because they seem like fun places to work and there’s a real sense of community involvement,” said Dan Holden, manager of corporate risk and insurance, Daimler Trucks North America. “In contrast, the manufacturing industry represents the ‘old school’ where your father and grandfather used to work.

“But nothing could be further from the truth: We offer almost limitless opportunities in engineering and IT, working in fields such as electric cars and autonomous driving.”

To dispel this myth, Holden said Daimler’s Educational Outreach Program assists qualified organizations that support public high school educational programs in STEM, CTE (career technical education) and skilled trades’ career development.

It also runs weeklong technology schools in its manufacturing facilities to encourage students to consider manufacturing as a vocation, he said.

“It’s all essentially a way of introducing ourselves to the younger generation and to present them with an alternative and rewarding career choice,” he said. “It also gives us the opportunity to get across the message that just because we make heavy duty equipment doesn’t mean we can’t be a fun and educational place to work.”

Rise of the Cobot

Automation undoubtedly helps manufacturers increase output and improve efficiency by streamlining production lines. But it’s fraught with its own set of risks, including technical failure, a compromised manufacturing process or worse — shutting down entire assembly lines.

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More technologically advanced machines also require more skilled workers to operate and maintain them. Their absence can in turn hinder the development of new manufacturing products and processes.

Christina Villena, vice president of risk solutions, The Hanover Insurance Group, said the main risk of using cobots is bodily injury to their human coworkers. These cobots are robots that share a physical workspace and interact with humans. To overcome the problem of potential injury, Villena said, cobots are placed in safety cages or use force-limited technology to prevent hazardous contact.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them.” — David Carlson, U.S. manufacturing and automobile practice leader, Marsh

“Technology must be in place to prevent cobots from exerting excessive force against a human or exposing them to hazardous tools or chemicals,” she said. “Traditional robots operate within a safety cage to prevent dangerous contact. Failure or absence of these guards has led to injuries and even fatalities.”

The increasing use of interconnected devices and the Cloud to control and collect data from industrial control systems can also leave manufacturers exposed to hacking, said David Carlson, Marsh’s U.S. manufacturing and automobile practice leader. Given the relatively new nature of cyber as a risk, however, he said coverage is still a gray area that must be assessed further.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them,” he said. “Therefore, companies need to think beyond the traditional risks, such as workers’ compensation and product liability.”

Another threat, said Bill Spiers, vice president, risk control consulting practice leader, Lockton Companies, is any malfunction of the software used to operate cobots. Then there is the machine not being able to cope with the increased workload when production is ramped up, he said.

“If your software goes wrong, it can stop the machine working or indeed the whole manufacturing process,” he said. “[Or] you might have a worker who is paid by how much they can produce in an hour who decides to turn up the dial, causing the machine to go into overdrive and malfunction.”

Potential Solutions

Spiers said risk managers need to produce a heatmap of their potential exposures in the workplace attached to the use of cobots in the manufacturing process, including safety and business interruption. This can also extend to cyber liability, he said.

“You need to understand the risk, if it’s controllable and, indeed, if it’s insurable,” he said. “By carrying out a full risk assessment, you can determine all of the relevant issues and prioritize them accordingly.”

By using collective learning to understand these issues, Joseph Mayo, president, JW Mayo Consulting, said companies can improve their safety and manufacturing processes.

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it.” — Joseph Mayo, president, JW Mayo Consulting

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it,” Mayo said. “They can also use detective controls to anticipate these issues and react accordingly by ensuring they have the appropriate controls and coverage in place to deal with them.”

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Manufacturing risks today extend beyond traditional coverage, like workers’ compensation, property, equipment breakdown, automobile, general liability and business interruption, to new risks, such as cyber liability.

It’s key to use a specialized broker and carrier with extensive knowledge and experience of the industry’s unique risks.

Stacie Graham, senior vice president and general manager, Liberty Mutual’s national insurance central division, said there are five key steps companies need to take to protect themselves and their employees against these risks. They include teaching them how to use the equipment properly, maintaining the same high quality of product and having a back-up location, as well as having the right contractual insurance policy language in place and plugging any potential coverage gaps.

“Risk managers need to work closely with their broker and carrier to make sure that they have the right contractual controls in place,” she said. “Secondly, they need to carry out on-site visits to make sure that they have the right safety practices and to identify the potential claims that they need to mitigate against.” &

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]