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Risk Insider: Stacie Graham

The Looming Manufacturing Skills Shortfall Part 2: Cobots to the Rescue?

By: | May 1, 2018 • 2 min read
Stacie Graham is SVP and General Manager of National Insurance Casualty & Middle Market – Central Division for Liberty Mutual Insurance. She leads underwriting and service teams for large and midsize accounts. You can reach her at [email protected]

Part 1 of this series covered the ongoing talent shortage in manufacturing and how apprenticeships can start building the next generation of workers.
Collaborative robots, or cobots, are another way for manufacturers to mitigate the shortfall of talent.

Cobots are meant to work alongside human workers rather than replace them. They perform the repetitive, ergonomically-challenging tasks that humans want to avoid, and they are quickly gaining popularity on a broad scale. According to market analysts at Barclays, the cobot market could grow to $3 billion by 2020.

Their benefit is three-pronged: Taking workers off repetitive fine motor tasks can reduce the risk of soft-tissue injuries; employees are free to take on higher-level thinking tasks, like quality control or programming, which increases job satisfaction and the likelihood of retaining those employees; and cobots boost the efficiency of each individual worker, which reduces the total number of employees needed on the floor and makes the talent gap easier to bridge.

According to market analysts at Barclays, the cobot market could grow to $3 billion by 2020.

Machines working alongside employees in any capacity will present their own unique risks. Manufacturing risk managers should consider the following five areas of exposures when implementing cobots on the factory floor:

  1. Safety: Incorrect or incomplete programming or a malfunction could cause a cobot to make unexpected movements, which poses a hazard to those working in close proximity. Workers also have to be aware of the cobots’ space and trained in how to operate its external safety mechanisms. Using cobots correctly should reduce workers’ exposures to more dangerous tasks, but misuse could place them directly in harm’s way. Have you conducted a risk assessment and updated safety training to make sure employees know how to work side-by-side with robots safely and effectively?
  2. Product Liability: With a place on the production line, cobots play an integral role in product quality. A malfunction or programming flaw can introduce inconsistencies into the final outcome and increase product liability exposure. Does your quality control protocol consider cobot programming?
  3. Contract Language: If your cobot does injure an employee or tarnish a product, who should be held responsible: the robot manufacturer, the programmer, or your facility? If the cobot breaks down due to a defect, who will foot the bill for repair or replacement? Consult with legal counsel to put contracts in place that assign liability appropriately.
  4. Contingency Planning: As manufacturers grow more dependent on robots, there’s an increased need for contingency planning. In the event of equipment breakdown, how quickly can you repair or procure a new cobot? Identifying backup suppliers and service vendors is critical to keep operations running smoothly and minimize business interruption.
  5. Insurance Coverage: New equipment and subsequent changes to normal operational procedures call for an overview of insurance policies. Do you have appropriate coverage limits on property, general liability, equipment breakdown, business interruption, and operational replacement costs?

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Masters of Risk

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]