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Safety and Energy conservation as tools to take care of people, planet and profit

1. Introduction:

If one of the principal aims of any business is, “to make a profit”, then it would be very pertinent to know what are the vital parameters for reaching this objective and whether there are any concrete examples of success or failure by not following these; whether the parameters “safety” and “energy conservation” are necessary and essential parameters, and what kind of “care” is necessary. Further, it is essential to bring out with clarity, the broad and comprehensive meaning of the term “care” in the business scenario. In fact, a detailed case study made with this aim has indicated that caring for the people and for the planet by using the tools “safety” and “energy conservation” does create a refreshing elixir for a business enterprise to enable making profits and to sustain in the business world, to sustain on the planet…. and vice versa.


We will proceed in a systematic way, by first examining in detail what the statement means, and then trying to verify its correctness by applying it to every aspect of a known performing industry.


2. Care Analysis

2.1. Safety of people:

Here the term "people" comprehensively refers to the employees, the customers, and the stakeholders.

One needs to, therefore, enquire,

  • Is sufficient safety provided to the employees,

  • Is sufficient safety provided to the customers,

  • Is sufficient safety provided to the stakeholders and general public.


The word “safety” refers in a comprehensive manner, to

  • Physical safety,

  • Emotional or Psychological safety and

  • Financial safety.

It refers to safety in the current environment, sustained throughout its operating life, right to the future operational era.


2.2. Internal safety:

2.2.1. Physical Safety of the employees:

Physical safety of employees can be ensured by,

  • installing safe and sound machinery in the plant with appropriate and adequate protection features,

  • providing adequate and appropriate safety apparel to the employees,

  • providing safe tools to the employees,

  • creating a safe working environment for the employees,

  • specifying and implementing safety rules, and standard operating procedures for all routine operations and at the time of extraordinary events such as disasters.


Measurement

The measure of physical safety to employees can be derived from the safety indices of the organization, which include the severity of accidents and the number of accidents causing disruptions in production. It is also measured in terms of damage to equipment and costs for repairs.


It is extremely important to note that breach of physical safety of employees causes injuries, and damage to the assets (men, machinery) of the industry and, its most despairing part is that it leads to psychological disturbance and breach of “Emotional safety”


2.2.2. Emotional safety of employees:

The emotional safety or psychological safety of employees may not be visible to the naked eye but it is detectable through the indicators such as “Employee satisfaction index”, “Employee engagement index”, and “Employee productivity index” as appropriately defined depending upon the nature of the industry.


The emotional safety of employees can be ensured by

  • Providing jobs as per skill sets.

  • Providing opportunities for enhancement of skill sets.

  • Providing physical safety.

  • Ensuring fair remuneration.

  • Ensuring fair play in performance appraisal and due encouragement to innovations.

  • Ensuring a healthy competitive environment.

  • Setting examples of, and encouraging, the “walk the talk” principle in operations of the business.


2.2.3. Effects of breach of the safety of employees

Effects of breach of the safety of employees lead to,

  • Reduction in employees’ output and performance efficiency.

  • Irrational operations due to lack of clear SoPs, leading to accidents or near-miss of accidents.

  • Derating of equipment capabilities, thereby leading to restrictive operations.

  • Uncertainty and dissatisfaction result in vertical and horizontal rifts between employees / managerial staff / management. Lack of loyalty and integrity.

  • Attrition, thereby losing skill sets.


All the above, finally lead to underperformance of the industrial unit or the set of units, and further to erosion of profits at specific business centres or overall business set.


2.3. External Safety

2.3.1. Physical safety - External

Physical safety of customers and stakeholders:

The physical safety of customers and stakeholders is affected by

Ensuring safe packaging of the product where end-user or customer is concerned.

Providing safety in transport and handling of raw material.

Ensuring the safety of handling the product by the dealers, intermediaries, and retailers.

Ensuring safety in the disposal of scrap, effluents, and gases.

Ensuring safety to the general public, not connected directly with the product or the business.


Measurement

Various indices exist to measure the direct consequences of disruption in supply or breach of safety in handling and utilisation of the product. But the consequential damage through the breach of safety parameters as above can be disastrously high and cannot be measured directly.


2.3.2. The emotional or psychological safety of customers and stakeholders:

The emotional safety of customers is indicated by

  • The customer satisfaction indices regarding the quality, quantity, and availability of the product in a manner befitting to the customers' requirements.

  • effective monitoring of customer complaints, grievances, and their speedy resolution.

  • Sustained deterioration or improvement in these indices.


Emotional safety to the Stakeholder is indicated by

  • the credit ratings (e.g., Crisil rating) of the organisation,

  • the trust built up in minds of suppliers, and financiers who would be evident through the ease with which transactions with these parties are carried out and their response to emergencies.


Emotional safety to customers and stakeholders is ensured by,

  • Ensuring a sustained supply of products of requisite quality at a fair price

  • Ensuring transparency of price structure of the product and competitive equality

  • Ensuring punctuality in payments pertaining to all kinds of loans, thereby instilling confidence regarding the creditworthiness of the organisation

  • Ensuring partnership attitude with vendors and contractors at appropriate level thereby ensuring smooth transactions at optimum cost.


Measurement

proportion of market share.

Creditworthiness is shown by credit rating and the lending conditions put up by lenders.

Customer loyalty to the product or migration to competitors.

A number of litigation proceedings and proportion of favourable decisions thereto.


3. Energy conservation

In the fiercely competitive world, Energy conservation is one effective tool for cost control. However, in the present scenario, where the resources are getting scarce, energy conservation has become a tool for the survival of not only the industrial unit but for the entire population in general.


An industrial establishment needs to conserve energy,

  • While manufacturing/producing its product.

  • While transporting/transmitting its product to the dealers, intermediaries, and end-users.

  • Additionally, it needs to coordinate with the end-users and educate them regarding ways and methods of using the product most optimally, thereby conserving precious resources.


Measurement

There are various indices available, industry-wise, and product-wise through which one can calculate the power wastage occurring in absolute terms or as a percentage of the total power used for the process/ procedure. These energy conservation or energy wastage indices are very helpful for the respective industries so that they may try and plug the holes and improve their competitiveness.


4. Safety of the planet:

In the past, before the dawn of the Industrial Revolution, there were no factories, and there was no plundering of natural resources on the scale we are experiencing today. However, with Industrial Revolutions 1, 2, 3, 4 … there is a great drain on natural resources and disturbance to the ecological balance. We need to know how these will affect the planet, what are the concerns and how these should be addressed. First, it is pertinent to know the causes of such disturbances and what would be their effect so that appropriate remedial measures can be put in place.


The planet “Earth” is a terrestrial planet of the solar system, the third one among the inner planets. It is the only planet in the entire known universe which has the right provisions to sustain life, that is, the marine life and the terrestrial life. The planet itself is under divine care and it does not need our intervention. It is the life on the planet, terrestrial as well as marine life which is endangered by the industrial activities and needs to be saved.


The causes for harm to the life on the planet (or just “planet”) are,

  • Any minor deviation in the given range of physical and chemical properties of the atmosphere, that is, reduction in the required proportion of life-sustaining gases, increase of harmful gases and pollutants, formation of holes in the atmosphere, thereby offering pass through to harmful solar and cosmic radiation.

  • Change in surface temperature of oceans and other water reservoirs.

  • Erosion of life-sustaining ingredients of water.

  • Melting of polar icecaps thereby causes a change in the albedo of the earth (proportion of reflecting solar rays and heat)

  • Extinction of species is important for ecological balance in nature and constructive activities such as pollination of plants or facilitation of the nitrogen cycle of the earth.


The safety of the planet needs to be affected by ensuring

  • the harmful products of combustion such as sulphur, suspended particulate etc are treated and disposed of and not let out freely in the atmosphere.

  • Industrial wastes and biological wastes are appropriately disposed of and not let out in oceans and rivers causing harm to marine creatures due to pollution and high temperature.

  • Conservation of Nature viz Trees, Plants, insects etc


Measurement

  • air quality measurement.

  • water quality measurement.


5. Test of the pudding

It is often said that the test of the pudding is in its taste. Therefore, it is essential to test out all the above postulations. For this purpose, we use another theoretical method, “Reductio ad absurdum”. we select a hypothetical, vertically integrated (Generation-Transmission-Distribution) Electrical power company and apply the postulations in a negative manner.


We all understand a healthy and sound Energy sector or more precisely, the power sector, is the fundamental requirement of the entire industrial world, and we know very well that the Indian power sector is not making profits and it is deep in debt. It is to be seen whether any of the conclusive findings below align with the real-life problems in the Indian Power sector.


6. Reductio ad absurdum

Here we assume that what is postulated is not correct and the reverse is right. After such an assumption, we get the results of these actions, which we correlate with what was desired in the business and then we conclude about the correctness of the postulates.


6.1. Effect due to lack of Employee care

Equipment related:

  • Functioning of power equipment below their rating, thereby underperformance in service.

  • Frequent failures and accelerated ageing of equipment.

  • Overloading of the limited equipment and carriers remaining in service.

Employees related:

  • Employees’ large-scale disengagement, resulting in a lackadaisical approach to duties. Errors in billing and bill collection.

  • Deficient maintenance causes frequent failures and consequential load shedding.

  • Extended periods of power failure and non-availability of power to consumers.

Financial and commercial:

  • Perennial cash crunch. The deficit in working capital is due to deficient metering and bill collection. Delays in making payments for goods and services.

  • The cost of a new erection per unit of production (Rs per Megawatt) is higher than the industry standard due to various problems.


6.2. Effects due to lack of customer and stakeholder care

  • Deficient Demand-side management whereby less coordination with consumers regarding energy saving.

  • Low creditworthiness, results in higher interest rates demanded by lenders.

  • The high number and high frequency of grievances of consumers and litigation proceedings with judicial and quasi-judicial bodies.

  • Restrictive supply of raw material (Fuel etc) due to delays in payments to the suppliers, resulting in artificially created production shortage.


6.3. Effects due to deficiencies in Energy conservation

  • Inefficient operating procedures, increasing production costs and losing competitiveness (in the electricity sector, going to lower order in “Merit Order Despatch”)

  • Consumers prefer Open Access supply from other power suppliers.

  • High losses in transmission and distribution of electricity due to various slippages result in penalties and financial loss.


6.4. Effect of lack of care for the planet:

Pollution problem (save the planet)

  • Old thermal power generating plants operate with cheap high s fuel and are not fitted with a Flue gas de-sulphurising system, thereby emitting a high amount of sulphur in the air.

  • The use of coal with high ash content causes the emission of high particulate content flue gases.

  • Untreated effluents and hot “once-through cooling water”, if let out to the ocean or river, would cause harm to the marine life.

  • Plant operation will be restricted to comply with the requirements of the pollution board.


Conclusion:

It can be seen from the above discussions that a power supply company working under uncaring culture in some or many or all departments cannot make a profit as the path to profit-making can pass only through the care of employees, customers, stakeholders, and the planet. In such cases, Root Cause Analysis with the help of the above postulates will certainly reveal that CARE is lacking in its operations and corrective action in the right place will bring about phenomenal improvements.


A similar revealing exercise should be carried out for any other industry with a view to addressing issues that may be causing restrictive operations and losses in operations.

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