Loss control in high technology electronics manufacturing: a longitudinal study of occupational safety.

This longitudinal twenty-year (1980-1999) study of occupational safety trends in the U.S. high technology electronics manufacturing industry revealed three key findings: 1) while the number o/workplace accidents and inspections decreased over the period, the penalties associated with violations increased; 2) the most common workplace safety citation over the period was the violation of the Hazard Communication Standard; and 3) the most frequently occurring high technology manufacturing industry accident was one in which the environmental factor and source of injury included gases, chemicals, and/or vapors which were inhaled by v one or morn employees. Managerial implications are discussed and appropriate responses to occupational safety in the high technology electronics manufacturing industry are provided.

Introduction

Te highly competitive and innovative electronics industry is now the world's largest and fastest-growing manufacturing sector [1,5,9]. It spans the production of semiconductors, computer communications equipment, disk drives, circuit boards, telecommunications equipment, and video display equipment--covering 52 SIC codes from 3570-3579 and from 3652-3695 [4,5]. The 2,500-member Electronic Industry Alliance (EIA) and the widely respected Journal of Electronics Manufacturing attest to the domestic and global importance of the $2 trillion industry [18]. The electronic manufacturing industry employed almost 1.6 million wage and salary workers in 2000 [5].

While working conditions in electronics manufacturing are relatively better than in some other manufacturing sectors, the industry appears to be drifting on its comparatively pristine laurels [5,14]. There are, however, many industry workers unwittingly exposed to hazardous materials and many workers who fabricate integrated circuits and other electronic components who inhale hazardous chemicals and vapors, but the extent and relative priority of these problems remain unclear [2,3,4]. So, although the agricultural, forestry, mining and construction industries take the lead in the incidence of occupational deaths worldwide, the toxicity of workplace safety trends in the domestic high technology electronics manufacturing industry warrants more focused managerial attention [3,9].

This unfocused managerial attention is particularly alarming in light of the increasingly substantial financial and non-financial costs of workplace safety neglect. The recent findings of the Liberty Mutual Group's Executive Survey of Workplace Safety, for example, indicate that U.S. businesses are spending $155 to $232 billion per year on workers' compensation losses, with $1 of direct costs (payments to injured employees and medical care providers) generating between $3 and $5 of indirect costs (lost productivity or overtime) [8]. In addition, managers who globally outsource high tech manufacturing jobs while ignoring workplace safety issues may face prison terms for workplace deaths [20]. Proposed legislation in England, for example, to reform involuntary manslaughter laws, introduces three new managerial criminal offences: reckless killing, which will carry a maximum sentence of life imprisonment; killing by gross carelessness (ten years in jail); and corporate killing (unlimited time) [20].

In addition to avoiding mounting costs, responsible workplace safety practices pay [1,6,13]. The Liberty Mutual Group's Executive Survey of Workplace Safety indicates that business leaders receive a return on investment of at least $3 for every $1 invested in workplace safety [8]. Furthermore, by realigning strategic and operational priorities to address the major sources of high tech manufacturing workplace safety violations, managers can increase their performance efficiency.

Due to the domestic and global preeminence of the high-tech electronics manufacturing industry and the staggering estimate of 8155 to S232 billion in worker compensation losses, we concentrated on this industry to improve its managerial focus and efficiency by detecting three data-based, major trends in workplace safety in the U.S., and making recommendations to prioritize future workplace safety actions better aligned with the most frequent citations and accident characteristics.

Accident Inspections in the High Technology Electronics Manufacturing Industry

To investigate the extent of accidents in the high technology electronics manufacturing industries (e.g., computer communications equipment, semiconductors, and telecommunications equipment, we utilized OSHA's Management Information Systems database, where more than three million workplace inspections have been recorded since 1972. The database contains detailed information compiled by OSHA compliance officers for each inspection conducted. We limited our review of the database to only those inspections where accidents had occurred during the twenty-year period covering 1980-1999. Information on distribution of company size, concentration, and related demographic variables are treated by OSHA as proprietary data, so our database consists exclusively of industry level data. Our search of the database revealed that OSHA had investigated 11,763 workplaces in the high technology manufacturing industry during tiffs time period.

For these inspections, 1,040 were a result of accidents that occurred. Exhibit 1 shows the number of total inspections and accidents per year. Over the 20-year period, both the number of inspections conducted annually and the number of accidents have declined. We attribute this both to managerial attention to bottom line impacts of workplace safety, and fewer OSHA inspections relative to other manufacturing sectors. In 1980, 645 inspections were conducted, and in 1999 only 352 were conducted. During the same period the number of accident inspections decreased from 88 in 1980 to 20 in 1999, with the number of accidents almost flat from 1990-1999. For the entire period there was an average of 588 inspections and 52 accidents per year. Given these general results of our review of the database, which confirmed anecdotal impressions of industry drift and acceptance of its workplace safety record, we focused our investigation on the violations and penalties associated with the accidents and types of accidents themselves.

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Violations and Penalties

Between 1980 and 1999, OSHA issued 35,822 citations for safety and health violations in the high technology manufacturing industrial sector. Of this total, 9,704 were considered serious violations by the compliance officers conducting the inspections. Moreover, the total fines (penalties) assessed as a result of these accidents and inspections were 87.1 million; the average penalty per violation was $203.32 and average penalty per serious violation was $567.54.

Exhibit 2 shows ratios of penalties to violations and penalties to serious violations by year. There appears to be a general upward trend in each of the ratios for the time frame used in this investigation. In 1980 the ratios were $75.89 in fines per violation for total violations, and $278.03 in fines per violation for total serious violations. By 1999 the ratios climbed to $373.43 and $961.92 in fines per violation for total violations and total serious violations, respectively. Thus, while the number of accidents and inspections has been decreasing over the 20-year period, the penalties associated with violations have been increasing. Based upon these results, we looked closer at the specific characteristics of the accidents, which generated the citations and penalties.

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Accident Characteristics

Based upon the OSHA compliance officers' reports, the nature of an accident is recorded in the database. We wanted to determine if there were any trends that could be identified with respect to the accidents. First, we reviewed the data to see if there were any commonalities among the accidents and inspections, concerning the types of violations of OSHA regulations that had occurred. What we found was quite revealing. Since 1986 the most common citation in the high technology manufacturing industry was the violation of the Hazard Communication Standard (29 CFR 1910.1200). The purpose of this safety and health standard "... is to ensure that the hazards of all chemicals produced or imported are evaluated and the information concerning their hazards is transmitted to employers and employees." The regulation requires the employer to develop a comprehensive hazard communication program. From 1986 through 1999, for inspections and accidents included in our study, 5,112 violations of the Hazard Communication Standard were cited by OSHA compliance officers.

Exhibit 3 provides greater detail about the characteristics of the accidents. As can be seen from the exhibit, the most frequently occurring accident was one in which the environmental factor and source of injury included gases, chemicals, or vapors which were inhaled by one or more employees. Note for example, that in 1980 more than 80% of the accidents in the high technology manufacturing industry included these characteristics and that in 1999 more than 30% of the total accidents had these sane characteristics. On the average, from 1980-1999, gas or chemical environmental factors were present in 52.14% of the accidents, chemicals and vapors were the source of injury in 33.61% of the accidents, and inhalation was the cause of injury in 46.07% of the accidents.