technology tools for risk assessment and mitigation · pdf file05.12.2017 ·...
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Technology Tools for Risk Assessment and MitigationAGC GRADING AND BASE FORUM
DECEMBER 5, 2017
AgendaEnterprise Risk Management in Construction
◦ What is it?
◦ Big data and risk avoidance
Risk Cases for Technology Solutions and Innovation◦ Transportation – telematics and cellular blockers
◦ Worker Injury - wearables
◦ Quality Assurance and Control – drones, sensors
◦ Operational Effectiveness - Project Management applications
Implementation, Change Management, Adoption
What is Enterprise Risk ManagementERM is the process of planning, organizing, and leading the operations of an organization to understand, manage, and minimize the impacts of risk on the organization’s strategic plan
ERM is a discipline that permeates all functions and operations within an organization; it is not a profession or a stand alone function
The primary goal of effective ERM to facilitate the ability of the organization to meet its strategic goals
In Construction, many risks make up the ERM function
Physical Risks
•Workers
•Property
•Auto and Equipment
•Construction Defects
Process/ Standard Operating Procedures
•Biddings
•Estimating
•Proposal
•Subcontractor Management
•Change orders, RFI, punch list
•Project Management
•Workflows
Operations
•People
• Technology•Claim Management
•Cyber/information confidentiality
•Internal collaboration
•Financial management
•Document Management
Strategy
•Vision
•Mission
•Performance Management
Regulatory
•Compliance Policies
•Employee Activity
Other
•Insurance Program
•New business division onboarding
•Customer Relationship Management
Big Data becoming increasing important for managing risk
◦ Changing insurance tech landscape◦ Internal cost containment
◦ Predictive Modeling
◦ Robotics and cognitive computing
◦ Predictability◦ Operational management
◦ Efficiency and productivity
◦ Loss cost increases and risk minimization◦ Medical inflation
◦ Project complexity
◦ Decreased project timelines and increased expectations
…and data driven technology use is Growing in the Construction Industry
JBKnowledge – 2015 Construction Industry Technology Survey
The Case for Technology in Transportation and Equipment UseoAutomobile related claim costs have increased from 120M to 163M over past 4 years
oAverage liability claim has increased from about $13K to over $16K over past 7 years
oConstruction industry is a significant user of mobile equipment and over the road vehicles
Cellular Phone ImpactIn 2011, 1 out of every 4 accidents results from texting and driving
Texting is 6 times more likely to cause an accident than drunk driving
The National Safety Council reports that cellular phone use results in 1.6M crashes per year
Answering a text takes 5 seconds. At 55 mph, a vehicle travels the length of a football field in 5 seconds
As far back as 2013, 424,000 people were injured in a crash from distracted driving
Use Cases for Transportation and Equipment Telematics and Cellular Blocking Technology#1: Decrease in accidents, injuries, loss of life
But also….
Increase fuel efficiency
Improve productivity
Decrease maintenance and equipment operational costs
Improved data quality and predictability
The Case for Technology in SafetyDespite all of our hard work, we can do better …
• Incident rate per 100 full time workers in 2016 for all private entities in Minnesota is 3.4, but in construction the rate is 5.0 (9 fatalities in construction in Minnesota in 2015)
•Claims for workers over 55 has risen from 9.1% in 1990 to 23.2% in 2013
•Among insured employers in NCCI states in 2005-2007:• Falls from Elevations by Carpenters cost approximately $93 million per year.
Average lost time claims cost over $97,000 each• Falls from ladders or scaffolds by Carpenters cost approximately $64 million
per year. Average lost time claims cost nearly $62,000 each• The average cost of a fall from elevation for all other occupational
classifications was under $50,000
Compounding the safety challenge is the opioid crisis related to Workers Compensationo 4% of group health drug spend is opioid yet 40% of WC drug spend is opioid related
o Average WC lost time claim without opioids (2013) is $13,000 (NY Times, 6/22/13)oWith short term opioid use the average increases to $39,000
oWith long term use, the average claim increases to $117,000
o Of the 47,085 drug overdoses in 2016, 33,215 (71%) were due to opioids
o 50% of people that take opioids for 30 days will continue to use them one year later
o $20.4B yearly cost for opioid related overdoses
o 1.9M people/year abuse or become dependent
CDC data; Teresa Bartlett, Sedgwick CMS, IRMI Presentation, November 2017
Fatal accidents continue to focus on transportation, equipment, and falls
Total cost of risk for a single accident:•Average Direct costs in 2013• $19K indemnity; $25K medical = $44K total
•Indirect risk estimate additional $50K including• Work stoppage
• Additional overtime
• Claim handling
• Training of replacement worker
• Loss of productivity due to schedule, labor impacts
• Equipment loss or repair
• Fines, brand image
•Insurance impact/ experience mod
direct lost time claim cost $ 19,000
direct medical costs $ 25,000
indirect expenses $ 50,000
change in ex. Mod (assuming 100K initial premium cost) 15%
impact on insurance premium (3 year impact) $ 75,000
TOTAL 3 year cost $ 169,000
Replacement revenue needed (assuming 10% margin) $ 1,169,000
Use cases for wearable technology to improve safety
Visual
Sensing
Tactile
The Case for technology in QA/QC arenaIncreasing complexity in projects
Shorter time lines and lower margins
Increasing risk related to construction defects
Use Cases for Technology to Improve QA/QCDrones
◦ Surveying
◦ Inspections
◦ Safety records and documentation
◦ Budget and scheduling
◦ Data analysis – actual versus plan in real time
Sensorso Water management
o BIM modeling tracking
o Documentation
The Case for Technology in Project ManagementMany RFI responses are delayed, not answered, or not documented
Safety and daily log documentation is inconsistent across the industry and perhaps inconsistent across a large project
Project team members often use different technology (or some with no technology) leading to collaboration challenges, and decreased productivity
A recent McKinsey report states that large projects take 20% longer than expected to complete and 80% are over budget while technology spend continues at a rate of 1% versus other industries in the 3-5% range
Use Cases for Project Management Applications and Software
◦ Less report writing
◦ Documentation of RFIs and submittals
◦ No time needed to transfer photos
◦ Improved profits and efficiencies
◦ Improved safety
◦ Eliminate duplicate data entry
◦ Fuel costs saving
◦ Less re-work
◦ Collaboration
◦ Time spend searching for docs and photos
◦ Better documentation and document availability in real time on the project site
◦ Reduced fines
Risk Assessment and Mitigation of Distracted Driving and OperatingAGC GRADING AND BASE FORUM
BEN LOVIN, AMES CONSTRUCTION
DECEMBER 5, 2017
Distracted Driving and Operating
Two Main Sources of DistractionElectronics◦ Texting
◦ Internet
◦ Phone Calls
Fatigueo Causes more industrial accidents than drugs and alcohol combined
o Too little rest
o Night shift work
o Personal Issues
ImpactsPublic◦ Potential for accidents on public roadways
◦ 3,477 deaths and 391,000 injuries due to distracted driving in 2015
◦ Litigation
◦ Negative public perception
Projecto Potential for accidents and injuries
o Equipment damage
o Lower quality work
o Increased fuel consumption
Technology SolutionsEquipment Telematics◦ Equipment manufacturer supplied sensors
◦ Distraction sensing cameras
◦ Detect when operators aren’t looking or using mirrors before backing
◦ Senses when an operators eyes have been closed for a predetermined period of time
◦ Employee wearables to establish fatigue susceptibility
◦ Equipment manufacturer services◦ Operator monitoring services
◦ Fatigue and distraction studies
Technology SolutionsVehicle Telematics◦ Lane departure warning
◦ Collision mitigation
◦ Side object detection
◦ Speed limit action and alert
The Human SolutionThere is still a person at the controls
◦ We need to know our people!
◦ Don’t add to the distractions
◦ Think about schedules
◦ Give employees a chance to succeed
© 2017 Corvex Connected Safety™ - PRIVATE & CONFIDENTIAL
Why now?
Workplace Injuries Safety Spend
© 2017 Corvex Connected Safety™ - PRIVATE & CONFIDENTIAL
Worker Powered.• Incredibly easy to use
• They need to own it
• Can’t slow them down
© 2017 Corvex Connected Safety™ - PRIVATE & CONFIDENTIAL
© 2017 Corvex Connected Safety™ - PRIVATE & CONFIDENTIAL
© 2017 Corvex Connected Safety™ - PRIVATE & CONFIDENTIAL
Adoption of Technology & Project Management Risk: From an Owners ViewA G C G R A D I N G & B A S E F O R U M
5 D E C E M B E R 2 0 1 7
R I C K B E C K E S
M N D O T, O F F I C E O F C O N S T R U C T I O N & I N N O VAT I V E C O N T R A C T I N G
MnDOT’s Use of TechnologyAASHTOWare Project
Mobile Devices
Primavera P6
Deltek
Project Management Information System (PMIS)
3D Plans and Models
Building Information Modeling (BIM)
DeltekAcumen Fuse
Acumen Risk
AASHTOWare ProjectEstimation
Preconstruction
Bids
Construction & Materials
Civil Rights & Labor (CRL)
Mobile DevicesiPhones
iPads
Rovers (RTK)
Primavera P6CPM Schedules
Project Management Information SystemReplacement for TRACS
Include Collaboration function
Access for External Stakeholders
3D PlansVisualize the Project before any Construction activities begin
Provide information for Electronic Grade Control
Building Information Modeling (BIM)BIM extends beyond 3D by supplementing the primary spatial dimensions (Length, Width, Depth) by adding:
> Time as the fourth dimension (4D)
> Cost as the fifth dimension (5D)
Information is KnowledgeThe adoption of technology provides for collection of data and information in “real time”
Real time info allows for better assessment of risks and mitigation of those risks
Change Management and Implementation for TechnologyPlanning and communication strategy
Definition of impacted audience
Clear business leadership roles
Stakeholder alignment and communication
“What’s in it for me” evaluation by role
Change champions
Adoption feedback and on-going assessment
Response to issue/ project management