Financial Cost Of Human Errors In Manufacturing

By Author: Gary Martin
Total Articles: 29
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The human errors seriously impact the profitability of the company, along with affecting the key aspects of safety and return on investment (ROI). The ROI is in relation to the processes followed and training provided to employees.

The various strategies of risk management have markedly decreased the instances of injuries and accidental deaths in the manufacturing plants. Yet, the resultant financial costs of the errors continue to be an enormous burden on the manufacturers.

The misunderstanding and misinterpretation of the various processes and procedures of the business, by the employees, is negatively affecting the revenues of manufacturing companies. This misunderstanding and misinterpretation is the primary reason for the occurrence of human errors.

In this connection, the major issue is that many organizations are sticking to “to err is human” to the letter. Thus, many manufacturing companies treat the financial implications of these human errors as inevitable in the course of business that can’t be avoided altogether.

Among the many negatives of human errors, we also have downtime. Repeated ...
... instances of downtime exercise a negative effect on the company’s profits.

Sometimes the human errors can lead to the most adverse crises such as the factory being forced to wind up its operations. Though these cases are not that common, they do happen on and off. And, the financial repercussions of these errors are too extreme.

Minimizing financial costs of human errors

There is only one way to minimize the financial costs resulting from human errors in factories: to reduce the instances of human errors, as much as possible. If any employee has a callous attitude towards their work or does not possess the experience needed for the job, errors tend to happen at a manufacturing plant. But, if there is a frequent recurrence of errors, it indicates that the flaw is with the procedures/processes of the factory operations.

If a manufacturing organization is committed to addressing this matter, a broader approach has to be adopted. Business needs to candidly admit that not all errors can be attributed to employee carelessness; a shortcoming in the organizational processes could also be the reason.

Manufacturing businesses need to focus on the improvement of procedures and encourage the employees to participate in the same. This greatly lessens the number of incidents of human error and contributes to the revenues.

Manufacturers must discard the misconception that only complex procedures shall be effective. Nothing can be farther from the truth. And, the truth is that the simpler you keep the processes, the lower the risk of human errors. If manufacturing plants stick to this fundamental point, they will be able to avoid unwanted costs.

Companies should opt for automation, at least covering those important aspects where there is a high possibility of human errors from oversight.

Organizations are entailed to train its employees to promptly identify their errors as well as particular situations where errors are likely to take place. In these training programs, the staff has to be educated with all relevant knowledge. Subsequently, the employees can take timely remedial measures, before the issue on hand escalates to the extent of financially burdening the business.

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