The New Pepsi Challenge: World-Class Safety

Feb. 1, 2008
In the 1940s, commercials for Pepsi-Cola featured a jingle that included the lines: Pepsi-Cola hits the spot. Twelve full ounces, that's a lot. When it

In the 1940s, commercials for Pepsi-Cola featured a jingle that included the lines: “Pepsi-Cola hits the spot. Twelve full ounces, that's a lot.”

When it comes to workplace safety, PepsiAmericas - the second-largest worldwide anchor bottler of Pepsi products - has found that an ounce of prevention is worth a pound of cure. By systematically changing our corporate culture from the top down, we've made great strides over the last 5 years toward establishing ourselves as a world-class industry leader in employee safety.

“I have often said that safety can be a great measure of the success of a company,” says Archie Meairs, director of risk management for PepsiAmericas. “Management that cares about safety recognizes how closely it is linked to performance. We often see a direct correlation between financial performance and a safe workplace. Simply said, top performing operations are safe operations.”

According to Meairs, employees and managers feel the passion, commitment and awareness for safety throughout PepsiAmericas “because we care about our employees and it's the right thing to do. We have a seasoned safety team on board that provides strategic direction and manages safety initiatives effectively. This translates into safer, better and more productive ways to achieve excellence in the workplace.”

The transition in the corporate culture to achieve world-class safety results hasn't been easy. First, you need to understand the scope of PepsiAmericas' operations, and the fact that the hazards our employees face come in many different forms.

We make, sell and deliver more than 100 different flavors and brands of Pepsi products in 19 states, as well as in Puerto Rico, Jamaica, the Bahamas, Trinidad and Tobago, Poland, Hungary, Ukraine, Romania, the Czech Republic and the Republic of Slovakia. The company also has distribution rights in Moldova, Estonia, Latvia, Lithuania and Barbados. In total, the company serves a population of more than 150 million people. That means we have employees exposed to risks that stretch from our manufacturing plants, to the roads our drivers travel on, to the stores where they deliver the equivalent of 1.3 million cases of product a day.

But our operations and our exposure don't end there. We also deliver, fill and maintain vending machines and fountain units, experiencing hazards and exposures that are unique from direct delivery to retail locations.

Correcting the Culture

For all the hazards that PepsiAmericas employees encounter, the biggest obstacle my team members faced in getting our company on the path to world-class safety was a corporate culture that took something of an inconsistent approach to risk reduction.

As Tim McHale, one of our corporate safety managers, explains, “As recently as a few years ago, the attitude toward safety was that while accidents and injuries should be controlled, they were an unavoidable part of our business.”

It was as if people believed there was a magical bucket of money at corporate headquarters that would pay for accidents.

In the late 1990s and early 2000s, an otherwise positive financial picture for PepsiAmericas was marred by costs that resulted from injuries and lost time. Management wanted to know where these costs were coming from and my colleagues and I in safety and health had some answers for them.

Once we put pen to paper and realized exactly what costs were involved, we were able to attach a dollar amount to the issue of safety. We spent a lot of time building the groundwork for a culture change. By 2002, we agreed on what our structure should be. We had our team in place and began benchmarking and compiling hard statistics.

From that point on, we weren't on the bench anymore - we were in the game. The perception of S&H personnel was on its way to changing from a bunch of nerdy guys with clipboards to team members who could make a real difference in the company's general and administrative (SG&A) expenses. We begged for accountability, and we got it.

Putting the Plan Together

Our focused approach to corporate safety was founded on what we termed our Safety Commitment:

“PepsiAmericas is committed to the health, safety and environmental well-being of our employees and the communities we serve. To that end, PepsiAmericas aims to provide a safe and productive work environment consistent with one of the world's largest-growing premier beverage companies.”

From there, we put together a five-plank model to develop measurable improvements and create a new safety culture. These planks, and some of the specific measures associated with each, appear below.

To build organizational capability, we began with the premise that if you want new standards to be accepted universally, you have to communicate them universally. PepsiAmericas' communication tools included:

  • A corporate safety manual with standardized rules;
  • Employee safety handbooks that are distributed to all new employees; and
  • Posters displaying our safety commitment statement, which we plastered everywhere.

We implemented compliance measures to make sure our rules were being followed:

  • Job descriptions were developed, assessed and validated by an ergonomist;
  • Reviews were conducted of driver qualification files;
  • Accident review committees were formed; and
  • Hours of service- and DOT- specific training was initiated for all drivers and managers.

On the subject of training, Todd Eveland, PepsiAmericas' senior vice president of field sales, says, “Since so many of our sales employees spend the majority of their time outside of our distribution centers, safety training and awareness is paramount in our pursuit of being a best-in-class supplier.”

So, we decided it was vital to install highly visible scoreboarding tools like:

  • The safety “cross”: a daily scorecard prominently displayed in all locations that provided immediate information on how many accidents each location had experienced; and

  • A standardized vehicle accident tracking form that helped us analyze accidents so we could prevent them from happening in the future.

In addition, specific cost-containment measures were adopted, including:

  • Installing a repeat-accident policy to effectively identify drivers who had been in multiple accidents, so we could take stricter corrective action;

  • Updating and communicating a transitional duty manual that allowed injured employees to return in temporary roles suited for their progressing rehabilitation; and

  • Introducing a variable deductible program that gave individual locations and regions more financial responsibility for their own accidents - thus directly impacting their bottom line.

Finally, we maintained safety communication and provided recognition for those who were leading the way in safety. Our communication and recognition tools included an industrial safety newsletter; safety articles in our corporate magazine, Refresh; a safe-driver recognition program; a safe-driver competition known as “Roadeo;” and a safe work site recognition program. This program was particularly effective in building team spirit and pride for those locations winning “safety championships.”

Safety Manager Perry Amoo-Mensah says the processes at PepsiAmericas “allow management to be more responsible and empower employees in the field to handle and report safety issues.”

Refreshing Results

Senior management expected us to deliver reductions that correlated to saved dollars, and we were able to deliver. From 2002 - when the first of our new safety measures was rolled out - to 2006, our safety strategies, coupled with the commitment, total buy-in and hard work of our employees, resulted in some pretty impressive safety statistics, including:

  • A 55 percent reduction in lost time cases;

  • A 29 percent reduction in OSHA- recordable cases;

  • A 14 percent reduction in overall claim count; and

  • A 37 percent reduction in charge- able (at-fault ) vehicle accidents.

We are seeking to change the culture at PepsiAmericas, not just improve the numbers, and there is compelling evidence we've succeeded there, too.

“People in our industry throw around the saying ‘Safety is everyone's responsibility,’” says one of my colleagues, Rob McLeod, a safety manager. “But that truly is the case at PepsiAmericas. The philosophy, attitude and ownership of safety are directly on the shoulders of every employee within the organization.”

As McHale observes, “PepsiAmericas operates with the belief that everyone is responsible for their own safety, but employees at all levels across our organization believe that accidents and injury causes can be eliminated, resulting in fewer accidents and injuries to fellow employees. Our employees are actively engaged in the hazard identification and elimination process.”

What Employees Say

Perhaps the most convincing proof of the culture change at PepsiAmericas can be found in the results of a recent internal employee survey. Respondents were asked to evaluate a wide variety of statements concerning corporate life. The statement that 8,000 U.S. employees agreed on more than any other was: “Safety is every employee's responsibility.”

When I look at the changes our company has gone through in the last 8 years, one of the things that stands out most is that it's not uncommon for senior management to take a direct role in promoting safety, because safety has been installed as a core value.

“When safety is a core value, it transcends the workplace and becomes part of your everyday life both at work and at home,” says Barb Kallay, PepsiAmericas U.S. vice president of human resources. “Safety must be the foundation for the decisions we make and the actions we take. It is a responsibility; a commitment to our families and our colleagues. And a world-class safety culture means an accident-free world. A world where no one gets hurt, and we all go home at the end of the day as healthy as when we started.”

Is that an impossible goal? Senior Vice President of Supply Tim Donnelly doesn't think so.

“If you work diligently, involve everyone on your team - your front line, your management, your supervisors - and you recognize people for being safe and offer incentives, you can reach perfection,” he says.

“All levels of the organization must view safety with equal importance,” Donnelly adds, “That's how you do it.”

And at PepsiAmericas, we're getting it done.

Chris M. Knox is the corporate director of safety and health for PepsiAmericas.

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