In manufacturing, our greatest asset is unquestionably our workforce. They are the ones who drive operations on the floor, craft and assemble products, and bring their creativity and problem-solving skills to the process. Great manufacturing leaders understand this and implement strong procedures. They apply lean methodology to establish structured, repeatable workflows that ensure consistency and prioritize safety for their team. Additionally, they adopt technology to enhance efficiency and quality while further safeguarding their employees.
But what happens when an employee does get injured? Is the process for taking care of the injured employee optimized? Could lean manufacturing principles identify waste that could be reduced or eliminated?
Tim Hayden is the CEO of Sargent Metal Fabricators in Anderson, SC. Tim is one of those great manufacturing leaders. He is the fourth generation of this family-owned business, and he cares deeply for his employees and values their well-being. During a recent tour of their facility by OpExChange, we witnessed firsthand how cutting-edge automation enhances productivity, quality, and safety for their workforce.
In a virtual OpExChange session last week, Tim joined Jesse Dantice of Zenjuries for an OpExChange discussion on how lean techniques and automation are being used to improve the workers’ compensation process at Sargent Metals.
The Workers’ Comp Process is Broken!
“The worker’s compensation process is broken,” Tim shared with the nearly 100 manufacturing folks in attendance. For companies that purchase worker’s compensation insurance, premium costs are determined from something called the EMOD (Experience Modification) rating. This rating is used to adjust the premiums a company pays based on their past claim history compared to other companies in their industry. A rating of 1.0 indicates the company’s worker compensation experience is on average the same as others in their industry. A rating of 1.3 indicates the claims for that company are higher and the company will pay 30% higher premiums than the average in their industry. A rating of 0.7 would comparably indicate they would pay 30% less than average.
But what is broken is how the EMOD is calculated based on the “reserved” funds. When a claim is filed, the adjuster will set aside a reserve fund to cover the cost of the claim. For instance, a cut hand might have a reserve set-aside for $30,000. If the actual costs turn out to be $5,000, but the claim was not closed in time, the new premiums are based on the reserve fund, not the actual costs incurred.
The average caseload of an adjuster is 220 claims, with the largest ones getting most of the attention. There is a good chance that there will be many open claims when the annual EMOD recalculation is done.
This is why Sargent Metal implemented the Zenjuries program for their workers’ compensation program.
Applying Lean Methodology to Workers’ Compensation
Jesse Dantice joined the discussion to emphasize the importance of manufacturers adopting a lean approach to workers’ compensation, similar to that used in their manufacturing processes. With over two decades of experience in the industry, he founded Zenjuries in 2015 to address the patterns of inefficiencies he observed. Zenjuries offers a software platform and mobile app designed to streamline workers’ compensation claims. Dantice explained that, regardless of whether you use Zenjuries or develop your own solution, the goal should be to eliminate waste, reduce claim processing time, and get injured employees back to work as quickly as possible. He highlighted that manufacturers have control over 70% of the factors affecting claim cycle time, offering a significant opportunity for improvement. Jesse explained that there are three areas manufacturers need to address in their current process:
- Identify the team – Before the incident occurs, all members of the team should be identified who will be involved in the claim process. This can include supervisors, managers, human resources, safety team, occupational health, adjusters, brokers, or others. The moment that an incident is reported, communication needs to be flowing to the right people so that action is occurring.
- Lag time reporting – This is the time between when the incident occurs and when it is first reported. This is the biggest cost driver in workers’ comp. claims. Jesse noted that claims with a lag time over three weeks have a 47% higher cost than those that were reported within the first day.
- Active Collaboration to Close out Claim – The team must stay in close communication to close out the claim and not allow it to stagnate. With the multiple players involved, the team needs to be clear on who is “on-point” and that the process is moving along.
Jesse gave a quick demonstration of the Zenjuries app, emphasizing how it addresses the inefficiencies in the workers’ compensation process. He described the standard process as “death by a thousand cuts” and explained how the Zenjuries app automates many routine tasks. The app visually documents all interactions, appointments, and instructions, providing clear workflows and identifying potential areas of delay. By organizing teams, assigning responsibilities, and maintaining a steady process, claims can be closed more quickly, reducing reserved costs and ultimately lowering premiums.
Playing Offense Against Worker’s Comp Costs
Just as reducing waste or non-value-added time in a manufacturing operation saves money, the same is true with worker’s comp claim cycle time. Jess shared that they are seeing between 30% to 50% less direct cost. He emphasized that this is only the tip of the iceberg. The Department of Labor estimates that there is up to a four-times cost loss for each claim.
Tim summarized that they work very hard at Sargent Metal to keep their team safe and out of harm’s way. Zenjuries was a logical continuation of their automation journey. “You don’t have to use Zenjuries,” Tim added, “but you do need to have a program in which you can play offense with your claims instead of playing defense.”
“This is yours,” Jesse added. “You control the lion’s share of the action. You can absolutely influence your own cost. If you don’t have lean processes in your work comp program, you are wasting time and money.”
About Sargent Metal Fabricators
Sargent Metal Fabricators is a family-owned and operated metal fabrication company located in Anderson, South Carolina. Founded in 1975 by J.D. and Donnie Sargent, the company has grown to become a leading provider of precision metal fabrication services to original equipment manufacturers (OEMs) across various industries. With a 160,000 square foot state-of-the-art manufacturing facility, Sargent Metal utilizes advanced equipment and technology to offer a wide range of services, including laser cutting, punching, welding, powder coating, and assembly. Committed to quality, innovation, and customer satisfaction, Sargent Metal’s skilled team of professionals works closely with clients to understand their unique requirements and deliver customized solutions that meet or exceed their expectations. By continuously investing in its people, processes, and equipment, Sargent Metal remains at the forefront of the metal fabrication industry, providing reliable and cost-effective services to its valued customers. Sargent Metal has been a member of the OpExChange since 2019.
About Zenjuries
Zenjuries is a technology-driven solution that aims to transform the workers’ compensation claims process. With over two decades of industry experience, we understand the challenges faced by all stakeholders.
Our app empowers each stakeholder to actively participate in the claims process through efficient workflows and real-time data. By streamlining communication, reducing costs, and mitigating litigation, Zenjuries helps injured workers recover, employers protect their bottom line, and insurance providers achieve better outcomes.
Zenjuries has partnered with the SCMEP to make this available to South Carolina. Contact your local SCMEP regional vice-president to learn more: https://scmep.org/team/?dept=business-development
About OpExChange
The OpExChange, sponsored by the SCMEP, is a peer-to-peer network of manufacturers and distributors in South Carolina known for generating success for members through benchmarking and best practice sharing. Member companies host events and share practical examples of industrial automation, lean manufacturing improvements, and leadership development. It is an invaluable resource to South Carolina companies that provides access to others who are on similar improvement journeys. If your company is interested in participating in this collaborative effort to improve both the competitiveness of your operation and South Carolina, contact Mike Demos (MDemos@SCMEP.org). More information and upcoming plant visits are available on the OpExChange website www.OpExChange.com.
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