Investigating the effectiveness of safety costs on productivity and quality enhancement by means of a quantitative approach

Senior managers face a number of challenges in safety area, e.g., to what extent it should be invested in safety programs. This study aims at determining the effectiveness of safety cost factors in productivity, quality, and safety performance in steel industry. The data related to five steel companies were gathered from documents of the companies. These data pertained to five safety cost indicators and eight indices relating to safety performance, productivity, and quality. Data envelopment analysis (DEA) approach was used to compute the influence of safety costs and to analyze the obtained results. The results of DEA demonstrated that safety cost indicators would positively affect the performance of decision-making units (DMUs) in this study. Furthermore, the results regarding sensitivity analysis indicates that Capita Total Safety Costs (CTSC) plays a considerable role in the enhancement of productivity and quality in this particular case study. To the best of the researchers' knowledge, this is the first study that evaluates the influence of safety cost indicators on productivity, quality, and safety performance through a quantitative method in steel industry. Therefore, it can assist managers and stockholders invest purposefully in safety and health programs to reduce interruptions and increase productivity.