Perceived safety management practices in the logistics sector

1 Introduction

Supply Chain Management (SCM) is a network of raw material extraction, production, distribution, and vendors. The logistics industry as part of the supply chain itself plays a very important and essential role in the development of an economy. The industry isutilising human resources effectively by contributing a relatively higher portion to the economy development [16]. The industry ensures supply of raw materials to all sectors for the economic development of the country. The international proliferation of supply chains has brought an added dimension of complexity, making networks more vulnerable to disruption [9].

The logistics industry involves a multitude of matters, such as vehicles and equipment, and the environment for the safety of operations. Safety issues related to transportation activities involve the hours of service requirements, driver qualifications, and maintenance. Those related to warehousing activities involve training employees to safely operate forklifts and providing them with safety tools, such as hardhats and goggles [35].

On the other hand, there are various types of accidents happening at workplaces, such as storage during warehousing and multi-modal logistics. Hemingway and Smith [14] stated that a lack of job clarity may have a direct effect on injuries as this leads to the individual operating in unfamiliar situations, thus, increasing the likelihood of accidents. Hence, workers’ safety behaviour is important to ensure the efficiency and effectiveness of safety programmes that minimise disruption to supply chain process, which may take a long time to recover from, as it is critical for the sustainability of the enterprise. Pia [24] found that whilst material damages make up 58% of unwanted events in the supply chain, occupational accidents account for as much as 26%.

In 2011, the Malaysian logistics (transport and storage) sector had 0.6143 million employees, representing 5% of the country’s work force. On the other hand, 7% of workplace injuries and illnesses were reported out of 57,639 cases in 2010 and 127 fatalities (3%) out of 3,690 cases in 2009 [31]. According to the Malaysian Logistic Directory 2013/2014 [20], The Malaysian logistics industry is projected to expand at a double digit compound annual growth rate (CAGR) of 10.2% to RM207.4 billion in 2017.

2 Literature review

A company’s main successes are related to the development of an efficacious and committed human team [28]. According to O’Brien and McIlwain [22], the organisation must focus on the written health and safety programme and procedure to attain positive OSH practices among teams at work. Researches have consistently argued that management commitment to be important to the success of safety initiatives and a high level of management commitment plays a crucial role in ensuring the success of safety intervention [26]. Furthermore, management commitment was also found the most significant behaviour measure in determining the success of a behavioural safety intervention [21]. In addition, management commitment to safety was concluded as a major factor affecting the success of safety programmes [37]. Sanmiguel et al. [29] obtained results indicating that workplaces with a low average score in the analysis of occupational safety management had a higher incidence rate of accidents. Specifically, greater involvement of managerial practices to adopt safe practices would have more enduring effects [12, 36]. In particular, Chandrakantan et al. [8] observed that safety behaviour was also influenced by satisfaction with safety practices. For instance, Ali, Abdullah and Chandrakantan [1] found that implementing good management practices reduced injury rates in a major industrial zone in Malaysia. Belzer [5] also suggested that higher driver pay that is a decision implemented by management to encourage safe practices is associated with safer operations.

Effective safety management will improve the quality of work [6]. Kamardeen [17] has explained that accidents inflict direct and indirect costs to a business. Example of the direct costs are higher insurance premiums, equipment costs, legal settlements, and damages, whereas the indirect costs can be a tarnished company image. These costs will definitely affect management operations and the work environment presented to the workers. Unnecessary costs to manage consequences due to safety at work may mean less funding made available for workers’ recreation and benefits. This may resulted in workplace being a totally operational environment with little entertainment or recreational opportunity to mediate the job demand. This may be stressful to workers that had to work long hours, and endure shift works such as logistic workers. The job and the organisational environment are related to job satisfaction [33]. An outcome of job dissatisfaction is withdrawal totally from the job. Turnover frequently results in decrements in organisational performance [4], as new talents will mean retraining and orientation to get the new workers adjusted to the new work environment. In the case of the logistic industry, whilst, the individuals’ job separation can be linked with driver safety outcomes [34]. For instance, Rodríguez et al. [27] argued that a lower turnover rate was translated into fewer crashes by increasing the retention of older, more experienced drivers. Hayes et al. [13] noted that the management’s safety practice were amongst the best predictors of accidents, job satisfaction and compliance with safety behaviour.

Cantor [7] urged the importance of firms across all echelons of the supply chain to improve their safety practices. Kiathulthorn and Sathapornwanit [18] have found that CSR was one of company’s considerations when selecting third party logistics providers. In addition, Shariff [30] have concluded that the two significant service quality factors attributed to a logistic provider are facility/value-added services and customised services, specifically the capability of the logistic provider to ensure safety of the product and reliability. Sustainable transportation can only be delivered when the transportation meets not only mobility needs whilst also able to preserve and enhance the human and ecosystem well-being, economic progress, and social justice now and for the future [11]. Porter [25] has identified opportunities in the inbound logistics, operations and outbound logistics activities to improve worker safety by minimising use of hazardous materials in creating the business value in a sustainable supply chain. However, only management can ensure a sustainable practices is practiced throughout the organisation through its directive in policies. Then, it will become easier for all other departments within the company to follow suit.

A comprehensive safety monitoring such as an OSHMS (Occupational Safety and Health Mangement System) is highly relevant and important in an industry that not only employs one of the big numbers of employees but also bring in a huge income to the economy. According to the Department of Statistics (DOS)’s Labour Force Survey, by third quarter of 2011, they were 12.2592 million employed persons. The number of employed persons data show that the manufacturing sector employs 2.0907 million persons (17.1%), construction sector employs 1.1677 million persons (9.5%) and Transport and Storage sector employs 0.6143 million persons (5.0%) of the work force. The Third Industrial Master Plan (IMP3) reported that in 2005, the logistics market, transport, storage and communication services, contributed RM23.2 billion accounted for 8.8% of gross domestic product (GDP), and the contribution dropped to 8.4% in 2008.

Employers are obliged to pay higher medical premiums and property insurance and also suffer from the low efficiency of damaged machinery and wasted materials with an elevated accident rate. If there is no comprehensive OSHMS, the society in general suffers great loss because the productivity of a healthy and safe worker is higher than a worker with permanent disability and receiving Social Safety Organisation (SOCSO) benefits.

Having the logistics industry involved in machineries and safety of operation, various laws and regulations were enacted by the Department of Occupational Safety and Health (DOSH) of Malaysian to effectively regulate, control and guide it towards a sustainable industry. The Occupational Safety and Health Act (OSHA) 1994 was enacted by the Government of Malaysia to protect the safety and health of the worker.

OSHA 1994 has established the responsible self-management by business and extended duties to company decision makers. The safety and health system is based on the principle of assessing the risks and managing them sensibly, encouraging the employers to focus their energy and resources more on the significant hazards that can cause real harm. The main principles of this Act are self-regulation, tri-partite consultation and co-operation amongst employers and employees. The main provisions of the OSHA 1994 are the General duties of the Employer (Section 15, Section 17, and Section 18), OSH Policy (Section 16), General Duties of Designers, Manufacturers, and Suppliers (Section 20 and Section 21), General duties of the Employee (Section 24), Medical Surveillance (Section 28), Safety and health Officer (Section 29), Safety and health committee (Section 30 and Section 31), and Reporting of accidents, dangerous occurrences, occupational poisoning, and disease (Section 32), and the Prohibition against use of plants or substances which is likely to affect the safety and health of persons at work (Section 35). DOSH also published the Code of Practice for Road Transport Activities in 2010. The national OSH policies are formulated by the National Council for Occupational Safety and Health (NCOSH) under the Ministry of Human Resources (MOHR). MOHR is the policy formulator and service regulator for the workforce.

In order to study human factors in logistics safety, the authors examined the perceived safety management practices of logistics workers. The purpose is to identify the perception of safety management practices of Malaysian logistics personnel.

3 Methodology

This survey investigated safety management practices of logistics service providers. The population of the study comprised of the staff of the logistics sector in Malaysia. The questionnaire on the safety management practices’ dimensions was adapted from Ittmann [15], Lu and Tsai [19], Panta and Vrysagotis [23], and Song and Zhao [32].

The list of logistics enterprises was confined to the list compiled by the Malaysian Logistics Directory with a total number of enterprises of 1096. After excluding the 277 enterprises for duplicated name and address entries, the number of companies became 819. As all companies were sent two questionnaires each, the total sampled were 1,638. The comprehensive survey was then administered to all these enterprises. One month after the questionnaire was sent, an e-mail follow up was carried out. Data was collected earlier during May to September 2012 from employees from the logistics sector in Malaysia. As the logistics is a supporting industry to international trade, its OSH situation does not experience drastic changes in a short span of over two years; therefore, data collected is expected to represent the current scenario. All items were measured on a 5-point Likert scale unless otherwise specified and all value points in the scale were labelled. The participants received a written description of the study and informed consent was obtained prior to the survey being taken. The surveys took approximately 20-30 minutes to complete. When the respondents finished the survey, they were collected and secured. The total number of completed questionnaires received was 103, representing a response rate of 6%. It was comparable with the response rate of 5.7% in a survey on supply chain integration [3].

4 Results and discussion

The respondents were comprised of 50.5% females and 49.5% males, and the employees aged 41 years and above (42.7% ). Most participants were Malay (46%). 62% of the respondents were married. The highest educational background consisted of graduates (45%). 50% of the respondents had been working five years and below in their enterprises. 57% of the respondents had a monthly income of RM3,001 and above.

On the mean score of the dimensions of OSH management (Figure 1), the respondents were highly satisfied with the fire apparatus dimension. Respondents also tended to agree that their management had prioritised safety and they knew the OSH policy. This was probably a reflection of the active OSH programme in the logistics sector. Training is important as employees who receive safety training suffer fewer work-related injuries than their untrained counterparts [10] as it allows employees to acquire greater competencies to control their work and perform jobs more safely [2].

The purpose of this study was to investigate the perception of safety management practices. The results of this study suggest that safety management practices were implemented as perceived by the respondents. These results suggest that safety management practices were implemented amongst the logistics service providers. Improvement in occupational safety and health programmes will contribute to the sustainability of an enterprise. A sound safety management system is an important factor for sustainable industrial upgrading strategies as well as through the improvement of labour conditions under global competitive markets. The industry will continue to contribute to the well-being of the labour, society and economy of the country as a whole. Government OSH legislation seems to be part of a much larger picture of safety measures to prevent occupational accidents.

5 Conclusions

An effective and continuous concept of development requires all stakeholders, the government authority, the industry and the employees to work together to foster an industry safety culture of best practices in logistics activities. This is to ensure the effectiveness of the occupational safety and health programme that minimise the supply chain disruption that may take a long time to recover from.

The findings of this paper reveal several important implications for organisations and safety professionals. This study revealed that the overall perception of OSH management in Malaysia was quite high, ranging 3.58 to 4.06. The score of the ability to locate the nearest fire apparatus was high, reflecting that the logistics service providers had placed emphasis on training. The scores of Safety Priority and Safety Policy were above 3.9, indicating that the respondents were aware of the employer’s OSH commitment. These findings suggest the need of logistics service providers to have committed leadership to ensure effective OSH practices.

In addition, companies have to conduct sufficient safety training to improve the competency of the staff with OSH practices. A company that has a clear safety policy would enhance the staff’s satisfaction. Clear safety rules and a proper reporting system would encourage the staff to report injuries and take responsibility for their own safety. Furthermore, greater participation of the employees is required. The data used in this study were self-reported and the same source bias may have inflated the results in this study. This study might lack generalisation as the study population attracted a rather low response rate.