A COST-BENEFIT ANALYSIS OF SAFETY MANAGEMENT SYSTEM IMPLEMENTATION IN THE TRANSPORTATION INDUSTRY

Abstract

ABSTRACT

The transportation industry across the world operates in a well-choreographed dance. This well-choreographed dance continues to face many threats; a smooth operation of the industry relies on the safety program that are in place. One such safety program is safety management systems. Safety Management Systems (SMSs) is defined variably by different organizations. For example, the Australian Transportation Safety Bureau (ATSB) defined SMS as a planned, documented, and verifiable way of managing aviation risks (ATSB, 2011). The Federal Aviation Administration (FAA) defined SMS as a creative and proactive response to system safety (FAA, 2015). Given the complex nature of the industry and the evolution of new risks or threats in the transportation industry, the success of managers and operators of transportation firms have much relied on balancing productivity, profitability, and the effectiveness of safety programs implemented. In fact, safety professionals, companies, and agencies have always documented humanistic benefits related to safety programs, but little research has documented the costs and benefits of implementing a safety program. This study reviewed studies by highly placed transportation scholars on the costs and benefits of SMS implementation. Findings from the study suggest companies and agencies within the transportation industry will experience some costs and benefits from the implementation of SMS. It was also discovered that it is very difficult to quantify the benefits from SMS implementation. The study concluded that even if companies will incur costs with implementing SMS, the benefits from the implementation are derived from the savings made when accidents are avoided.