10d • 🔎 Case Studies
How a 15-Second Shortcut Ended up Costing $847,000
This is the story of a mid-sized packaging manufacturer in the Greater Houston area—$8M in annual revenue, 35 employees, solid safety record. They'd been in business 14 years without a serious OSHA violation. Until a Wednesday morning in March 2024 changed everything.
🔎The company ran a high-speed packaging line with an automated conveyor system. Around 10:30 AM, the conveyor jammed. Product was backing up. The production supervisor called over a maintenance technician, we'll call him Carlos, to clear the jam. This was routine—happened 2-3 times per week.
Carlos knew the official procedure: shut down the line, lock out the main breaker panel, verify zero energy, clear the jam, restore energy, and restart. But the official procedure took 8-10 minutes. The shortcut version? Hit the emergency stop button, clear the jam, hit reset. 90 seconds max.
The supervisor was under pressure to hit production targets. Carlos had cleared jams this way dozens of times. He hit the e-stop, opened the conveyor guard, and reached in to pull out the jammed cardboard.
What Went Wrong:
Another employee in the facility, unaware that Carlos was inside the conveyor, saw the line stopped and assumed it was a malfunction. He walked to the operator panel and pressed the reset button. The conveyor engaged instantly. Carlos's right hand was caught between the belt and drive roller. Three fingers were crushed. He was rushed to the ER. Two fingers were amputated. One was saved but permanently disabled.
The OSHA Investigation 🔎:
OSHA arrived within 48 hours. They requested:
- Written LOTO procedures for the conveyor system (the company had none)
- Training records for authorized LOTO employees (the company had a generic "safety orientation" from 2019)
- Machine-specific energy control documentation (the company had never conducted an energy source audit)
- Proof of annual LOTO procedure reviews (didn't exist)
OSHA issued five separate citations:
- Failure to develop machine-specific LOTO procedures – $18,700 penalty
- Failure to train authorized employees – $15,400 penalty
- Failure to conduct periodic LOTO inspections – $14,200 penalty
- Inadequate energy control during servicing – $24,800 penalty (serious violation)
- Failure to use lockout devices – $11,600 penalty
💰Total OSHA penalties: $84,700.
But that was just the beginning.
- Workers' comp claim: $320,000 (medical costs, disability, wage replacement)
- Legal settlement: Carlos sued for negligence. The company settled for $420,000 to avoid trial.
- EMR impact: Their experience modification rate jumped from 0.92 to 1.38, raising workers' comp premiums by $63,000 annually for the next three years.
- Production loss: The line was shut down for six days during the investigation, costing an estimated $140,000 in lost revenue.
Total financial impact: $847,000 💰💰💰
This wasn't a "freak accident." It was a systemic failure. The company had:
- No written LOTO procedures
- No training program for energy control
- No enforcement of lockout requirements
- A culture that normalized shortcuts under production pressure
The super and Carlos weren't negligent—they were operating in a system that never gave them the tools or training to do it right.
The Aftermath:
The company implemented a full LOTO compliance program post-incident:
- Conducted energy source audits for all equipment
- Developed machine-specific written procedures
- Trained and certified 8 authorized employees
- Installed 35 lockout points with locks and tags
- Instituted a zero-tolerance policy for LOTO shortcuts
Cost to implement: $18,500. If they'd done this before the incident, they would have saved $828,500.
LOTO violations don't happen because employees are careless. They happen because leadership doesn't build systems that make compliance easier than shortcuts. You can't expect employees to "be safe" if you haven't given them machine-specific procedures, proper training, and a culture that rewards doing it right over doing it fast.
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How a 15-Second Shortcut Ended up Costing $847,000
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