Value In Systematized EHS Programs (2007 Nrep Conference)

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Value in Systematized Approaches to EHS

Lawrence E. Miles, REM

Presentation first given at the NREP National Convention

San Antonio, Texas, September 2007

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EHS Programs Have Value…

EHS programs help avoid LOSS from:Loss of Production Capability

Loss of Personnel Medical care (or worse) Cost of training replacements Cost of lesser skilled temporary workers (loss of

production, quality, etc.)

Higher Insurance Costs

Loss of Customers who care about EHS…

Fines!

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Semantics: Speaker’s Choice

Systematized/Systemized vs. Systematic

“Systematized” (or systemized) is the dynamic verb form of systematic and implies action in arranging programs in or according to a system; to act to make systematic.

“Systematic” implies a passive state already achieved.

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Conference Talks: Preaching to the Choir

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Not Everyone at the Top Sings!

Why do we have to spend money for ISO 14001?What’s 5S? Why do we need ISO 18001? Can’t we

just take 14001 and add another 4000 to it?

Where’s the RETURN ON INVESTMENT?!?(what’ll the shareholders think?)

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Three “C”s of Success

Systematic EHS programs provide companies the tools to fulfill the 3 “C”s of success:

Coordination

Communication

Cooperation

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Eternal Questions

Systematic EHS programs can do much to answer these questions :

What do I do?

How am I supposed to do it?

How do I know when I’m done?

How do I know I’ve done it right?

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Systematic Programs

TwoExamples

TwoExamples

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United States Navy

Engineering

Operations

Sequencing

System

Step-by-step procedures detailing how to start, operate and secure the various

equipment within the Engineering departments.

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Navy EOSS

Anyone who could read could start/secure equipment.

Provided a consistent, uniform method of operating equipment.

Made training new members of the department much easier.

Along with procedures, contained explanatory side notes, as well.

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LEAN Manufacturing / 5S

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“5 S” originated in Japan

Seiri ( 整理 ): tidiness, organization. Refers to the practice of sorting through all the tools, materials, etc., in the work area and keeping only essential items.

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Seiri ( 整理 ): tidiness, organization. Refers to the practice of sorting through all the tools, materials, etc., in the work area and keeping only essential items.

Seiton ( 整頓 ): orderliness. Focuses on the need for an orderly workplace. "Orderly" in this sense means arranging the tools and equipment in an order that promotes work flow.

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Seiso ( 清掃 ): systemized cleanliness. Indicates the need to keep the workplace clean as well as neat. Cleaning in Japanese companies is a daily activity.

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Seiso ( 清掃 ): systemized cleanliness. Indicates the need to keep the workplace clean as well as neat. Cleaning in Japanese companies is a daily activity.

Seiketsu ( 清潔 ): standards. This refers to standardized work practices. More than standardized cleanliness; it means operating in a consistent, repeatable fashion with responsibilities are known to all.

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Shitsuke ( 躾 ): sustaining discipline. Refers to maintaining standards.

Once the previous 4S's have been established they become the new way to operate.

Maintain the focus on this new way of operating, and do not allow a gradual decline back to the old ways of operating.

Source: Wikipedia

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5S and EHS

Your mother: “Pick that up before you trip over it!”

Norbert Alsup, EHS Manager at SKF Sealing Solutions in Hobart, OK and JJ Keller’s 2006 SPOTY, implemented the 5S program through which employees become engaged in the safety management program by performing the 5S audit within, and taking responsibility for, their own departments or areas. Result = 0 accidents for 2 years!

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1. EHS Compliance is extremely complex.a. OSHA regulationsb. DoT regulationsc. EPA regulationsd. NFPA regulationse. ANSI standardsf. ISO standardsg. Internal / External Industry Specific rules.h. Then there are international rules for global

companies such as MacDermid…Multiple regulations may affect the same process, but with different emphases.

EHS in the 21st Century

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Non-Compliance

Noncompliance can result from:The facility not being aware of the requirement.

Source: ENHESA Flash No. 36 – July 2007

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Non-Compliance

Noncompliance can result from:The facility not being aware of the requirement.

Not knowing what you don’t know will get you

every time!

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Non-Compliance

Noncompliance can result from:Being aware of the requirement, but with no proper control in place (aware, but nothing had been done).


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Non-Compliance

Noncompliance can result from:Being aware of the requirement but with no proper control in place (aware, but nothing had been done).

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Non-Compliance

Noncompliance can result from:Control has been implemented but there was a system breakdown.


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Non-Compliance

Noncompliance can result from:Control has been implemented but there was a system breakdown.

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2. EHS Compliance is being driven down to the employee level. Employees are no longer sheltered from personal liability by the corporate umbrella, but many don’t know what their responsibilities are, or don’t care...

Philadelphia Naval Shipyard managers imprisoned for illegal dumping in the 1990s.

OSHA referral of fatalities to state Attorneys General for criminal prosecution.


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3. EHS return on investment is difficult to quantify.

EHS professionals, as with our Quality Management cousins, do not produce profit; rather we keep profits from being wasted.

Projected ROI must be expressed in terms of cost avoidance, rather than direct profit taking.


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4. EHS impact on corporate finances is becoming more public. Sarbanes-Oxley Act requires full disclosure of

liabilities, including EHS liabilities. Global Community requires cooperation with

different state regulations, particularly with the EU leading the way in so many areas.

Activism bordering on fascism seeks media attention.

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5. Turnover of Critical Personnel is Increasing.Average tenure of managers with any company is less than two years, due to competition and performance emphasis.

There is an active labor market for executives and managers. In EHS, www.EHSCareers.com is just one major source of follow-on employment.


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Turnover: Bad for Business

Employees leaving their employer generate a significant cost for the organization.Financial costs include:

Administration (Personnel & Payroll time).Recruitment costs (including advertising).Agency fees (% of salary).Selection costs (interviewing time).Training (on-the-job).Temporary recruitment.

Source: CALMA Partnership LLP.

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Employees leaving their employer generate a significant cost for the organization.Human costs include:

Extra workload for remaining team members Added stress due to increased workload Uncertainty about new entrant Potential impact on morale Job security concerns On-the-job training for new employee

Source: CALMA Partnership LLP

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Employees leaving their employer generate a significant cost for the organization.Less defined and/or less understood problems arising from the loss of key personnel:

Loss of experience and company historyLoss of project/program continuity

Financial costs and human costs may detract from the success of the company for years.

Both can lead the company to “spin its wheels”, doing things tried before…

…often with the very same results.

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Turnover and EHS

“With the reductions in workforce, if managers and supervisors can get rid of things on their plate like safety responsibilities,

they will do it.

But then managers are perceived as having abdicated their safety responsibilities and so management is perceived by workers as not

caring about safety.

And if managers don't care, the workforce won't care either.”

ISHN Interview, Dan Petersen July 22, 2003

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6. Companies rely on a history of “luck”…“We haven’t had any (choose your incident), so why should we spend money to prevent it

from happening?”

This is Failing to Plan for Failure...

EHS Professionals must PLAN for failure!


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Companies without Systems

Characteristics of companies lacking dynamic EHS management systems include:

Senior managers lack of knowledge of health and safety principles, legislation and management systems.

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There is an over-reliance on health and safety specialists to drive health and safety activity without sufficient management involvement and support.

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The health and safety supervisor plays a limited and reactive role, typically associated with limited time, resources and support to attend to health and safety, and sometimes in the context of the development of a broader role for the supervisor in relation to quality management.

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Separate facilities in multi-site companies with a centralized EHS unit that has difficulty servicing the health and safety needs of myriad smaller concerns, let alone facilitating effective self-management of health and safety; with limited health and safety consultative arrangements; and an operational culture focused strongly on productivity targets, leaving little time to attend to health and safety management.

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Without systematic

organization, EHS

management becomes

a juggling act of

competing priorities...

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… management by “plate spinning”

From relatively simple…

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... management by “plate spinning”

From relatively simple…

… to complex!

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EHS Program Systems

To avoid confusion and to assist in determining compliance requirements for regulations affecting your operation — and

the degree to which you are or will be or must be complying — a systems

approach is required.

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Challenges to EHS Systems

Challenges to implementing an systematized EHS system can come from several areas:

The value of EHS systems is not understood;

The support for EHS systems is not provided;

EHS programs once in place are not sustained;

Change is resisted; and

One size doesn’t fit all.

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One Size Does NOT Fit All!

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Systems Approach

Characteristics of a successful system include:Appropriate Assessment, Prevention and Control -- addressing all known risk(s);

Planning -- Policy and Programs in writing;

Roles/Responsibilities and Accountability well defined;

Subject to periodic Review, Checks & Balances;

Organized -- logically arranged toward information retrieval and repeatability;

Sustainable -- well documented and independent of specific individuals;

Easy to improve and update.

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Written = Planned

Planned = Efficient

Efficient = Profitable

Written = Consistent

Consistent = SustainableSustainable = EfficientEfficient = Profitable

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Keystone Point:

The The principal advantageprincipal advantage of having a of having a systematized approach is that the systematized approach is that the

SYSTEMSYSTEM is independent of the is independent of the INDIVIDUALINDIVIDUAL..

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Types of Management Systems

Traditional management, where health and safety is integrated into the supervisory role and the 'key persons' are the supervisor and/or any health and safety specialist.

Employees may be involved, but their involvement is not viewed as critical for the operation of the EMS system.

Alternatively, a traditional health and committee is in place.

Source: Health and Safety Management Systems - An Analysis of System Types and Effectiveness (Australian Safety & Compensation Council)

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Innovative management, where management has a key role in the health and safety effort.

There is a high level of integration of EHS into broader management systems and practices;

Employee involvement is viewed as critical to system operation, with mechanisms in place to give effect to a high level of involvement.



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A 'safe place' control strategy.Focused on the control of hazards at source through attention at the design stage and application of hazard identification, risk assessment and risk control principles.

A 'safe person' control strategy.Focused on the control of employee behavior.



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Cultural Fit

The chosen system must work within your company’s culture:

ISO 14001 Behavior Based Safety v.2.0 People Based Safety ISO 18001 DuPont’s STOP Keller Safety Management Process™ Combination of the Above (BEST)Combination of the Above (BEST)

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Consensus Required

Must be TEAM based, with all participants realizing they are part owners of both the

problems and the solutions.

There is no “I” in TEAM!

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Consensus Required

Employee engagement and commitment is the key to success in any program implementation.

Strategic Safety Management: A top-down infusion of safety management principles and bottom-up infusion of safety engineering principles into policy, planning and work organization (Rahimi, 1995).

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Install/Integrate the System

DIRECTION MUST COME FROM

TOP MANAGEMENT

…without top management driving the system, all effort is wasted.

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Integrate the EHS System

Integration activity is critical to the mainstreaming of EHS as a part of normal business practice.

Various interpretations of what integration means emphasize EHS as a central aspect of management, on par with other functions of critical importance to the organization.

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We do not want production and a safety program, or production and safety, or

production with safety - but rather, we want safe production."

Dan Petersen, 1978

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Integration:

an Essential Element

Integration activity is critical to the mainstreaming of EHS as a part of normal business practice.

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EHS System Integration

Integration runs contrary to traditional management practices in which the “Lone Ranger” EHS professional runs the show. As EHS became more complex, the “Lone Ranger” can not do it all.For maximum sustainability and effectiveness, EHS systems must become integral to the functions of planning, organizing, leading and controlling, as a matter of routine practice.

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EHS System Integration

The goal of preventing EHS noncompliance is dependent upon EHS being an integral part of production and a feature of daily operations, and upon the involvement of employees at all levels in improving EHS conditions through team-based work organization.

A systematized approach can be integrated much more readily than disorganization or stand alone programs.

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Five Approaches to Integration

Business Operation —

1. Integrate EHS into other aspects of business operation:

Production Meetings

Position Descriptions

Operational Procedures

Periodic Production & Quality Reports

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Organizational Objective —

2. Locates health and safety as an integral organizational objective, but with discrete health and safety objectives and strategy plans developed through appropriately resourced health and safety committees located at the heart of organizational decision-making.

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Combine with Quality Management —

3. An innovative, holistic approach to the integration of health and safety into quality management systems and recent innovative or best practice management techniques.

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Safety Engineering —

4. A safety engineering approach focused on the integration of health and safety into the design of equipment and productive processes, and its inclusion in contractual agreements and quality assurance initiatives.

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Behavioral Approach —

5. Integration is focused on infusing health and safety into the corporate culture in order to raise employees' awareness of the risks they face and their responsibility to behave safely.

“Safe Person” vs. “Safe Workplace” debate!

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End Result

Companies with more highly developed EHS management systems will share a range of key distinguishing characteristics.

Ensure health and safety responsibilities are identified and known, including responsibilities set out in health and safety legislation. Have senior managers taking an active role in health and safety. Encourage supervisor involvement in health and safety. Have health and safety representatives who are actively and broadly involved in health and safety management system activity.

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End Result

Companies with more highly developed EHS management systems will share a range of key distinguishing characteristics.

Have effective health and safety committees. Have a planned approach to hazard identification and risk assessment. Give high priority and consistent attention to control of hazards at source. Have a comprehensive approach to workplace inspections and incident investigations.Furthermore, such companies are found to be much more profitable, as well as being better regarded by employees and the communities around them.

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Out of CHAOS, ORDER

Value In Systematized EHS Programs (2007 Nrep Conference)

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