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There are many different tools that companies use to better
understand and manage the EHS aspects of their supply chain
management strategies. Tools generally can be divided into the
following categories:
- Business process mapping tools are used to
capture the dependencies and flows of information between
business processes. Visual mapping techniques such as
workflow analysis help to depict existing processes and to
develop alternative, more streamlined processes.
- Brainstorming tools are used to identify
innovative opportunities for product development or business
process improvement. For example, structured brainstorming
is a key element of Six Sigma, a comprehensive approach
toward eliminating waste and maximizing speed and
efficiency.
Six Sigma has been widely adopted by leading
companies, such as 3M, Dow Chemical, DuPont, and Motorola
(see case study). Many of the resulting projects have included EHS
considerations.
- Checklists and screening tools are used to review
whether business decisions conform to company policies and
guidelines. Many companies have incorporated EHS criteria,
such as lists of preferred materials or points to consider,
into business processes including procurement, outsourcing,
and product development. For example, 3M has incorporated a
life
cycle management tool into their
worldwide new product development process.
- Quantitative decision support tools are used to
evaluate and compare the costs, benefits, and risks
associated with specific projects or business decisions. For
example, BASF Corp. has utilized an Eco-efficiency Analysis
tool to develop products and processes with a reduced
environmental footprint and lower life cycle costs.
The tool
has been used in over 100 different BASF product
applications such as asphalt microsurfacing, nylon fiber,
building materials, automotive coatings, plastics, and
adhesives, and the results have influenced business
decisions regarding capital investments, process selection,
and supply chain partnershipss.
- Full cost accounting tools provide a means for
measuring the true costs associated with a product or
process. One example is an
EPA guidebook that
synthesizes best practices in improving both financial and
environmental performance through materials management.
Another important quantitative tool is the Total Cost
Assessment (TCA) approach developed through a collaborative
project involving several GEMI member companies, including
Bristol-Myers Squibb, Dow Chemical, Eastman Kodak, Georgia
Pacific, and Merck. This methodology seeks to quantify the
full monetary impact of business decisions, including
indirect EH&S-related costs, contingent liabilities, and
intangibles such as public perception. For example, Dow
Chemical has used TCA to supplement conventional accounting
methods and influence major business expansion decisions.
- Performance measurement tools are used to
evaluate and track the results of improvement initiatives. A
variety of resources are available for selecting EHS metrics
that align with supply chain performance, and the process of
environmental performance evaluation has become standardized
as part of the ISO 14000 series of environmental management
system standards. The types of performance indicators used
in conventional EHS reports include wastes and emissions,
lost-time injuries, notices of violation, and spills and
releases. More recently, many companies have adopted
value-oriented EHS indicators such as eco-efficiency. Supply
chain EHS performance measurement is challenged by boundary
issues - for example, should a company be accountable for
emissions from outsourced operations? Also, expansion of EHS
concerns to include social responsibility presents new
challenges, since the measurement of human well-being
introduces subjective and intangible factors. A popular
system for combining financial, operational, and
organizational process indicators is the
Balanced Scorecard,
which is well suited for supply chain applications.
- Risk management tools are used to identify,
assess, and mitigate a variety of risks to the enterprise,
including business interruption and EHS liabilities.
Traditional risk management has focused on insurance
strategies, but modern risk management has expanded to
include a broad range of proactive techniques for analyzing
and controlling risks in many different arenas - markets and
currency, political and social, technical innovation,
project management, safety and security, and others. EHS
risk management focuses specifically on threats to human
health, safety, and the environment. There are a broad
variety of risk management tools in use, ranging from
qualitative hazard identification and screening tools to
sophisticated probabilistic risk assessment.
- Life cycle assessment tools provide a systematic
method for identifying and quantifying the environmental
burdens associated with the life cycle of a product or
process.
Pro-active companies usually consider the full life
cycles of their products and services, including resource
extraction, procurement, transportation, manufacturing,
product use, service, and end-of-life disposition or asset
recovery. A life cycle inventory can be used to profile the
system-wide energy and material consumption and waste
generation in terms of flows per functional unit. Life cycle
impact assessment attempts to evaluate the actual
significance of these flows in terms of human effects and
ecosystem perturbations. Despite uncertainties and data
quality issues, life cycle methods can be useful for
relative comparisons of alternative system designs, thus
supporting supply chain business decisions.
- Environmental management systems are analogous to
quality management systems such as ISO 9000, except that
they address EHS rather than product quality. They establish
a repeatable, verifiable process whereby companies can set
performance objectives, measure their progress in meeting
those objectives, and pursue continuous improvement. There
are a variety of different frameworks in use today, ranging
from company-specific systems to international standards
such as ISO 14000 that require external verification.
Standards bodies are exploring the potential for integrating
standards for quality, environment, health and safety, and
even social performance into a single system. Many companies
have already developed in-house management systems that
integrate EHS and sustainability considerations, often
extending to relevant aspects of supply chain performance.
- Responsible Care® is a global chemical industry
initiative to safely handle products from inception in the
research laboratory, through manufacture and distribution,
to ultimate disposal, and to involve the public in
decision-making processes. Born in Canada in 1987,
Responsible Care has spread to 45 countries, and is
administered in the U.S. by the
American Chemistry Council.
The program includes basic codes of management practice that
cover EHS concerns in the areas of Community Awareness and
Emergency Response, Distribution, Process Safety,
Occupational Health and Safety, Pollution Prevention, and
Product Stewardship. It also includes Supply Chain Protocols
for evaluating the EHS practices of carriers, and offers
partner memberships to chemical industry suppliers. Recent
program enhancements include management system protocols,
and a new Security Code.
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