The Path to Social Responsibility:The Path to Social Responsibility:

University BocconiMilano, Italy Lisa Greenwood

8 June 2009

Integrating EHS Management Integrating EHS Management into Organizational into Organizational

ExcellenceExcellenceWorkshop SummaryWorkshop Summary

Workshop GoalsWorkshop GoalsProblem: there is a need for organizations to be more socially responsible– This could be accomplished by moving from operational focus to

organizational focus• Holistic approach, focused on providing value to customers,

employees and the community (stakeholder value)• Utilization of lean enterprise methods

Workshop topics– opportunities for expansion of lean enterprise concepts to

environmental management– whether the scope of operational excellence could realistically be

expanded to include EHS performance and how it could be best accomplished.

Lean & Green ApproachLean & Green Approach

Adapted from Company Stakeholder Interactivity - Quality Council of Indiana

SOCIETY

STOCKHOLDERS or OWNERS

MANAGEMENT and EMPLOYEES

SU

PP

LIE

RS C

US

TO

ME

RS

INTERNAL COMPANY PROCESSES

Unified goal: Sustainable productionWaste = any material or activity that is non-value added to the stakeholderOrganizational value boundary:

Waste Reduction Goals of the Organization

Overproduction

Waiting

Excess Motion

Processing

Transport

Defects

Excess Inventory

Operational Goals of the Organization

Reducing

Liability

ReducedEnvironmental

Impacts

Environmental Outcomesof Organizational Goals

Operational Goals of theEnvironmental Manager

Professional Goals of the Environmental Manager

Less waste

Fewer environmental releases

Increased pollution control

Social Social ResponsibilityResponsibilityEnvironmental Goals

of the Organization

Reducing Environmental

Cost

Environmental

Regulatory Compliance

Reduce

Waste

Environmental

Lean & Green GoalsLean & Green Goals

Operational Focus Organizational Focus

Lean WastesLean WastesWaste Operational Context

Defects Quality defects resulting in rework or scrap

EHS aspects:

Energy use

Producing more waste

Double impact per defect

Unanticipated impacts

EHS impact (such as release/spill, injury) requires similar processes for root cause investigation and action to prevent recurrence

Lean WastesLean WastesWaste Operational Context

Overproduction Manufacturing a product before it is actually required/requested

Excess inventory Use of productive floor space for materials in excess of what is needed right now

EHS aspects:

Raw material consumption/use

Air emissions

Energy use

Floor space use

Potential solid waste, use of landfill space

Note 1: ability to wait for customer order may depend on type of product

Note 2: may be able to use excess material to make another product in order to minimize waste

Lean WastesLean WastesWaste Operational Context

Waiting Product is in queue, waiting to be processed

EHS aspects:

Floor space use

Employee inactivity/boredom unsafe behaviors, injuries

Employee de-motivation

Waste in storage leakage, mixing of incompatibles, emissions

Lean WastesLean WastesWaste Operational Context

Transportation Transporting product between processes

EHS aspects:

Fuel use

Energy consumption

Emissions

Traffic/noise

Unnecessary motion Unnecessary/excessive bending, stretching, walking, lifting, and reaching

EHS aspects:

Injuries

Lean WastesLean WastesWaste Operational Context

Inappropriate processing Using complex processes or equipment, when a simpler process is sufficient to do the job

EHS aspects:

Increased energy use

Increased emissions

Additional material use

Additional material waste

Additional maintenance injury risk

Lean WastesLean WastesWaste Operational Context

Employee underutilization Failure to recognize/utilize employee creativity

EHS aspects:

Affects organizational safety culture

Limits innovation

Note: recognition of employee creativity makes employees feel valued, encourages innovative ideas, and may help to find ways to minimize the other seven wastes

Exercise 2: Exercise 2: Discussion QuestionsDiscussion Questions

1. To what extent does environmental performance factor into business process (operational) management?

– If customer values EHS, the company values EHS

– BUT sometimes it is only a marketing tool (Greenwashing)

– If company culture values EHS, approach is more likely to be integrated

Exercise 2: Exercise 2: Discussion QuestionsDiscussion Questions

2. Could/should EHS performance be considered as part of business excellence?

How could this be best accomplished? What conditions are necessary?

– Not always easy– If it starts with the CEO more successful– Otherwise, customer/stakeholders

must require it