Posts tagged ‘Supply chain management’
Transparency Begins with Data Management
Connie Prostko-Bell
Meeting the demands of new product regulations requires better data management solutions. We sat down this week with 3E Company’s Connie Prostko-Bell to learn more about this emerging issue and to find out what companies are doing to provide greater supply chain transparency.
GT: Why do companies collect MSDSs and other product data from their suppliers? What is this information used for?
CPB: Operational risk and compliance management is increasingly focused on environmental issues across the supply chain. As companies strive to deliver sustainable ongoing improvements in compliance and risk management, they are closely scrutinizing the management of products in the enterprise, especially chemicals and other hazardous materials, with a special emphasis on fulfilling requirements in environmental, health and safety (EHS) regulatory compliance. A comprehensive view of compliance performance and risk management throughout the supply chain and product life cycle is necessary to promote and sustain ongoing improvement.
This vision is fueled by accurate and comprehensive content, including environmental, health and safety (EHS) product data, such as Material Safety Data Sheets (MSDS), which can be leveraged to ensure that the products that are incorporated into finished goods meet legal, regulatory, industry and self-imposed standards. Leveraging this type of data helps communicate to a company’s stakeholders that externally sourced processes and materials do not introduce legal, financial, ethical or market access risks to the company. Furthermore, it gives organizations an opportunity to advance their own value-based agendas by leveraging buying power to enforce desired practices.
GT: What trends are driving the management of supplier-sourced product data?
CPB: Manufacturers with complex supply chains are struggling under the burden of spiraling global EHS regulations. More often than not, they possess neither the requisite internal methodologies nor the necessary personnel to collect, analyze, share, and distribute key information related to supplier compliance and corporate risk across the various functional groups within the organization. Compliance issues such as GHS, REACh, RoHS and Frank-Dodd are driving the need for a common source of product data.
The shifting regulatory landscape also burdens suppliers, who often need help gaining access from suppliers and understanding the global EHS laws with which they must comply. Companies are increasingly recognizing supplier compliance as a critical component of business continuity efforts.
GT: A company’s efforts are only as strong as the quality of its data. How can companies ensure data quality, especially when they are dealing with a multitude of suppliers?
CPB: The number of suppliers can vary wildly from company to company. Generally speaking, it is safe to say that the larger the organization, the more suppliers it will have. Many factors influence this number such as geographical diversity of operations and customers, the complexity of the product line, and availability of the required raw materials. It is certainly not uncommon for a large company to have tens of thousands of suppliers. However, regardless of whether the company has hundreds or thousands of suppliers, managing supplier data can be a very challenging task. Finding, maintaining and acting on data is difficult and painstakingly time-consuming.
It is important that companies use documented, best practice methodologies and direct relationships to gather, refine and maintain data.
When it comes to sharing the information, you should choose an easy-to-use and practical system that meet each customer’s specific needs. The data should be broad, dynamically updated, and of the highest quality and accuracy. Substance- level regulatory data and product level MSDS data should be integrated together to provide a view into the impact of regulatory changes across inventories in the enterprise.
At the product level, from its inception to the present day, the vendor supplied product MSDS has evolved into a document that goes far beyond its original purpose, now serving as a source, foundation and clearinghouse for a range of safety and regulatory compliance data, including classification, transportation, environmental, ecological and disposal considerations. MSDS product-level data should be continuously updated with information and search technologies, documented best practice methodologies and through direct data obtainment relationships with raw material and other chemical product manufacturers.
Connie Prostko-Bell is a Senior Solutions Manager with 3E Company. She has 16 years of EH&S and chemical industry experience, spanning the project management, product safety and product stewardship sectors. She will share strategies for getting accurate supplier data during NAEM’s webinar on the topic Feb. 16.
How a New Design Revolution will Change Supply Chain Management
Howard Brown
Stories about Henry Ford’s genius with manufacturing abound, though it’s rarely clear which ones are actually true. One of my favorites is his insisting that parts manufacturers deliver their products to his plants in wooden crates of his design, which he then dismantled and used as floorboards in his cars.
Supply chain management has grown in sophistication and importance since Ford’s time. The quality movement, just-in-time manufacturing, corporate responsibility initiatives, enterprise-wide information systems, environmental impact analyses like life-cycle assessments, and growth in transparency and public access to information have all brought about major changes in supply change management. Now a new design revolution is about to create an even bigger change in supply chain thinking. The change will come both from new materials and products and from new manufacturing technologies.
Radical new materials and products (such as the ones we feature in the dMASS Insights newsletter) will themselves disrupt traditional supply chain relationships. For example, there are composite materials that exhibit behaviors with the potential to replace mechanical appliances, tools, and other machinery – even entire factories. There are materials that can be used to generate electricity by movement, temperature differences and solar energy conversion. Others have the ability to interfere with the growth of harmful bacteria, actively transfer heat or emit light with minimal energy subsidy. The cumulative effect of new materials and products will be shorter and simpler supply chains.
New manufacturing technologies will be at least as disruptive as the products themselves. Nano-scale manufacturing technologies such as Additive Layer Manufacturing (including 3D printing) and bio-manufacturing (the growing of products) stem from recent advances in the scientific understanding of how nature organizes itself at the most fundamental levels of matter and energy. Similarly, biomanufacturing stems from new discoveries in the fields of genetics and micro-organisms. The common thread among each of these technologies is a growing knowledge of nature’s tendency to self-organize, and an ability to leverage this knowledge.
Three-dimensional (3D)printing, in particular, has the potential to drastically cut resource demands, costs and dependence on resource-intensive supply chains, as well as pollution and waste. Advanced computer-aided design (CAD) systems bring design down to the level of individual molecules. The entire downstream supply chain for a 3D-printed product can be a set of printer cartridges containing different chemical elements. When laid down in precise proportions, the atoms arrange themselves into material structures with the desired characteristics. Printing can often be done in small shops, portable facilities, or even in the home. There is little or no need for high-temperature smelting in parts manufacturing, high-speed grinding or stamping that produces manufacturing scrap, or glues, adhesives, staples, rivets and other parts to hold separate pieces together.
Henry Ford’s tactic saved resources a century ago by creatively taking advantage of existing supply chain resources and harvesting value from waste. Nano- and bio-technologies will radically transform supply chain management in a new way. Business success will increasingly require understanding these technologies and taking advantage of the changes they will bring about.
What are your thoughts? Have you begun to experience supply chain changes due to commodity prices or supply problems, or due to the availability of new materials, products, or technologies?
Howard Brown is a noted entrepreneur and the founder of dMASS.net, an organization focused on helping businesses improve resource performance. For more than 20 years, he was CEO of the consultancy RPM Systems, Inc. (Resource Planning and Management), where he worked with companies such as International Paper, Mobil, BP, Duracell, Avery- Dennison, Whirlpool, SaraLee, and Wrigley, earning a worldwide reputation for developing practical strategies that merge environmental and business goals. To learn more about dMass, visit: http://www.dmass.net/wordpress/
Meet the NAEM Board of Directors: What are the EHS and sustainability trends to watch in 2012?
As part of NAEM’s 2012 Member Appreciation Week celebration, we sat down with members of the NAEM Board of Directors to talk about the EHS and sustainability trends to watch in 2012. Featuring Michael Miller of Dean Foods; David Newman; Mark Hause of DuPont; and Verne Shortel of NRG Energy.
Corporate Social Responsibility: Is it measurable?
Lisa Barnes
Those of us who have grown up in the environment, health and safety (EHS) arena are very comfortable with quantitative metrics. We are comfortable measuring and reporting in terms such as metric tons, millions of gallons and parts per billion. However, we are increasingly being called upon to report on our company’s social responsibility performance. This is a bit trickier and we need to work with different types of metrics that aren’t as easy to quantify. Metrics for social issues such as ethics, labor relations and community support are not as easily quantified as waste disposal, water use, greenhouse gas emissions and injuries and illnesses.
Measuring corporate performance in the social arena is getting increasing attention in recent years and is a continually evolving area. Most corporations have moved beyond traditional environmental sustainability reporting. There are guidelines available with social responsibility metrics. The Global Reporting Initiative (GRI) Reporting guidelines include 40 Social Performance Indicators, which it groups into four categories:
- Labor Practices and Decent Work
- Human Rights
- Society
- Product Responsibility
There are also industry-specific guidelines such as the International Council of Metals and Mining (ICMM) and American Petroleum Institute (API) guidelines, that include social parameters. For specific aspects within the broad area of social responsibility there are guidelines that companies can formally agree to follow, including the Voluntary Principles on Security and Human Rights.
Sustainability ratings that compare the performance of corporations usually focus on the full spectrum of corporate responsibility issues and social performance is often an important element in how companies are ranked. The SAM Corporate Sustainability Assessment Questionnaire, used during the assessment of companies for the Dow Jones Sustainability Indexes (DJSI), includes a series of questions in the “social dimension.” In 2010, these questions were categorized as:
- Labor Practice Indicators
- Human Capital Development
- Talent Attraction & Retention
- Corporate Citizenship and Philanthropy
- Standards for Suppliers
- Stakeholder Engagement
Corporate Responsibility’s methodology for ranking The 100 Best Corporate Citizens includes seven categories that are each weighted based on their relative values. The “Employee Relations” accounts for 19.5 percent and Human Rights accounts for 16 percent of the score highlighting the importance of these social issues.
The crucial part of social responsibility measurement is focusing on the most appropriate and relevant metrics for your company. Going back to the basics of materiality – deciding what is most important – helps companies decide where to focus their resources for measuring and reporting in the social arena. Once the material issues are identified, you need to find metrics that are measurable in a meaningful way. What are the material social issues for your company and how do you measure your performance in those areas?
During the Social Metrics session at the upcoming EHS Management Forum in Tucson, we will hear how three global companies have incorporated social metrics into their CSR strategy. For those of you who have social metrics of your own, how did you identify which ones to track? Did you use an existing protocol or develop a unique set for your company?
Lisa Barnes is Technical Director of Climate Change Services for Bureau Veritas North America. She is a registered professional engineer, certified industrial hygienist, Lead Verifier for Greenhouse Gas Emissions, Lead Assuror for Sustainability Reporting and Lead Verifier for ISO 14001 Environmental Management Systems. Ms. Barnes’ education includes a bachelor of science in engineering from University of Vermont, master of health sciences from Harvard University and a master of business administration from St. Mary’s College. She has more than 25 years of experience in environmental, health and safety.
Confronting Conflict Minerals
Gary Niekerk
Most environmental professionals don’t hang out with the Wall Street crowd. We don’t typically have a lot of designer suits and six figure bonuses (although I do own a pair of wing-tipped safety shoes). However, Wall Street and environmental, health and safety (EHS) are a little more connected these days than you think. What I’m referring to is a piece of legislation buried in the 800-plus-pages of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, called “SEC 1502 – Conflict Minerals”.
The intention of SEC 1502 is to increase transparency in the minerals supply chain, with the hopes of reducing the terrible violence in parts of Central Africa related to the minerals trade. This somewhat controversial regulation is garnering a lot of attention as the final rulemaking is expected in the next few months.
If your company manufactures products where, “conflict minerals (tin, tantalum, tungsten, or gold ) are necessary to the functionality or production” of the product, you could be one of the 5,000 or more public companies the SEC estimates may be impacted by this legislation.
NAEM will be covering the topic at the upcoming EHS Management Forum on Oct. 19-20, where I’ll talk about Intel’s approach to this complex issue. For more information, please contact our Corporate Social Responsibility team or read the white paper we wrote about trying to achieve a ‘conflict-free’ supply chain.
In the meantime, I’d love to hear from you. What are you doing to address this important issue? What are some of the unique challenges this legislation will present for your company?
Gary Niekerk is the Director of Global Citizenship for Intel Corp., where he works on corporate strategy related to sustainability, corporate reputation and stakeholder management. He has spent 25 years working with employees, customers, and stakeholders to protect and build the brands and reputation of some of the world’s leading high-tech companies, including Hewlett-Packard Co., Apple Inc. and Intel Corp.
Dow Chemical Co.’s Strategy for Addressing Product Stewardship Issues
With the growth in product stewardship regulations in Europe and beyond, chemical makers are facing unprecedented demand for transparency. In this video at our recent EHS Compliance Excellence Conference, Connie Deford, Director of U.S. Chemical Management Policy for Dow Chemical Co., discusses the impact these regulations are having and how the company is addressing them.
“In God we trust; all others must bring data”
By Vickie Mecsey
Manager of Global Environmental Programs, General Motors Co.
A quick poll –
- How many requests have you received about chemical use in your supply chain over the past year?
- How many data systems does your company use to track chemical use, from purchasing through disposal?
If you answered “a lot” to either of the above, you’re not alone. Data management is a hot topic for EHS professionals and I bet most have heard the above mantra from W. Edwards Deming.
From my vantage point in the Energy and Environment department at General Motors Co., I’ve certainly seen the good, the bad and the ugly in data management. We’ve been working on our data management strategy for 12 years now to move toward operating in a proactive rather than reactive mode, to improve the efficiency of our risk assessment process and to prepare for compliance each time a new regulation comes out.
Collecting data is very different from managing it and I’ve seen how a thoughtfully implemented and proactively maintained data management strategy can serve a department well when the appropriate level of planning and due diligence is applied.
What did we learn?
- There are no data fairies: Before embarking on any kind of data management strategy, it’s important not to underestimate the necessary time, manpower and leadership buy-in required to carry it out.
- Recruit your allies: We began our data management effort around the same time we introduced chemical management service (CMS) programs into our facilities. The service providers were a critical component to the overall success of the strategy. Using a standardized process that defined the format and content, we began receiving automated inputs from CMS providers who were already tracking and consolidating chemical purchasing, use and process related information.
The most important lesson we learned, though, was to find the point of diminishing returns (i.e. When is the next piece of data no longer adding value?) – and that this is different for every business.
Anyone else have a lesson to share?
Vickie Mecsey is the Manager of Global Environmental Programs at General Motors Co. She will be speaking about GM’s innovative chemical and resource management programs at the annual Chemical Management Services (CMS) Workshop on Oct. 12, 2010, co-located with NAEM’s EHS Management Forum in Indianapolis. For more details or to register, visit: http://chemicalstrategies.org/workevents_conf10.html.
Certifiably Sustainable?
Celia Spence
Measuring sustainability is something companies have been struggling with for several years, especially in the area of supply chain management. On August 2, UL Environment and Greener World Media announced a draft standard for manufacturing companies to measure and certify their sustainability.
The standard has been released for a 45-day comment period and the public is encouraged to review and provide comments in an open, transparent process. “ULE 880 – Sustainability for Manufacturing Organizations” spans 102 indicators in five areas of sustainability, that include:
- Sustainability governance: How an organization leads and manages itself in relation to its stakeholders, including employees, investors, regulatory authorities, customers and the communities in which it operates.
- Environment: How an organization manages its environmental footprint across its policies, operations, products and services, including its resource use and emissions.
- Workforce: Issues related to employee working conditions, organization culture, benefits and retention.
- Customers and suppliers: Issues related to an organization’s policies and practices on product safety, quality, pricing and marketing as well as its supply chain policies and practices.
- Social and community engagement: An organization’s impacts on the communities in which it operates in the areas of social equity, ethical conduct and human rights.
Having a tool that will actually result in a score and allow companies to obtain certification could be extremely useful for those companies wishing to demonstrate that their supply chains or operations are sustainable. But the challenges we have faced with measuring sustainability have resulted from the enormous diversity of manufacturing processes, raw materials and cultural practices we encounter in global corporations.
It will be interesting to see how this has been addressed in this new standard. Is it actually possible to agree on the metrics that should be used to determine which of the companies among us is operating in a sustainable fashion? Are there too many subjective choices in deciding what is sustainable and what is not, or do we have enough of a consensus to move forward with a standard at this point?
It will be important to get involved in this and to provide our feedback on the draft. If such a standard is finalized and becomes widely used, it is something that will affect us all and shape the work that EHS managers do on a daily basis. What are your thoughts? Is a standard a welcome development? Will consensus be possible?
