Edition No. 9

Act: Developing and Prioritizing Your EHS Management Strategy

Our February issue focused on environmental, health, and safety (EHS) strategic planning and reviewed some of the pitfalls of building an EHS plan (aiming too high, length of time to implement, and not having the internal resources available for success) and ways to gather information to make proactive decisions. We discussed obtaining information from customers, suppliers, and shareholders, so the EHS team could align their planning to the goals and initiatives these groups may be spearheading.

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In this article, we take another look at the planning process and introduce some of the act steps related to your EHS strategic plan so that informed business choices about managing EHS risks are being realized. Once the plan is complete, how do you develop, prioritize, and recommend an EHS management strategy that is cost-effective, meets compliance requirements, and most importantly, integrates with your business? By focusing on the development of early solutions in product and process design, you can achieve efficient and consistent compliance and help your company meet their business objectives.

Building the EHS Value Proposition

In many companies the EHS function is viewed as a necessity but not a vital business function. In today’s business climate, EHS organizations are under fire to reduce budgets and lower headcount. Managers under pressure sometimes pare programs down to little more than maintenance and selective compliance. The EHS organization itself is sometimes perceived as a cost center with little connection to the fundamental business results. In acting on the EHS strategic plan, you must find ways to build higher value propositions and better visibility for the EHS function so that you are focusing efforts on helping your company manage risk (and gain more support for EHS), identify cost savings, support productivity improvements, and suggest ways to strengthen the company’s business advantages.

To understand the company’s business objectives, you must align the EHS focus across a value chain that includes R&D, procurement, manufacturing, sales, and service departments. Your ability to integrate EHS objectives into the company’s overall business objectives directly affects how the EHS function is valued and how you can position and service the company to create savings and productivity advantages. Understanding the key business objectives of the company and aligning your plan with those objectives so that EHS is maximized across the value chain will result in the development of a successful tactical EHS plan. The illustration below highlights this concept.

Contribution to Value Chain

EHS Value Chain in the Semiconductor Industry

A semiconductor capital equipment manufacturer has a company objective of gaining market share in Asia Pacific and Europe. One of the trends in both regions is the ability to respond to product take back (especially in Europe where there isn’t much landfill available; it’s an emerging trend in Asia Pacific, too). The opportunity for the savvy EHS organization is to work with the sales, marketing, and development groups to ensure there will be no EHS barriers to product take back that could potentially limit the company’s growth. Key activities might include determining the specific risks and approaches necessary for the new products and casting the risks in specific ROI / financial terms. The EHS team could gain agreement from key people within the departments involved, then approach the necessary department leaders and gain involvement in their product placement tactical plans.

The materials used in product design could have a similar impact on growth, especially if the objective is Asia market growth. The EHS team must be a vital part of the design team to restrict the use of hazardous materials such as lead, cadmium, and nickel in the product so that delays and reworks are kept to a minimum.

Field Service and the EHS Value Chain

Field service is a growing part of any global company’s revenue stream. To win new field service contracts, service engineers need to be regionally located and up-to- date on all local and regional EHS requirements. China is a hotbed of activity in the technology sector right now; and the country has always been viewed as less than proactive in EHS policies. But as this emerging industrial giant grows, it is adopting very stringent EHS global requirements, ones that aren’t necessarily in harmony with the U.S. or Europe. The EHS team must take action to keep the field service personal informed of the emerging requirements to be in the running for new service contracts, thus furthering the company’s objectives.

The key change in stance for the successful EHS organization of the future is to move beyond meeting regulatory compliance needs and to take a strategic leadership role in preparing the company to take their products into the market. Attach your EHS plans directly to the key business initiatives of the organization. Specifically, they should be connected to growing revenue and market share, not just reducing injury or compliance risk.

Focus on Key Business Objectives

In summary, to put an EHS strategic plan into action, look outside the EHS function. Connect directly to the company’s key business objectives. Learn which markets the company is trying to penetrate and who their strategic customers are. Review geographical expansion plans. Connect EHS activities to the company’s value chain. The key action in an effective EHS strategic plan is to find ways to help your company manage risk. If that can be accomplished by identifying cost savings, productivity improvements, and ways to strengthen the company’s business advantages, it will not only be a successful plan, but will also elevate the value and visibility of the EHS function within the company.

Review the first article in this series.

The Contribution to Value Chain chart is used with permission from Bovo-Tighe, LLC, a leader in developing EHS organizational performance. David Tighe, co-founder of Bovo-Tighe also contributed to this article. Mr. Tighe recently offered a Professional Development Course at the Semiconductor Environmental Safety and Health Association (SESHA) conference in Phoenix, AZ on this topic. The session, entitled: Building Credibility For Your EH&S Program, is an update of a highly successful 2001 offering originally developed jointly with EORM. For more information about Mr. Tighe’s SESHA presentations, go to http://seshaonline.org/meetings/2004/index2.php3