1. The Path to Social Responsibility: University Bocconi Milano, Italy Lisa Greenwood 8 June 2009 Integrating EHS Management into Organizational Excellence Workshop Summary

2. Workshop Goals Problem: 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.

3. Lean & Green Approach Adapted from Company Stakeholder Interactivity - Quality Council of Indiana SOCIETY STOCKHOLDERS or OWNERS MANAGEMENT and EMPLOYEES SUPPLIERS CUSTOMERS INTERNAL COMPANY PROCESSES Unified goal: Sustainable production Waste = any material or activity that is non-value added to the stakeholder Organizational value boundary:

4. Waste Reduction Goals of the Organization Overproduction Waiting Excess Motion Processing Transport Defects Excess Inventory Operational Goals of the Organization Reducing Liability Reduced Environmental Impacts Environmental Outcomes of Organizational Goals Operational Goals of the Environmental Manager Professional Goals of the Environmental Manager Less waste Fewer environmental releases Increased pollution control Social Responsibility Environmental Goals of the Organization Reducing Environmental Cost Environmental Regulatory Compliance Reduce Waste Environmental Lean & Green Goals Operational FocusOrganizational Focus

5. Lean Wastes WasteOperational Context DefectsQuality 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

6. Lean Wastes WasteOperational Context OverproductionManufacturing a product before it is actually required/requested Excess inventoryUse 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

7. Lean Wastes WasteOperational Context WaitingProduct 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

8. Lean Wastes WasteOperational Context TransportationTransporting product between processes EHS aspects: Fuel use Energy consumption Emissions Traffic/noise Unnecessary motionUnnecessary/excessive bending, stretching, walking, lifting, and reaching EHS aspects: Injuries

9. Lean Wastes WasteOperational Context Inappropriate processingUsing 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

10. Lean Wastes WasteOperational Context Employee underutilizationFailure 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

11. Exercise 2: Discussion 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

12. Exercise 2: Discussion 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