Taking an EHS-Centric View of Business Performance
Recently, I attended a webinar hosted by LNS Research. “Breaking down silos” was a theme that was omnipresent. But in this case, instead of greeting it with a sarcastic sense of déjà vu, I actually enjoyed the context in which the theme was covered during the webinar.
The webinar explains how EHS management went from being a discrete siloed function concerned with compliance and safety, to becoming an important pillar of enterprise Operational Excellence (OpEx). According to LNS Research, this is especially the case when an EHS-centric view is taken where EHS activities affect other aspects of business performance.
EHS activities can produce positive impacts affecting other business areas and leading to Operational Excellence. Here are four examples covered in the webinar.
Reduced energy consumption and costs
Tracking greenhouse gas (GHG) and carbon emissions, specifically Scope 2 emissions that cover indirect emissions of GHG from electricity purchases, provides an opportunity. By reducing emissions as part of an effort to improve environmental performance, energy consumption can also be reduced, thus leading to energy cost savings as well.
Healthy and well-maintained assets
LNS Research makes the link between EHS management and Asset Performance Management (APM). Many people don’t realize that they both impact each other. As part of efforts to keep workers safe and healthy, companies must make sure assets are not malfunctioning or underperforming. This could avoid potential adverse events such as spills, releases, fires, equipment failures, etc., that lead to occupational incidents and injuries. The reverse is also true. By having an effective APM program in place, a healthy and safe workplace is maintained, thus mitigating the risk of incidents and injuries.
The management of audits and inspections, regulatory compliance management, Corrective and Preventive Actions (CAPA), and Management of Change (MoC) have two things in common: 1) They are all important parts of an EHS management program, and 2) they are essential quality functions. As a result, EHS performance leads to quality improvements and reduces the total cost of quality.
An effective EHS management program keeps employees safe and healthy by reducing incidents and accidents. This in turn leads to lower annual rates of days away from work (DAFW), compared to companies with poor EHS performance. In addition, as demonstrated above, the impact of EHS on APM results in healthier assets, thus resulting in lower equipment downtime and avoiding lost production.
Clearly there is integration between EHS management, Energy management, APM, Quality and Operations. All of these functions are connected and interrelated to one another. Therefore, they have to be addressed as part of an enterprise framework that enables Operational Excellence.
If you want to learn more about this interesting topic and the concepts covered in this post, we invite you to listen to the recording of LNS Research’s webinar The New EHS Performance-Based Paradigm: Enabling Operational Excellence with a Holistic Technology Framework. You can also download a complimentary copy of LNS Reserch’s e-book Driving EHS Performance with Technology.