© 2003 Pojasek & Associates Robert B. Pojasek, Ph.D. [email protected] MEASURING THE VALUE OF AN EMS AND SCORING THE EMS RESULTS August 19, 2004.

© 2003 Pojasek & Associates

Robert B. Pojasek, Ph.D.Robert B. Pojasek, [email protected]

MEASURING THE VALUE OF AN EMSMEASURING THE VALUE OF AN EMSAND SCORING THE EMS RESULTSAND SCORING THE EMS RESULTS

August 19, 2004August 19, 2004

© 2003 Pojasek & Associates 2

EHS AS A “COST CENTER”EHS AS A “COST CENTER”

• Most organizations see EHS as a cost centerMost organizations see EHS as a cost center• These companies are focused only on These companies are focused only on

regulatory complianceregulatory compliance• Management initiatives can help move EHS Management initiatives can help move EHS

into the core businessinto the core business– Lean, Six Sigma, Lean Six SigmaLean, Six Sigma, Lean Six Sigma– Operational Excellence (Baldrige Model)Operational Excellence (Baldrige Model)


EHS INTEGRATIONEHS INTEGRATION

• Using quality management as a Using quality management as a languagelanguage for for all of the programsall of the programs– OHSAS 18001, SA 8000, AA 1000, ISO 9000OHSAS 18001, SA 8000, AA 1000, ISO 9000– Lean, Six Sigma, Operational ExcellenceLean, Six Sigma, Operational Excellence

• Driving improvements through people and Driving improvements through people and programsprograms

• Scoring the program using the Baldrige ModelScoring the program using the Baldrige Model


SYSTEMS APPROACHSYSTEMS APPROACH

• Proven method for improving processesProven method for improving processes

• Uses employee-driven “bottom up” approachUses employee-driven “bottom up” approach

• Provides for management oversightProvides for management oversight

• Tools common to all the programs mentionedTools common to all the programs mentioned

• Links to management information systemsLinks to management information systems– ERP, MRP, CMMS, Business Results ERP, MRP, CMMS, Business Results


MRP SYSTEMMRP SYSTEM

• Assigns a part number to all resource usesAssigns a part number to all resource uses• Needs to track resources to a work step in Needs to track resources to a work step in

the hierarchical process mapthe hierarchical process map• You need to assign a part number to all You need to assign a part number to all

wastes, discharges, emissions, spills, etc.wastes, discharges, emissions, spills, etc.• Create a computerized way to track resource Create a computerized way to track resource

use and loss in the operationuse and loss in the operation


CMMS SOFTWARE APPLICATIONCMMS SOFTWARE APPLICATION

• Assigns a work order number for each activityAssigns a work order number for each activity– e.g. Obtain air permit, file manifests, keep e.g. Obtain air permit, file manifests, keep

records, monitor stack, conduct audit, etc.records, monitor stack, conduct audit, etc.

• People charge time to work order numbersPeople charge time to work order numbers

• Work orders assigned to work steps using the Work orders assigned to work steps using the activity accounting sheetsactivity accounting sheets


ACTION PLAN FORMATACTION PLAN FORMAT

ActionResponsible

PersonPerformance

StandardCompletion

DeadlineResourcesNeeded

Date:

1

2

3

4

Alternative Selected•Purpose•Project•Benefits


ACTION PLAN COMPONENTSACTION PLAN COMPONENTS

• First action step is to perform a baseline First action step is to perform a baseline analysis for weight/volume reduction and analysis for weight/volume reduction and cost savingscost savings

• Second step should be the alternative at the Second step should be the alternative at the top of the prioritization listingtop of the prioritization listing

• Next to the last action step is to repeat the Next to the last action step is to repeat the baseline analysis to determine quantitative baseline analysis to determine quantitative resultsresults


COST ACCOUNTINGCOST ACCOUNTING

• Link a spreadsheet to the resource Link a spreadsheet to the resource accounting sheetaccounting sheet

• Link a spreadsheet to the activity Link a spreadsheet to the activity accounting sheetaccounting sheet

• Input cost information from MRP and Input cost information from MRP and CMMSCMMS

• Create a Cost Accounting Sheet to Create a Cost Accounting Sheet to combine these spreadsheetscombine these spreadsheets


EHS COSTSEHS COSTS

• Traditional AccountingTraditional Accounting• Activity-Based ManagementActivity-Based Management

– Manage activity costsManage activity costs

• Real Options for IntangiblesReal Options for Intangibles– Delphi group look at EHS issuesDelphi group look at EHS issues– Cost assigned as an option costCost assigned as an option cost– Cost discounted for use by accountingCost discounted for use by accounting


INTERNAL IMPROVEMENT SCORINGINTERNAL IMPROVEMENT SCORING

• Scoring the continual improvement of Scoring the continual improvement of your EMS (ISO 14001) programyour EMS (ISO 14001) program

• Influencing the behaviors that will drive Influencing the behaviors that will drive change and success in the programchange and success in the program

• Scoring of the results to focus on areas Scoring of the results to focus on areas where improvement is necessarywhere improvement is necessary


SCORING AND THE BALDRIGE MODELSCORING AND THE BALDRIGE MODEL

• There are two parts to scoring true There are two parts to scoring true performance using the Baldrige model:performance using the Baldrige model:– TrueTrue Performance Performance– Sustainability Sustainability ResultsResults

• Scores are issued by trained, third-party Scores are issued by trained, third-party examinersexaminers

• Scores can be used to measure and trend Scores can be used to measure and trend sustainability progress and any type of facility sustainability progress and any type of facility and aggregated across the enterpriseand aggregated across the enterprise


SCORING SCORING TRUETRUE PERFORMANCE PERFORMANCE

• The Baldrige criteria document and it’s State The Baldrige criteria document and it’s State of New Mexico counterpart (Green Zia) of New Mexico counterpart (Green Zia) have more than 100 questions to answer in have more than 100 questions to answer in a 50-page applicationa 50-page application

• Currently used in over 60 countries to Currently used in over 60 countries to measure overall performance of the measure overall performance of the companycompany

• Program is transparent, copyright-free and Program is transparent, copyright-free and continually improved every yearcontinually improved every year


USING THE BALDRIGE MODELUSING THE BALDRIGE MODEL• Some organizations apply for Some organizations apply for awardsawards in in

established programs - state and federal levelestablished programs - state and federal level

• Model can be used as a self-assessment toolModel can be used as a self-assessment tool

• Factor analysis can be used to create a Factor analysis can be used to create a diagnostic for surveying employeesdiagnostic for surveying employees

• Each method has a “feedback” report to drive Each method has a “feedback” report to drive continual improvementcontinual improvement

• Each method scores the true performance of Each method scores the true performance of the organizationthe organization


PERFORMANCE CRITERIAPERFORMANCE CRITERIA

• LeadershipLeadership

• Strategic planningStrategic planning

• Influence of other interested partiesInfluence of other interested parties

• Use of management information and Use of management information and analysisanalysis

• Employee involvement and well-beingEmployee involvement and well-being

• Process managementProcess management


USING A DIAGNOSTIC SURVEYUSING A DIAGNOSTIC SURVEY

• Pojasek & AssociatesPojasek & Associates has used factor has used factor analysis and reduced the number of questions analysis and reduced the number of questions in the performance criteria to 22in the performance criteria to 22

• Wording of the questions must address Wording of the questions must address sustainability and the culture of the sustainability and the culture of the employeesemployees

• Questions are asked to a random number of Questions are asked to a random number of employees in the organization employees in the organization


USE OF A DIAGNOSTICUSE OF A DIAGNOSTIC• Questions delivered to employees either by a Questions delivered to employees either by a

web enabled questionnaire or a paper survey web enabled questionnaire or a paper survey form or bothform or both

• Considered less painful than a 50-page Considered less painful than a 50-page applicationapplication

• Diagnostic is handled like a 360-degree Diagnostic is handled like a 360-degree performance reviewperformance review

• Questions can be extended to the “other Questions can be extended to the “other interested parties” with some revisions to the interested parties” with some revisions to the wordingwording


TYPICAL QUESTIONTYPICAL QUESTION

1. Senior leadership personally and visibly demonstrates its commitment tothe sustainability program in this organization

Agreement:Indicate how strongly you disagree/agree with this statement.

o o o o o o o o 1 2 3 4 5 6 7

N/A Disagree Agree


DIAGNOSTIC COMPONENTDIAGNOSTIC COMPONENT

Cite some strengths of the senior leaders in this category.

List some opportunities for the senior leaders to improve in this category.

All responses are confidential and maintained by an independent examiner.

Employees can explain their scoring with words to be compiled and used in the “feedback” report.


TRUETRUE PERFORMANCE FEEDBACK PERFORMANCE FEEDBACK• The facility will receive a true performance The facility will receive a true performance

score from the third-party score from the third-party examinerexaminer

• Each question will have a standard Each question will have a standard deviation calculateddeviation calculated

• Written comments will be be consolidated Written comments will be be consolidated by the third-party examiner and summarized by the third-party examiner and summarized by questionby question– StrengthsStrengths– Opportunities to improveOpportunities to improve


RESULTS SCORED SEPARATELYRESULTS SCORED SEPARATELY

• Improvement results and indicators can be Improvement results and indicators can be scored by a third-party examiner just as the scored by a third-party examiner just as the true performance was scoredtrue performance was scored

• Results categories include:Results categories include:– EnvironmentalEnvironmental– Social responsibilitySocial responsibility– Other interested party involvementOther interested party involvement– FinancialFinancial– Other program indicatorsOther program indicators


FACTORS FOR SCORING RESULTSFACTORS FOR SCORING RESULTS

• Is the result or indicator demonstrated to be Is the result or indicator demonstrated to be importantimportant to the organization? Link to to the organization? Link to performanceperformance

• Was the result Was the result plannedplanned? Was the plan ? Was the plan attained?attained?

• Did the organization trend the result? Can Did the organization trend the result? Can the trend be adequately explained?the trend be adequately explained?

• Did the organization benchmark the result? Did the organization benchmark the result? How did it compare?How did it compare?


SCORING PROCEDURESCORING PROCEDURE

• Examiners use a transparent scoring matrix Examiners use a transparent scoring matrix and methodology found at and methodology found at http://www.quality.nist.govhttp://www.quality.nist.gov

• Examiners file draft feedback report through Examiners file draft feedback report through the lead examiner to a panel of judgesthe lead examiner to a panel of judges

• Judges determine if a site visit is warranted Judges determine if a site visit is warranted to confirm the score (for award program)to confirm the score (for award program)


USING THE SCORESUSING THE SCORES

• Some organizations have a single true Some organizations have a single true performance score where the results performance score where the results component score is approximately 40% of component score is approximately 40% of the total scorethe total score

• Some organizations prefer to have two Some organizations prefer to have two scores – one for true performance and one scores – one for true performance and one for results and indicatorsfor results and indicators

• There are many uses for these scores as a There are many uses for these scores as a means to track and improve EHS programsmeans to track and improve EHS programs


HOW WOULD YOU SCORE?HOW WOULD YOU SCORE?


Contact InformationContact Information

Robert B. Pojasek, Ph. D.Robert B. Pojasek, Ph. D.

P.O. Box 1333P.O. Box 1333

E. Arlington, MA 02474-0071, USAE. Arlington, MA 02474-0071, USA

Phone: (781) 641-2422Phone: (781) 641-2422

Fax: (781) 465-6006Fax: (781) 465-6006

e-Mail: [email protected]: [email protected]

Website: www.Pojasek-Associates.comWebsite: www.Pojasek-Associates.com

© 2003 Pojasek & Associates Robert B. Pojasek, Ph.D. [email protected] MEASURING THE VALUE OF AN EMS AND SCORING THE EMS RESULTS August 19, 2004.

Documents

accounting slide

cost accounting sheet

option cost cost

pojasek associates robert

cost accounting link

work step

ehs issues cost

cost savingsfirst action