Environment, Health and Safety: Good for Business, Good for Plants

In the Wake of the Deepwater Horizon Disaster, Plants Are Putting Increased Emphasis on the Role of Environment, Health and Safety in Both High-Level Strategy and Day-to-Day Operations, According to Recent Research by Aberdeen

By Nuris Ismail, Reid Paquin

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Environmental, Health and Safety (EH&S) issues are becoming a significant business concern. In follow up conversations with executives, it is impossible to have a conversation about EH&S without the discussion revolving around the Deepwater Horizon oil spill. Even though it has been two years, manufacturers have not forgotten the impact an adverse event can have to not only your organization's bottom line, but also brand image. It truly was a tipping point, raising the profile of the EH&S role in the organization and creating an environment where manufactures have become laser focused on ensuring compliance in EH&S.

In addition, EH&S regulations are constantly changing, and as a result, companies are focusing on means to comply and reduce adverse events. Aberdeen Group's 2012 research, "Environment, Health and Safety: Going Beyond Compliance," shows that 80% of surveyed organizations (down from 85% in 2011) chose compliance as a top market pressure, with the risk of an adverse event coming at a distant second (See Figure 1).

How are companies overcoming these pressures? Aberdeen's research uncovered that visibility into key EH&S data and compliance mandates can result in a higher amount of audited action items being completed on time, increased overall equipment effectiveness (OEE), a lower recordable injury frequency rate, and a positive operating margin versus corporate plan.

There are three specific actions that Leader companies are undertaking to address these common pressures compared to their competitors. First, Leader companies are optimizing their processes to support the organization's EH&S goals (See Figure 2).

A simple example of the optimization process would be taking energy cost into consideration while scheduling production or including energy as one of the factors in addition to asset condition when scheduling maintenance. Leaders are also more likely to invest in training to raise awareness about EH&S (29% versus 21%). By raising such awareness, the employees are more likely to follow processes, report noncompliance, and suggest improvements. Lastly, Leaders are 50% more likely to invest in a centralized knowledge base that provides visibility into current regulatory requirements (Figure 2). Managing the myriad of compliance mandates is an extremely daunting task – investing in a centralized knowledge base enables manufacturers to look to a single source for such critical information.

To reduce energy consumption, emissions and safety issues, the Leaders understand the importance of having visibility into this information. The Leaders are over 91% more likely to have real-time and historical data accessible to decision-makers (Figure 3). This EH&S data is collected automatically. Automating data collection ensures that the data is complete and accurate. To ensure that the right data is presented to the right decision-maker at the right time, the Leaders are also providing their executives role-based visibility into EH&S information.

In addition, almost two thirds of the Leaders have a central repository for relevant compliance laws. By having relevant laws to compare to the EH&S data collected, Leaders are able to save time and increase efficiency in analyzing EH&S issues.

For further analysis, refer to Aberdeen's "Environment, Health and Safety: Going Beyond Compliance." This report provides a roadmap to an effective EH&S initiative within an organization, and supporting technology solutions that can help organizations get on track toward compliance, and beyond.

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