Environmental and safety issues

Environmental and Safety Issuesin Supply Chain Management

Lijo M LoyidMBA (FT)

School of Management StudiesCUSAT, Kochi - 22

Introduction

• Environmental Health and Safety (EHS) coversa wide range of environment, health andsafety management issues.• EHS issues are major challenges that facecompanies in today's business world.• A major concern is the protection ofemployee's health in the workplace, andtoday that is addressed with an increasingamount of federal and local legislation.

Introduction

• In addition companies are becoming moreconcerned with the environment in theircommunities and where they do business.• As well as local concerns, companies are moreaware of their responsibility of the health andsafety of workers at vendors and facilitiesalong their complex supply chains.

Environment

• Each facility that a company owns should besafe for the employees that work there.• As such each company should have a set ofEHS guidelines that they can use to ensureemployee safety.• These guidelines may be based on federal orlocal regulations that determine the minimumlimits on certain key elements.

Environment

• Air Quality– Air quality is important for the health and safetyof the employees of a facility as well as the localsurrounding community. Companies need anapproach for the management of sources ofemissions that can occur during a manufacturingprocess. A manufacturing location can generateair contaminants such as sulfur dioxide (SO2),nitrogen dioxide (NO2), ozone (O3), andparticulate matter (PM).

Environment

• Energy Conservation– Companies are not only eager to reduce theamount of energy they expend to theenvironmental aspect, but to reduce their overallenergy consumption, which will improve thebottom line. Many facilities can reduce energyconsumption by reducing the use of motors,pumps, fans, lighting systems, compressed airsystems and heating, ventilation and airconditioning systems (HVAC).

Environment

• Water Conservation– Reducing the consumption of water is a keyenvironmental goal for any company, but again,like energy conservation, reducing waterconsumption will improve the bottom line. Oneaspect of water consumption that companies areaware of is that of wastewater. Contaminatedwater is harmful to the environment and must betreated before discharging.

Environment

• Hazardous Materials– Companies that work with hazardous materialshave to ensure that their employees are safe andare trained on the how to deal with these types ofmaterials. Disposal of used hazmats, as well asplans on what to do in an emergency concerninghazmats are important EHS topics.

Environment

• Waste Management– All companies produce waste and it is

importantto the environment how that waste is dealt with.Because of the increasing cost of waste removal,companies are trying to avoid or minimizegenerating waste and considering reuse orrecycling of the waste they generate.

Occupational Health and Safety

• Companies have to minimize the risks tooccupational health and safety. The tasks ofEHS are to eliminate any potential hazards, orminimize hazards that may occur as part ofthe manufacturing process.• Biological Hazards– These hazards can represent potential for illnessor injury due to single acute exposure or chronicrepetitive exposure.


• Education and Training– It is important that all employees are trained inbasic rules that apply at the site, and how toprevent injuries to themselves to fellowemployees. Any training should include basichazard awareness, site specific hazards, safe workpractices, and emergency procedures for fire,evacuation, and natural disaster.


• Physical Hazards– In any facility there are physical hazards that cancause injury, either due to a single event or due torepetitive use over a period of time. Noise andvibration can cause injuries due to over exposure.– There should be some measures to eliminate anypotential physical hazards, or minimize physicalhazards that may occur as part of themanufacturing process.


• Chemical Hazards– Similar to physical hazards, a single chemicalexposure can cause injury or exposure to achemical over a period of time can be hazardousto an employee. There are many chemical hazardsin a plant, such as corrosive, oxidizing, andreactive chemicals, as well as fires from theignition of flammable materials or gases.

Community Health and Safety

• The health and safety of the employees is oneaspect of EHS but the community where thefacility is located is also the responsibility of acompany. It is vital that a company ensuresthat the processes it uses does not negativelyimpact the well being of the community thatsurrounds them.


• Water Quality– As part of the manufacturing process, water maybecome contaminated and it is imperative thatthere is no contamination of water sources thatthe community depend upon. In addition, theremust also be awareness that the facility shouldnot monopolize the local water availability to thedetriment of the community.


• Infrastructure– The development of the facility should not impactthe community. It is important that thecommunity should not be impacted by dangerousstructures, traffic, or emissions. Care to includesafety contingencies for the community, forexample in the event of fire, should be built intothe plans for any facility.


• Transportation– The transportation of materials into and out of afacility should be examined so not impact thecommunity. Traffic safety is very important as it isa leading cause of injuries worldwide. In additionthe transportation of hazardous materials shouldbe considered when reviewing traffic options at afacility.

Obstacles to implementation ofenvironmentally friendly SCM

• Trade globalization, off shoring of manufacturingoperations to low-cost countries, just-in-timedeliveries; all these stimulate growth of theinternational freight of goods between continentsand countries.• Frequent and prompt deliveries require moremeans of transport, whereas the absence of cooperationamong companies and processescoordination result in increased congestion onmain roads.


• Environmentally friendly transport operationswithin the supply chain require animplementation of resource efficient policies, areduction of energy consumption, anintroduction of cleaner energy and a betterutilization of the infrastructure.• There are still obstacles on the way to thecreation of an efficient environmentally friendlytransport system within the supply chain


• The important role to play in the investmentsprocess should have not only regional andnational governances but also multinationaland multimodal logistics operators.• The important role to play in the investmentsprocess should have not only regional andnational governances but also multinationaland multimodal logistics operators.



• Proposed environmentally friendly transportoperations within Supply Chain

HOW COMPANIES ADDRESSES THEENVIRONMENTAL AND SAFETY ISSUES

IN SCM

• In order to ensure that environmental andSafety issues are maintained, companies havetaken various measures. The following aresome of the companies that have addressedtheir concerns.• Sony• Adidas Group• Vodafone


IN SCM

• Sony– Sony is committed to conducting its operations ina socially and environmentally responsiblemanner and to sourcing from suppliers that shareits values. Accordingly, in order to enable positivechange in its supply chain, Sony works closely withits suppliers and subcontractors to address humanrights, labor, health and safety, and environmentalprotection issues related to the procurement ofraw materials and components


IN SCM

• Sony– Compliance with "Sony Group Code of

Conduct"in Business– Managing Chemical Substances in

Procurement– Participation in the Electronic IndustryCitizenship Coalition (EICC)


IN SCM

• Adidas Group– “As our supply chain is large, multi-tiered andvaried, we have a detailed and systematicapproach to managing the relationships with oursuppliers. To enforce compliance with ourStandards we have a multi-level monitoring andenforcement process in place, including the use ofan innovative rating system for the assessment ofour suppliers”.


IN SCM• Vodafone– Vodafone addresses it priority areas to include the

following:-• Safety of contractors working on our networkinfrastructure in emerging markets (see Health andsafety)• Social and environmental standards in suppliers’operations and factories• Mining of minerals in conflict regions

HOW GOVERNMENTS ADDRESSES THEENVIRONMENTAL AND SAFETY ISSUES

IN SCMVarious governments have introducedmeasures and rules to ensure thatEnvironmental and Safety Issues areaddressed and maintained in Supply ChainManagement. The following are few exampleswhich show how governments are concernedwith Environment and Safety in Supply ChainManagement.


IN SCM• China’s Government– Companies doing business in China have had difficultymaintaining quality throughout the supply chain, asillustrated by recent food and product safety scandals. Forexample, in last year’s melamine-tainted milk scandal,inherent problems in manufacturing processes and supplychains led to a breakdown of quality assurance.– Companies investing in China should be aware of severalpotential pitfalls when trying to build and manage supplychains ethically in China. The PRC Administration ofQuality, Supervision, Inspection, and Quarantine (AQSIQ)—China’s primary quality watchdog—launched a food andtoy recall system in August 2007.


IN SCM• America– Safety in American warehouses is regulated by aseries of standards from the Occupational Safetyand Health Administration, commonly known asOHSA. The US Congress created OSHA under theOccupational Safety and Health Act, which wassigned into law by President Nixon on December29, 1970. The main focus of OSHA is to preventwork-related injuries, illnesses, and deaths.

CONCLUSION

• Environmental and safety issues are diversified insupply chain of all sectors. Supply chain risk hasbecome a major area of concern for companies in theagribusiness sector, as well as for their customers,financiers, and external stakeholders.• Environmental supply chain management consists ofthe purchasing function's involvement in activities thatinclude reduction, recycling, reuse and the substitutionof materials.• Companies can implement a variety of strategies tomanage supply chain environmental risks utilizingoperational and strategic levers.

Engineering

Environmental and safety issues