On September 9, LNS Research and Environmental Leader hosted a webinar entitled "The New EHS Performance-Based Paradigm: Enabling Operational Excellence with a Holistic Technology Strategy." During the presentation, there were a number of questions that filtered in that we were unable to address in the time alloted on air, which I'll address below.
If you were unable to attend the live event, during the webinar presentation Rob Harrison and I explained the way that Environment, Health & Safety (EHS) philosophy has changed over the past few decades, particularly in the last 5-10 years due to mobile technology and the revolution in social media that has put every business under a public microscope like never before. Today manufacturing organizations need to consider their EHS strategies as key, integrated, and proactive pillar of Operational Excellence rather than a siloed, reactive department. Doing so creates bottom line value in a number of ways, like lowering the total cost of quality, improving compliance, and raising performance in key operational metrics like Overall Equipment Effectiveness (OEE).
The full, on-demand recording of the webinar can be accessed here.
Q. The process slide looks similar to Six Sigma "DMAIC" process -- Define, Measure, Analyze, Improve, Control. Is this by coincidence or by design?
A. There are many process frameworks out there that span a variety of enterprise practices, and I believe it is no coincidence that most tend to leverage the same basic cycle of continuous improvement. While the Six Sigma approach has one step more embedded into its framework, most approaches display a very similar footing, even when defined with different terms. Most of these approaches borrow from the iterative management method known as the Deming or Shewhart cycle, which uses the Plan-Do-Check-Act approach. The Define-Execute-Monitor-Improve approach mentioned in the presentation is not dissimilar.
While we find many nuances in many continuous improvement frameworks, including Six Sigma, various ISO standards, lean manufacturing, the Kaizen practice, and beyond, there often tends to be a cycle of continuous improvement that either mirrors or builds on the Deming cycle of Plan-Do-Check-Act.
Q. With all these connections seen between systems, does middleware become the weak link?
A. Frequently, yes. Establishing the ability to both integrate and exchange data between Enterprise Resource Planning (ERP) applications and other systems has long presented a challenge for manufacturers. Some enterprise software vendors are providing and building on architecture that enable customers to connect and exchange data more effectively through XML and APIs with various third-party system implemented in their organizations.
However, it can still be a challenge to, firstly, discover the right solution and, secondly, implement it in an effective and timely manner. However, these hurdles can be overcome with the right guidance.
Q. Regarding EHS and OEE performance, what is the reason for the relationship and what is the key takeaway for the improvements presented?
A. As we mentioned in the webinar and as we have suggested across our blog and report content here are LNS Research, OEE is an excellent metric for monitoring the efficiency of manufacturing processes and helps us determine the availability of our equipment. Though it is often tied to asset performance and also extends into quality, as a comprehensive metric it is linked to almost all key areas of enterprise activities, including EHS. Missteps in EHS management, execution, and performance can directly impact assets in many ways.
A simple example is an employee injury or accident that, in addition to compromising the employee’s health, negatively impacts the asset in question. This not only creates downtime, but the employee’s lost-time can also impact the overall operation of the equipment in some cases. This is a very basic example, but there are myriad ways in which both environmental and health and safety impacts can be linked to OEE.
The key takeaway of the performance improvements presented would be that, as an essential metric of overall performance, OEE relates (to varying degrees of intensity) to most areas of enterprise activities. In order to improve, manufacturers seek to provide the best products, in as timely a manner as possible, and to avoid downtime. As a result, it’s important to assess and monitor how all pillars of enterprise activity are impacting OEE.
Q. Is there a "best set" of leading indicators most companies use or is defining leading indicators more fluid and dependent on company performance and trends?
A. Across many individual manufacturing industries there is definitely an ongoing trend in defining the some of the most critical leading indicators. However, at the same time there is a degree of subjectivity in determining what a ‘leading indicator’ is. It can vary from company to company. However, in our in-depth research, which involved a comprehensive EHS survey of hundreds of EHS professionals across manufacturers, we have noted a number of commonalities.
Respondents were given the opportunity to select their top three indicators and the most widely reported were Total Injuries (55%), Lost-Time (53%) and Recordables (31%). While these may be perennial and valuable metrics to use, what I would identify as other key—and proactive—metrics that would factor into a ‘best set’ of leading indicators, namely Near-Misses and At-Risk Behaviours, ranked comparatively low. This is something I will be discussing in an upcoming blog post, so stay tuned.
Q. Loved seeing the five elements interact. As an APM geek I observe many similarities to John Moubray's Reliability Centered Maintenance (RCM) stories. Any comments?
A. The five pillars alluded to here (energy management, quality management, EHS management, asset performance management, and manufacturing operations) are central aspects of our research model. To use an analogy, if they were the legs of a table, if any one is compromised in any way, the table becomes wobbly, and may collapse. Hence, it’s important to understand the linkages holistically to ensure success.
Sometimes overlooked, safety in particular is such a critical element to the RCM model. In the RCM evaluation spelled out in the technical standard SAE JA11011, it is asked “What are the consequences of each (maintenance or asset) failure?” From a health and safety perspective, the consequences are obvious, and vast. A weak routine maintenance program that lacks predictive maintenance capabilities and eventually leads to an asset failure can lead directly to an employee injury in many cases, which can result in it its own substantial bottom-line costs, organization wide. This is but one example. But the benefits of understanding and applying basic routine maintenance tasks and implementing condition-based or predictive maintenance programs from an EHS perspective should be clear for manufacturers.