Integrating EHS&S And ISO Harmonization To Drive .

Integrating EHS&Sand ISO Harmonizationto Drive OperationalExcellence

Executive SummaryOperational excellence is just that. Besides seeking to improveHarmonization: A Flexible Approach toOperational Excellencequality, environmental management, health and safety andThe International Organization for Standardization (ISO) hassustainability, it is also designed to address asset management,made a dramatic shift in how companies can create managementfacilities management, business continuity, regulatory controlsystems that will help meet their strategic objectives in anand process improvement.uncertain world. All companies face volatility, uncertainty,Many companies end up limiting the scope of operationalexcellence in the face of siloed systems and the challenge ofcomplexity and ambiguity in both the internal operationalcontext and the broader external environment.expanding the program to include all of the disciplines needed.All of the new management systems seek to help organizationsA recent study revealed that companies with operationalidentify the opportunities and threats associated with thisexcellence programs only gave those programs an averageuncertainty. Armed with this information, the organization canrating of 6.1 out of 10.engage its stakeholders and design an operational excellenceIn the past, companies have used ISO management standards tohelp break down the many corporate silos that stand in the wayof operational excellence and enhancements.However, all of this is changing. Since 2012, ISO has been revisingprogram that will help it achieve the strategic objectives setout in the company’s mission statement. This is critical to thesuccess of any organization operating in these uncertain times.Many companies are currently making the transition to thesenew management systems:all of its existing management system standards, as well as Quality Management (ISO 9001:2015) Environmental Management (ISO 14001:2015)system. Health & Safety Management (ISO 45001:2017)It is now possible for a company to comply with an integrated Compliance Management (ISO 19600:2014) Risk Management (ISO 31000:2009).creating new standards, using a harmonization scheme knownas the “Annex SL - High Level Structure.” At present, it is possibleto apply the same numbering system to each managementand harmonized standard to meet its operational excellencerequirements at corporate, facility and supply chain levels.Management system standards exist or are planned for anumber of areas, including quality, environment, health & safety,energy management, compliance, business continuity, riskmanagement, sustainable procurement, social responsibilityand sustainable development.ISO makes it clear that businesses can choose how they usethe standards. Third-party registration is only one of the manydifferent options for using these international managementsystem standards.This white paper is Part 1 of a 3-part series on EHS&S andOperational Excellence. This edition will explore howorganizations can address their opportunities and threats (i.e. theHowever, there are many other standards and managementsystems which can be used by organizational excellenceprograms. They include: Sustainable Procurement (ISO 20400:2016) Business Continuity (ISO 22310:2012) Assets Management (ISO 51002:2014) Facility Management (ISO 41001:2018) Social Responsibility (ISO 26000:2010) Organizational Resilience (ISO 22316:2017) Process Improvement – Lean and Six Sigma (ISO 18404:2015) Emergency Management – Requirements for Incidenteffects of uncertainty) using harmonized management systems.It will also consider technological issues around softwaresystems used to support the requirement for harmonizationwhen working towards operational excellence.Response (ISO 22320:2011).www.etq.com

of the organization (e.g. corporation, facility or supplier facility).In addition, there are many other new and revised standardscurrently under development. Each standard can be usedconsistently within the new harmonized high level structure.These standards adopt the authoritative “plan-do-check-act”cycle:Determining the external context involves the application ofa widely-used business tool known at PESTLE. This involvesidentifying the political, economic, social, technological, legaland environmental factors that could influence the mannerin which each management system is implemented on theharmonized platform mentioned above. Context of the Organization and Stakeholder Engagement Leadership Planning Support OperationsThe internal context includes the organization’s strategic Operationsobjectives and requirements for operational excellence across Performance Evaluationthe value chain must incorporate the information on dealing Continual Improvement and Innovation.Each organization needs to engage its external stakeholdersto make sure that it has accounted for all of the significantinfluences that can affect its internal operations and businesscontinuity.all of its facilities and value chain partners. Each organization inwith the effects of uncertainty (i.e. opportunities and threats) inits operational planning efforts.This harmonization of the plethora of management systems isnot without its problems. Those responsible for ISO managementsystems are often resistant to change and seek to keep as muchof the old structure in place while conforming with the revisionsfound in the harmonized high-level structure. On the otherhand, company leaders are now being held directly accountableThis data-intensive evaluation of operational excellenceopportunities and threats provides the foundation for planningthe harmonized management system. This is no longer theprovince of the ISO managers. It involves the entire corporatevalue chain and needs to be carefully monitored with anappropriate data-analytical system.for meeting the objectives of the organization using these newmanagement systems. As a result, senior managers are gettingmore involved with the revision processes now underway.There are new requirements for measuring performance anddemonstrating continual improvement. This is important toorganizations’ sustainability programs. It will now be possibleto include operations in the enterprise risk managementprograms required of all publicly-traded corporations. Thenew management systems are less about discipline silos andmore about getting everyone on the same page, helping theirorganizations meet key strategic objectives in an uncertainworld.Leadership and CommitmentLeaders in an organization are expected to take fullresponsibility for the effectiveness of the EHS&S performanceresults by demonstrating leadership of and commitment tothe harmonized management system. The harmonized ISOsystem of management requires leaders to communicate aclear direction for their organization(s) with a defined strategicfocus. They need to understand the effects of uncertaintyon the company’s strategic objectives so they can ensure theachievement of these objectives in an uncertain world.The ability to be flexible in adapting to changes in the externalManagingContexttheInternalandExternalAll the revised ISO management system standards open withrequirements for determining the internal and external contextoperating environment is just as important as managing theinternal operations. After all, sustainable success relies oncontinual improvement, innovation and learning. Organizationalsuccess comes from the ability of each organization to integratesustainability into what every employee does every day, insteadof having a sustainability manager leading separate initiativeswww.etq.com

to document the organization’s sustainability.Ensuring that sustainability efforts meet the intended outcomesidentify the actions that need to be taken to address eachfacility’s operational excellence needs.helps drive continual improvement and innovation across theSome corporations already have an Enterprise Risk Managementorganization. Sustainability represents the sum total of the many(ERM) program in place within their financial managementcomponents of a well-executed and harmonized managementsystem. It is now possible to harmonize this program withsystem standard.the operational excellence structure to strengthen financialBusiness leaders need to review the policies around the manyoperational components of the program and integrate themperformance in line with improved operational excellence andsustainability performance.into a harmonized set of documents that are appropriate forPlanning is an iterative effort, as every corporation facesthe purpose and context of the organization. Planning theuncertainty in its internal and external contexts. Riskharmonized organizational excellence program must includemanagement programs focus on the organization’s ability tothe nature, scale and organizational excellence impact of itsmeet its strategic objectives. Meeting objectives becomes moreactivities, processes, products and services.likely when the organization is able to deal with uncertainty.Leaders must demonstrate commitment to fulfil all of their legaland regulatory compliance obligations.Implementing the HarmonizedFinally, leaders must determine the organizational roles,Operational Excellence Programresponsibilities and authorities of all the internal stakeholders,and be certain that this information will be communicatedeffectively throughout the entire value chain.engagement with the external stakeholders. There are no longeremployees with the title of ISO management representative.This function is built into the entire organization.Harmonizedharmonized management system. There are two key aspects ofimplementation programs – support processes and operations.This information must also be vetted through sufficientPlanning forExcellenceOnce a plan is in place, the focus can turn to implementing theSupport processes include the identification and allocationof resources needed for the operational excellence of theharmonized EHS&S management system. These includeprograms that ensure worker competence and awareness,effective internal and external communication and theOperational widespread use of documented information.Operations must have a focused operational planning andIt should be clear by now that operational excellence hascontrol program to meet the requirements of the EHS&Sthe potential to meet its goals when a company uses themanagement system. An emergency preparedness and responseISO harmonized structure as a means of determining howsystem needs to be in place to manage unplanned situations.the program will be operated and monitored for continualFinally, there needs to be a system for dealing with change andimprovement. Planning begins with the formulation of actionsuncertainty to keep operations in line so the organization canto address the opportunities and threats that were identifiedmeet its strategic objectives.using the PESTLE analysis of the internal and external contexts.It often helps to think of this process as realizing high priorityopportunities to offset the most significant threats.Under the direction of senior leaders, uncertainty analysis isconducted using the risk management methods prescribed inthe ISO 31000 risk management standard. Uncertainty analysistakes the information from the PESTLE analysis and seeks toPerformance EvaluationOrganizational excellence is built on the successful execution ofthe planning and implementation stages. Progress is carefullymonitored and reviewed by senior leaders of the organization,using a formal monitoring, measurement, analysis andevaluation program. Performance indicators are determinedwww.etq.com