On September 30, 2009, OSHA announced that it will be pursuing GHS. GHS -- the Globally Harmonized System of chemical classification and labeling -- is the next step in the march towards greening the manufacturing industry. Market leading companies are already positioned for GHS.

GHS is a simple concept: uniformity. A good example is how mailing addresses employ uniformity, using a certain number and types of fields in a certain order: name, street, city, code, etc. Currently, there is no uniformity in manufacturing or supply chain data reporting and documentation. Material Safety Data Sheets, also called SDSs, contain critical chemical information and warnings-- yet there is no standard format for authoring these sheets.

SDSs describe any hazardous properties or potential hazardous properties of the material and how to avoid harm. The typical sheet is four pages long. Beyond that, however, there is no typical. Some sheets are still typed up and scanned. Even if SDS contents come from a database, the final format is almost always unique. This is why a GHS standard is needed. Imagine how much time the postman would spend considering mail if every envelope used its own address formula.

Get Your Department Ready for Cost Savings

OSHA predicts that GHS will result in ROI and cost-savings. Lookat at the big picture, benefits of GHS are expected to be in the hundreds of millions each year. According to the Federal Register, "the net benefits of proposed modifications to the standard are estimated to be $754 million annually."

The goal of GHS is to provide a consistent global framework for classifying and identifying chemical hazards. Different countries will be able to fine-tune the regulation to their specific initiatives by increasing requirements on toxicological thresholds or exposure.

The overall key to assessing the full span of information is to have all raw materials identified -- down to the substance level, with their ingredient percentages -- and housed in a clean, updated data library. The information is collected from SDSs from the raw material suppliers, or from full disclosure documents.

Specific Steps to Prepare for GHS:

There are specific things to do to convert to GHS as well are tweaks and optimizations that can be made to each ste.

  1. Start by weeding out redundant and outdated documents. 33% of SDS or full-disclosure documents are revised each year, so make sure to start with the most up-to-date information.
  2. Set up a process to ensure that outreach to suppliers occurs on an ongoing basis. Ongoing outreach is critical -- to verify that raw material information remains current for all finished goods, down to the substance level, throughout the year. Outreach to the supply chain can be done manually, often with phone calls and spreadsheets, but it's best if outreach is automated, as some software add-on modules will do.
  3. Assemble raw materials in a spreadsheet or database application. A relational database is the best approach because then raw material ingredients can be tied to a finished product. If using formulation software or a formulation database, formula information can be tied to the raw material ingredient information to produce a comprehensive BOM (bill of material) for your finished good. Also, a relational database provides visibility into your materials data, providing huge bonus value for reporting, re-formulating, cost savings and streamlining in procurement and storage. Almost a no-brainer: all this value-add should come from one database.
  4. To produce a GHS-compliant data sheet, all data must be validated with available references such as toxicological studies, exposure data, and environmental regulatory databases, to name a few. Having all data in a relational database will prove to be essential to maintaining and cross-referencing these layers of data and resources. Companies will also want to examine and decide how materials and mixtures fit under the GHS classifications. Once the data is aligned, GHS compliant SDSs and labels are easily generated.
  5. The remaining requirements are similar to the existing HCS: employees must be trained on the new data sheets, labels must be produced that reflect the information contained on the SDS, and everyone must be trained on the safe handling of raw materials and finished goods.

It may sound like a lot, but it pays off almost immediately and then keeps on returning. It might be worth bringing in experts to expedite the conversion process and make sure it's done right.

There more efficient the conversion, the more meaningful the ROI. For specifics, let's look at specific costs. How much money can be saved just in time spent reviewing SDSs alone?

Cost$

OSHA estimates that in safety data sheet review, standardized data sheets would save 2.5 to 4 hours each. That's an astonishing figure!

OSHA further estimates the average salary of the person reviewing the SDS to be $47/hour. If your department reviews an average of three SDSs per day, that's a $141 savings each day, and $36,660 each year. You would have to do the math for your organization, but in SDS review alone GHS conversion provides immediate ROI.

Good news: SDS review is merely a fraction of the savings OSHA estimates in the switch to GHS.

OSHA further estimates time-to-market ROI, international trade cost reduction, and savings resulting from greater job safety and less injury. Also consider cost savings in Six Sigma initiatives resulting from streamlined processes; never mind cost-savings in time, paper and clerical labor, and the priceless ease-of-reporting to stakeholders such as the EPA, REACH agencies, any regulatory bodies, customers, board members, the public at large. Finally, there are huge risk management returns to consider.

Database

Every manager knows that having substance-level data in a centralized, relational database is not just a progressive notion anymore. It's a necessity and a reality. There are regulations that require visibility into product information which can only be attained this way -- REACH, RoHS, and material disclosure parameters, to cite a few.

There is immediate ROI in streamlining operations by relinquishing paper-based systems. Further, there is also ROI in how data can be leveraged and reused -- not to mention the benefit of making the project lead look like a substance-data and environmental compliance virtuoso. Structured materials data can be leveraged for Corporate Social Responsibility initiatives, Public Relations, Marketing, Environmental Compliance and Governance statements.

Embrace the Inevitable

Regardless of how we all get through the steps to GHS, we'll be glad we did. The conversion is inevitable. We may as well convert consciously, even enthusiastically. It could be a great thing for your company, for the career of whomever is at the helm, for employee safety and a greener environment.

Kal Kawar is the co-Founder of Actio Corp., a provider of SaaS software for environmental compliance through supply chain materials information management. Kathleen Hurley is director of corporate communications. http://www.actio.net/default/index.cfm