Does Your Lean Facility Have a ‘First Line of Defense’?

Sept. 4, 2012
Costly losses from avoidable environmental compliance mistakes can be easily prevented with a simple, proactive defense system.

It’s a discomforting thought, but by inadvertently purchasing the wrong materials for your processes you may be opening up your facility to potential noncompliance fines, shutdowns, and other complications without even knowing it. A seemingly safe material could turn out to be a Trojan horse, costing you far more than you expect.

When it comes to defending yourself from this sort of mishap, most facilities have a reactionary policy -- moving to fix an issue when they discover a material violates a regulatory condition or puts them at a market disadvantage. As most executives know, reacting to a situation means you are not in control. This article will focus instead on the benefits you can experience by proactively developing a system to prevent these material issues before they occur.

Any time a material enters your facility, it brings with it many types risks: it might contain a little-known substance that’s been banned by the EPA, it could increase your VOC or GHG emissions above emission limits or you could even lock yourself out of a valuable market by using a substance prohibited in that region.

All of these risks typically go unnoticed until you start paying the consequences.

There is nothing more costly than discovering you can’t sell a product you’ve manufactured from start to finish because it contains a substances banned by the EPA, or that some countries can’t import your goods for a similar reason.

Similarly, if you’re a Tier II supplier you may notice OEMs becoming more sensitive about what goes into their products. This trend could cause a sudden shift in requirements from further up the chain, as OEMs look to eliminate certain substances from their products, meaning you will have to actively ensure none of their banned substances end up in your product.

Make Prevention a Process

It’s no secret -- the way forward in manufacturing is as lean as possible, with automation paying a huge role in driving efficiencies upwards and costs down. But how can you ever hope to be as efficient as possible if you’re playing catch up for avoidable mistakes?

That’s why developing a “gatekeeper system” to vet your material purchases could be your best choice for the next step in your continuous improvement measures at your facilities.

This gatekeeper system can play many roles, including vetting products for their contribution to the energy efficiency of the supply chain, their green chemistry e-factor, and other performance indicators that are starting to play a big role in the future of manufacturing.

Your gatekeeper system should take into account all of your compliance obligations: external, internal, and voluntary. Each one comes with its own list of vetting criteria and each will have a different level of priority.

External compliance obligations will differ from facility to facility, and are generally based on permit conditions and any additional local regulations. Depending on how complex your operations are, your gatekeeping system may need to reference several databases and “ban” lists.

Your gatekeeper system may also require some forecasting capabilities, as a material may not present an immediate compliance risk, but could jeopardize your compliance with sustained use. You’ll only be able to anticipate these consequences by calculating the resulting emissions before they occur. Having a gatekeeper system in place to vet materials first could be the only thing protecting you from finding out at the end of the reporting year that you used a noncompliant material which, over time, has resulted in your organization having to pay fines.

Developing Your Own Vetting System

The first step in the gatekeeper continuous improvement technique is to collect a library of all banned substance lists and emission limits that apply to your facility, including U.S.-based NESHAPs, MACTs, air permits, along with other international permit conditions, should they apply. For most of these, there will be standardized regulatory guidelines and documentation indicating which materials will put you at risk if you use them, and which you are outright prohibited from using.

This combined library of conditions acts as your filter to catch potential problems. Proper maintenance is critical to ensuring the long-term success of your system.

Next, it’s time to examine and possibly reinvent your material acquisition processes. If you employ a specialized chemical inventory manager for this responsibility, they should “take point” and oversee the gatekeeper system’s operations. Whenever a facility purchases a new material, it will need to undergo a rigorous vetting process against the filters you have compiled.

While collecting chemical component information of the materials purchased should be the bare minimum first step, you may also begin to request that your suppliers provide energy efficiency details and the material’s e-factor.

This vetting process can be done either manually or electronically, depending on the resources you have available and the nature of your industry.

For example, the automotive industry regularly purchases vast quantities of different chemical coatings, and coating vendors are constantly adjusting the chemical compositions of their formulas. This means even materials you’ve used before may need to be vetted every time a change is made and the product is ordered. While this may increase the workload for the EH&S department, it will also ensure there is a fine control mechanism in place for ensuring absolute management over your regulatory risks.

If you organization has integrated your environmental management system (EMS) and material inventory management systems, the best solution is to create an automated gatekeeping system that vets all incoming materials against your internal electronic databases.

This option of automating your vetting process is hands down the most efficient way of making your chemical inventory management as lean as possible. Compared to the manual option for vetting chemicals, you could save dozens of hours each month, as well as all-but-eliminating your instances of preventable noncompliance.

Continual Improvement from the Ground Up

Once you’ve got a gatekeeper system in place and operational, it will pay big dividends towards the continual improvement of your processes. Through comparative forecasting, you’ll also have the raw data needed to identify the most efficient materials and know when to seek alternatives.

With the development of more sophisticated internal lists, the gatekeeper system should become an essential part of your material decision making process, helping to select more environmentally sustainable and more cost effective materials.

Vetting all incoming materials, whether manually or automatically, is arguably the embodiment of being proactive in the manufacturing industry. It protects your business from having to fix noncompliance events as they occur and instead addresses noncompliance at its source.  And because lean manufacturing and continuous improvement planning rely on agility, you shouldn’t waste time fixing preventable mistakes.

Start your processes off on the right foot by keeping noncompliant materials out of your facility entirely.  

Gary Vegh, co-founder of ERA Environmental Management Solutions, has more than 15 years of experience in providing environmental compliance software to manufacturing companies looking for solutions to comply with complex environmental regulations. Vegh graduated from Concordia University - Montreal, where he studied Chemistry/Ecotoxicology. He later moved to Raleigh, NC to complete work in the Research Triangle, where ERA was founded to meet the compliance needs of the local wood furnishing industry. Today the company’s clients include Volkwagen, Toyota, Nalco, Vigor & BMW. He can be reached at [email protected].

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