Many industrial organizations have already reaped benefits by bringing together aspects of their environment, health and safety (EHS), and quality business functions. LNS Research has uncovered evidence of strategic value to the business when companies apply a combined approach across these disciplines. Efficiency gains, optimized risk and compliance management, faster innovation cycles, and competitive advantage are just a few of the upside benefits of a connected environment, health, safety, and quality (EHSQ) strategy.
A connected EHSQ approach often involves aligning objectives, harmonizing common processes, and integrating enabling technologies. Most importantly, each organization must develop the right plan and implementation roadmap based on its unique situation, goals, and resources. If your company is eager to formulate the right strategy, consider these factors to make the best choices along the way.
Factor #1: Industry Risk Profile and Regulatory Requirements
Industry sector has a significant influence on your company’s risk profile and compliance obligations. These aspects impact operational priorities and execution. For example, a global oil and gas company has risks and compliance obligations weighted toward EHS and operational risk management relative to quality concerns.
On the other hand, some industries (e.g., aerospace and defense, automotive) face stiff product quality requirements relative to environmental obligations. Highly specialized regulatory requirements in the life sciences and medical device sectors are another example. Help your company examine the EHSQ initiative in context with its industry sector and priorities to support organizational objectives to avoid creating risk in core competencies.
Factor #2: Potential Synergies and Business Value
Just because a company can harmonize and integrate EHS and quality to some extent or even fully, it doesn’t mean that it should. Challenge your organization to ask: “What are the potential synergies and the resulting business value?” Prime areas for synergy are aligning management systems, harmonizing business processes, and integrating enabling technologies, especially information management systems.
Organizational priorities and the current situation across people, process, and technology dimensions of the various EHSQ dimensions will, in large part, determine the degree to which building a connected EHSQ strategy is possible or even desirable. What is the leadership structure? How are teams organized? To what extent are various management systems already harmonized or integrated? Are there similar processes across multiple business functions? Which systems does the company currently use to manage EHS and quality data, workflows, and reporting?
Once the team documents and assesses commonalities and differences, it can determine if a combined approach is feasible, how to structure it, and which specific opportunities exist to create business value.
Factor #3: Relative Maturity of Current Management Systems
Industry survey data from LNS Research show that most industrial organizations have implemented one or more discipline-specific management systems based on industry consensus standards. Relevant to EHSQ management, the most commonly adopted standards are ISO 9001, ISO 14001, and OHSAS 18001/ISO 45001 for quality, environmental, and health and safety management, respectively. In many cases, we observe that one of the existing management systems tends to be more mature in design and execution than the others. That’s not surprising, given that one of the EHSQ disciplines may be more mission-critical than the others, per the discussion above on industry-specific risk and compliance profiles.
The maturity of one management system over another has implications for developing a connected EHSQ strategy. For example, in a life sciences company, it may not make sense to integrate a mature and well-functioning quality management system with a less-essential, less-mature environmental management system. The risk of impairing a mission-critical system and processes may not be worth the incremental improvement to the less-important function, or to organizational efficiency overall. From another angle, it could be advisable to build on strengths by using a mature environmental management system as the basis to integrate quality and health and safety.
Connected EHSQ Strategy Recommendations
Research by LNS shows that the individual EHSQ disciplines share many common objectives, challenges, and processes. EHS, quality, and operational business leaders have a clear opportunity to draw these aspects closer together, along with leadership, teams, and technologies. Capturing synergies with connected EHSQ offers significant benefits in terms of risk and compliance, along with productivity and innovation.
The first step for every organization contemplating connected EHSQ is to define the right approach and implementation roadmap, given its unique blend of risk and regulatory profile, potential business value, and existing management systems. Your company’s readiness for change and its ability to manage it may affect the speed of the journey, but using the three factors mentioned above to guide it will ensure a strategy that builds on existing strengths while minimizing risk that comes with change.
Learn how industrial companies drive operational performance using connected EHSQ in this eBook by LNS Research:
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