TOTAL QUALITY

MANAGEMENT ASSIGNMENT

By SUHAS CHOWDHARY.J

215110068

INDEX

SNo. Page No

1

2

3

4

5

6

7

8

9

10

11

Introduction to ISO 14000

Environmental Management Systems

ISO 14000 family of standards

Steps and Guidelines for ISO 1400 implementation

Effects of ISO 14000 standards on businesses

Indian context for ISO 14000

Gap analysis

Potential Problems for implementing ISO 14000

Case Study : Milan screw products

Conclusion

References

1

2

4

6

9

12

13

17

18

24

25

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INTRODUCTION TO ISO 14000

In today‘s business world market pressures are forcing internationally and domestically

competing companies to better understand the costs and benefits of their products and services.

Environmental mismanagement of a firm can cause a lack of control and loss of revenue for a

company. Standardizing the development and implementation of an Environmental Management

System (EMS) can help companies start, improve, and monitor an environmental program. So

this is where the ISO 14000 comes into effect.

The ISO 14000 is a worldwide recognized voluntary set of standards formed by the International

Standards Organization in Amsterdam to incorporating environmental aspects into operations

and product standards. The ISO 14001 was completed in September of 1996 and is a set of

specifications for implementing an EMS. The ISO14001 standard specifies requirements for

establishing an environmental policy, determining environmental aspects and impacts of

products and services, planning environmental objectives, implementation and operation of

programs to meet objectives and targets, checking and corrective action, and management

review.

Environmental Management Systems (EMS): There are two components to an EMS: A written

program, which commits the company to producing the highest quality product with the lowest

possible environmental impact and sets forth the procedures to be followed to achieve this goal;

this program must incorporate relevant local and federal environmental regulations that apply to

their specific facility; and an education and training program for employees to enable

understanding and implementation of the written program.

Some unique and important characteristics of ISO 14001 are:

It is comprehensive: all members of the Organization participate in environmental

protection, the environmental management system considers all stakeholders, and there

are processes to identify all environmental impacts.

It is proactive: it focuses on forward thinking and action instead of reacting to command

and control policies.

It is a systems approach: it stresses improving environmental protection by using a single

environmental management system across all functions of the Organization.

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ENVIRONMENTAL MANAGEMENT SYSTEMS

What is an Environmental Management System?

An environmental management system (EMS) is a systematic approach for managing an

organizationís environmental issues and opportunities. Good, or even ìbest practicesî alone do

not make an EMS. The essential characteristic of an EMS is that its various components interact

to provide measurable information enabling continual improvements. The ìsystemsî approach

means that processes are stable and repeatable, yield more predictable outcomes and adapt new

learning to continuous improvement.

The key systems components of an EMS are:

• An Environmental Policy Statement actively promoted by senior management;

• A Planning Process oriented toward integration of environmental with the organizations

business and operations management;

• An Organizational Structure, responsibilities and accountability;

• Implementation Systems and Operational Controls;

• Measurement and auditing systems;

• Systems for periodic Top Management Review of the EMS.

Three Pillars of an Environmental Policy

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A continual cycle of planning, implementing, reviewing and improving the actions that an

organization takes to meet its environmental obligations.

An effective EMS is built on TQM concepts. To improve environmental management, your

organization needs to focus not only on what things happen but also on why they happen. Over

time, this systematic identification and correction of system deficiencies leads to better

environmental (and overall business) performance. Most EMS models (including the recently

issued ISO 14001 Standard, which will be described later) are built on the ―Plan, Do, Check,

Act‖ model introduced by Shewart and Deming. This model endorses the concept of continual

improvement.

Key Elements of an EMS

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FAMILY OF STANDARDS

The family of ISO 14000 standards address a broad range of environmental disciplines that

include a basic EMS, auditing, performance evaluation, product labeling, life cycle assessment,

and product standards. All the standards except the standard for an EMS are ―guidance‖

documents. Only one standard, ISO 14001, is a ―specification‖ standard to which an organization

can receive certification or registration. ISO 14001 is considered the foundation document of the

entire series, and most other documents in the series are proposed as guidelines that will support

an organization‘s environmental management sytem. The ISO 14000 standards can be classified

into two general categories: organizational evaluation and product evaluations. The EMS (14001,

14004), the environmental auditing (14010, 14011, 14012), and the environmental performance

standard (14031, 14032)

Figure above provides an overview of some of the categories of standards. The ISO 14001

standard is the key standard for an organization to implement its environmental practices, while

other ISO 14000 standards support this development and implementation by specifying tools,

methods, techniques and guidelines for management system auditing, environmental

performance evaluations, life cycle analysis, environmental aspects for product specifications

and standards, environmental labeling, etc.

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General Model of ISO 14000 standard

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STEPS TO CERTIFICATION

Understand ISO 14001‘s need for controls, procedures and records.

Determine environmental impacts and laws relevant to your organization.

Identify existing procedures to use in ISO 14001 and new ones needed.

Write a Policy, Environment Manual, Management Procedures and Records.

Measure and record your environmental performance against objectives.

Audit, correct and improve your environmental system and procedures.

Undergo independent assessment and registration to ISO 14001.

ISO does not carry out assessments to check that standards are being implemented by users in

conformity with the requirements of any ISO standard. Rather, private sector suppliers or

regulatory bodies that have been approved by a national accreditation body will carry out

certifications.

GUIDELINES FOR IMPLEMENTING ISO 14000

The first and most important step in how the ISO 14001 works is having a firm commitment

from senior management. If the senior management needs to provide direction and focus on the

EMS and if they do not follow through with a commitment then there is a good chance any EMS

implemented will fail. So one senior management is on board the planning process begins. The

planning process includes scheduling, budgeting, and assigning personnel, responsibilities and

resources to the EMS. The planning process is broken down into four categories that cover 1.1)

environmental aspects, 1.2) legal and other requirements, 1.3) objectives and targets, and 1.4)

environmental management program. A plan should be developed, written down, and made

accessible to anyone who wishes to see the plan. This is a great way to see where your

organization is with its plan and where it is going.

The next step is to implementation and operation. Here you want to take the plan you developed

in step one and execute it among your company. The subcategories in this step are 2.1) structure

and responsibility 2.2) training, awareness and competence 2.3) communication 2.4)

environmental management system documentation 2.5) document control 2.6) and operational

control 2.7) emergency preparedness and response. So here is where you want to lay out your

plan to your employees, provide training and consciences about the EMS, keep an open line of

communication among personnel about environmental issues, document everything, and have an

emergency plan in case something is to happen. An important issue to remember here is to

document everything. This provides the organization with reference as to how the company is

doing, where the organization is at with concerns to its plan, and where they are going.

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The third step is to check and take the proper corrective action. Here you would wait a proper

amount of time, say on quarter to one year, and review what has happen in that time. The

subcategories in this section are 3.1) monitoring and measurement, 3.2) non-conformance and

corrective and preventive action, 3.3) records, 3.4) environmental management system audit. On

the basis of these four subcategories we would observe and assess the EMS during the period,

watch for problems that may arise and take the proper corrective actions, record all observances

and changes, and finally audit the way things are being done to ensure that the best actions are

being taken. This step gives you a chance to look at how things are working and make the

necessary adjustments to perfect them. You should continually monitor how the implemented

EMS is going but at least once a quarter to once a year audit your EMS to ensure that things are

being done the way are supposed to be and if changes need to be made to conform to new

advances or to conform with the original plan. I would also suggest auditing the plan once a year

to see how you are in line with the original idea and if some changes need to be made as to the

EMS goals.

So the final step in the ISO 14001 is for management to review the process similar to step 4 and

start all over again with step 3. This is the process of continual improvement. Every organization

should make every effort to achieve environmental excellence not only for the environment but

for the bottom line of the company as well. The ISO 14000 gives an organization a chance to

maximize the use of scarce resources, implement recycling programs, and get national and

possible global recognition for environmental policies, all of which can contribute to the bottom

line. But what companies actually use the ISO 14000 standards?

International Case Study - Axel Springer Verlag AG, Heidelberg, Berlin, Germany (Lundi,

1998)

Springer Verlag is an international publishing company which employs approximately 12,500

people. In 1995, the company decided to improve its environmental credentials by introducing an

Environmental Management System (EMS). The EMS contains the following guidelines:

• To put in place programs which would increase the sensitivity of readers, business

partners and employees to environmental issues?

• To minimise the waste stream from Springer Verlag company and its suppliers‘

production processes and products.

• Use of eco-efficient technologies and substances in all company units.

• Avoid and decrease of environmental burdens by reducing energy and water

consumption, emissions and waste.

• Publish an annual enviornmental report to record improvements and changes.

The company began implementation of its EMS by carrying out an Life Cycle Assessment on its

operation. Based on this analysis, a number of key areas were targeted for reform:

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• Paper and ink: The most important raw material for the company is paper. The company

introduced a ―Forest Use Standard‖ for its suppliers, reduced the weight of paper and

includes approximately 66% recycled paper content. These actions save 1,400 tons of

paper and 11 tons of aluminum per year.

• Rather than disposing of coloured ink residues, the company uses the residues to make

black or white ink, enabling approximately 13 tons of colour paint to be recycled, and,

therefore, saving an equivalent to 65,000DM per year (an amortisation of the investment

in about 1.4 years).

• Water and waste water: A new machine for waste water treatment reduced the amount of

waste water by 80% (amortisation 4 years).

• Energy use: A new combined power-heat plant (1 MW electricity) which produced less

emissions was installed in a Berlin factory. This plant reduced energy costs by

approximately 850,000DM per year. The investment was approximately 5,000,000DM

(amortisation of about six years).

• Water treatment costs: The cleaning of print machines was changed. Ultra-sound

treatment is now used instead of detergent, reducing costs for purchase of detergent by

90%. In one plant in Hamburg, galvanic sludge is dried reducing the quantity of sludge

by 50%. The investment was amortised over 2.4 years.

WHO'S USING ISO 14001?

ISO 14001 is certainly a global phenomenon, with registrations in over 110 of the world's

nations. However, some regions of the world have been quicker to adopt the standard than

others. Organizations in Europe and Asia have been the most aggressive in pursuing ISO 14001

registration so far, although there are registrations on every continent except Antarctica. Of the

almost 41,000 registrations reported as of June 2002:

47% were in Europe

41% were in the Asia-Pacific region

8% were in North America

2% were in South America

1% were in Africa

1% were in north and west Asia (Russia and the Middle East region)

ISO 14001 is in widespread use throughout the world, but the drivers and motivations for

using and registering to ISO 14001 are quite different from one region to the next. These

differences are based on the unique culture, economic situation, and environmental history of

each region. Some significant regional differences are highlighted below.

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EFFECTS OF ISO 14000 STANDARDS ON BUSINESSES

The ISO 14000 standards are designed to apply to all businesses and industries – large and small

– and service industries, as well as government agencies. Businesses serving an international

market either directly or indirectly will be the first to be affected. While businesses can expect

Japanese and European businesses to lead in requiring suppliers to be ISO 14001 certified, even

the U.S. Department of Energy is investigating where to require certification by certain

contractors. Because of its universal applicability, the ISO 14000 series has the potential for

much broader acceptance and adherence than the ISO 9000 quality standards.

BENEFITS OF ISO 14000

The ISO 14000 standards are practical tools for organizations who are not satisfied with mere

compliance with legislation – which may be perceived as a cost of doing business. They are

useful tools for proactive organizations who understand that implementing a strategic approach

can bring reurn on investment in environmental- related measures

The systematic ISO 14001:2004 approach requires the organization to take a hard look at all

areas where its activities have an environmental impact. A properly designed ISO 14001:2004

Environmental Management System (EMS) allows efficient identification of opportunities for

cost savings. It can trigger procedural and/or technological changes that reduce the total cost of a

product or improve its value. Some of the benefits of implementing an ISO 14000 Environmental

Management System (EMS) in accordance with the ISO 14000 standards include:

1. Operational Benefits

Efficiency, discipline and operational integration with ISO 9000

Greater employee involvement in business operations with a more motivated workforce

Easier to obtain operational permits and authorizations

Assists in developing and transferring technology within the company

Helps reduce pollution

Fewer operating costs

Savings from safer workplace conditions

Reduction of costs associated with emissions, discharges, waste handling, transport &

disposal

Improvements in the product as a result of process changes

Safer products

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2. Environmental Benefits

Minimizes hazardous and non-hazardous waste

Conserves natural resources - electricity, gas, space and water with resultant cost savings

Prevents pollution and reduces wastage

3.Marketing Benefits

Demonstrates to customers that the firm has met environmental expectations

Meets potential national and international government purchasing requirements

Delivers profits from marketing "green" products

Provides a competitive marketing tool

Improves international competitiveness

4. Financial Benefits

Improves the organization‘s relationship with insurance companies

Elimination of costs associated with conformance to conflicting national standards

Process cost savings by reduction of material and energy input

Satisfying investor / shareholder criteria

Helps reduce liability and risk

Improved access to capital

Other benefits

There are a number of benefits to organisations for adopting ISO 14000. These include

(Goodman,

1998):

• Management of Change in Supply: Implementation of an EMS encourages checking

whether suppliers will be able to supply products in the long-term that meet changes

brought about by consumer and regulatory ESD pressures. As well, it causes them to

focus on their materials use improvement.

• Improved Image: With increasing awareness of environmental issues, it is becoming

more likely that environmental credentials will play a part in customer loyalty.

Environmental aspects are now commonly being incorporated in labelling and packaging.

• Employee Motivation: The implementation of an EMS in an organisation is symbolic of

caring for the environment and can lead to improved employee morale and motivation,

with its flow-on economic benefits.

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The ISO 14001 standard: a useful tool for a differentiation strategy

On the intermediate market (business to business), the agents of the food chain have more

expertise than final consumers (Grolleau, 2000b), enabling them to understand the real

implications of an ISO 14001 certification. Thus, the ISO 14001 certification could at the end

become selection criteria of agricultural suppliers. For example, according to Wall and al.

(1999), in the case of Sweden, "a number of certifications have been carried out because

expectations are high for the food service/retailers (Mac Donald's) to start making demands". In

their report to the French Minister of the Environment, Pujol and Dron (1998, p. 433) say that

"farmers are currently strongly urged by their customers to involve themselves in this way,

knowing that farmers in others countries conform themselves to it".

Moreover, when marketing eco-labeled products,12 food processors and distributors should have

to prove that their raw materials, in this case, farming products, really come from

environmentally friendly production systems. In this perspective, "the ISO 14001 certification

could constitute a reliable means" to provide this guarantee (Wall, 1997b).

On the final market, the product represents one of the main informational vehicles for the

consumer.Nevertheless, differentiation of products coming from ISO 14001 certified farms is

especially complex, because the consumer cannot detect environmental characteristics Products

coming from certified farms do not necessarily have intrinsic characteristics higher than the

classical products. In some cases, the environmental differentiation of the farming process can

generate positive effects on these classical qualities i.e. lower pesticides and heavy metals

contents. On the other hand, an ISO 14001 certified farm can inherit a polluted environment.

This situation can lead to produce whose quality level doesn't correspond to the "green image"

the consumer expects. An environmental food product differentiation is strongly based on a

process differentiation. The relation between ISO 14001 certification of farms and eco-labelled

food products is particularly complex and ambiguous. Moreover, the French world of official

and non-official quality signs, is often unknown by the consumers. The consumers can not

always understand the difference between what the products claim and their real meanings.

Public authorities do not want to destabilize this precarious equilibrium by introducing a new

sign, whose message concerning environmental impacts of the production system, could be not

well understood by consumers. In another way, this lack of official sign based on a credible

referential is an opportunity for marketing allegations without real environmental significance.

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Linkages between ISO 9000 and ISO 14001

INDIAN CONTEXT

The response and adoption of Indian firms to ISO 14001

As in other Asian countries, the response of firms in India to ISO 14000 has been enthusiastic. In

India the largest number of certified firms is private Indian firms. Public Sector undertakings

(PSUs), which are resource based infrastructure plants, also form a high proportion of certified

firms. Transnational Corporations (TNCs) and their affiliates have been slow to take up

certification. Most Indian firms and

TNCs sought certification for improving their corporate image. Joint venture firms (JVs) have by

and large worked towards certification collaboratively. Public Sector Units (PSUs) also are

pursuing certification actively. Most PSUs have got all or most their units certified in rapid

succession as a result of the clearly visible and perceived benefits of a structured response to

environmental issues through EMS.

Difficulties encountered by firms in India

The most common difficulty was defining the full range of environmental aspects, and defining a

methodology for their impacts. Some firms had difficulties setting realistic and meaningful

targets. Some firms reported difficulties finding access to necessary external resources.

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Documentation and document control were not identified as impediments to ISO 14001

implementation by those organizations who had an ISO 9000 certificate. SMEs and those large-

scale enterprises which were not ISO 9000 certified found difficulty in documentation process.

Some firms found it difficult to identify end-of-pipe technology, as well as to implement

necessary monitoring and measurement processes.

Other difficulties include: identifying key personnel for EMS responsibility; attaining regulatory

compliance gaps in emergency response plans; carrying out an initial environmental review.

GAP ANALYSIS

It is critical to compare the organization's existing environmental management systems, if there

is one - with the requirements of the standard (ISO 14001) to see where you start the

implementation process by filling the gap. To do so it is necessary to device a questioner such as

the statements given below that address the requirement of the standard. By answering to each of

the statements in number (0=none 1=some 2=about half 3=most 4=all) to represent the degree

your company has accomplished each statement.

Statement 1: Environmental Policy

An environmental policy has been defined by top management that includes the following:

• It is appropriate for the nature, scale and environmental impacts of the company's

activities, products, and services.

• It includes a commitment to continual improvement in the prevention of pollution.

• It includes a commitment to comply with relevant environmental legislation, regulations,

and requirements.

• It provides a framework for setting and reviewing environmental objectives and targets.

• It is documented, implemented, and maintained.

• It has been communicated to all employees.

• It is available to the public.

Statement 2: Environmental Aspects

• A procedure exists to identify environmental aspects and determine which have

significant impacts on the environment.

• Significant aspects are considered when setting environmental objectives.

• This information is kept up-to-date.

Statement 3: Legal and Other Requirements

• A procedure exists to identify and have access to legal and other requirements pertaining

to the environmental aspects.

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Statement 4: Objectives and Targets

• These have been established at each relevant function and level.

• Legal and other requirements were considered in establishing them.

• Significant environmental impacts were considered in establishing them.

• Technological options were considered in establishing them.

• Financial, operational and business requirements were considered in establishing them.

• The views of interested parties were considered in establishing them.

• They are consistent with the environmental policy.

Statement 5: Environmental Management Programs

An environmental management program for achieving objectives and targets has been

established and includes:

• Designation of responsibility for achieving objectives and targets at each relevant

function and level of the company.

• The means and time-frame for accomplishment.

• The program applies to new developments, new or modified activities, products, and

services.

Statement 6: Structure and Responsibility

• Roles, responsibilities, and authorities are defined, documented, and communicated.

• Resources are provided that are essential to the implementation and operation of the

environmental management system.

• A specific management representative (one or more) has been appointed by top

management with defined roles, responsibility, and authority for:

• Establishing, implementing, and maintaining the EMS.

• Reporting on the performance of the EMS to top management.

Statement 7: Training, Awareness, and Competence

• Training needs are identified and all personnel whose work may create a significant

impact upon the environment have received appropriate training.

• Procedures are established and maintained to make appropriate employees aware of:

• The importance of conformance with environmental policy and procedures and the

requirements of the EMS.

• The significant environmental impacts of their work activities and environmental benefits

of improved personal performance.

• Their roles and responsibilities in achieving: conformance with environmental policy,

procedures, and EMS.

• The potential consequences of departure from specified operating procedures.

• Personnel performing tasks which can cause significant environmental impacts are

competent.

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Statement 8: Communication

The company has established and maintains procedures for:

• Internal communications among levels and functions.

• Receiving, documenting, and responding to relevant communication from external

interested parties.

• The company has considered processes for external communication on its significant

environmental aspects and recorded its decision.

Statement 9: EMS Documentation

• Information describing the core elements of the EMS and their interaction has been

established and maintained.

• Information providing directions to related documentation has been established and

maintained.

Statement 10: Document Control

A procedure has been established and maintained for controlling documents to ensure that:

• They can be located.

• They are periodically reviewed, revised, and approved by authorized personnel.

• Current versions are available at all appropriate locations.

• Obsolete documents are promptly removed.

• Obsolete documents retained for preservation purposes are identified as such.

• Documents are legible, dated, readily identifiable, maintained, and retained.

• Procedures exist and are maintained for creation and modification of documents.

Statement 11: Emergency Preparedness and Response

• There are procedures for identifying the potential for and response to accidents and

emergency situations.

• There are procedures for preventing and mitigating the environmental impacts that may

be associated with emergencies.

• These are reviewed and revised as necessary.

• Procedures are periodically tested where practicable.

Statement 12: Monitoring and Measurement

• Procedures exist and are documented to regularly monitor and measure the key

characteristics of operations having a significant impact on the environment.

• This includes recording information to track performance, relevant operations controls,

and conformance with objectives and targets.

• Monitoring equipment is calibrated and maintained and records of the process retained.

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• A procedure exists for periodically evaluating compliance with legislation and

regulations.

Statement 13: Nonconformance and Corrective and Preventive Action

• Procedures exist and are maintained for defining responsibility and authority for

handling and investigating nonconformance and taking appropriate action.

• Corrective or preventive action is appropriate.

• Changes in procedures resulting from corrective and preventive action are

documented.

Statement 14: Records

• Procedures are established and maintained for the identification, maintenance, and

disposition of environmental records. These include training and audit results.

• Records are legible, identifiable, and traceable to the activity, product, or service

involved.

• Records are easily retrievable and protected from damage, deterioration, or loss.

• Retention times are established and recorded.

• Records demonstrate conformance to the standard.

Statement 14: EMS Audit

• A program and procedures for periodic EMS audits is established and maintained.

• The audits determine:

• Whether the EMS conforms to the ISO 14001 standard.

• Whether it has been properly implemented and maintained.

• The program provides information on the results of audits to management.

• Procedures cover the audit scope, frequency, and methods, and responsibilities and

requirements for conducting audits and reporting results.

Statement 15: Management Review

• Top management regularly reviews the EMS to ensure its suitability, adequacy, and

effectiveness. The review is documented.

• Information necessary for management to do this is collected.

• The review shall consider the need for changes to policy, objectives, and other elements

of the EMS resulting from audit results, changing conditions, and the commitment to

continual improvement.

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POTENTIAL PROBLEM AREAS THAT NEED CONSIDERATION IN

IMPLEMENTING EMS

According to SGS, an international certification Organization, the following have been the major

areas of nonconformance to the standard found in audits:

Establishing procedures for identifying environmental aspect (4.3.1),

Integrating the EMS into existing management system elements (4.4.1, 4.4.3, and 4.4.4),

Identifying appropriate operational controls (4.4.6), and procedures for identifying

problems and taking action to eliminate them (4.5.2).

Extra attention to these areas during EMS development and gap analysis can speed the

registration process. The biggest challenge and opportunity for success is to change the way a

company thinks about the environment. It must be seen as a business issue: what benefits does

the environment bring to the company and its customers? This is a change from reactive,

command and control thinking. This change in thinking leads to protection of the sources of

business prosperity.

ISO

There will be conflicts between environmental management and business operations.

Management must truly consider all sides with an eye to win-win solutions. Since most people

can sense when a "spin" is being given to a situation, rigorous honesty is required in the

communication of problems and solutions. ISO

Top management's commitment to ISO 14000 must include visible concern over environmental

issues and high standards for which people are held accountable. Most important is the

commitment of adequate financial, organizational, and technological resources. If the "walk"

doesn't match the "talk", credibility will be lost along with individual effort and results.

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CASE STUDY MILAN SCREW PRODUCTS

Background

Milan Screw Products is a small manufacturing firm located in southeastern Michigan that

employs 32 individuals. Milan Screw Products manufactures precision fittings for the fluid

power, automotive, and refrigeration industries, and is registered to the ISO 9002 quality

management system Standard. There are approximately 1,500 companies in the United States in

the screw-machine products industry. Most of these companies are family-owned and family-

managed, and typically have approximately 50 employees.

While there are generally few hazardous materials used in the screw-machine industry, there are

environmental issues associated with the containment of coolants and cutting oils, the

substitution of chlorinated solvents, and the disposal of waste oils. The most persistent

environmental challenge is the containment of cutting oil within production machines. Many

screw-machine shops have production equipment that was manufactured in the 1950s, which

may have leaky gearbox covers and inadequate oil splash guards. The cutting oils also create

cleaning and disposal issues (e.g., stained carpets; waste bins filled with saturated oil absorbents

swept from the shop floor; and liquid wastes from the solvents and soaps used in cleaning).

While many shops have simply accepted the oily film that soon coats everything from the light

fixtures to the floors, Milan Screw Products decided that it was going to improve the

management of its environmental issues. Top management recognized that a clear environmental

policy, objectives and targets, written procedures, training, and corrective action (elements

similar to its quality management system), would help them to proactively manage their

environmental practices. The motivation to implement an EMS was derived from the company‘s

desire to improve its environmental performance, and in light of the company‘s quality

management system experience, the EMS approach seemed to be the best way to achieve it.

Milan Screw Products was soon committed to implementing an environmental management

system.

EMS Implementation

One of the first steps in the implementation of the EMS at Milan Screw Products was the

establishment of a cross-functional environmental task group. Top management appointed five

representatives from production, support, and management. The environmental task group is

responsible for assuring continued regulatory compliance (including the submission of all

permits/forms to federal, state, and county environmental agencies), and improving the

company‘s environmental performance. Milan Screw Products found that participation of shop-

floor employees is essential to the successful implementation of an EMS because it encourages

their ownership of the process. Top management was pleased with the heightened environmental

awareness among task group members and their growing understanding of the company‘s

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environmental responsibilities. In addition, environmental compliance activities were soon

effectively managed by the environmental task group and would only require top management

review. While progress had been made, the organization was lacking a structure for its EMS

program and had no means to measure progress. In March 1995, Milan Screw Products joined

the EPA-sponsored EMS Demonstration Project at NSF International. One of the first steps in

the project was the self-assessment process. Milan Screw Products completed NSF‘s EMS Self-

Assessment Tool, which is a checklist that enables an organization to determine how its EMS

measures up against an EMS standard, such as ISO 14001. Milan Screw Products‘ score was

very low because they did not have a formal EMS in place. The score did not discourage Milan

Screw Products and the company set a goal for itself — complete EMS implementation by June

1996.

Policy

Milan Screw Products developed an environmental policy that includes a commitment to

regulatory compliance, continual improvement, and the prevention of pollution. The

environmental policy was modeled after the organization‘s quality policy, which was developed

with the help of a consultant.

Planning

In order to determine the company‘s environmental aspects, the environmental task group

members set up an easel and participated in a brainstorming session. The task group listed all of

the company‘s inputs (e.g. energy, water), outputs (e.g. oil mist, noise), and conversions (e.g.

steel bars to chips, and cutting oils to mist). The task group examined the company‘s purchases,

processes, and waste streams. The task group also identified the company‘s stakeholders. Some

of the stakeholders were interviewed so that the company could gain a better understanding of

their environmental concerns. These stakeholder concerns were added to the list of

environmental aspects. A neighbor reported that their only concern was that oil from the shop

could damage their lawn. A supplier‘s sales representative reported that the oil on his shoes was

a nuisance. Customers were pleased to learn that the company was implementing an EMS

because they want to be assured of continued production (fines imposed on a small company

could result in a shutdown). The task group also interviewed employees and some of their family

members. All in all, the environmental task group had done an excellent job at identifying their

environmental aspects. The task group then rated the probability of an environmental impact

occurring against the severity of the impact. They then grouped the environmental

aspects/impacts in general categories (e.g. oil-related problems). It soon became clear that the

company‘s primary objective was oil recovery. The top management at Milan Screw Products

had been contemplating the need for a new facility.

The identification of the company‘s environmental aspects/impacts provided additional

motivation for the development of a new facility. The environmental aspects/impacts that were

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identified and the company‘s EMS have played a role in determining how the new facility will

be built. The company will continue to perform oil recovery practices, but will not set numerical

targets until the new facility is complete. Milan Screw Products started its first EMS cycle with

reasonable objectives that focus on its manufacturing practices. Over time, the company will

continually improve its EMS, and hopes to include objectives such as the recycling of office

paper.

The environmental task group will continue to be responsible for keeping Milan Screw Products

fully in compliance. The company has found that its trade association has been a tremendous

help in keeping them abreast of environmental compliance issues.

Milan Screw Products intends to develop its environmental management program at its current

facility and will improve the EMS at the new facility. The new facility will help the company to

achieve its environmental objectives and targets.

Implementation and Operation

Milan Screw Products has found that the structure and responsibility requirements of the ISO

14001 Standard are easier to manage in a small company. Milan Screw Products has developed

six teams (each composed of individuals with similar job descriptions) for the quality

management system; the teams have been given more decision-making authority and have been

an effective element of the quality management system. These teams will help with

environmental issues over time. The environmental task group will continue to spearhead the

EMS program — the owner, plant manager, quality manager, safety manager, plant

supervisor/environmental coordinator, and a representative from production staff are actively

involved. The key to success in a small company appears to be the team approach, since there is

often no one that can be solely dedicated to managing environmental affairs.

Since finding the time to do employee training can be a challenging aspect of running a small

business, Milan Screw Products has scheduled training sessions a half hour before or after the

employees‘ normal shift. Their best success has been with ―brown bag‖ sessions where the

employees bring their lunches, listen to the training presentation, and remain ―on-the-clock‖ for

their lunch/training period. Milan Screw Products has also found that videotaping training

sessions can be helpful for new-hire training. The environmental task group has helped with

training by gathering training materials. The team approach that has been developed at Milan

Screw Products has been an effective means of fostering good internal communication

procedures. In addition, Milan Screw Products has gone beyond the requirements of the ISO

14001 Standard by soliciting the opinions of external interested parties. The company has found

that a good external communication program has resulted in a lot of benefits because it builds

trust. The company has been straightforward with its community about potential oil problems,

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and the community has been very supportive of their efforts and of their plans for a new facility.

The external communication program helped them identify some of their environmental aspects,

and has helped them to communicate with their customers. Milan Screw Products‘ customers

appreciate that it is an environmentally-responsible company that is a leader in its industry.

Since Milan Screw Products has a registered quality management system, they have a sound

document control program in place. As mentioned previously, a quality management system

consultant helped the company with their ISO 9002 implementation, and the document control

procedures for quality will be adapted where applicable for the EMS. Milan Screw Products is

still in the process of establishing its EMS documentation. As part of their brainstorming session,

the environmental task group also listed potential emergencies. The company used this

information when it reviewed its emergency preparedness and response procedures. The EMS

implementation process helped the company to consider possible areas of liability that it had

previously overlooked (e.g. a delivery truck leak).

Checking and Corrective Action

Milan Screw Products has made some preliminary calculations of some of its environmental

aspects. The new facility will facilitate the quantification of its environmental aspects and

impacts. The company intends to build on its quality management system corrective and

preventive action procedures to help them develop their EMS. In addition, the company intends

to utilize some of the lessons it has learned about data collection and monitoring and

measurement through its quality operating system and will apply these lessons to the EMS over

time.

Milan Screw Products has gained experience with management system audits through its quality

management system implementation. Top management has performed quality management

system audits with the help of an auditor training guide that their quality management system

consultant developed for their organization. The company has done inhouse auditor training with

the help of the guide and has used the auditor training guide for its EMS audits where applicable.

Top management and the plant supervisor/environmental coordinator have performed an EMS

audit, even though they have not yet fully implemented the ISO 14001 Standard.

Management Review

Milan Screw Products Management Review Board meets monthly. The company also performs

an annual review of its operations. A third-party (consultant) is used to verify the results of the

company‘s annual in-house review. The EMS is being incorporated in the management review

process of the company.

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The Milan Screw Products’ Experience

While Milan Screw Products has not completely implemented its EMS, it has made significant

progress over 1 ½ years. Due to the groundbreaking for the new facility in June 1996, the

organization had to shift its priorities to new construction (it is now hoping to completely

implement its EMS by April 1997). Top management at Milan Screw Products stated that

organizations that choose to implement an EMS should not get discouraged if the EMS

implementation needs to be set aside occasionally. You can start, stop, and resume your efforts

as needed — your aspects won‘t change unless you change your processes or products — and

any progress that you have made will still be there.

Milan Screw Products‘ top management believes that there are numerous potential benefits

associated with a successful EMS. Specifically, the company determined that an EMS could

improve employee retention, new hire selection, working conditions, and the perceptions of its

suppliers, lenders, customers, neighbors, and regulators. The EMS will also ease management

concerns that an environmental problem could arise from simple ignorance or lack of training.

The company‘s top management has stated that it may be difficult to perform a cost/benefit

analysis on the value of EMS implementation because several of the potential benefits are

intangible and cannot be given a monetary value. Milan Screw Products ‗proactive

environmental program has improved its stature and fostered communication with regulatory

agencies. Top management also believes that the company will benefit from being one of the

first in their industry to successfully implement an EMS — it may encourage their customers to

perceive the company as being more innovative, more responsible, and perhaps more desirable

than their competitors. Top management has reported that it is impossible to tally citations that

are not written, fines that are not levied, nor lawsuits that are not filed. Milan Screw Products‘

top management has also stated that many of the benefits of an EMS cannot be anticipated

beforehand, and that an organization will discover them as pleasant surprises at some point after

implementation.

To date, the biggest challenge that Milan Screw Products has encountered while implementing

an EMS has been allocating the human resources to the EMS project while production demands

are high. The company has also had to overcome old practices by explaining the rationale behind

its desire to successfully implement an EMS. Milan Screw Products has not calculated the costs

of EMS implementation to date. Top management reports that it is difficult to attribute

costs/benefits at this stage of EMS implementation, particularly since the company is in a

transition phase due to the new construction. While it is too early to quantify costs and benefits,

top management is confident that the benefits will outweigh the costs — early projections of

their oil recovery savings at the new facility are estimated to be $20,000 per year

.

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Milan Screw Products will integrate its ISO 9002 quality management system with its ISO 14001

EMS. The company is developing one manual that will incorporate both quality and

environmental management system elements. For example, the organization has a quality policy

on white paper and its environmental policy on blue paper on facing pages. The documents also

refer to one another where appropriate. The document control programs for both systems will be

fully integrated as well. In addition, the audit function will be integrated once auditor training for

the EMS is complete.

Top management at Milan Screw Products has not determined if the company will pursue EMS

registration in the future. Top management has stated that it will depend on factors such as costs

and customer demand. The company intends to completely implement its EMS and will evaluate

the need for registration next year. Top management has stated that obtaining EMS registration

would be a great satisfaction and it may improve their customers‘ perception of the company, but

it has not determined whether or not it can justify the costs. Milan Screw Products encourages

other small companies to implement an EMS because it believes that small companies may not

have sufficient resources to mitigate environmental problems. An EMS can help a small or

medium-sized organization prevent environmental problems which may keep a small company

in business. Top management at Milan Screw Products has stated that an EMS enables an

organization to look at its business from another perspective. Organizations have considered

quality, safety, etc., as integral parts of their business and should look at their business from the

environmental perspective as well. All of the various perspectives result in greater opportunities

for improving the organization as a whole.

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CONCLUSION

The benefits of ISO 14001 have been realized by organizations everywhere. Firms with

established EMSs and some with headquarter driven customized EMS have adopted this

standard. ISO 14001 is an ideal catalyst to break the inertia in firms that do not have an EMS and

have not advanced over their existing EMS. The immediate operational benefits of ISO 14001

include improved efficiency in resource utilization, greening of supply chain, and improved

corporate commitment. The largest benefit perceived by firm‘s visa-vis the overall industrial

environment is the realization of the importance of the greening of the suppliers. Almost all

firms have reported the benefits of the ISO 14001 like greater cost savings, resource

conservation, and improved corporate image.

In many countries for example in India few initiatives have been taken by industrial

organisations to promote ISO 14000 proactively. The government and industrial associations

have now started focusing on small and medium scale enterprises, which account for a large

percentage of India's exports. Many firms have developed innovative measures to further the

benefits of the ISO 14001 process. Many firms are considering Greening of supply chain through

vendor development programs and defining environmental specification for procurement and

sourcing. Vendor development and procurement of services and raw materials both domestically

and internationally has been initiated in a few firms already. A major auto manufacturer has

selected its key vendors to create a viable model for other vendors to follow. An increasing trend

in firms is that they have graduated from a 'wait and watch' policy to actively pursuing

certification. Gap analysis has confirmed that by changing current EMS conform to ISO 14001

standards give positive benefits. The initiative of regulatory bodies like EPAs and Pollution

Control Board in promoting the ISO 14000 protocol through various programs will make the

organizations aware of the various perspectives of the protocol.

However, to remain effective and ensure that international standards benefit Communities, we

need a comprehensive standards strategy that sets out clear directions for continuous

improvement and involves the broadest range of standardization players. This puts forward a

broad vision and over-arching strategic directions designed to standardize activities in the

dynamic international and domestic environment ahead. There are sound economic and business

reasons for developing Environmental Management Systems. Some companies still fight

environmental standards that actually could enhance their competitiveness, but there will always

be competitors who take a pro-active stance on environmental issues and these are the companies

that will win in the 21stcentury. Policy-makers, organizations and managers need to stop

clinging to the old mind-set, which can cause heavy penalties in the longer term. They must start

to recognize that environmental improvement is an economic and competitive opportunity, and

that ISO 14001 can be an important element in modern business survival.

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REFERENCES

1. ISO 14000 a Guide to the New Environmental Management Standards.

2. http://14000store.com/downloads/14000-Family.pdf

3. http://www.qsae.org/web_en/pdf/ISO14000Concepts.pdf

4. http://www.ellipson.com/files/ebooks/ISO14000.pdf

5. http://www.quality.co.uk/eco/isolist.htm

6. http://www.simplyquality.org/faq05.htm

7. http://www.ingenieroambiental.com/4030/02897.pdf

8. http://www.agsm.edu.au/bobm/teaching/SSS/Profit_Foundation_Reports/MATERIALS_

INSTITUTE.pdf

9. http://www.iso.org/iso/14001_decade_ims3_07.pdf

10. http://www.trst.com/iso1-frame.htm

11. http://www.kcg.com.sg/benefits- iso14000.html

12. http://iso14001.homestead.com/ISO14000World.html

13. Environmental Management Systems:

An Implementation Guide for Small and Medium-Sized Organizations, Philip J.

Stapleton.