Management System Maturity: An Indicator of Sustainable...

An examination of four automotive manufacturers’ management systems as an

indicator for the sector’s potential to reach aggressive EHS&S goals and develop

or maintain sustainable production systems.

Management System Maturity:An Indicator of Sustainable Production

and EHS&S Goal Attainmentby Dawn M. Hess, Sarah Dobie, Michael McGuinness, Jr., Lindsey Rodbourn, and Alicia Ball

EHS&S Management System Maturity by Dawn Hess et al.

em • The Magazine for Environmental Managers • A&WMA • August 2018



Management systems are becoming increasingly commonfor handling the environment, health, safety, and sustainabil-ity (EHS&S) matters of an organization. However, not allmanagement systems are created equally. More maturemanagement systems indicate a greater ability by an organi-zation to proactively manage EHS&S impacts, improve socialjustice performance, as well as develop and maintain sustain-able production systems. Unfortunately, each industry sectorhas its own unique management system format, makingmeasurement of, and comparison between, industry sectorsdifficult. This article presents a novel way to empirically measure the maturity of the EHS&S management systems of a sector by examining four automotive manufacturers' systems as an indicator for the sector’s potential to reach aggressive EHS&S goals and develop or maintain sustainableproduction systems.

In order to do so, publically available EHS&S information forfour major automotive companies was reviewed, and for purposes of this work, assumed to represent the automobilesector as a whole: Ford Motor Company (Ford), General Mo-tors (GM), Honda Motor Company (Honda), and ToyotaMotor Corporation (Toyota). Data reviewed included EHS&Spolicies, indicators for demonstration of top managementcommitment, activities, performance measurement and evalu-ation, demonstration of continuous improvement, collabora-tion with external organizations and degree of regulatorycompliance. This information was used to identify and visuallyconstruct the relationship between the various components of the automotive sector’s EHS&S management system byadapting the EHS&S management system map developed by Schneider et al.1 The EHS&S management system maprepresenting the automotive sector is shown in Figure 1.

Figure 1. EHS&S Management System Map for the Automotive Sector.



The EHS&S map is divided into three sections. Phase I is theplanning phase and includes the vision and policy for the organization. It is in Phase I where the external and internalcontext have the ability to influence the second phase. Phase II is where the ideas from Phase I are implemented—it is the level of action. Then in Phase III, results from PhaseII are checked and actions are taken to drive continual improvement. Phase III feeds back into Phase I as the process is cyclical and represents with more detail the Plan-Do-Check-Act (PDCA) cycle of continual improvement.

Construction of the management system map for the auto-motive sector system was the first step toward evaluating the

maturity of the sector’s EHS&S management system. Next, afive-level maturity indictor framework was created specificallyfor the automotive industry. The framework incorporated var-ious management system components, as well as the degreeof each organization’s regulatory compliance. As a Level 1 in-dicator, regulatory compliance is considered a significant partof a system’s maturity. While an organization may have manycomponents of a management system in place, if there arestill major instance of non-compliance then the existing sys-tem is not effective. It is important to note that a review ofthe four organization’s representing the automotive sector forthis research found one of the most commonly cited regula-tory violations was that of the U.S. Clean Air Act.

Figure 2. Laddered EHS&S Management System Maturity Indicator.

The maturity indicator framework developed for this research was based upon a sustainable production tool developed by the Lowell Center for Sustainable Production(LCSP). The LCSP tool focuses on indicators that trackperformance. According to Veleva and Ellenbecker (2001),2

“the five levels of the framework represent the five mainsteps in moving toward more sophisticated indicators of sustainable production.” The laddered maturity indicatorframework is shown in Figure 2.

For this research, the LCSP-based tool was then combinedwith an additional sustainability program qualitative andquantitative indicator methodology developed from two further management system approaches.3,4 Consequently,the resulting framework combined existing approaches forEHS&S management systems, as well as incorporated indicators specific to the automotive sector. Consisting of

a combination of lagging and leading indicators, thesemanagement system components within the framework were then used as proxies for measuring the maturity of the automotive sector management system.

Maturity levels were arrived at quantitatively as each levelwithin the framework was given a weight of one, and eachindicator was given an equal weighting within each maturitylevel. For example, within the framework, Level 1 has 11 indicators, so each indicator within Level 1 is worth 0.09points. Table 1 has been color-coded to visually indicate thenumerical value assigned to each indicator. The highest possible point is 1 for each indicator scored. Indicators with a score of 0.75 were coded yellow, 0.5 were coded orange,and 0.25 were a darker orange with a score of zero codedred. Table 1 shows the complete indicator framework used toassess EHS&S management system maturity.



Table 1. EHS&S management system maturity indicator framework for the automotive sector.

Level 1 Ford GM Honda Toyota Average

Policy includes focus on facility EHS compliance 1 1 1 1 1

Top management commitment 1 1 1 1 1

Average $ environmental violations past 5 years 0.5 0.5 0.25 0.75 0.5

Average $ H&S violations past 5 years 0.5 0.5 0.5 0.5 0.5

# of violations for EHS, consumer safety, labor 0 1 1 1 0.75

$ of violations for EHS, consumer safety, labor 0 0 0 0 0

Injury and illness rate 1 1 1 1 1

# of near misses 1 0 0 0 0.25

Total energy consumption 1 1 1 1 1

Total water consumption 1 1 1 1 1

Total waste produced 1 1 1 1 1

Total GHG emissions 1 1 1 1 1

Total VOC emissions 1 1 0 0 0.5

Weighted Average 0.77 0.77 0.67 0.71 0.73


Policy focuses on improving facility performance 1 1 1 1 1

Short-term / interim goals for facility performance 1 1 1 1 1

Reduction in # of violations 0 0 0 1 0.25

Reduction in $ of violations 0 0 0 0 0

Energy intensity 1 1 0 1 0.75

% breakdown of energy sources 0 1 0 1 0.5

Water intensity 1 1 1 1 1

% breakdown of water sources 0 1 0 1 0.5

Waste intensity 1 1 0 1 0.75

Waste diversion rate 0 0 0 1 0.25

GHG intensity 1 1 0 1 0.75

% of GHG emissions by source 0 1 1 1 0.75

VOC intensity 0 1 0 1 0.5



Policy focuses on minimizing environmental 1 1 1 1 1 and social Impacts of facility

Long-term goals set for facility performance 0 0 1 1 0.5

Engages in voluntary standard for EHS&S 1 1 1 1 1

Audit system for evaluating performance 1 1 1 1 1

Reduction in energy consumption / intensity 1 1 1 1 1

Increase in renewable energy 0 1 0 0 0.25

Reduction in water consumption / intensity 1 1 1 1 1

Increase in water reuse/recycling 0 1 0 1 0.5

Decrease in waste production / intensity 1 1 1 1 1

Increase in waste diversion rate 0 1 0 1 0.5

Decrease in GHG emissions / intensity 1 1 1 1 1




Using this framework, the maturity of the four individual automotive companies’ EHS&S management systems wasevaluated and then the maturity of the sector was determinedbased on the average EHS&S management system maturityof the four organizations individually. The quantitative evaluation of the four major automotive companies yieldedan average EHS&S management system maturity of 3.18 out of a possible total score of 5. This average represents a range of maturity scores from a low of 2.53 to a high of3.63. Table 2 details the results of the EHS&S managementsystem maturity analysis, while Figure 3 offers a visual representation of the total maturity levels for each organiza-tion and the average for the automotive sector.

To achieve a Level 5 score, an organization must showachievement of sustainable production systems. From thisreview and an average EHS&S management system maturityscore of 3.16, it is clear that there is room for improvementin the management of EHS&S issues in the automotive sector. Fortunately, this review also found that the sector hasdemonstrated a desire to move beyond mere compliance, represented by an average score greater than 1. The highestscores were found in Level 3, represented by actions to minimize environmental and societal impacts of operations.Within Level 3, it was found that all four organizations conduct self-audits and engage in voluntary EHS&S management standards and specific activities to improve


Policy focuses on EHS&S performance of supply 1 1 1 1 1 chain / lifecycle of products

Interim / long-term performance goals for supply 1 1 1 1 1 chain / lifecycle of products

Track EHS&S performance of suppliers 0.5 0.75 0.5 0.5 0.56

# suppliers audited /assessed for EHS&S 1 1 0 1 0.75

# suppliers trained in sustainability management 1 0 0 0 0.25

R&D spend for improving environmental 0 0 1 1 0.5 performance of automobiles

R&D spend for improving automobile safety 0 0 0 1 0.25

philanthropic contributions 1 1 1 1 1

# of volunteer hours 1 1 0 0 0.5

# of employees that volunteer 0 1 1 0.25 0.56

Average fuel economy of vehicles 1 0 0 1 0.5

# of employees given health screenings 0 0 0 1 0.25

# of safety recalls for vehicles 1 1 0.5 0 0.63



Proactive policy focuses on a positive impact 0 0 1 0.5 0.38 on the environment and society

Long-term goals for environmental sustainability 0 0 1 1 0.5 & corporate citizenship, including focus on suppliers / lifecycle of products

Performed materiality assessment 1 1 1 1 1

Collects and incorporates stakeholder feedback 1 1 1 1 1 into management system

Increase in $ for philanthropic contributions 1 0 0 0 0.25

Increase in volunteer hours 0 0 0 0 0

% of employees that volunteer 0 0 0 0 0

Reduction in safety recalls 0 1 0 0 0.25

Increase in average fuel economy of vehicles 1 1 0 1 0.75

% of employees given health screenings 0 0 0 0 0

% of suppliers audited /assessed for EHS&S 1 1 0 0 0.5


Maturity Score 2.98 3.5 2.53 3.63 3.16

Table 1. EHS&S management system maturity indicator framework for the automotive sector.

Cont.



performance. Specifically, Toyota has expressed an interestin having a zero-emissions vehicle;5 however, none of the organizations reviewed have metrics to actually trackprogress in achieving this type of goal.

The automotive sector must continue to build upon the gains they have made in EHS&S management and sustainable practices. The demand for transportation will continue to grow and the automotive sector must accept agreater leadership role in responsible business practices thatare proportionate to the impacts of their operations andproducts. By setting stretch goals, the automotive sector ismaking a public statement and moving toward leadershipand acceptance of EHS&S issues. In 2017, GM reportedly

spent US$7.3 billion and Toyota spent approximately US$9.3billion in research and development.6 Honda7 states that it isstriving for a “sustainable society” by increasing their sales ofelectric vehicles. Both Ford8,9 and GM10 are making effortstoward reducing the number of facility sites that send waste to landfill.

However, to achieve the aggressive EHS&S goals set bythe automotive sector organizations reviewed, these organizations must fully embrace their PDCA-based management systems, as depicted in the EHS&S Management System map in Figure 1. For example, loftygoals in the planning phase are not enough to positively impact the generation of greenhouse gases and the

Table 2. Summary results of EHS&S maturity analysis.

EHS&S Maturity Level (1.0 weighted average) Ford GM Honda Toyota Average

1 0.77 0.77 0.67 0.71 0.73

2 0.46 0.77 0.31 0.92 0.62

3 0.64 0.91 0.73 0.91 0.80

4 0.65 0.60 0.46 0.67 0.60

5 0.45 0.45 0.36 0.41 0.42

Total Maturity (possible 5.00) 2.98 3.50 2.53 3.63 3.16

Figure 3. EHS&S Management Maturity Level for Automotive Sector.



automotive sector is too important a contributor of green-house gases to accept this level of management system maturity performance.11 Automotive manufacturers mustmove toward Level 5 with sustainable production systems.This review of the organizations in the automotive sector

found that EHS&S management systems are in place andwell-structured; however, major focus, including financial support, must be directed toward Part II, Implementation,and Part III, Checking and Continual Improvement phase,where the Do-Check-Act of the PDCA cycle occurs. em

Dr. Dawn M. Hess is Director of Enterprise Risk Management and Environmental, Health, and Safety at Finger Lakes Community College, Canandaigua, NY; and Adjunct Professor of Environmental Management and Safety at Rochester Institute of Technology.Sarah Dobie, Michael McGuinness Jr., Lindsey Rodbourn, and Alicia Ball are all graduate students at Rochester Institute of Technology. E-mail: [email protected].

References1. Schneider, J.; Romanowski, C.; Raj, R.; Mishra, S.; Alenka, J.; Wang, K. Mapping a Community Resilience Management System: Building Operational Knowledge. Presented at the IEEE Symposium on Technologies for Homeland Security, May 2016.2. Velva, V.; Ellenbecker, M. Indicators of Sustainable Production: Framework and Methodology; Journal of Cleaner Production 2001, 9 (6), 519-549.3. Dobie, S.; Schneider, J. Measuring the Impact of Organizational Efforts on Community Sustainability and Resilience. Presented at the A&WMA Specialty Conference, Finding Common Ground of Climate Change Mitigation and Adaptation, 2017.4. Dobie, S.; Schneider, J. Development of a Process Improvement Matrix to Measure Community Level Sustainability and Resilience: A Collaborative Case Study of Rochester, NY, USA. Presented at the IEEE Symposium on Technologies for Homeland Security, 2017.5. Toyota Motor Corporation. Toyota Environmental Challenge 2050. See http://www.toyota-global.com/sustainability/environment/challenge2050/ [Online] (accessed May 16, 2018).6. Statista. GM’s Research and Development Expenditures from FY 2015 to FY 2017 (in billion U.S. dollars). See https://www.statista.com/statistics/260866/ research-and-development-expenditures-of-general-motors/ [Online] (accessed May 15, 2018).7. Honda Motor Company. Honda Sustainability Report 2017. See http://world.honda.com/sustainability/report/pdf/2017/Honda-SR-2017-en-024-042.pdf [Online] (accessed March 5, 2018).8. Ford Motor Company. Energy Use and Greenhouse Gas Emissions. Sustainability Report 2016/2017. See https://corporate.ford.com/microsites/sustainability- report-2016-17/operations/emissions/index.html [Online] (accessed April 30, 2018).9. Ford Motor Company. Waste Reduction. Sustainability Report 2016/2017. See https://corporate.ford.com/microsites/sustainability-report-2016-17/operations/ waste/index.html [Online] (accessed April 29, 2018).10. General Motors. 2016 Sustainability Report. See http://www.gmsustainability.com/measure/operations.html [Online] (accessed April 29, 2018).11. U.S. Environmental Protection Agency. Sources of Greenhouse Gas Emissions, 2011. See https://www.epa.gov/ghgemissions/sources-greenhouse-gas- emissions [Online] (accessed May 11, 2011).

Management System Maturity: An Indicator of Sustainable...

Documents

Transcript of Management System Maturity: An Indicator of Sustainable...