Published on May 14, 2018 by Melita Elmore and Kimberly Rodriguez
GreenBiz ran an article from the Strategic Sourceror entitled: “Hiring an EHS manager could help clean up your supply chain.” That the article detailed how partnerships between Environment, Health and Safety (EHS) management and supply chain teams could solve many challenges faced today by many large global companies.
How does this synergy work?
EHS is a vital and often overlooked service within companies. Due to the myriad of environmental and worker health and safety requirements, EHS managers and staff are charged with the development and implementation of all the EHS programs in the company. They are not only responsible for all employees’ safety at work and the use of proper safeguards, but are also in charge of the company’s compliance with all environmental standards and regulations. Unfortunately, this important responsibility is often siloed in a company or, even worse, seen as simply a necessary expense and not part of the overall business strategy. Many companies have found that this sentiment has led to unnecessary costs at best, and reactive disasters at worst.
Another silo that intersects with social and environmental risk is procurement. Procurement managers are responsible for obtaining materials, goods, and services at the lowest reasonable costs as well as for ensuring that the supplier or vendor reliably provides high-quality goods, and meets all regulatory requirements for human resources within factories. If procurement teams are not on top of their jobs, a company’s production output may be adversely affected so that schedules are missed, costs rise for alternative logistical support, and employees are negatively impacted. Yet, like with EHS, procurement teams may be isolated within a company and have limited contact with other business units.
How do these functions work together?
If EHS compliance is compromised, or if the supply chain procurement process goes wrong at any point— either of those two things could damage and harm an organization; if both things occur, it could be disastrous.
Another area that both EHS Managers and increasingly supply chain teams are responsible for is a company’s Corporate Social Responsibility (CSR) program, specifically in legal EHS compliance as well as for ethical and sustainable procurement. A company with a CSR program is committed to embracing business practices that value and account for more than just financial results. Further, today’s consumers and shareholders know that a commitment to sustainability applies not only to an organization’s bottom line, but to its commitment to responsible EHS and supply chain operations.
Although both EHS and supply chain teams have roles to further their company’s mission and values, the lack of information on both sides about the other’s responsibilities may negatively impact the organization’s goal of risk reduction.
Our experience shows that companies spanning across various geographic, political, economic, commercial, and social boundaries need to develop cross-functional relationships to support critical operations, such as supply chain and EHS. These synergistic partnerships are conducive to the company protecting its workforce and continue engaging its employees.
Integration of these two functions also allow for integration with company systems to build organizational resilience. It demonstrates commitment to sustainability and social responsibility, and allows for leadership to have assurance that both critical programs are functioning correctly. Integration insures that ethical supply chain obligations are met, EHS legal compliance is adhered to, and that social responsibility and sustainability goals are being reached. By working in tandem with supply chain and EHS, organizations are able to achieve local, responsive support from internal and external stakeholders, and help increase the knowledge of national and provincial requirements and cultural considerations.
Bringing the two functions together
A proven environmental, health and safety risk assessment process, both within an organization’s supply chain and its day to day operations, that includes pragmatic program development, supply chain intelligence, training and knowledge transfer internally as well as to external stakeholders significantly raises the level of safety, health, and environmental performance throughout a company’s global footprint. ¬
BSI helps global companies manage risks and improve business continuity through the strengthening of a responsible supply chain, the development and implementation of environment, health and safety (EHS) compliance, and the facilitation, development, and leadership of corporate social responsibility programs. For over 25 years our experts have improved EHS performance within our clients’ supply chains, both domestically and around the globe.