INTEGRATION OF THE ENVIRONMENTAL
MANAGEMENT SYSTEM INTO OTHER BUSINESS
OPERATIONS SYSTEMS
Jenni K. Lintala
*and Josu A. Takala
Department of Production
University of Vaasa
Wolffintie (65100), Finland
ABSTRACT
The core goal of the case study in heavy process industry was to define how to create an effective and efficient integration in the business operations systems including quality, environmental and safety operations. A great challenge was to find out the basis for the integration and to help to decide the actions needed. A company can have only one management system for all the business operations. By the interviews information was gathered both about the current situation and the viewpoints for integration. The aim of Analytic Hierarchy Process (AHP) method was to depict the basic principles in the integration and the conditions for its implementation. By benchmarking it was concentrated on analyzing how the integration has been carried out earlier, and on analyzing Best Practices based on CARMAN-operation model striving for developing working processes. The purpose was to find knowledge, advice and ideas to carry out the integration and to make it possible to take it into use. Finally, the operational model developed was verified by the weak market test which belongs to a constructive research approach in business sciences. When evaluating effects of organizational cultures it is important to understand deeply the differences between them. The company has to achieve benefits from the business with the common customer and still to ensure good quality in operations. The importance of continuous improvement in the change process was found out. It was also important to observe different interest groups e.g. in communications. The continuous improvement makes a good progress thanks to certification of the operational systems. It is remarkable that the personnel and management have to commit to the change process. For the commitment and secure communications the solution is training remarkable factor in the integration in our case, too. By the help of that we can diminish conflicts and reduce resistance to the changes needed.
Keywords: Business Operations System, Quality, Environmental, Occupational Health and
Safety Systems
1. INTRODUCTION
*
The case study handles the basic principles in the integration of the business operations system and the conditions for its implementation. A Business operations system is a documented management system of a company. The aim of the study was to solve how to implement a good and efficient integration. Used methods were Analytic Hierarchy Process (AHP)-analysis and benchmarking. The target in combining business operation system is to develop co-operation and compress togetherness between partners. The target is to work for entity and favor working and learning together. Best knowledge is favored in carrying out operation [13].
*
Corresponding author: [email protected]
The study was part of a project in Neste Oil Oyj whose plan is to create preparedness to integrate the operational business system used in Laboratory and Research unit to operational business system in Refinery. The management system in the Refinery -unit is certificated by the ISO 9001 Quality system, ISO 14001 Environmental system and OHSAS 18001 Occupational Health and Safety system for one entity. The Laboratory and Research unit is certified by the quality system ISO 9001 and it has good preparedness to integrate both Environmental and Occupational Health and Safety System. Principle in the integration is to carry it out flexibly so that the achieved result is better than separate systems [13].
2. THEORY OF BUSINESS
OPERATION SYSTEM
Integration of business operations system increases communication and makes co-operation easier. Resource needs in auditing and maintenance drops because of the reduction in overlapping work. Work with authorities becomes easier when units can be regarded as one entity. This removes interface between systems and strengthens quality verification work. The target is to reduce bureaucracy and carry operations to use. Integration should be profitable. Zutshi and Sohal [30] present in their article critical success factors for successful implementation of an environmental management system. For the paper “successful” implementation has been defined as one being “smoother, faster, effective and sustainable” in nature.
Safety work has been considered central aspect in Refinery positions for occupational safety have been combined in Porvoo. Management has set the strategic principles in integration of business operations system to tighten the idea of one position. Second reason is to lower apparent borders on the region. One target is to increase co-operation and compress togetherness between partners. Part of the idea is to help job circulation. Job circulation consists for example of the case when people shift to other affair and new tasks are planned. Familiarizing with new tasks requires smaller investment when being in the shared system.
The challenge in the project is to take into consideration the different cultures that exist in the business units. Threats in the project are the prejudices and heavy change resistance against development work. Challenging in the project is to achieve consensus in different actions. Task descriptions should be updated for both parties. In order to improve co-operation it is important to find a compromise and a common target and wish. Change process in organizations should be methodical. Several changes at the same time cause easily fatigue towards change. The Risk that a project is not successful forms possible organization- and responsibility changes in consolidated corporations or in business units. This leads to re-evaluation of targets and schedules. [13]
The culture of an organization appears in behaviour and relations. Culture motivates people and gives reason for solutions in uncertain circumstances. It appears in the way company handles knowledge, internal relations and values. Culture is a learned way of life, style to feel and think which leads action. Organizational culture consists of beliefs, norms, attitudes, experiences and practices which are common to a specific group. Organization expresses its values in communication, documents
and declarations. A company’s culture affects company’s togetherness and people’s behaviour in organization [2][8][9][10][15][28].
Culture refuses feelings and knowledge which are not typical to it. Cultural differences often cause conflicts and change resistance in relation to a goal. Dialogue and understanding differences improve co-operation. The mission of the management should be to lead in resolving conflicts and aspire to adjust opposite forces together to create intensive growth. It is important to respect each other and value co-operation and to understand the We-concept. The benefit from the integration should be felt in the shared customer interface [9][16][22][23].
3. RESEARCH METHODS
The research problem was to solve, how to create an effective and efficient integration in the
business operations systems. Research methods were
chosen based on the research problem. Exploited methods were Analytic Hierarchy Process (AHP) and benchmarking. AHP-method is a systematical method to perform and solve problems hierarchically. It helps in drilling into the root cause of a problem. Problem factor and its ground factors were compared together to end up to actions and solutions. Factors were combined pair wise together and were given weight values [20][21].
AHP-interview was used to find out thoughts and experiences of interviewed people about integration of business system classified by sections. Interviewed people were specialists who had view about the realization of the integration of business system. Benchmark was a good method for getting familiar with examples of action and how integration of business unit has been realized earlier. Knowledge and advices about the issue how to create good and efficient integration and avoid problems were gathered.
AHP-research was used to define the basis and requirements for the integration, as well as what was relevant and where to focus on. The reliability of the AHP research was good because the inconsistency rate stayed clearly under 0, 2. Unreliable answers were deleted [21].
The examined factors in this research were based on the theory of Balanced Score Card, RAL-concept and general strategy model. The five main factors were continuous learning, agility, communication, partnership and cost efficiency Those were further divided to sub criteria which could seen in Appendix 1 where the results are defined by sections and the main factors are separated to sub factors.
Continuous learning leads management of quality-, environment- and occupational health and
safety systems. It introduces problems and creates proposals for solutions to make a company’s operations continuously better. Agility describes a company’s ability to work and succeed in continuously variable circumstances. Co-operation and communication is important in adopting knowledge. Communication should be open, sufficient, real-time and quick. Integration should be carried out to the personnel level. Company co-operates with its external and internal interest groups. Cost efficiency observes how to direct time and costs. It shows where to invest in integration process and what is important [1][18].
Benchmarking was used tool to search best practices from one’s own and other branches and to learn from the best policies. Benchmarking is mutual learning and communication for partners. Partners compare actions together. New ideas rise from success and mistakes. Important in communication is confidence between the different parties involved. Successful partnerships increase good reputation and co-operation [3][12][14][24][27][31].
Commitment of management is important when starting to carry out systematical development. That is how the resources to development work are ensured. Achieving real results requires help from the whole personnel. In developing sectors it is important to remember the entity. Trying to develop one sector to top condition can weaken other sectors. The change process should go in hand with the company’s vision and strategy so that it acts as a leading development program in the company.
Takala, Nuutinen & Helo [25] discuss benchmarking used in developing strategy when management is based on Total Quality Management (TQM). Management sets the vision and strategy for a company and lead company’s operation [14][24].
A company’s actions are based on vision and strategy and are divided to functions, competition factors and core processes. With benchmarking it is possible to increase process capacity and added value. Part of the method is to describe process and analyze it. Processes and methods are measured and developed continuously and benchmarking is a suitable tool for this. Total Quality Management –model supports continuous improvement and development of processes [29].
4. RESULTS
4.1 AHP
After evaluating answers generally and combining answers of the groups it can be seen that
continuous improvement, partnership and communication were considered the central factors for good and efficient integration. Improving business operations systems is a part a of company’s
continuous learning. The same principle leads quality systems. Agility was somewhat valued and the significance of cost efficiency was the smallest. In Figure 1, we can see weight values of the different factors in relation to each other.
Good and efficient integration of business operation system
11 % 30 % 16 % 21 % 22 % Cost efficiency 11 % Continouos improvement 30 % Agility 16 % Communication 21 % Partnership 22 %
Figure 1: Weightings of continuous improvement in general
The results show the in continuous learning the main attention is on occupational health and safety matters (Figure 2). Actions to develop continuous learning are certification of environmental and occupational health and safety to business operations systems, according to ISO 14001 and OHSAS 18001. This ensures reliability in operations. Integration of business operations systems promotes continuity in operations when operations go through development.
Continous learning 5 % 8 % 9 % 15 % 15 % 16 % 32 % Energy efficiency 5 % Practicality 8 %
Minimation of release and remnant 9 %
Technical reliability 15 %
Know how 15 %
Delivery safety 16 %
Occupational health and safety 33 %
Figure 2: Weightings of continuous learning in general
Good training ensures commitment of personnel and helps to lead in conflict situations. That is how management shows support and commitment. Satisfied and committed personnel are conditional to customer satisfaction and continuous development. The customer defines the quality that the company’s operations are developed for [12][17][27].
Training is a solution to protect sufficient and open communication, and feedback. It is important to get everybody involved so that the project does not stop because of the change resistance. Communication helps to understand the partner better so that change resistance decreases.
Critical success factors in adoption and maintenance of environmental management systems Zutshi and Sohal [30] find similarly management leadership and support, and learning and training. In the study management leadership and support contain top management commitment, cultural change and organizational vision, allocation of resources, appointment of champion, and importance of communication and avoidance of personality clashes. Learning and training contains learning from other organizations’ experiences and benchmarking, reference to industry standards, employee induction and training, general training and awareness for suppliers and other stakeholders [5].
Critical success factors Zutshi and Sohal [30] find also internal analysis and sustainability. Internal analysis contains conducting cost-benefit analysis,
IER/gab analysis, identification of aspects and impacts and setting of objectives and targets, necessity and usage of audits. Sustainability consist life cycle analysis (LCA), design for disassembly (DfD), and industrial ecology.
The usability of the responses in this study can be evaluated by interpreting the standard deviation diagram (Figure 3). The figure reflects the respondent groups’ commitment to the issues in question. The values in the implementation index (IMPL) can be interpreted to be below one, which proves the respondents’ commitment to the inquiry. Based on the answers of the experts and reliability of the values we can believe in repeatability of the result [11][26].
Standard deviation
Management y = -0,8337x + 0,5052 Refinery y = -0,5463x + 0,4128
Laboratory and Research y = -0,8338x + 0,4852
External y = -0,5583x + 0,4241 Total y = -0,2616x + 0,3404 0 0,2 0,4 0,6 0,8 1 1,2 1,4 1,6 0 0,05 0,1 0,15 0,2 0,25 0,3 0,35 0,4 0,45 0,5 KOMPL IM P L Management Refinery
Laboratory and Research
External experts
Department totally
Figure 3: Standard deviation of the answers by the groups
4.2 Benchmarking
Both internal and external benchmarking was applied in the study. Benchmarking was used to study how integration of business operations systems has been implemented earlier and to study the CARMAN standard of activity, which is based on Best Practice-thinking. It is important to remove overlap and repetition in business operations system. Training is a great challenge when we are integrating operational business systems in which we should reserve enough resources. It is great challenge caused by the differences of people and different backgrounds.
The project should not be considered too big a burden or compulsion. Instead, a positive attitude
should be emphasized upon. It should be regarded as
development work, not bureaucracy work.
Integration should acquaint by leading not managing. Integration increases consistency and co-operation between units. The maintenance of the business operations systems has become easier. The upper level maintenance is handled automatically, which frees up additional time for handling single activities and personal tasks. Through these developments the integration work has led to time savings. However, extra costs have resulted from audit costs.
More resources could be allocated to lead
through the integration. The change work was carried out parallel to normal work, resulting sometimes in delays in schedules. It would be good that work could be planned as a project, with plans of the first and ending day and other schedule including resources.
CARMAN is a method developed by Human Reliability Associate which reduces abuse of
operation mode in working situations. Operation is based on Best Practice thinking how to lead best practice to a part of doing and developing best operational mode to the chosen work assignment. Its general aim is to improve safety, reliability and efficiency of production [5][6].
Accidents occur usually from abuse of operation mode. Embrey [5][6] lists causes why written methods are not followed. Instructions are inaccurate or out of date. Methods are not working in practice and there is better and easier ways of doing the tasks. Task description is limiting and takes too much time. Work can not be carried out in a given time if instruction is followed literally. Needed knowledge to do the work is hard to find or people do not know that knowledge is available. They do not see the importance of following instructions. People assume to know how to do the work and become irritated when they are advised.
Actions are planned from the human perspective. The goal is to gather silent knowledge
from people. Knowledge becomes valuable when it succeeds to be transferred to articles, systems and methods. By defining a standardized best task manner a balance between task descriptions and procedures can be achieved [1].
There is a consensus group collected from the process personnel which creates task description on basis of best practice. Phases of the operation and its risks are mapped out and analyzed. On the ground of best practice is created a Reference Task Description (RTD). To help the practice descriptions are made where operations are described in a more simply way. Task descriptions are introduced to personnel according to a studying schedule. People get stressed if working practices are risky or knowledge is defective [1][6].
The result of the method is, that instructions are in a better format, they are perceived better than before and work knowledge has improved. It could be possible to measure for example the participating rate of the method as well as the transfer and growth rate of knowledge.
5. CONCLUSIONS
Main issues in AHP-research are continuous learning, importance of communication and partnership. Through certification quality operation systems can be developed and the quality of the operation and knowledge can be ensured. The managing system leads the operation of a company.
In partnerships it is important to observe the customers and the commitment of the personnel and management. Feedback and sufficient open communication should be enabled. Training is supports commitment and communication of the
personnel and management. Management should manage and lead change processes. Profit of the integration should be experienced in connection to common customer. In integration process it is important to find out solidarity and common goal.
The reliability of the study was verified with the weak market test by asking of the experts participated in the research if they were ready to commit to the model of the good and efficient integration. Importance of commitment of the management came up in the conversation. The mission of the management is to lead in contradictory situations and aspire to adjust opposite strengths together. Management should ensure sufficient resources for the change work. The integration was found to support management’s strategic expectations for the project. In the process of becoming familiar with the management system it should be invested in the issue that the partners understand the meaning of the change. That is how better commitment can be achieved.
The example case stressed also the importance of training. Systems should be merged together, standardized and trained to personnel. The operation of the system should be seen as a development and it should be arranged as a project with a schedule and resources. CARMAN is a good working manner to acquaint good and efficient integration. With the method workers get to participate in the development of the operation and the best practices become a part of practice. In addition safety, reliability and efficiency increases [5][6].
With the research time and costs are possible to direct better in company and problems can be avoided better. On the basis of the research integration of the business operations system is supported. Project is a part of development of
management system. It supports continuity of
operation and it increases unity and co-operation
inside the company. Continuous learning happens with small steps and if improvement is not successful it is possible to take steps back to old system [31].
Results are possible to apply to a new solution of the problem. Operation is typical of a heavy process industry and results are possible to generalize also in some other branch where operation is lead on ground of business operations system. It is worth considering, how large a business system can be still to be effective from the operative perspective.
Observing critically common operation system is a big entity and its maintenance needs a lot of resources. The length of the task references is growing and the risk is that the agility of the system suffers. Training and adopting of a big system is a challenge. It would be interesting to define optimal size for the operation business system.
6. REFERENCES
1. Aaltonen, M. and Mutanen, U. M., 2001, Tiellä Tietämyksenhallintaan, Jyväskylä: Gummerus Kirjapaino Oy.
2. Booth, R. T. and Lee, T. R., 1995, “The role of human factors and safety culture in safety management,” Journal of Engineering Manufacture, Vol. 209, No. 85, pp. 393-400. 3. Camp, R., 1989, Benchmarking: The Search for
Industry Best Practices that Lead to Superior Performance, U.S.A: ASQC Quality, pp. 299. 4. Camp, R., 1995, Benchmarking-Finding and
Implementing Best Practices, Milwaukee: ASQ Quality, pp. 464.
5. Cline, K. D., 2000, “Defining the implementation problem: Organizational management versus cooperation,” Journal of Public Administration Research and Theory, Vol. 10, No. 3, pp. 551-572.
6. Embrey, D., 1998, “Creating procedures culture to minimise risks using CARMAN,” Symposium on Human Factors in Aviation Maintenance in Gatwick Air port, UK: CAA, pp. 167-178.
7. Embrey, D., 2000, “Preventing human error: Developing a consensus led safety culture based on best practice, http://www.humanreliability.com/resource1.ht ml.
8. Hale, A. R., 2000, “Culture’s confusion,” Safety Science, Vol. 34, pp. 1-14.
9. Hampden-Turner, C., 1991, Yrityskulttuuri, Yrityksen Mahdollisuus Ja Vahvuus, Jyväskylä: Gummerus Kirjapaino Oy, pp. 282.
10. Hatch, M. J., 1997, Organization Theory Modern Symbolic and Postmodern Perspectives, New York: Oxford University, pp, 387.
11. Hirsijärvi, S., Remes, P. and Sajavaara, P., 2000, Tutki Ja Kirjoita, Vantaa: Tummavuorenkirjapaino Oy, pp. 249.
12. Hölttä, T. and Savonen, M. L., 1997, Muutosvoimana Laatujohtaminen, Helsinki: Oy Edita Ab, pp. 112.
13. Kehittäminen ja L., 2005, Laatujärjestelmän
Integroiminen Jalostamon Toimintajärjestelmään, Projectplan, Porvoo:
Neste Oil Oyj, pp. 9.
14. Laatukeskus, 1998, Benchmarking Käsikirja Nopea Oppiminen-Ylivoimainen Kilpailuetu, Lahti: Esa Print Oy, pp. 49.
15. Pidgeon, N. and O’Leary, M., 2000, “Man-made disaster: Why technology and organizations sometimes fail,” Safety Science, Vol. 34, pp. 15-30.
16. Reiman, T., 1999, Organisaatiokulttuuri Ja Turvallisuus Kirjallisuuskatsaus, Espoo: Valtion Teknillinen Tutkimuskeskus, pp. 46.
17. Rissa, K., 1999, Riskit Hallintaan, Jyväskylä: The Centre for Occupational Safety, pp. 208. 18. Sarkis, J., 2001, “Benchmarking for agility,”
Benchmarking: An International Journal Vol. 8, No.2, pp. 88-107.
19. Saaty, T. L., 1980, The Analytic Hierarchy Process Planning, Priority Setting, Resource Allocation, U.S.A.: McGraw-Hill Inc, pp. 287. 20. Saaty, T. L., 1982, Decision Making for
Leaders the Analytical Hierarchy Process for decisions in a Complex World, U.S.A.: Wadsworth Inc, pp. 291.
21. Saaty, T. and Kearns, K. P., 1985, Analytic Planning: The Organization of Systems, Great Britain: Wheaton & Co. Ltd., pp. 208.
22. Schein, E. H., 1989, Organizational Culture and Leadership, San Francisco: Jossey-Bass Publishers, pp. 358.
23. Schein, E. H., 1999, The Corporate Culture Survival Guide-Sense and Nonsense about Culture Change (1st Ed.), San Francisco: Jossey-Bass Publisher, pp. 191.
24. Suomen, L. ry, 1996, Benchmarking Työkalu Oppivalle Organisaatiolle, pp. 40.
25. Takala, J., Nuutinen, M. and Helo, P., 2003, Strategy Driven Benchmarking: A Proposed Model Based on Competitive Priorities, Vaasa: University of Vaasa.
26. Takala, J., Sivusuo, H., Leskinen, J and Hirvelä, J., 2005, How to Communicate and Implement Strategies in a Strong Organization Culture? Vaasa: University of Vaasa, pp. 13.
27. Tuominen, K., 2000, Managing Change Practical Strategies for Competitive Advantage, U.S.A.: ASQC Quality, pp. 356.
28. Varonen, U., 2002, Turvallisuuskulttuuri Ja Turvallisuusilmapiiri Sahalaitoksissa, Tampere: Tampere University of Technology, pp. 57. 29. Zairi, M., 1996, Benchmarking for Best
Practice, Continuous Learning through Sustainable Innovation, Great Britain: MPG Books LTD., pp. 496 p.
30. Zutshi, A. and Sohal, A. S., 2004, Adoption and Maintenance of Environmental Management Systems Critical Success Factors, Australia: Monash University, pp. 20.
31. Åhlberg, M., 1997, Jatkuva
laadunparantaminen korkealaatuisena oppimisena: eheyttävä jatkuva laadunkehittäminen (CQI, joka sisältää mm. TQM, TQC yms.) korkealaatuisena oppimisena ja sen edellytyksistä huolehtimisena: teoreettinen perusta ja alustavia empiirisiä tapaustutkimuksia, Joensuu: Univeristy of Joensuu, pp. 430.
ABOUT THE AUTHORS
Jenni K. Lintala received MS degree from industrial management at faculty of technology at University of Vaasa Finland. Field of interest is mainly new product development, production management, logistics, environmental management and quality control.
Josu A. Takala is a docent, professor in industrial management, vice dean of faculty of technology at University of Vaasa Finland, research professor of the same university during academic year 2006-7 on comparative research about global manufacturing strategies. Educational background: Tampere University of Technology M.Sc (El.Eng) 1980and Dr.Tech. (El. Eng.and business studies in the University of Vaasa) 1988. Industrial Researcher of Academy of Finland 1985-87. R& - and QA- tasks related to automation business as a researcher and
manager in ABB (Asea Brown Boveri) 1979-92. Professor in Industrial Managementat the University of Vaasa 1988-, Finland. Docent in Industrial Management at the Helsinki University of Technology 1994-, in the University of Jyväskylä 1996-, in the University of Oulu 2000-, Finland, and in the University of Kasetsart, Bangkok, Thailand 2002-. Field of interest is mainly technology management in the competitive strategies of private and public organizations in manufacturing networks by utilizing the generic fields of quality management, (technology) strategy, new product development, production management, logistics and environmental management. Member of IEEE and Chairman of ISPQR, International Society of Productivity and Quality Research. Over 200 scientific articles
(Received November 2007, revised January 2008, accepted February 2008)
