Cost Justification of EH&S Information Systems

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Courtesy of Quantum Compliance

Background
While there has been significant progress in developing accounting methods that integrate environmental considerations into the decision making process, conventional accounting practices generally lean toward the near side of complexity. Many organizations do not include the cost of activities such as EH&S monitoring as cost to production, but rather tend to bury these costs into overheads.

From the viewpoint of many corporate decision makers, the three major benefits of EH&S monitoring are:

Improvement of firm’s bottom line
Improvement of complying with environmental health and safety regulations
Demonstration of proactive commitment to the EH&S programs

The Cost can be segmented into three areas, the Project cost, Compliance cost and the Relative Qualitative cost.

The project cost include the everything from the site permits, R&D, construction, labor, capital equipment, utilities, to including the software and implementation of any EH&S Information system.

Compliance cost can be divided into the traditional compliance cost (i.e. Regulatory notification, reporting testing/monitoring, record keeping spill response, fees, insurance, medical surveillance and audits), the gate to gate cost (the cost associated with operating cost of receiving, processing and disposing of all raw materials in the plant’s operation and Community cost (recycling, habitat protection, joint community projects and proactive publicity).

The EH&S Related Qualitative Cost has two areas of impact the first the corporate image in the world (customers, suppliers, officers, work force etc.) and qualitative costs such as fines, penalties, clean-up cost and economic loss damages.

Traditional EH&S information systems give management the tools necessary to measure, judge and set goals for improvements in all of these cost areas. Because what gets measured is managed.
The information that has been collected illustrates an increase in efficiency in the recording and reporting of Injury/Illness, Industrial Hygiene and other Metrics data. The FacTS Application standardizes the data streams and allows for an expedited output to capture Corporate Metrics. The centralized data storage and data entry functions allow the users to protect its data investment and meet its global reporting requirements.

INJURY/ILLNESS

Company A, B, & C: Prior to installing the FacTS Application, processing an Injury Illness record required that documents be distributed and handled by multiple (up to six) parties. With the installation of the FacTS application the data became centrally stored which meant that it could simultaneously accessed by all parties. This not only significantly decreasing the amount of time required to process and handle he record (one client estimated a six-fold time savings) but critical information regarding the severity and cause of the incident became immediately available. Other benefits that were immediately noted was a significant reduction in the number of edits required to ensure conformance with company guidelines

Company B & C - Generation of corporate reports. Prior to the installation of the FacTs applications a signification amount of data manipulation had to been performed by each reporting facility, division, office and corporate staff to prepare the data for consolidated corporate reporting Clients have stated that collecting injury/illness regulatory and/or Corporate Metric data for reporting purposes would take in excess of one day per facility, per month. Additional time would be necessary to complete divisional, regional and other corporate rollups. The FacTS Application has allowed a central data processing point, standardizing the data and reducing the number of people who handle the document down to one or two individuals.

Once the corporation develops the metrics, the application will measure the metrics and offer results to inform you which areas need managerial assistance. Injury metrics can be tied to production units, chemical usage, jobs, departments and facility specific activities. During the metrics evaluation, your staff will be able to identify areas where high incident rate trends occur and provide managerial solutions to modify the trends, thus reducing costs. Costs typically included, which are not readily measurable are: Lost Time, Lost of Productivity, Reporting Time, Manager Approval Time, Medical expenditures.

INDUSTRIAL HYGIENE

Company A noted similar reductions time and effort have been noted with the Industrial Hygiene Module. Prior to installing the Hygiene Module, the Laboratory would send the results to the Industrial Hygienist and then the Hygienist would enter the results in to the old Hygiene System. Now the lab can enter the results either electronically or manually to relieve the burden of the Corporate Hygienist. Furthermore the Hygienist has the ability to query the results at a corporate level, to evaluate trends and exposure levels, rather than on an individual site level. This data combined with Training data and Injury/Illness data can offer solutions on focusing you training needs, to allow for the reduction of overexposures and other health and safety incidents.

WASTE MODULE

Because all the information required completing waste profile, manifest, annual and biannual reports and check invoices was stored in a central locations the Implementation of the Waste Module resulted in significant timesavings for Company B, C and D. Prior to the installation of FacTS multiple parties were involved in the handling, distribution and signoff of the information associated to preparation of the waste profiles, waste manifest, bill of laden and annual reports. Significant times saving have been experience in the preparation, distributions and signoff of all the stated documents. Whereas the preparation of the documentations previously required the input of technical experts in several fields, baseline information provided by these individuals is now available on line and can be access non technical personal

METRICS REPORTING

This brings us back to measuring and setting goals and objectives. Management needs the appropriate tools to measure all aspect of EH&S compliance and performance. FacTS’s flexibility, report generation and email notification capabilities give every manager, user and corporate officer the tools necessary to insure that limited resources are being leveraged to the maximum.

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