Managing risk in silos fails to meet today’s societal pressures and market demands. Ian Achterkirch explains how integration can help EHS do more with less.
The summer season is winding down all too soon. But for many families, the stability of the school year offers some relief from hectic summer schedules of camps, sports, vacations, cookouts and more activities that run without regard for one another.
When everyone has places to go and people to see, schedules become stressfully uncoordinated, conflicting and inefficient. There are only three short months to pack in the memories, not to mention everyday work challenges. The lack of integration makes it hard to avoid too much time in the car, a few late arrivals to practice or a missed barbecue here and there.
As strange as it may seem, organizations are facing similar challenges with operational risk management (ORM) – although the stakes are much higher than a shortage of burgers or baseball. The traditional approach of managing ORM through functional silos (asset maintenance, EHS, security/asset protection, quality, corporate audit and sustainability) with limited coordination doesn’t stand up to new societal pressures and the market’s demand for increased efficiency. Leaders are looking for new ways to optimize asset performance.
In our “Risk Central” webinar, we examined these issues using our latest ORM insight. We looked at ORM through our clients’ eyes and shared research perspectives from across the industry to help organizations maximize the value of their ORM.
You can watch the full webinar here, but we also wanted to quickly share some highlights in case you’re still balancing work with pool days and weekend trips.
Doing more with less is EHS’ new mantra
Many ORM teams we partner with face these growing challenges with flat or decreasing budgets. For others, increased regulations create more complex working environments. Societal trends stretch limited resources even further. There are new reputational risks due to social media, an increasing number of sustainability rating agencies, as well as an aging workforce to think about.
The calls for enhanced efficiency and effectiveness set us on a path toward what we’re calling the Integrator, a methodology that improves coordination and communication across the ORM silos to lower costs. A client that leveraged the Integrator achieved a 20% reduction in their costs to manage and execute their ORM Audit program across more than 500 sites.
The “secret sauce” is the innovative use of a digital toolset that we call the Digital Powerpack. It enables insights into the organization’s process/policy revision needs, strengths and risks, and serves as a decision-support mechanism.
The Integrator methodology is especially useful for companies with multi-site operations/portfolios, parallel initiatives, siloed actions or decentralized business models. But it can be a useful tool for any company looking to streamline their corporate risk program. Notable benefits include:
- Reduced silos, improved data flows and data-driven decisions.
- Program cost and efficiency improvements.
- Improved vertical integration (better integration between regions/business lines/suppliers).
- Improved governance, transformation and control.
- Step change in business-as-usual performance.
How the Integrator works
The methodology is a four-step process focused on eliminating redundancy and waste while improving transparency. It uses the management systems-based Plan, Do, Check, and Act process to drive adoption and success. The continuous improvement cycle isn’t a novel idea, but the Integrator is unique because it uses digital innovations to enhance how teams collect risk data and turn it into actionable insights.
The Digital Powerpack is a cost-efficient toolkit that enables uniform data collection and visibility across disparate databases and systems. It’s a user-friendly self-service tool for teams to gather data in multiple formats, and then transform the data so leaders can easily digest trends and spot anomalies. It creates a story around critical information, pointing to valuable options that remain hidden when data is siloed.
As a result, the Integrator provides corporate functions and business leaders a clear view of situational and operational risks as well as opportunities for their asset portfolio.
The methodology in action
Our testing grounds for the Integrator include one of the largest privately held manufacturing companies in the U.S. Under the company’s old model, risk data was kept in departmental and functional silos, creating redundant activities, unnecessary disruptions and obscuring areas of cross-functional risks. The Integrator is being used to manage its facility audit, inspection and maintenance for multiple business functions (e.g., health, safety, environment, security, sustainability and quality).
Using the Integrator creates a more holistic and robust understanding of enterprise and facility risks, issues, priorities, and disruptions. It’s furnishing standards and best practices for scheduling, master planning, audit protocols and metrics, auditor selection and performance, and corrective action taking.
Step into Industry 4.0 with integrated ORM
Most companies have the capacity to optimize their risk management, and it comes down to a matter of governance. The Integrator brings pieces of the ORM puzzle together in innovative ways, making data an asset that drives performance and value while reducing overall EHS risk.
The Integrator can help companies break into Industry 4.0 and feel confident that they’re getting the most out of EHS and their various ORM functions. For more on integrated risk management and the Integrator, >watch the full Risk Central webinar.
