I am new to the Health and Safety Technology world after living in the ERP, CRM, and Supply Chain world during my very long career. During these crisis times however, as I come up to speed, I read a lot about operational excellence and improving safety culture. I have not seen many reports about the value of integrating EHS with ERP. Is there value here with all the supply and demand issues surrounding our lives?
I have heard from many “experts” that even connecting EHS with EQMS offerings has limited potential because they target different persona. But I do not buy this. Is it not the same thing that happens with ERP on the buy and the sell side with procurement and customer service persona? In both scenarios, the stakeholders have different processes, needs, and objectives within the enterprise. Yet they choose a single system in the case of ERP. Why is that? I ask.
In ERP, both personas leverage a common data model for supply and demand, item criteria, location information, and orders for customers and suppliers. Both have visibility into the manufacturing floor on what is being produced and when it will be available or when exceptions occur. The same can be said for combining EHS and EQMS solutions with a common model for workplace safety training, documentation, regulatory reporting, and corrective action preventive action (CAPA). EHS deals with workplace and employees while EQMS with items and products.
Coming from the ERP world of manufacturing, I understand what operational excellence means to a CFO and COO in terms of monies saved in working capital, inventory turns, and productivity gains resulting in higher revenue streams. I can even relate to operational excellence improvements as they relate to improved product quality from an EQMS implementation.
The question then is,
Does health and safety really drive operational excellence from a financial perspective with ERP?
I believe it does. I also believe EHS has implications with supply chain, HR, CRM, and PLM solutions to drive not just bottom line but top line results as well. The EHS focus here would be on capacity constraints, not material implications on the plant floor.
In discrete manufacturing, the value add for EHS integration is on the capacity side of the supply and demand equation and to be more specific – capacity planning. ERP capacity planning or CRP focuses on the resources needed to convert the material into finished product. Health and safety of employees places a significant impact here as a constraint.
As we input a high-level forecast of demand, we should incorporate Health and Safety data on incidents, days off, near misses, etc. into the resource requirement model. We should do the same with rough cut capacity at specific bottleneck assets and materials. In the end we achieve a more accurate forecast of supply and demand for the plant for accurate scheduling.
At a more detailed level of specific items, workstations, and time requirements when running the detailed CRP algorithms, we relate to specific loads on work centers. We do this to determine if we have the resources sufficient to meet the detailed schedule. Incorporating EHS data, we can address key questions like,
- Do we have the correct handling equipment?
- Is the workplace safe?
- Are the employees trained and certified so we can shift resources around effectively to meet the desired schedule?
All this data comes from information stored in an EHS solution and can be integrated in the ERP offering.
During execution of the schedule on the plant floor,
- Do employees know how to handle the material routing movements from stock to floor and from work center to work center?
- Are they safely protected and have easy access to MSDS documents?
Integrating EHS documentation on workplace safety combined with manufacturing process sheets and work instructions is critical to maintaining and improving the safety culture and operational excellence.
Bottom Line: integrating Health and Safety systems, like ComplianceQuest into ERP at the Forecast, Planning, Scheduling, and Execution level improves the execution accuracy on what will be built over the time horizon. By sharing the two data models for ERP and EHS, a manufacturer increases productivity, improves throughput, further optimizes inventory, has better visibility to meet demand fluctuations with accurate resources. The result is greater employee morale and culture. And for the CFO, higher operational excellence for the balance sheet and income statement.
From David Cahn, ComplianceQuest Marketing team