Ford Motor Company & ISO 14000

Case Study.

Group 5.

ISO 14000

ISO 14000 is a new (late 1996) standard for Environmental Management Systems.  It was based upon the ISO 9000 family of specifications. The key aspects of ISO14000 are that it is

Voluntary, Flexible and non-prescriptive, Can use existing environmental programs and

systems, Pushes continual improvement, Encourages cost saving by integrating

environmental requirements into the overall company systems (design, manufacturing, etc.)

Can provide a substantial market advantage

HISTORY

The concept of an environmental management system evolved in the early nineties and its origin can be traced back to 1972, when the United Nations organized a Conference on the Human Environment in Stockholm and the United Nations Environment Programme (UNEP) was launched (Corbett & Kirsch, 2001). These early initiatives led to the establishment of the World Commission on Environment and Development (WCED) and the adoption of the Montreal Protocol and Basel Convention.

In 1992, the first Earth Summit was held in Rio-de-Janeiro (Jiang & Bansal, 2001), which served to generate a global commitment to the environment (RMIT University). In the same year, BSI Group published the world's first environmental management systems standard, BS 7750. This supplied the template for the development of the ISO 14000 series in 1996, by the International Organization for Standardization, which has representation from committees all over the world (ISO) (Clements 1996, Brorson & Larsson, 1999). As of 2010, ISO 14001 is now used by at least 223 149 organizations in 159 countries and economies.

A SUMMARY ON ISO 14000 A new paradigm for controlling indiscriminate development and seeking a continuous development is a global trend.Definite system is required for realization of environmental improvement.ISO 14000 is international standard for environmental management system legislated by ISO(International Standardization Organization) and it is a standard among representative standards with ISO 9000 in organization's management system certification field.

This standard is requiring construction of environmental management system for continuous improvement of environmental results about organization's product and process.This is a system that acquire certification through the objective assessment conducted by third party certification body about whether constructed environmental management system meets the requirements of standard or not.

Now in case of global trade, the needs of quality management system and environmental management system are spreading over the whole industrial fields.Applications of this standard are the same as ISO 9000. Therefore it can be applicable not only manufacturing, construction, servicing but also public service section such as school, local autonomy. And it can cover all various size companies.

ISO 14000 FAMILY

ISO 14001 is standard of certification and assessment criteria. Other standards are guides about assessment criteria, method and evaluation of system.

ISO 14000 series [Environmental management system] : General / Guide

ISO 14010 series [Environmental assessment] : General principle / assessment procedure / qualification criteria of auditor

ISO 14020 series [Environmental labeling] : environmental labeling, symbol

ISO 14030 series [Evaluation of environmental results] : Evaluation of achieved environmental results and so on.

ISO 14040 series [Evaluation of whole processes] : Principle and Guide / list analysis / evaluation of environmental effect.

ISO 14050 series [Terms and definition]

EMS The ISO Environmental Standards for Environmental Management Systems (EMS) are a series of completely voluntary standards and guideline reference documents which include environmental management systems, eco-labeling, environmental auditing, life cycle assessment, environmental performance evaluation, and environmental aspects in product standards.

It is the focus on management" that distinguishes these standards from "performance" standards. 

An EMS help and organization to establish and meet its own policy goals through objectives and targets, organizational structures and accountability, management controls and review functions all with top management oversight.

EMS do not set specific requirements for environmental compliance nor do these standards establish requirements for specific levels of pollution prevention or performance.

REQUIREMENTS OF ISO 14000

An environmental policyDetermining environmental aspects & impacts of products/activities/servicesPlanning environmental objectives and measurable targetsImplementation & operation of programs to meet objectives & targetsChecking & corrective actionManagement review.

Environmental Policy : As mentioned above, the most important requirement is a commitment by the company and it's senior management to achieving a working environmental management system, and to maintaining that system. This must be documented in a published, communicated environmental policy.

Documentation: Certain environmental program elements, including the policy, plans, objectives, etc., must be documented (written down). As with ISO9001, one of the keys to a successful (achieving environmental and financial goals) ISO14000 EMS is having documented procedures that are implemented and maintained in such a way that achievement of environmental goals appropriate to the type and scale of our activities is promoted inherently, and without a bureaucracy or additional expense.

Planning: This planning, or setting of environmental objectives and targets is critical to the success.  The goals must be reasonable and achievable, and based on practical considerations, not aribtrarily chosen. The procedures must be established for ongoing review of the environmental aspects & impacts of products, activities, & services.  Based on these environmental aspects & impacts, environmental goals and objectives must be established that are consistent with the environmental policy  Programs must then be set in place to implement these activities. Checking: The EMS must include appropriate monitoring and review to ensure effective functioning of the EMS and to identify and implement corrective measures in a timely manner.   Internal audits of the EMS must be conducted routinely to ensure that non-conformances to the system are identified and addressed.

Management Review : Designated management must conduct an ongoing review process that ensures top management involvement in the assessment of the EMS, and as necessary, addressing need for changes.

Implementation and operation

Environmental policy

ISO 14000 EMS Model

Continual Improvement

Management review

Checking and corrective action

Planning

BENEFITS OF ISO 14000

Identifying areas for reduction in energy and other resource consumption and their associated costs

Reducing environmental liability and risk

Helping to maintain consistent compliance with legal & regulatory requirements

Potentially faster permitting processes with state agencies

Benefiting form regulatory incentives that reward companies showing environmental leadership through certified compliance with environmental excellence

Preventing pollution and reducing waste, both of which reduces costs

Responding in a positive fashion to pressure from customers and shareholders

Improving community goodwill

Profiting in the market for "green" products,  and generally achieving a market advantage

Lower insurance costs by demonstrating proof of good management before pollution-incident coverage is issued

Demonstrating commitment to high-quality.

Ford Motor Company

We see no conflict between business goals and social and environmental needs. I believe the distinction between a good company and a great one is this:

A good company delivers excellent products and services; a great one delivers excellent products and services and strives to make the world a better place

William Clay Ford, Jr.Chairman of the Board

Background The Ford Motor Company-Twin Cities Assembly Plant (TCAP) has 2,000 employees who produce approximately 160,000 Ranger trucks per year. The 2.2 million square foot plant, constructed in 1925, has the unique capability of producing its own electricity through an onsite hydroelectric power generator. When the ISO 14001 Standard was released in 1996, Ford headquarters immediately recognized the benefits of improved environmental performance and required all of the company’s plants to establish the standardized ISO 14001 environmental management system (EMS).The implementation was so successful that Ford now requires its suppliers to certify their own facilities. TCAP was initially certified in March 1998.

HOW IT WORKS?

The ISO 14000 EMS at Ford is based upon a foundation of an environmental policy and management commitment.

An integral part of the system is identifying environmental "aspects." Aspects are elements of a plant’s activities, products or services that can positively or negatively interact with the environment.

Trained Ford employees identify these environmental aspects and then rank them based upon the plant’s activities, products or services being; subject to regulation, addressed in the company business plan, or subject to high environmental load charges.

The ISO 14000 EMS system at the Twin Cities Ford Motor Companyplant is based upon environmental policy and management support.

FORD’S ENVIRONNEMENTAL MANAGEMENT PROGRAM (EMP)

Aspects that employees rank as significant areincluded in a summary plan to manage, improve,or control these environmental concerns. Specificcompany procedures are then created or modifiedto meet the goals of the plan, called theEnvironmental Management Program.

Why Ford chose ISO 14000?

Implementation.

Lesson’s Learned.

Why ISO 14000

Transition from a multi-national company to a global company -- Ford 2000.

Desire for consistent global systems including environmental systems.

Supports Ford strategies Corporate citizenship Empowerment (delegated responsibility)

Third party certification is an additional resource for monitoring and provides credibility.

Potential requirement for sales.

Enhance image, potential competitive advantage.

Improve relations with government agencies.

ISO 14001 is NOT a Performance Standard or a Guarantee of 100% regulatory compliance

Ford Environmental SystemISO 14000

Top Two Questions

Why ISO 14000 for suppliers?

What is required of suppliers?

Why ISO 14000 for suppliers

For Ford to be able to demonstrate continuous improvement, it was determined our suppliers should also be certified to the same standards

Ford Supplier Requirements

Certification and maintenance of an ISO 14000 environmental management system

Chemicals and materials involved in products or services delivered must meet the requirements stated in Restricted Material Standard WSS-M99P9999-A1 and/or Black & Grey lists Standards 1009,1 and 1009,11 (for Volvo suppliers)

Environmental data on processes used and products or materials supplied must be available and furnished upon request to enable environmental product assessments

Effective packaging solutions must be used to minimize waste for delivered products and services

Recyclability – the use of recycled materials and design for recycling principles – shall be considered during the selection of materials and design solutions. All plastic and polymeric parts must be properly identified

Cascade of ISO 14000 requirements to tiered suppliers.

Ford Supplier Requirements

Production and non-production suppliers to achieve

registration at a minimum of one manufacturing site

shipping product to Ford by year end 2001.

Suppliers to achieve registration of all their manufacturing sites shipping to Ford by July

2003, Volvo by year end 2002.

Suppliers encouraged to take similar action with

their tiered suppliers.

ISO 14000 Supplier Requirements

Prepare to Change

Communication

Training

Communication

ISO 14000 Requirement Letter

Supplier Environmental Requirements Guide

Training & Support Ford had developed & instituted a Supplier

Awareness training program in US Nov 1999.

Monthly classes are offered through Fairlane Training and Development Center (FTDC)

Training being cascaded in other regions Europe, Mexico, South America, Asia Pacific.

Exploring web-based training options.

Open dialogue

Lessons Learned Training Program is Essential

Materials/templates Sharing/Spirit of Partnership

Supplier Assessment began early engagement of supply base

CONTINUAL IMPROVEMENTTo meet the continual improvement requirement of ISO 14000, employees regularly look at new ways to bemore efficient and to identify opportunities to reduce waste at the plant. The EMS has empowered employeesto become active participants in identifyingand implementing improvements. TheseEnvironmental Management Programs (EMP)have yielded significant cost and environmentalsavings. The plant has also established newrelationships with suppliers and the local utility,and supports an overall corporate citizenshipwith the community.

BENEFITS OF AN ISO 14000 EMSUnder the EMS, a group of ISO 9000 and14000 trained employees at Ford formed a CrossFunctional (or Core) Team to meet regularly. In addition to addressing quality issues, they identify objectives and targets, or ways to minimize environmental impact. Many benefits have occurred since implementing the ISO 14000 Certified EMS:

1. Previously a change in paint colour required cleaning painting equipment with solvents prior to use of the new colour. Now, a paint block is assigned only one colour for a substantial reduction in solvent and paint waste. In addition, Ford installed meters on the cleaning solvent transfer pumps used to clean paint from application equipment, established a daily review of solvent usage, improved transfer efficiency in the paint application, and now uses reformulated paint that contains less VOCs.

Since 1996, there has been a 49 percent reduction in solvent usage and a 45 percent reduction in volatile

organic compoundemissions (VOC lb./unit). As a result of these reductions,

the company has saved approximately $129,000 annually.

2. At TCAP’s wastewater pre-treatment plant, measurements were taken to optimize batch treatment dosing, a work practice was revised, and employees were retrained. The result is an overall reduction in chemical usage and waste filter press sludge production.

Wastewater pre-treatment plant improvements have resulted in a 33 percent reduction in hydrogen sulphate, a 9 percentreduction in sodium hydroxide, and an 8 percent reduction in iron chlorate use. An 18 percent reduction in filter presssludge waste was also achieved. As a result of these reductions, the company has saved $60,000 in costs as well as$32,000 in waste management.

3. A partnership was developed between the local power company and the Ford hydroelectric plant. An automated control system was installed and the power distribution system and water gate mechanics were all upgraded to improve the electrical production of the hydroelectric plant.

Since 2001, the facility’s hydroelectric power plant has increased its electrical output byapproximately 17 percent, with no increase in waste. Ford estimates that it saves$750,000 annually in costs as a result of this improvement.

CONSISTENCY

One of the significant benefits the EMS brought to Ford’s Twin City facility is a consistent approach to environmental issues, regulatory compliance, and pollution prevention. For example, information is readily available and easily tracked during routine compliance inspections. Because the Environmental Management System is common to all Ford facilities, it also creates accountability and consistency within the corporation.

Reference

Google

ISO – Official site

Journal of Cleaner Production

Science Direct

Wikipedia

Ford Motor Company

Design for the Environment Guide

Group Members

Sajith P.S. Sam Scaria. Scaria Joseph. Sooraj. Sonu Sebastian. Siju. Roy Thomas.

Shruthi S. Murali. Surayya. Shipla. Swathi Raj. Thambu John. Tony Xavier.

Thank You.