The Use of Chemical Management Services as a Strategy to Measure Chemical Use, Develop Assessments and Utilize Decision Making Tools

Joe Sprangel - Mary Baldwin CollegeJill Kauffman Johnson - Chemical Strategies

Partnership

May 3, 2011

Agenda Our Chemical Future Chemical Management Services (CMS) Research Case Study Limitations of Research Research & Practitioner Implications Concluding Remarks

Our Chemical Future

The next generation of environmental management systems will require: More sophisticated environmental

data More business information More resources

REACH Most pressing regulatory issues is the

new chemicals regulatory framework being implemented in the European Union, the Registration, Evaluation, and Authorization of Chemicals (REACH)

The regulation requires more detailed information about chemicals embodied in products and used in processes, as well as banning and restricting numerous chemicals

Article Questions How will environmental managers

increase the effectiveness and sophistication of their programs without increasing costs to their company?

How will they satisfy the increasing demands by supply chain managers, business unit managers, regulators, and customers for better information, reduced emissions, and less toxic alternatives?

CMS Model

Kauffman Johnson (2009)Figure 1

CMS Shift in Supplier Relationships

CMS Benefits Reduced chemical use, toxic use, and

associated energy, waste and water impacts

Utilizes the expertise and capacity of that CMS providers can provide the environmental manager with decision making tools and the resources to: Decrease costs Reduce chemical-related environmental

impacts

Chemical Lifecycle

Kauffman Johnson & Cole (2005)Figure 3

The Business Reality

Environmental managers often need to help make the business case for chemical initiatives

Understanding the gaps in program performance and the true “enterprise” cost of chemical management is an important first step in making the case for improving chemical management

Visible vs. Hidden Costs

Bierma & Waterstraat (2000)Figure 4

Centralized Chemical Information Increasing US and international

regulatory requirements raise the need for accurate information for: Chemical sourcing Product use Costs Quantity Location Constituents

CMS Use By Sector

Sector Average MarketPenetration 2009

(%)

Estimated MarketPenetration 2004

(%)

Automotive 57 75-80

Automotive Suppliers

41 30-40

Heavy Equipment 33 15-25

Aerospace 45 25-30

Electronics 43 30-40

Air Transport 41 40-50

Steel Manufacturing

22 20-30

Chemical Strategies Partnership (2009)Table 1

Research Case Study

CMS provider Haas TCM Group Largest independent CMS provider

in North America Surveyed on-site program

managers & their key company contacts

Quantitative Survey Research Haas TCM Group is an independent CMS

supplier operating around the globe Studied customer sites in the United

States & Canada with an onsite program managerParticipan

t TypeSample Populatio

nResponse

Rate

Program Managers

41 46 89%

Customers 30 62 48%

Total 71 108 66%

Data Collection Survey

The survey was a self-report format administered via the web

The scale of measurement for the variables was a 5-level Likert rating scale:

1 = Strongly Disagree, 2 = Disagree, 3 = Don’t Know, 4 = Agree, 5 = Strongly Agree

An overall score for each of the study factors was developed

Data Collection Survey Perspective

Item 11b (Appendix H) from the program manager survey instrument reads “Our onsite manager training emphasizes treating our customer fairly (e.g. provides us tools to do so)”

The same Item 11b (Appendix I) from the customer survey instrument reads “Their onsite manager training emphasizes treating us fairly (e.g. provides them tools to do so)”

Demographic Variables

Total PMs Customers

Gender ** **, + --

Age ** *,+ **

Country ** ** **

Industry Type ** ** **

Site Employees

** * **

Total Employees

** ** **

Years w/ CMS ** ** ** Note. * p < .05 ** p < .01 difference within variable. + p < .05 difference between groups for nominal and dichotomous variables, and t test for the continuous variable (i.e., age).

All Participants N=71, Program Managers n=41, and Customers n=30.

Descriptive Statistics

CMSMean (SD)

SupPerMean (SD)

All Participants

3.56 (0.53)

4.01 (0.43)

Program Managers

3.71 (0.51) **

4.12 (0.43) **

Customers 3.36 (0.51)

3.85 (0.39

Age -- *Note. p < .05 ** p < .01 General Linear Model test for difference between PM and customers, and difference between five age categories.

All Participants N=71, Program Managers n=41, and Customers

n=30.

Reliability – Cronbach’s Alpha

Participant

Group

CMS SupplierPerformanc

e

# of Items 16 13

All .898 .752

Program Managers

.899 .742

Customers .877 .703

Note. All Participants N=71, Program Managers n=41, and Customers n=30.

Linear Regression Result

Hypothesis

DV IV B Std. Error

t p

H1 Sup Perf

CMS .350 .087 4.01 .000**

Note. ** Regression coefficient significant at p < 0.01 level

N=71

Intercorrelation

Measure 1

1. SupPerf --

2. CMS .471**

Note. ** Correlation coefficient significant at p < 0.05.

N=71

Limitations of Research Sample size Program manager & customer survey

versions Haas TCM Group program managers &

customers in United States & Canada Lack of full representation of all industry

types

Research Implications This research provides a better

understanding of CMS and other similar green supply chain management practices

This research adds the supplier’s perceptions element to this body of knowledge in the CMS industry sector

Practitioner Implications CMS can lead to improved supplier

performance ratings of your chemical providers & triple bottom-line success

“Sustainability is doing things efficiently to preserve resources and minimize environmental impacts” - George David, the Chairman and CEO of United Technologies Corporation

“It requires a whole different kind of thinking” -Bob Conrad of Chrysler Corporation

Conclusion The element of a green supply chain management is

becoming increasingly important in the business world

CMS use helps to realize accurate measurement of chemical use across their value chain

The CMS model is an example of how to gain additional help from the supply chain in assessing environmental challenges

CMS companies are able use this as a decision making tool to allocate increasingly scarce resources to the right initiatives to help realize business and sustainability goals

Additional Information on CMS

Chemical Strategies Partnership423 Washington Street, 4th FloorSan Francisco, CA 94111ph: (415) 421-3405fax: (415) 421-3304http://www.chemicalstrategies.org

Questions?

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