What EHS Managers need to know about digital transformation
As an Environment, Health, and Safety (EHS) manager or professional, you’re well-aware of the critical role EHS plays in Operational Excellence. There is no doubt that your company has one (or more) continuous improvement initiatives aimed towards operational efficiency and effectiveness; perhaps it’s based on a Lean approach or Six Sigma. A strong EHS component is necessary for such initiatives to produce desired results. After all, an unsafe plant that doesn’t meet compliance obligations or manage operational risks is not a smooth-running, profitable plant.
A new breed of strategic business initiative has come on the industrial scene that’s having a profound impact on Operational Excellence and continuous improvement: Digital Transformation. This topic is actively being discussed in executive suites and plant managers’ offices across all industries. Projects to digitalize the plant, the enterprise, and the value chain are underway, with more coming.
These digital initiatives impact how businesses operate from the shop floor to the top floor, and across global business networks. In this post, I’ll discuss why the EHS management function needs to be fully aware of and engaged in Digital Transformation, and the associated risks and opportunities.
Digital Transformation is More than a Buzzword
Is Digital Transformation for real? In short, yes, driven by the availability of inexpensive computing power, sensor technology, and pervasive internet connectivity. Four main digital technology trends are enabling new business models, processes, and products not before possible.
The Internet of Things (IoT) is enabling networks of smart connected devices and equipment that use sensors to gather many types of data that can be mined for insights, and trigger intelligent actions, even without human intervention.
Big Data Analytics tools can analyze large volumes of diverse operational and business data, enabling Predictive Analytics and improved decision-making.
Mobile applications are driving employee engagement by making information and capabilities available anytime; anywhere they’re needed.
Cloud computing is enabling much more cost-effective, flexible deployment of robust business applications than was possible before with expensive on-premises systems.
Digital technologies are indeed changing the way business is done by enabling new capabilities. EHS managers and professionals will benefit from awareness of these trends and adapting accordingly.
New Risks Are Being Introduced
Digital Transformation can change how businesses operate, which has major implications for EHS management regarding new risks that need to be managed. Consider two examples:
1.) New business models mean new workplace risks. As formerly product-based businesses become more like service providers, new roles and workplaces may be created. For example, an aircraft-engine manufacturer selling hours-in-service rather than an engine may have new off-site job roles for inspection, maintenance, repairs, etc. with a new set of hazards.
2.) Networked production systems pose greater cyber security threats. Manufacturing and industrial operations are being revolutionized by the IoT, with networks of smart connected devices, assets, and operations. Such systems are more vulnerable to security breaches by cyber-intruders, with associated safety and environmental impacts. After all, security lapses create risk, and risk decreases safety. Consider that in many languages including French, Italian, and German security and safety are described by the same word.
Digital technologies are accelerating the pace of change in organizations and operations. With change comes risk, and the need for rigorous systems to manage it effectively. The EHS function plays a vital role in operational risk assessment and control, and management of change. These processes need to be better defined and executed than ever to be a part of the overall EHS management system.
Digital Transformation Creates Opportunities for EHS
The digital revolution also presents opportunities to incorporate new ways of managing EHS. Innovative technologies can help better operationalize EHS management systems to drive continuous improvement. The use cases below just scratch the surface of what’s possible.
Improved machine and equipment safety with the IoT-sensor-equipped manufacturing lines capture extensive information on production, safety systems, and asset performance, such as operational status, event sequences, stoppage codes, motion monitoring, and so forth. With IoT-enabled Smart Connected Assets, EHS and operations personnel now have better visibility to such data, as well as advanced analytics capabilities, and can use it in root cause analysis of incidents and accidents for preventive action.
Predictive Analytics and leading indicators – it’s now possible to combine the analysis of EHS data with vast amounts of operational data from other business systems such as EHS, HR, asset management, and manufacturing to identify and mitigate priority risks predictively. In the case of one manufacturer, such analysis showed that factors such as overtime hours and completion of preventive maintenance activities were correlated with incident rates. By monitoring and acting on these leading indicators, incidents rates were reduced significantly.
Mobile applications to increase employee engagement. Mobile applications are widely available as part of most EHS management software platforms. Incident management, including safety observations, is among the most common apps, along with audits and inspections. Equipping employees with mobile apps helps them to actively engage in EHS programs and processes such as a behavior-based safety and helps build the desired culture around EHS and safety. This also allows larger amounts of data to be collected, in turn enabling better analysis.
The Promise of the Digital Transformation of EHS Management
Digital technologies such as the IoT, Big Data, Mobility, and Cloud offer the potential to improve EHS performance in new and meaningful ways. The digitalization of EHS management is already occurring, and helping organizations make EHS processes more automated and intelligent, and perhaps more importantly more integrated with core business operations across extended supply chains.
EHS managers and professionals are well-advised to get involved in their organization’s Digital Transformation initiatives, both to help better manage the risks, as well as take advantage of the big shift as a means to better operationalize EHS management systems.