IN JUNE, SPHERA HOSTED A ROUNDTABLE DISCUSSION IN CALGARY, ALBERTA, CANADA, ON INTEGRATED RISK MANAGEMENT. The panelists were Bill Timbers, a Professional Engineer specializing in Process Safety and Operational Risk Management; Jim Cormack, an environmental management, regulation and risk consultant with Internex; and Tyler Tarnoczi, Senior Advisor, Air & GHG Emissions at Cenovus Energy. Mike Easley, Sphera’s group vice president of sales, moderated the discussion.
As research firm Gartner explains, Integrated Risk Management is “a set of practices and processes supported by a risk-aware culture and enabling technologies that improves decision-making and performance through an integrated view of how well an organization manages its unique set of risks.”
To re-create that event, Easley led a follow-up discussion with the three panelists in August. Here are some of those highlights in an edited transcript. What are your thoughts on a successful Integrated Risk Management program? Email us at firstname.lastname@example.org, and your comments might appear in the next edition of Spark.
Francis Trudeau: How do you define Product Stewardship, and what are the aspects of Product Stewardship that are most important to you?
Chuck McCormick: So from my perspective, I view the Product Stewardship space principally on its right to sell and right to operate impacts on an organization. And I tend to view Product Stewardship through the lens of business process integration and interdependencies across product development, R&D, supply chain and logistics execution. Most importantly, given my focus on the information system side of the equation, automation demands are driven by the sheer volume aspects of the Safety Data Sheet and Extended Safety Data Sheet space as prominent examples. But from an impact standpoint, I really look at the product compliance aspects both in terms of risk mitigation and business impact, which is to say the potential to close off a market, stop a transaction and business continuity concerns.
Trudeau: It’s interesting to see Product Stewardship playing the central role in any business. They relate to every department it seems—R&D, marketing, sales and so on. What do you think, Fred?
Fred Gouzoules: I guess I could spew off the sort of standard defini- tion that you’d see in a textbook or on an internet course, but the really brief way I like to represent it to, especially to management, is if anybody follows the National Football League, I think of Product Stewardship as the major func- tion to protect the logo of the company and really after numerous issues in recent years things like microbeads in the Great Lakes or life cycle issues around perfluorinated chemicals or Bisphenol-A. It’s becoming expected and necessary to address Product Stewardship in an upfront and diligent way.
Jennifer Howell: Being a values- driven company, this is an area where I see a lot of future potential for us, and it’s something that I’m passion- ate about. So I feel like it’s things that we’re already reflecting in our actions, and we just need to establish more of a formal base. So we recently started a new type of drying process that releases less VOCs [volatile organic compounds] into the atmosphere, and that’s an exciting move for us. And we’re also digging deeply into the supply chain transparency piece to understand more of where our foot- print is and how it’s impacting natural areas around the world.
Trudeau: And what challenges do you see regarding regulations?
Howell: Being in the food industry, one of the biggest challenges we have are the regulations and requirements that are not written. So things like third-party issues or customer-specific, consumer-specific issues. For example, we have the proliferation of a ‘no-no’ list where we have at least 10 differ- ent customers that we work with that have a list of ingredients that we’re not allowed to use. It’s really, really chal- lenging to establish long-term prod- ucts that meet these ‘no-no’ lists when it’s really up to those third parties to change that list. We’re really grateful when there’s actually a regulation in place because it allows us to speak together and understand each other a lot better.
Gouzoules: Especially in the chem- icals area, and certainly in my own experience, two major challenges have arisen on a rather rapid basis. The first of these is the greater demands in Substance Volume Tracking as a result of REACH [the European Union’s Registration, Evaluation, Authorisation and Restriction of Chemicals] imple- mentation and the TSCA [the U.S. Toxic Substances Control Act] revision and added onto the two that were already existing there. So this now becomes a major challenge in terms of burden. The other for me, if anybody works in the area of UVCBs [substances of Unknown or Variable composition, Complex reaction products or Biological materials], the substance identity or, unequivocal substance identity and the implications for such around a data-sharing global database concept and the mutual acceptance of data that exists when two substances may not be named the same but actu- ally are quite different. With different approaches to nomenclature, you essentially have to manage the burden of multiple names and identities for your same substance for commerce around the world.
McCormick: Yeah, so kind of building on Jennifer and Fred’s comments, but perhaps from a more generalized organizational management point of view, what we see is this space traditionally has been thinly resourced and asks a lot of a relative few folks in most organizations. And, of course, as global regulatory expansion continues to happen at ever-increasing rates, that further stretches the relatively thin layer of organizational resources. And, add to that, as soon as we get more and more specific requirements that are either regional or country-specific with the expansion, we’re seeing a tremendous spike in requests for help. It’s really kind of a maturity curve dynamic as these new requirements hit.
Gouzoules: If I could just add to Chuck’s comment, I’m sure many people have experienced a lot of pain around Korea REACH because never have I seen a regulation develop and be implemented as with more of a moving target aspect to it. And so unless a company has got a lot of resources within Korea, I’m sure the need to get expert services assis- tance has been quite significant for compliance.
Trudeau: Chuck, you mentioned technology enabling. So what role does technology adoption play in Product Stewardship?
McCormick: From my perspective, technology is an essential ingredient to enable enterprise integration for Product Stewardship across those core business areas that we have discussed, principally in supply chain and logistics execution. That truly, is where the impact or value from a return on investment perspective for Product Stewardship lies. On a lower complexity but high-repetition basis, the automation of SDS distribution, including multiple language and format handling all triggered on receipt of an order is essential. Alternatively, labeling requirements across multimodal shipments, including languages and variable content, and to include even relative real-time transactional controls to prevent noncompliant situations illustrates relational complexities.
Gouzoules: Let me just add in to reinforce some things that Chuck said. Yes, especially in the chemicals area in international commerce, we’ve gotten pretty much beyond the point for anything other than a very small enter- prise to be able to manage as I said before Substance Volume Tracking compliance to the chemical control laws around the world, and very much as he indicated the global GHS compli- ance not harmonized around the world puts a huge demand on a compliant labelling [program]. Such challenges really just cannot be managed in a manual basis anymore. You’ve got to have some system interfaces that make it a manageable burden in the way the world is right now.
Howell: To dove-tail on to that, tech- nology is an absolutely critical part of what Product Stewardship looks like at FONA. We clearly have to rely heavily on technology for a lot of the horse- power that runs our gears. Being a service-focused organization, we have to do it fast and accurately. A typical project for our custom flavors starts on a Monday and is shipped on a Friday. In that time we have to do all the iter- ations for all the different flavors. And when we have customers that are asking us to formulate to a specific standard, it allows us to do that a lot more quickly. We could not be as fast and as accurate as we are without the way that our technology has been inte- grated with our R&D process.
Trudeau: Lastly, what do you think the Product Stewardship function will be like in 10 years?
McCormick: So I’ll take a look at my crystal ball if you like first, Francis. It’s probably a little cloudy, but we’ll give it a shot. I see the continuation of technology enablement spreading and penetrating. Particularly technology enablement of core transactional business processes ensuring continuity. Areas where it’s already dominant, say in SDS authoring as an example will continue to evolve. However, areas such as embedding integration of Product Stewardship functionality into core business processes, again, supply-chain logistics as a prime example, will become ever more dominant and in fact eventually table stakes to support global business. In terms of R&D and the new product development and introduction processes, I do see, although it’s been a slow burn to date for sure, continued progress toward a product development and product regulatory compliance continuum, which I described as the ideal maturity point. That is, moving those compliance and sustainability decisions and integrations far upstream into the R&D product development process. If that all comes to fruition, it will strengthen Product Stewardship significantly across the industry.
Howell: Yeah, it’s such a tipping point right now. You never know which way it’s going to go so I’m going to try to be more hopeful in my predictions than dystopian. So we’re going to assume that things are going to kind of tick along the way they’ve been going. I think supply chain transparency is going to reach new highs where the partnership that you have with your suppliers has to be extremely well-de- veloped and hand-in-hand so that we understand better where our products are coming from all the way up through the chain. Then once we understand that, we’ll have a better understanding of the negative or unintended conse- quences that we might be having on different regions of the world.
For example, to pick on the food industry, the growth in natural vanilla over the last three years has had an extremely negative impact on the people of Madagascar in the form of increased deaths from malaria. I believe that over time consumers will understand that natural doesn’t always mean better, and that better has a bigger definition than just health. That it’s the health of my family, the health of my community and the health of my planet not just me alone. Maybe we can start looking at products that are artificial for a purpose, where we can tell the story of why we’re using synthetic vanillin in a more responsible manner.
Trudeau: Lastly, what do you think the Product Stewardship function will be like in 10 years?
Gouzoules: Well, it’s probably about as reliable as Chuck’s. We’ll see about this one. I really think that because of the progression and a lot of public concern over, especially the chemical industry, I would think that in 10 years that the Product Stewardship func- tion will be much more highly staffed, supported and recognized as essential for success and sustainability.