MRO Today - Chemical safety: reducing risk

Chemical safety: reducing risk

When plant managers and MRO specialists think of areas where they can cut costs, maintenance chemicals are rarely at the top of the list.

The temptation is to think big and go for large, high-visibility improvements in inventory reduction, cell redesign, and 5-S programs. However, once the “low hanging fruit” savings have been captured, many managers are stymied as to where to focus next.

Most manufacturers now realize the value of lubrication management and analysis programs, but these are often limited to a narrow range of products. As a result, your plant may pay a lot of attention to lubricants, but not much, if any, to their chemical counterparts. This can leave you and your workers open to hazardous spill incidents, improper disposal citations, huge regulatory fines and litigation. In truth, the administration of MRO chemicals, including storage, paperwork, disposal and other hidden expenses, may cost you more than the products themselves.

The true costs
The issues that drive chemical costs include regulations, safety issues, transactional costs, and manufacturing efficiencies.

The sources of regulations on chemical storage and disposal include the EPA, OSHA and state and local agencies. They contain provisions for Volatile Organic Compounds (VOCs), air pollutants, ozone depleting chemicals and cross-contamination among others.

Safety factors that drive costs include flammability, compliance, HACCP initiatives, explosive limits and MSDS administration.

Transactional costs within your company are created by inventory control, product duplication, purchase orders and invoices, receiving, storage and more.

Finally, manufacturing efficiencies such as downtime, improper usage, productivity improvements and on-time delivery have a major impact on your overall chemical costs.

Minimizing your risk
The solution is to develop a risk reduction program, a five-step process to identify and implement real cost savings. Just as importantly, it also quantifies and documents savings in SKU reduction, transaction cost reduction, application savings, process improvements, training costs, regulatory reporting, risk minimization and any other goals you define. This is where you will see your cost savings on paper.

Step 1: Develop the plan
The first step of the process is to develop a risk reduction plan. In this step your corporate managers and, whenever possible, key distributors and suppliers, design a plan targeting specific cost generators and potential areas of risk such as productivity, safety and regulation. First, what are the key corporate goals for the program? A critical component of this discovery process is to take the search as broadly as possible across your organization. A technician who regularly handles chemicals will have a different perspective than a person who processes invoices, purchases the product or maintains compliance records; yet all these viewpoints have value.

And, involving trusted distributors and suppliers in this process does more than bring additional sets of impartial, experienced eyes to bear on the problem, it challenges them to develop solutions that bring real value and improved efficiency to your organization. This allows you to clearly target areas to improve.

Step 2: Product survey and application analysis
After developing a basic strategy, the next step is to analyze current products, their use and application requirements to get the “big-picture” of how your company conducts its business. This involves an in-depth plant survey to analyze current usage patterns, applications and requirements, and identify product duplications and “hot spots.”

Step 3: Standardize and improve processes
Once the product usage map is established, your distributors and suppliers can identify solutions that fit specific needs. Those solutions must meet your criteria, such as eliminating duplications, maximizing compliance, improving productivity, reducing downtime and reducing administrative costs in paperwork and minimizing exposure and risk.

Step 4: Support and training
As experts, your distributors and suppliers can also provide product training in how to handle, store and dispose of products, reinforce the plan benefits and ensure smooth implementation. They should also be able to explain which personal protective equipment (PPE) to use. Training and support should also include hazard communications training in hazardous chemical inventory, MSDS, hazardous warning labels and other and training.

Step 5: Documentation
The final step is to document the hard cost savings generated by the program. In addition to addressing all of your defined goals, this should also cover SKU reduction, transaction and training costs, application savings, process improvements, reporting and risk minimization.

There’s no need to go it alone. Your key vendors and distributors are there to help you, so get them involved from the beginning. Make your expectations clear at the outset and let them know that if you win, they do, too. Contact your vendors and ask if they can help you create a Risk Reduction program for your chemicals. If they do, put them to the test. If they don’t, find one that does.

Material for this article was provided by CRC Industries: www.crcindustries.com.

This article appeared in the April/May 2006 issue of MRO Today magazine. Copyright, 2006.