Environmental Quality Office, May 25, 2000

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ISO 14001 and Supplier Environmental Requirements

By

Bob Devlin, ManagerEnvironmental Management

andGary Davis, Environmental Engineer, Norfolk

Assembly Plant

“Protecting the Environment is Everyone’s Job.”

Environmental Quality Office, May 25, 2000

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Overview

• Ford’s Environmental Management System – Gary Davis, Environmental Engineer, Norfolk Assembly Plant

• Ford Supplier ISO 14001 – Bob Devlin, Ford Motor Company

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Ford’s Environmental Management System

• Why Ford chose ISO 14001?

• Implementation

• Lesson’s Learned

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Why ISO 14001 Certification

• 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)

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Why ISO 14001 Certification• 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

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BackgroundWe 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

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ISO 14000• Benefits:

– Improve Environmental performance– Reduce costs– Establish single management system standard

and process– Integrate with other management systems– Increase Public Credibility– Competitiveness– Improved relationship w/ Regulatory Agencies

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Lessons Learned

• Top Management and Plant Management Support

• Begin by evaluating and using what’s already in place

• Borrowing – a great place to start

- Aspects, EMPs, Procedures, Work Instructions

• Bottom line: Must work for YOU!

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Lessons Learned

• Implementation requires a significant level of effort and commitment

• Excellent opportunity to heighten environmental awareness within the facility/plant

• Program maintenance involves the continued support of the plant & management team

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Examples of Benefits

• Assembly Plant in Ohio reduced purge solvent by 30% resulting in material cost savings of $104,000 annually

• Assembly Plant in Kentucky reduced the plant air pressure from 105 PSI to 95 PSI resulting in an annual savings of $150,000

• Canadian Engine Plant (typical of many plants) replaced 3200 fluorescent lights with energy efficient bulbs and ballasts reduced energy usage by 1.04 million kWh per year and reduced energy costs by $44,000 per year

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Ford Environmental SystemISO 14001

Top Two QuestionsTop Two Questions

• Why ISO 14001 for suppliers?

• What is required of suppliers?

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Why ISO 14001 for suppliers :

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

Environmental Quality Office, May 25, 2000

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Ford Supplier Requirements• Certification and maintenance of an ISO 14001

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

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Ford Supplier Requirements

• 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 14001 requirements to tiered suppliers.

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• 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 14001 Supplier Requirements

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Implementation of Supplier Requirements

• The Case For Change

• Communication

• Training

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Case For Change

• Internal Lessons Learned

• Benchmarking

• Supplier Readiness Assessment

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Case for ChangeBenchmarking

Automotive Companies Requesting ISO 14001

Require Recommend

Ford (certification) BMW / RoverJaguar (certification) VW/AudiVolvo (certification) SaabGM (self certification) PorscheHonda (Europe & Top NA) ? ToyotaDaimler Chrysler (Europe) ?Nissan ?

Environmental Quality Office, May 25, 2000

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Case For ChangeISO 14001 Supplier Readiness Survey

• Letter and survey sent to Top 200 production and Top 90 non-production suppliers in North America in February 1999.

• Letter and survey sent to “Europe 150” suppliers in Europe 95% production suppliers.

• Jaguar sent letter to Top suppliers in June 1998 encouraging suppliers to pursue ISO 14001, followed up with survey to assess supplier readiness in March 1999.

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Case For Change

• While not conforming to these requirements may not remove a supplier from the approved source list, it may cost that supplier future business and may encourage re-sourcing in the future.

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Percent of Suppliers With A Corporate Environmental Policy

88%

70%

83%

61%

Top 100 Next 100 Europe 150 FM&SP

Note : Percentages represent percentage of survey respondents only.

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Benchmark Survey Results

• A total of 35 European Suppliers* currently have plants registered to ISO 14001 or EMAS. (Europe 150 Production)

• A total of 38 North American Suppliers* have plants currently registered to ISO 14001. (Top 100 & Next 100)

• Among non-production suppliers, 7 reported registration to ISO 14001.

* Suppliers Reporting minimum of one plant currently shipping to Ford registered to ISO 14001 or EMAS as of July 1999.

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Prepare to Change

• Communication

• Training

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Communication

• ISO 14001 Requirement Letter

• Supplier Environmental Requirements Guide

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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

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Lessons Learned

• Training Program is Essential– Materials/templates– Sharing/Spirit of Partnership

• Supplier Assessment began early engagement of supply base

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Next Steps

• Online training

• Investigate training for sub tier suppliers

• Buyer training

• Tracking/governance system

• Develop Measurables

• Best Practices, Partnering & Conferences to share experiences