By Travis Kruse, Grainger 2/28/22
Abstract. This white paper argues for the urgency of improving the way management systems are built and run in operational settings, offering a practical framework for better integrating management systems within operational contexts. The value of adopting an integrated management system in operations is that the operations system relies on the same workers and data, encounters the same risks and regulations, performs similar routines, and functions within the same workspace as those being managed/protected by the integrated management system. Hence, it is essential to integrate them into the overall operations strategy and treat them as operational priorities. The paper should be of significance to chief operating officers, operations/supply chain managers, and environment, safety, and health managers/engineers. In particular, the paper explores the merits of digitizing management systems to transform the way decisions are made and supported. To re-envision the building and running of management systems the evidence-based research on the topic was synthesized into a critical review. Emerging from this review, we uncover previously unidentified, relevant connections between management systems and operations/supply chain management systems and advocate for adopting digital technology for automating management system processes. Finally, we offer concrete recommendations about the implementation of automated technology of management systems within operations management settings.
Building and Running Management Systems in Operational Settings
21st-century organizations bear an increasing burden to balance traditional operational considerations with the navigation of their social and environmental impacts – in addition to their financial performance. Optimization of production, as derived from effective and efficient use of operational resources and handling variation in customer expectations for quality, eco-friendly, safe products, and services, is now viewed as an operational responsibility and a foundational component of sustainable supply chains. Towards this end, operations/supply chain managers have taken a broadly resource-based view of operations (i.e., drawing on the competencies and capabilities of internal resources to achieve competitive advantage), ultimately emphasizing a systems management/engineering approach (i.e., steering production performance to remain within normal limits and controlling operational variance to avoid abnormal situations). As organizations have placed greater emphasis on running a stable and robust production system with no quality defects, no injuries and illnesses, and no environmental impacts, operations managers/engineers have increasingly sought to incorporate consideration of management systems as a means of controlling exposure to risk, enhancing regulatory compliance, and fulfilling internal and external supply chain concerns. Building up capabilities in the form of management system practices supports all three dimensions of the triple bottom line, boosting firms' financial performance while improving their social and environmental impact. In short, these systems enable organizations to monitor operations and achieve relevant organizational objectives more effectively and efficiently.
The three most widely employed management system standards referred to in this paper are the ISO 9001 for quality management systems, the ISO 14001 for environmental management systems, and the ISO 45001 for occupational health and safety management systems. Table 1 presents a description of each standard.
Table 1
Prominent Management Systems Available & Being Used in Operation Management
System |
Description |
Quality Management (ISO 9001) |
Specifies requirements to ensure that products, production processes and services are free of defects and provide value. |
Environmental Management (ISO 14001) |
Specifies requirements to ensure that environmental aspects are managed and the effects of changing environmental conditions and regulatory compliance are accounted for to avoid environmental impacts.
|
Safety & Health Management (ISO 45001) |
Specifies requirements to ensure that exposures to workplace hazards are managed and the effects of changing operating conditions and regulatory compliance are accounted for to avoid injury and illness. |
Typically, management systems have been built as a standalone arrangement, intended to operate unaccompanied and not requiring connection to other management systems in order to function. Standalone systems offer greater coherence and consistency in decision-making and single-mindedness in work routines. However, many of the elements associated with these siloed systems overlap, creating redundancies that drive resource usage and losses, amplifying the need to find a more efficacious way to build and run these systems.
For operations desiring to have control over more than one management system, an integration arrangement may eliminate the inefficiencies with the standalone approach. An integrated management system combines multiple management systems to simultaneously handle the requirements of quality, environment, safety & health management systems. Linking siloed systems makes adopting an integrated approach more attainable and supports the lean enterprise movement taking place in today’s high-performance-driven operations. Although the capacity of integrated management systems to create more sustainable operations and ensure that management system and operations management system goals are congruent, some logistical concerns may arise during implementation. For instance, the differences in scope and scale between the combined systems may be underestimated, or there may be competing priorities between quality and environment or safety. Thus, although integrating management systems is an important first step to minimizing redundancy and improving efficiency, further optimization may be needed in order to realize the full potential of integrated management systems to guide quality performance while mitigating environmental impacts and maximizing operational safety.
Alongside the rise of integrated management systems within operations/supply chain management, decision-making is being simultaneously transformed by a new culture of management that has arisen within the digital economy. The digital economy is the economic activity of online interconnectedness, driven by information communication technologies (ICT) such as mobile technology and the internet of things (IoT). The connectivity, scalability, and security of digital technologies allow a more data-driven approach to decision-making, facilitating the smooth delivery of a broad range of quality, environment, and safety & health management system outcomes that can be tracked, updated, and distributed instantly – across facilities anywhere. Ultimately, although digital platforms may also improve the effectiveness of standalone management systems, their capacity to automate and optimize may be especially pivotal to the effective design and maintenance of integrated management systems in operational settings, allowing organizations to resolve the logistical concerns that arise while integrating previously siloed management systems.
As the digital transformation becomes more embedded within operations/supply chain management, it will continue to alter how management systems are built and run. In what follows, this paper will explore the merits of automating management systems in operational settings as a means of more efficiently achieving operational, quality, environmental, safety, and health objectives.
Automating Management Systems
Because management systems largely depend on acquiring and distributing information throughout the internal and external supply chain, automation provides greater means for leveraging critical data. Automating management systems has the benefit of bringing all system documents—e.g., policies, risk assessment and control, regulatory compliance, management of change, inspection, incident tracking—into one centralized repository that can be accessed instantly by internal and external supply chains. This in turn enables managers and workers to link system elements with best practices and work routines in the most clear-cut, effective, and efficient manner, all actionable within an operational setting. In addition to the general efficiency and optimization afforded by such technologies, one of the most powerful benefits to digitizing management systems is the capacity for automation.
Automated task functionality ensures that the right documents are always in use, that routine activities are recorded appropriately, and that management and workers are both meaningfully engaged. By de-duplicating time-consuming manual tasks and spreadsheets, automation has the potential to save considerable time and energy, optimizing interactions among management system users and allowing operations to be more efficient, cost-effective, environmentally correct, and operationally safe. Moreover, automation enables more substantial integration of management systems with operations; by monitoring processes and proactively generating alerts when deviations from process control limits are detected, automated systems can ensure that quality, environment, safety, and health considerations are central to operations. Data generated by sensors on physical objects can be analyzed and compiled on connected devices, yielding configurable, searchable summary reports that reveal patterns and offer insights to guide informed decision-making and quick action. The advanced networking capabilities of internet-connected devices within such a system provide ways to steer the shared planning, assessment, control, monitoring, and continuous improvement of information accurately and transparently, ensuring that the work continues to conform to the requirements of the management system. In these ways, technology-enabled management systems improve employee engagement and operational productivity, leading to better outcomes in terms of quality, environment, safety, and health.
Management System Design and Implementation
The mounting pressure for operations management to balance operational considerations with the navigation of quality, environment, safety, and health impacts demands that operations maintain an effective management system. Given this reality, the decision to pursue a lean, integrated, and automated management system is now an operational necessity; however, the strategy by which this goal is pursued is often ill-defined and short-sighted. In what follows, we provide strategic and tactical guidelines for effectively and efficiently building and running a lean, integrated, automated management system. The strategy comprises a two-phase approach, consisting of an assessment of the current state of the existing management system, a system re-design based on intended specifications, and financial support necessary for capitalizing the system.
Phase I. Assessment (Existing Management System)
Evaluate the following existing management system capabilities:
Phase II. Management System Redesign (System Scale and Alignment)
Revise the following new management system capabilities:
Summary
The need to balance traditional financial and operational considerations with social and environmental impacts will likely persist in the future as organizations increasingly seek sustainable and equitable paths to profitability. Integrating and automating management systems provides a way for increasing operational efficiency, controlling risk, ensuring compliance, and handling supply chain concerns. The affordances of digital technology and automation allow operations managers and environment, safety, and health specialists to optimize monitoring, assessment, and continuous improvement within an operational context. We hope that organizations embrace this opportunity to transcend the limitations of outdated management system structures, using the strategies and guidelines we have offered to streamline their transition to a truly 21st-century management system, thereby paving better organizational futures.
The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.