Designing, Developing and Implementing a Management System: An Overview April 2010

1. IBM Corporate Environmental Affairs and Product Safety Designing, Developing and Implementing a Management System: An OverviewApril 2010

2. Discussion Points • What is a Management System • Basic Considerations • Keys to Success • Components of a Management System • Assessing What You Have • Steps to Designing, Developing and Implementing a Management System: • Step 1: Establishing a policy statement • Step 2: Planning • Step 3: Implementing and operating • Step 4: Checking • Step 5: Reviewing • Continual Improvement – Goal Setting • Goal Setting Examples • Take Credit for Your Accomplishments • Pitfalls & Challenges • Benefits 2

3. What is a Management System • A management system is a structured framework of practices and procedures that enables an organization to execute its operations in a consistent and sustained manner. • The management system is intended to be system dependent, not people dependent. • The system is built on the Plan, Do, Check and Act Model. . 3

4. Basic Considerations • Vision statement (formalized policy statement, commitment) -- what is it that you want to accomplish? • Identify the elements of your activities, products and services that intersect with the policy statement. • What are the legal requirements associated with the intersects? • What is the process to identify applicable legal requirements? • What documents and/or procedures are needed to control the intersects? • How is performance against procedures, practices or requirements monitored and measured? • Management review, involvement and support. 4

5. Keys to Success • Top management commitment and support is critical. • Recognize that the management system is dynamic and should be seamlessly incorporated into everyday operations. • The management system should be robust enough to address the values of the company yet flexible enough to accommodate change rapidly and efficiently. • Look beyond the initial effort to define and deploy the management system. • As you initiate the process, keep it simple. 5

6. Components of a Management System • Policy (Formal statement of values and commitments) • Planning • Implementation and Operation • Monitoring, Checking and Corrective Action • Management Review 6

7. Assessing What You Have • Identify current management systems in place • Review internal requirements and associated documentation • Directives, guidelines, procedures, practices, standards, business plans, etc. and determine where they fit into the Plan, Do, Check and Act Model • Perform a gap analysis • Begin to build on what you have and set implementation milestones to facilitate progress 7

8. Designing, Developing and Implementing a Management System: Step 1 -Establishing a policy statement A policy statement will outline the strategic values that are most important to the company and provide the foundation upon which you build your management system. • Documented, communicated and available – both internally and externally • It should address what is important to your business and/or your clients and your company’s strategic values • Consider avoiding vague statements 8

9. Designing, Developing and Implementing a Management System: Step 2 -Planning Planning is critical and should be as holistic as practical. • Identify the elements of the organization’s activities, products and services that intersect with the company’s policy. • Which can the organization control and/or influence? • Which are the most important to control? • Establish a process to identify legal and other requirements, and to maintain compliance. • Set goals to help you achieve and continue to improve upon your management system. 9

10. Designing, Developing and Implementing a Management System: Step 3 -Implementing and operating Identify the requirements necessary to execute against your policy and plans: • Defined roles and responsibilities • Identify proper skills, education and/or experience necessary for persons executing the requirements of the management system • Process to communicate relevant information about the management system and performance to employees and other interested parties • Document and control the core elements of the management system that are essential to maintain operational control • Plan for emergency situations 10

11. Designing, Developing and Implementing a Management System: Step 4 -Checking Establish a process to monitor performance, legal compliance and the execution of management system requirements. • The self-assessments and/or internal audits should closely examine whether: • Employees are aware of the policy statement and understand how what they do in their job might impact it • Goals and targets are established and on track • The company is in compliance with legal and other requirements • Procedures, processes and related documents exist where necessary for the management system to be maintained in a sustainable manner • Identify records that must be maintained to demonstrate legal compliance and operational control • Audit results will provide a good sense of the status of the management system and should be periodically reviewed with top management 11

12. Designing, Developing and Implementing a Management System: Step 5 -Reviewing Periodic review with top management. Some elements of this review should include: • Status of goals and targets • Status of compliance with legal and other applicable requirements • Identification of any changes to business operations • Discussion regarding opportunities for improvement • Any resulting action that management identifies as a need for changes to the management system, goals, other opportunities for improvement or is there a need to change the policy statement? 12

13. Continual Improvement – Goal Setting • Establishing goals and program management: • Identify the goal and respective target • Define the means – how you will accomplish this goal • Provide a time frame – by when • Designate the person responsible to execute or oversee execution • Periodically check progress • The goals can be performance based or system based 13

14. Continual Improvement – Goal Setting Examples • Energy Conservation • Identifying energy intensive operations, equipment, buildings • Energy conservation measures • Investment opportunities to improve efficiency • Accurate accounting • Waste Management • Waste inventory - hazardous and nonhazardous waste generated • Product or facility operation • Recycling programs or source reduction plan • Accurate accounting and reporting • Greenhouse Gas Emissions • Emissions inventory • Scope 1 • What are the direct GHG Emissions from your operations? • Scope 2 • Purchased electricity/electricity use • Use of correct GHG emissions factor to estimate emissions associated with purchased electricity • Electricity Efficiency Programs – lighting, manufacturing operations, HVAC, plug load • Establish programs to monitor and reduce • Supplier Conduct Principles 14

15. Take Credit for Your Accomplishments Establish a process to disclose performance, whether positive or negative, with respect to the company’s policy statement and management system. • This could include: • Policy statement • Status of established goals and their associated targets • Status of compliance to legal and other applicable requirements (including any regulatory fines or penalties) • Other elements of the management system • Disclosure can be accomplished several ways: company Web site, annual report, newsletters, press releases, attached to request for proposals and other means to let external interested parties know how you are doing in relation to the stated management system. 15

16. Pitfalls & Challenges • Perception that this is extra work and not integrated into the fabric of the business • Over documentation, bureaucratic and/or theoretical • Designing a “wish list” or "to be" system that is not reality • Fear that documented job responsibilities will lead to resource reduction • Can’t see the value of the management system past the initial effort to get there 16

17. Benefits • Formal Management System is System Dependent, Not People Dependent • Promotes and Reinforces a Consistent Approach to the Execution of the Organization’s Operations • Drives Sustained Performance • Fosters Awareness and Responsibility Throughout the Organization • Formal System Drives Common Solutions and Efficiency • Enhances Employee Mobility Within the Organization • Positions the Organization to Respond to Inquiries from Customers, Stakeholders and Other Interested Parties • Marketplace Leverage 17

18. www.ibm.com/ibm/environment 18