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Supplier Request for Cost Savings

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					  ISO 14001 and Supplier
Environmental Requirements
                              By
             Bob Devlin, Manager
        Environmental Management
                    and
 Gary Davis, Environmental Engineer, Norfolk
               Assembly Plant


“Protecting the Environment is Everyone’s Job.”

            Environmental Quality Office, May 25, 2000   1
              Overview

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

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


          Environmental Quality Office, May 25, 2000   2
    Ford’s Environmental
    Management System

• Why Ford chose ISO 14001?

• Implementation

• Lesson’s Learned


          Environmental Quality Office, May 25, 2000   3
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)

            Environmental Quality Office, May 25, 2000   4
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



             Environmental Quality Office, May 25, 2000   5
            Background
We 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

              Environmental Quality Office, May 25, 2000   6
                 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



              Environmental Quality Office, May 25, 2000   7
           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!



              Environmental Quality Office, May 25, 2000   8
         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

            Environmental Quality Office, May 25, 2000   9
      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

              Environmental Quality Office, May 25, 2000   10
    Ford Environmental System
            ISO 14001
        Top Two Questions

• Why ISO 14001 for suppliers?

• What is required of suppliers?



             Environmental Quality Office, May 25, 2000   11
      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   12
 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


            Environmental Quality Office, May 25, 2000   13
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.

               Environmental Quality Office, May 25, 2000   14
      ISO 14001 Supplier Requirements
• 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.



                Environmental Quality Office, May 25, 2000   15
    Implementation of
  Supplier Requirements
• The Case For Change
• Communication
• Training




        Environmental Quality Office, May 25, 2000   16
       Case For Change
• Internal Lessons Learned
• Benchmarking
• Supplier Readiness Assessment




          Environmental Quality Office, May 25, 2000   17
          Case for Change
                      Benchmarking

 Automotive Companies Requesting ISO 14001

Require                                           Recommend

Ford (certification)                              BMW / Rover
Jaguar (certification)                            VW/Audi
Volvo (certification)                             Saab
GM (self certification)                           Porsche
Honda (Europe & Top NA) ?                         Toyota
Daimler Chrysler (Europe) ?
Nissan ?


           Environmental Quality Office, May 25, 2000           18
           Case For Change
       ISO 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.

               Environmental Quality Office, May 25, 2000   19
            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.




               Environmental Quality Office, May 25, 2000   20
  Percent of Suppliers With A Corporate
  Environmental Policy




Note : Percentages represent percentage of survey respondents only.



                Environmental Quality Office, May 25, 2000            21
                 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.



                        Environmental Quality Office, May 25, 2000    22
      Prepare to Change
• Communication
• Training




          Environmental Quality Office, May 25, 2000   23
        Communication
• ISO 14001 Requirement Letter
• Supplier Environmental Requirements
  Guide




           Environmental Quality Office, May 25, 2000   24
     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
           Environmental Quality Office, May 25, 2000   25
        Lessons Learned
• Training Program is Essential
  – Materials/templates
  – Sharing/Spirit of Partnership
• Supplier Assessment began early
  engagement of supply base




             Environmental Quality Office, May 25, 2000   26
                 Next Steps
•   Online training
•   Investigate training for sub tier suppliers
•   Buyer training
•   Tracking/governance system
•   Develop Measurables
•   Best Practices, Partnering &
    Conferences to share experiences

               Environmental Quality Office, May 25, 2000   27

				
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