Improving Profits by Better Management Control

Aspects International Ltd specializes in helping organizations achieve ISO 14001 through consultancy and training. Many of our consultants also have experience of ISO 9001:2000 and also work as auditors for leading certification bodies. Recently we completed a review of the benefits organizations are gaining from achieving these standards. The result of the review was disappointing in that few companies were improving profits.

Fig 1. Degree of Control

Fig 1. Degree of Control

A number of key reasons were identified:
  • Too much focus on documentation and not enough action.
  • Ineffective internal auditing.
By action we mean improving operational control.

It also requires management to specify accident/ incident and emergency conditions that may occur when control is lost.

The concept of "continual improvement" is introduced in ISO 14001. In the context of control mechanisms continual improvement is the ability of management to change the specified set of conditions to deliver improved business performance and reduce environmental impact.

Statement of the problem
Unfortunately as an ISO 14001 consultant starting an implementation project or as an EMS Lead Auditor I find that management have frequently not clearly specified what they mean by normal and abnormal operating conditions and often have difficulty identifying all risks. In other words management generally and genuinely believe that they have good control of the business activities and are consequently very surprised when this is shown not to be the case. If management do not have these different operating conditions clearly defined then there can be a gradual loss of control leading ultimately to a major emergency.

Consequently it is also surprising that as an EMS Lead Auditor I find the vital step of deciding the degree of control is often omitted in the process of deciding which aspects are significant. The result can be that certain aspects are rated as not being significant and are consequently not included in the environmental management system.

A simple model of management control
A simple model of management control (Figure 1) has been developed to help management understand the importance of determining the degree of control and the immediate benefits that can be gained. The model indicates that when control is significantly lost an emergency or incident may result and control will be extremely difficult to regain. On the other hand through a process of setting higher and higher standards with regular management review world class competitiveness can be achieved.

Developing criteria for assessing control

Table 1 - Using criteria to assess control


Possibly or in part

Is the activity controlled bya documented procedure (or SOP.) or a work instruction?      
Has training been provided for theManagement andOperators?      
Is there good supervision byMicroprocessor control orSupervisors close to the activity?      
Have performance criteria been specified for the EquipmentManagement & operators?      
Has the time been specified for the Activity orProcess step ?      
How is the activity or process maintainedPlanned maintenance schedule orReactive (fix it when it breaks)?      
How is the performance of the activity or process reportedSenior managementWorkforce?      
Is non-achievement of internal standards investigated & corrective & preventive action applied?      
Are improvements actively sought byManagementWorkforce?      

Above are nine questions that can be used to assess control within an organisation. However management should add more specific questions. Fifteen questions is typical.

Quick fixes and improved profits
Here we can combine the ISO 14001 approach and the new ISO 9001:2000 with its commitment to continual improvement. There is now at long last a powerful management tool to achieve business improvement in all areas; environmental, quality, health & safety and financial. Significant benefits generally accrue from this quick exercise of determining the degree of control. This mechanism is set out below.

  • Setting internal standards of performance better than customer expectations and competitors ability.
  • Improving monitoring and measurement to provide management with more data about the effectiveness of their control systems.
  • Raising nonconformances any time any where by anybody can change cultures within an organisation but by careful analysis of the root cause of the nonconformance can lead to detailed new objectives and targets being set.
  • Improved internal audit checklists more focused on identifying opportunities to improve and less on documentation errors.
  • Regular top management review should review the standard of operational control and set new objectives to achieve.

All of the above combine to make a powerful mechanism to achieve continual improvement of the organisation's business.

The need to improve audit methodologies
For both ISO14001 and ISO9001:2000 Certification Body audit teams are finding that many organisation's are failing to derive real benefit from the internal audit process. After 2-3 years of having their ISO certificates few if any nonconformances are found and management lose interest in the audit process and possibly even maintenance of the management systems. The main reason is that the internal audit is still focusing on documentation and not the achievement of objectives and the identification of new opportunities for improving systems and processes.

We are seeing many companies worldwide seeking to improve their internal auditors skills by sending them on a 5 day ISO 14001 Lead Assessor Course. Management has realised often with encouragement from their Certification Body that they are not getting as much benefit from their internal auditing as they should. They may have a well documented system but is it delivering business benefit by increasing profits?

To gain financial benefits management must seek to improve operational control through the setting of objectives and targets and a regular review of their achievement followed by the setting of higher standards. The internal audit is a powerful tool to drive continual improvement but it requires auditors trained to much higher standards than at present.

Barry F P Little FIEMA, EARA reg. Principal Environmental Auditor, EMS and QMS Lead Auditor
March 04


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