Appendix A

Case Studies

MILAN SCREW PRODUCTS

Background

Milan Screw Products is a small manufacturing firm located in southeastern Michigan that
employs 32 individuals. Milan Screw Products manufactures precision fittings for the fluid
power, automotive, and refrigeration industries, and is registered to the ISO 9002 quality
management system Standard. There are approximately 1,500 companies in the United
States in the screw-machine products industry. Most of these companies are family-owned
and family-managed, and typically have approximately 50 employees.

While there are generally few hazardous materials used in the screw-machine industry, there
are environmental issues associated with the containment of coolants and cutting oils, the
substitution of chlorinated solvents, and the disposal of waste oils. The most persistent
environmental challenge is the containment of cutting oil within production machines. Many
screw-machine shops have production equipment that was manufactured in the 1950s, which
may have leaky gearbox covers and inadequate oil splash guards. The cutting oils also create
cleaning and disposal issues (e.g., stained carpets; waste bins filled with saturated oil
absorbents swept from the shop floor; and liquid wastes from the solvents and soaps used in
cleaning).

While many shops have simply accepted the oily film that soon coats everything from the light
fixtures to the floors, Milan Screw Products decided that it was going to improve the
management of its environmental issues. Top management recognized that a clear
environmental policy, objectives and targets, written procedures, training, and corrective action
(elements similar to its quality management system), would help them to proactively manage
their environmental practices. The motivation to implement an EMS was derived from the
company’s desire to improve its environmental performance, and in light of the company’s
quality management system experience, the EMS approach seemed to be the best way to
achieve it. Milan Screw Products was soon committed to implementing an environmental
management system.

EMS Implementation

One of the first steps in the implementation of the EMS at Milan Screw Products was the
establishment of a cross-functional environmental task group. Top management appointed
five representatives from production, support, and management. The environmental task
group is responsible for assuring continued regulatory compliance (including the submission of
all permits/forms to federal, state, and county environmental agencies), and improving the
company’s environmental performance. Milan Screw Products found that participation of
shop-floor employees is essential to the successful implementation of an EMS because it
encourages their ownership of the process. Top management was pleased with the
heightened environmental awareness among task group members and their growing

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understanding of the company’s environmental responsibilities. In addition, environmental
compliance activities were soon effectively managed by the environmental task group and
would only require top management review.

While progress had been made, the organization was lacking a structure for its EMS program
and had no means to measure progress. In March 1995, Milan Screw Products joined the
EPA-sponsored EMS Demonstration Project at NSF International. One of the first steps in the
project was the self-assessment process. Milan Screw Products completed NSF’s EMS Self-
Assessment Tool, which is a checklist that enables an organization to determine how its EMS
measures up against an EMS standard, such as ISO 14001. Milan Screw Products’ score was
very low because they did not have a formal EMS in place. The score did not discourage
Milan Screw Products and the company set a goal for itself — complete EMS implementation
by June 1996.

Policy

Milan Screw Products developed an environmental policy that includes a commitment to

Planning

In order to determine the company’s environmental aspects, the environmental task group
members set up an easel and participated in a brainstorming session. The task group listed all
of the company’s inputs (e.g. energy, water), outputs (e.g. oil mist, noise), and conversions
(e.g. steel bars to chips, and cutting oils to mist). The task group examined the company’s
purchases, processes, and waste streams. The task group also identified the company’s
stakeholders. Some of the stakeholders were interviewed so that the company could gain a
better understanding of their environmental concerns. These stakeholder concerns were
added to the list of environmental aspects. A neighbor reported that their only concern was
that oil from the shop could damage their lawn. A supplier’s sales representative reported that
the oil on his shoes was a nuisance. Customers were pleased to learn that the company was
implementing an EMS because they want to be assured of continued production (fines
imposed on a small company could result in a shut down). The task group also interviewed
employees and some of their family members. All in all, the environmental task group had
done an excellent job at identifying their environmental aspects. The task group then rated the
probability of an environmental impact occurring against the severity of the impact. They then
grouped the environmental aspects/impacts in general categories (e.g. oil-related problems).

It soon became clear that the company’s primary objective was oil recovery. The top
management at Milan Screw Products had been contemplating the need for a new facility.
The identification of the company’s environmental aspects/impacts provided additional
motivation for the development of a new facility. The environmental aspects/impacts that were
identified and the company’s EMS have played a role in determining how the new facility will
be built. The company will continue to perform oil recovery practices, but will not set numerical
targets until the new facility is complete. Milan Screw Products started its first EMS cycle with
reasonable objectives that focus on its manufacturing practices. Over time, the company will
continually improve its EMS, and hopes to include objectives such as the recycling of office
paper.

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The environmental task group will continue to be responsible for keeping Milan Screw Products
fully in compliance. The company has found that its trade association has been a tremendous
help in keeping them abreast of environmental compliance issues.

Milan Screw Products intends to develop its environmental management program at its
current facility and will improve the EMS at the new facility. The new facility will help the
company to achieve its environmental objectives and targets.

Implementation and Operation

Milan Screw Products has found that the structure and responsibility requirements of the
ISO 14001 Standard are easier to manage in a small company. Milan Screw Products has
developed six teams (each composed of individuals with similar job descriptions) for the quality
management system; the teams have been given more decision-making authority and have
been an effective element of the quality management system. These teams will help with
environmental issues over time. The environmental task group will continue to spearhead the
EMS program — the owner, plant manager, quality manager, safety manager, plant
supervisor/environmental coordinator, and a representative from production staff are actively
involved. The key to success in a small company appears to be the team approach, since
there is often no one that can be solely dedicated to managing environmental affairs.

Since finding the time to do employee training can be a challenging aspect of running a small
business, Milan Screw Products has scheduled training sessions a half hour before or after the
employees’ normal shift. Their best success has been with “brown bag” sessions where the
employees bring their lunches, listen to the training presentation, and remain “on-the-clock” for
their lunch/training period. Milan Screw Products has also found that videotaping training
sessions can be helpful for new-hire training. The environmental task group has helped with
training by gathering training materials.

The team approach that has been developed at Milan Screw Products has been an effective
means of fostering good internal communication procedures. In addition, Milan Screw
Products has gone beyond the requirements of the ISO 14001 Standard by soliciting the
opinions of external interested parties. The company has found that a good external
communication program has resulted in a lot of benefits because it builds trust. The company
has been straightforward with its community about potential oil problems, and the community
has been very supportive of their efforts and of their plans for a new facility. The external
communication program helped them identify some of their environmental aspects, and has
helped them to communicate with their customers. Milan Screw Products’ customers
appreciate that it is an environmentally-responsible company that is a leader in its industry.

Since Milan Screw Products has a registered quality management system, they have a sound
document control program in place. As mentioned previously, a quality management system
consultant helped the company with their ISO 9002 implementation, and the document control
procedures for quality will be adapted where applicable for the EMS. Milan Screw Products is
still in the process of establishing its EMS documentation.

As part of their brainstorming session, the environmental task group also listed potential
emergencies. The company used this information when it reviewed its emergency
preparedness and response procedures. The EMS implementation process helped the

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company to consider possible areas of liability that it had previously overlooked (e.g. a delivery
truck leak).

Checking and Corrective Action

Milan Screw Products has made some preliminary calculations of some of its environmental
aspects. The new facility will facilitate the quantification of its environmental aspects and
impacts. The company intends to build on its quality management system corrective and
preventive action procedures to help them develop their EMS. In addition, the company
intends to utilize some of the lessons it has learned about data collection and monitoring and
measurement through its quality operating system and will apply these lessons to the EMS
over time.

Milan Screw Products has gained experience with management system audits through its
quality management system implementation. Top management has performed quality
management system audits with the help of an auditor training guide that their quality
management system consultant developed for their organization. The company has done in-
house auditor training with the help of the guide and has used the auditor training guide for its
EMS audits where applicable. Top management and the plant supervisor/environmental
coordinator have performed an EMS audit, even though they have not yet fully implemented
the ISO 14001 Standard.

Management Review

Milan Screw Products Management Review Board meets monthly. The company also
performs an annual review of its operations. A third-party (consultant) is used to verify the
results of the company’s annual in-house review. The EMS is being incorporated in the
management review process of the company.

The Milan Screw Products’ Experience

While Milan Screw Products has not completely implemented its EMS, it has made significant
progress over 1 ½ years. Due to the groundbreaking for the new facility in June 1996, the
organization had to shift its priorities to new construction (it is now hoping to completely
implement its EMS by April 1997). Top management at Milan Screw Products stated that
organizations that choose to implement an EMS should not get discouraged if the EMS
implementation needs to be set aside occasionally. You can start, stop, and resume your
efforts as needed — your aspects won’t change unless you change your processes or
products — and any progress that you have made will still be there.

Milan Screw Products’ top management believes that there are numerous potential benefits
associated with a successful EMS. Specifically, the company determined that an EMS could
improve employee retention, new hire selection, working conditions, and the perceptions of its
suppliers, lenders, customers, neighbors, and regulators. The EMS will also ease
management concerns that an environmental problem could arise from simple ignorance or
lack of training. The company’s top management has stated that it may be difficult to
perform a cost/benefit analysis on the value of EMS implementation because several of the
potential benefits are intangible and cannot be given a monetary value. Milan Screw Products’

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proactive environmental program has improved its stature and fostered communication with
regulatory agencies. Top management also believes that the company will benefit from
being one of the first in their industry to successfully implement an EMS — it may encourage
their customers to perceive the company as being more innovative, more responsible, and
perhaps more desirable than their competitors. Top management has reported that it is
impossible to tally citations that are not written, fines that are not levied, nor lawsuits
that are not filed. Milan Screw Products’ top management has also stated that many of the
benefits of an EMS cannot be anticipated beforehand, and that an organization will discover
them as pleasant surprises at some point after implementation.

To date, the biggest challenge that Milan Screw Products has encountered while
implementing an EMS has been allocating the human resources to the EMS project while
production demands are high. The company has also had to overcome old practices by
explaining the rationale behind its desire to successfully implement an EMS.

Milan Screw Products has not calculated the costs of EMS implementation to date. Top
management reports that it is difficult to attribute costs/benefits at this stage of EMS
implementation, particularly since the company is in a transition phase due to the new
construction. While it is too early to quantify costs and benefits, top management is confident
that the benefits will outweigh the costs — early projections of their oil recovery savings at the
new facility are estimated to be $20,000 per year.

Milan Screw Products will integrate its ISO 9002 quality management system with its ISO
14001 EMS. The company is developing one manual that will incorporate both quality and
environmental management system elements. For example, the organization has a quality
policy on white paper and its environmental policy on blue paper on facing pages. The
documents also refer to one another where appropriate. The document control programs for
both systems will be fully integrated as well. In addition, the audit function will be integrated
once auditor training for the EMS is complete.

Top management at Milan Screw Products has not determined if the company will pursue EMS
registration in the future. Top management has stated that it will depend on factors such as
costs and customer demand. The company intends to completely implement its EMS and will
evaluate the need for registration next year. Top management has stated that obtaining EMS
registration would be a great satisfaction and it may improve their customers’ perception of the
company, but it has not determined whether or not it can justify the costs.

Milan Screw Products encourages other small companies to implement an EMS because it
believes that small companies may not have sufficient resources to mitigate environmental
problems. An EMS can help a small or medium-sized organization prevent environmental
problems which may keep a small company in business. Top management at Milan Screw
Products has stated that an EMS enables an organization to look at its business from another
perspective. Organizations have considered quality, safety, etc., as integral parts of their
business and should look at their business from the environmental perspective as well. All of
the various perspectives result in greater opportunities for improving the organization as a
whole.

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