29 November 2012 18:48 [Source: ICB]
Responsible Distribution prepares for its fifth cycle and continued performance improvement throughout the supply chain
As a management system designed specifically for chemical distributors, the NACD's Responsible Distribution programme has been shown to be effective at increasing the performance of the environmental, health, safety and security (EHS&S) programmes of member companies. Every year, NACD members as a group have significantly fewer safety incidents and lower emissions than chemical distributors that do not belong to the association.
NACD members are increasingly looking at best practice to improve standards
Copyright: Nic Redhead
In preparation for the fifth cycle, the NACD spent time comparing Responsible Distribution to other internationally recognised quality and EHS&S programmes, including those offered by the International Standards Organization (ISO), the Occupational Health and Safety Advisory Service (OHSAS), the American National Standards Institute (ANSI) and the American Chemistry Council (ACC).
"We are always looking to improve Responsible Distribution, and want to be sure that our programme incorporates best practices wherever appropriate," notes Mike Lang, vice president of Responsible Distribution for the NACD.
"The various standards we evaluated are not chemical specific, but aspects of each are quite relevant to the management of chemical distribution companies, and where appropriate, we incorporated some of their best practices that we believed would add value to our programme," he says.
The fifth cycle will require increased top level management commitment. For example, senior executives must commit to the Responsible Distribution Guiding Principles every year, and they must also be more involved when third-party verifications take place. Specifically, top level management must be present at the opening and closing meetings and be involved in overseeing implementation of any internal audits and relevant corrective actions.
Additional security requirements have been incorporated as well, including the development of cyber security programmes and enhanced security training for all employees.
In addition, results of an investigation of the most common citations from regulatory agencies led to incorporation of those relevant issues to assist members.
Currently, a minimum of one site per company is verified each cycle. However, with more than 1,600 member sites, that number does not lead to a high representation. "To increase the credibility of the programme, it was determined that a greater number of verifications should be conducted, and thus companies with many sites will have more than one of those sites verified during each cycle," Lang explains.
Maintaining credibility with suppliers is critical, indeed. "Responsible suppliers are committed to Responsible Care, which places requirements on manufacturers to ensure that their products are properly managed throughout their product lifecycles. Distributors play a role in the product lifecycle, and thus suppliers expect their distributors to have policies and procedures in place to ensure proper management of their products through to the end-user," notes Frank Bergonzi, president and CEO of KODA Distribution Group.
In fact, a growing number of suppliers have affiliate membership in the NACD (known as NACD Chemical Supplier Affiliates or CSAs), and many mandate distributor commitment to Responsible Distribution as a prerequisite for doing business. That is nota surprise to Lang.
"Responsible Care and Responsible Distribution both stress senior management commitment, the importance of specific procedures for chemical management, security practices, communication with all stakeholders and so much more. Plus, CSAs can request copies of the independent verification results," he says.
One supplier that makes use of those verification reports is Shell. The company actually treats Responsible Care and Responsible Distribution as one and the same, according to distribution manager Perry Lea. Importantly, if a distributor cannot demonstrate verification according to one or the other, Shell will not do business with that company.
"Distributors are an extension of their suppliers. Responsible Distribution and our third-party verification results give our suppliers real confidence that we have EHS&S management systems in place," Bergonzi adds.
There are far fewer safety incidents because of the Responsible Distribution programme
That reassurance is crucial because chemical distributors serve many more customers than manufacturers do - about three times as many, according to Mat Brainerd, chairman of Brainerd Chemical Company and an NACD board member.
Furthermore, at KODA, safety is the company's number one priority, and Responsible Distribution fits perfectly, according to Bergonzi. It also helps ensure that similar practices are followed at all four of its different companies with respect to compliance and safety, resulting in increased efficiency.
Tim Nicholson, vice president of PVS Chemicals and an NACD board member, agrees that safety and protection of the environment are absolutely critical for any company in the chemical industry, and that Responsible Distribution - and Responsible Care - are systems of preservation that ensure that companies are well-managed. While Responsible Distribution is a costly program, PVS Nolwood Chemicals, the distribution business of PVS Chemicals, is dedicated to Responsible Distribution because it is effective.
Like their suppliers, many distributors will not sell to customers that do not have effective EHS&S procedures in place. Brainerd will not conduct business with any carrier or customer that does not meet its EHS&S requirements, but they are happy to help customers develop and implement the necessary programmes if asked.
Harcros Chemicals also refuses to sell to customers that do not operate in a responsible manner. "Fortunately, the number of such customers is decreasing as more and more businesses realise the need for chemical management and control systems. We believe such progress is a sign that Responsible Care and Responsible Distribution are working well," notes senior vice president Jeff O'Neill.
Responsible Distribution and Responsible Care actually provide the framework for management of the entire business, and help to do much more than manage EHS&S activities, according to John Shepherd, environmental, health, and safety compliance coordinator for PVS Chemicals. "They improve our reliability, result in reduced waste and emissions production, give us a better reputation in the industry and help us address the concerns of the community," he says.
PVS is looking forward to implementing the improvements to the Responsible Distribution program during the fifth cycle. "We are very happy with the modifications to the Responsible Distribution Code of Management Practice and are pleased that it will be better aligned with other industry standards," says Nicholson.
"We also believe that both Responsible Care and Responsible Distribution make it possible for chemical companies to do business in a way that greatly reduces public concern, which in turn can help eliminate the mistaken perceptions of the industry," he adds.
The American Chemistry Council (ACC) also sees Responsible Care as an essential element within supply chain operations, according to Debra Phillips, managing director of Responsible Care at ACC.
"Responsible Care helps chemical manufacturers build relationships with their supply chain partners, to help them better understand and manage their EHS&S performance and achieve continual improvement, with a resulting positive influence on the entire industry.
"Responsible Distribution, in turn, can provide assurance to ACC members that are seeking ways to assure that their chemical distribution partners share a common commitment to enhanced EHS&S performance that a distributor's participation in both Responsible Distribution and the Responsible Care Partnership Program signifies," she says.
Because Responsible Distribution shares many critical EHS&S issues with Responsible Care, the NACD follows closely the progress of the ACC and its continual improvement of Responsible Care. "Our relationship with ACC is very positive, and there is always a good exchange of information," says Lang.
In fact, the ACC and NACD have had a Memorandum of Understanding in place for the past four years, through which they agree to exchange information, continue to assess the content of both the Responsible Care and Responsible Distribution programmes and harmonise them where possible, adopt excellent practices identified by their respective practitioners, and maximise learning from each other's experiences.
"When ACC proposes changes to Responsible Care, as it is doing right now through its strategic review process, it communicates with NACD to share new information," comments Phillips. "The goal is to continue to make improvements to both programmes to the benefit of both supply chain partners and chemical manufacturers."
As part of ACC's strategic review of Responsible Care, two proposed codes - a Product Safety Code and a Process Safety Code - was being reviewed and voted upon by the ACC's board of directors at its meeting in November 2012.
"A new Product Safety Code for Responsible Care makes good industry sense," Harcros' O'Neill says. "Product stewardship has always been a part of both Responsible Care and Responsible Distribution, and with recent regulatory developments on the state level and actions by NGOs and related groups against specific chemicals, it seems to be an appropriate time to bring more attention to this issue."
O'Neill: Responsible Distribution works
The Product Safety Code in Responsible Care will likely be implemented in 2013, but there are several tangible benefits that suppliers can appreciate today. For example, NACD members practicing Responsible Distribution are 80% safer than non-NACD distributors, according to Lang.
Increased compliance is also a direct consequence of commitment to Responsible Distribution. "We joined NACD after a supplier asked what we were going to do about implementing management practices. The Responsible Distribution programme was so impressive, it was an easy decision to become a member," says Brainerd. "Without NACD and the Responsible Distribution programme, we would not be able to pass compliance audits in such good shape," he adds.
REAPING THE REWARDS
There are economic benefits as well. "Prior to the development of Responsible Distribution, each supplier conducted audits of each distributor, with massive duplication of effort. With Responsible Distribution in place, distributors are now following a high level of management practices with harmonisation of safety requirements and performance metrics that everyone has agreed on. The result is elimination of duplicated effort and significant cost and resource savings," Shell's Lea explains.
The NACD also provides substantial assistance to its members. "The association is constantly passing on information through workshops, webinars, newsletters, regional and national meetings. Their support is truly invaluable," asserts Brainerd.
The association's Responsible Distribution Mentoring Program is another key resource that members can use, according to Shepherd. "An expert will come to a member site and help with compliance assistance, with the only cost being travel-related expenses." There is no cost to the member for phone and electronic communications."
Even international companies are coming to recognise the value that the Responsible Distribution programme offers. Membership in the NACD is expanding to include companies in Canada, Mexico, and even as far away as South Africa. As with any US-based distributor, the firms must meet the requirements of the Responsible Distribution programme before they can become full members.
"This growing interest in NACD and Responsible Distribution speaks volumes with respect to the value that the association and the programme provide," claims Lang. "Clearly, a commitment to Responsible Distribution is becoming a requirement for any company that wants to be truly successful in the US chemical distribution market."
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