Paterson Recycling Corporation (PRC) is a business venture that was established on January 2, 2017. It is located at 10 Bridge Street, Paterson, NJ. It is a duly-organized, limited liability corporation (LLC). PRC (hereinafter also called the “Company”) provides products and services focused on collecting, processing and selling recyclable materials, including metals, plastics, crumb rubber and related products. The Company can be described as in the business of recycling end-of-life products from consumers and scrap materials from other manufacturers using proprietary equipment and technology.
The Company participates in three distinct markets, in which it has competitive advantages. The primary processes and activities include:
The Company’s entry into these market segments is based on the needs of its customers (manufacturers) to meet the growing pressures to use recycled materials in their products. The development of end markets for recycled materials is based on the quality and cost-effectiveness of the materials. The best market segments for using recycled materials have been difficult to define in the past. Since the processes of collecting, sorting, shredding, and processing scrap materials have been fragmented in the past, there are enormous opportunities to combine these activities at a single facility and generate increased value by eliminating the costs associated with handling and transporting materials from one location to another. Successful recycling is akin to a pipeline, in which the smallest-volume section determines the flows of the entire system.
PRC’s key strengths are its technical understanding of all facets of the processes, the technologies, and the market segments and its knowledge on how to create value and wealth from used products and scrap materials. It is the combination of all the activities that provides the mechanisms to keep the system balanced and to develop markets for the materials or products. While creating a balance between the collection of products and materials and end use of the materials is an obvious goal, the long-term success of the operation depends on its economic viability and stability. Because market development promotes increased demand for recyclable materials, the added demand affects not only the volume but the price of the materials as well. The primary emphasis is to achieve an efficient and safe operations within the given structure and technology. Although there are many important parameters, the priorities are as follows:
| Lecture 5-Business Impact Analysis (BIA)
• Structure, Constructs, and Framework • Impact Assessment • Improvement Assessment Term Project Elements and Flow [Business Impact Analysis] 5.1 Explain the importance of business impacts analysis (BIA) 5.2 Discuss how BIA research plays a role in ascertaining opportunities and challenges. 5.3 Discuss the BIA framework. 5.4 Explain the BIA threat and risk assessment process. 5.5 Identify and assess the main threats and risks. 5.6 Discuss impact assessment and improvement assessment. |
Business impact analysis (BIA) is a key tool used by the Company to research the implications of the threats, risks and potential disruptions and to determine the possible action plans to detect, prevent and/or mitigate the negative aspects. Senior management wants to identify, assess, mitigate and manage all potentially serious threats and risks. The Company’s strategic leaders embrace taking direct and indirect responsibilities for the impacts and implications of their systems, processes and products. Moreover, the goal is to discover negatives, especially hidden defects and burdens, take every action possible to improve the implications and impacts. While the primary focus is on the effects, impacts and their consequences, BIA includes all the effects and impacts of the operations system that must be considered and managed to meet the expectations of the business environment. Secondary effects are important as laws and regulations have forced management into more effectively dealing with waste streams and preventing pollution.
Figure 8: PRC’s BIA Areas of Consideration of the Operating System
BIA includes the flow of information, materials, components, products, services and waste streams from the acquisition of raw materials through shipping. The Company’s approach as shown in Figure 8 also examines the nature of design, the design process, functional requirements, and design constraints with emphasis on health and safety issues and accident and spills. It reviews process designs by analyzing customer requirements and selecting the most economic, technical and environmentally conscious process architecture. An appropriate design is one that satisfies the entire set of requirements. Process design establishes the material and energy requirements and determines the flows of materials services and information. The choices made during the process design are directly linked to creating better solutions and eliminating defects, burdens and potential liabilities.
Examining the operating system is critical for understanding where the problems are and contemplating possible solutions. The basic model provides a construct that is like econometric models for industry analysis. It is also related to the engineering construct of energy and materials balances for a system. Such analysis examines the inputs and outputs of the processes to determine what alternatives fit the needs of the Company and provide the best solution. The methodology is supported by scientific principles and provides a means to increase the rigor of design selection for future products and processes. It also provides a construct for improving existing products and processes.
The basic framework for the Company’s BIA model involves a multi-phase process for defining, developing, implementing and evaluating treats, risks and potential disruptions. The starting point depends on the information about the subject that exists in the literature, the Company’s databases, and the public domain. Preliminary research is the initial phase, a precursor to the actual research. It identifies the critical questions and determines the scope of the ultimate research. It defines and refines the most important issues, challenges, and opportunities. It is based on scientific reasoning, requiring both a theoretical view and a fundamental understanding of PRC and its business environment. Preliminary research uses a variety of means to acquire knowledge about the business environment that can help to formulate the proper research questions. Based on this fundamental understanding of the business environment derived from preliminary research and generally accepted knowledge, the next step is to determine appropriate research questions to guide the discovery and assessment process. These questions pertain to the most important issues, concerns, constraints, challenges and opportunities, always reflecting the dynamics of the external forces and how the corporation relates to such forces. They are the propositions that can be assessed using analytical methods such as risk assessment and BIA. It is PRC’s intent to discover all challenges, including hidden defects and potential disruptions. The Company uses BIA to find ways to reduce uncertainties, mitigate threats risks, prevent or prepare for potential disruption, and facilitate positive outcomes. BIA incorporates analytical techniques to determine and cure challenges, defects and burdens across the entire organization. It seeks to recognize and solve social, economic, and environmental difficulties at the earliest possible stage.
BCM teams and practitioners tailor the BIA framework to specific situations. There is a defendable logic to the choices made. The BIA framework examines every element and every impact. While this is the ideal, practicality may dictate otherwise. The BIA framework follows the conventional approach. It starts with definition, which includes the sub-phases of goals setting and baseline factors. Figure 9 portrays the phases and individual steps of the BIA framework. The most important step is setting the overarching goals. These set the stage for all the other elements in the process. Establishing the direction and framework for the execution of the work occurs in concert with goal setting. Mapping out the process elements and the basis for the analysis is equally important and prescribes the flow of the effort.
The BIA framework for the BCM teams or situations depends on many factors including the objectives and goals, the need to validate the outcomes, the desire to communicate the results to constituencies, and the ability of participants to perform their roles. The availability of certified and credible information and data also influences the BIA framework. It may be impossible to execute a full BIA every time because of the lack of objective information and the limited sophistication of participants. While it is difficult to generalize for each BCM team, there is often more relevant information about manufacturing processes than there is information and data about applications and community considerations. If there are significant amounts of toxic substances used in the production and consumption processes, BIA efforts are skewed toward these areas of concern. The severity of impacts is the most important consideration combined with the complexity and longevity aspects. If the impacts and potential disruptions are potentially severe, the BIA framework provides a more comprehensive approach than when the impacts are known and less problematic.
The critical step is to identify the specific systems and processes to be included in the assessments. The framework includes all the stages of the processes from material collection to end-of life considerations. However, the actual BIA may be modified to meet the purposes and objectives of the initiatives. PRC’s BIA focuses on systems, processes and products and on what practitioners know to be critical. These constitute how the Company is currently meeting the market, production, technical, and financial requirements. Baselines identify the existing situation and thereby facilitate determining the amount of improvement a corporation has achieved or the level of improvement that is required. They are also critical for determining the potential for improvement. Baselines can be constructed for the management system, the products, and/or the processes depending upon what kinds of information must be compared. In this way, they can link the present and future expectations.
Figure 9: PRC’s BIA Framework
The ideal solution is one that has many positives and no negatives. While the ideal may be impossible, moving toward it is a fundamental precept of sustainable business development. The specifications for definition are guidelines for applying BIA to assess and improve products and processes. They facilitate decision-making in the process, and ultimately in outcomes. Generally, the specifications come from customer needs, stakeholder expectations, government mandates, industry standards, and company criteria.
Establishing the BIA framework for the analysis and determining the guidelines that the organization and BCM teams use in obtaining, analyzing and interpreting the information and data is perhaps the most important aspect. It lays the foundation for the remaining phases of BIA.
The risk and threat assessment process examines production processes, product evaluation, facility design and layout, policy determination, and all aspects of the systems. Impact assessment explores the effects of defects, burdens, and impacts. Improvement assessment involves discovering ways to improve outcomes. Table 5 provides an overview of the three main components of the Company’s use of BIA. The steps in the process are intended to identify potential problems, determine their severity, and invent solutions for improving the situation(s).
Table 5: Key Steps in the Assessment Process
PRC’s BIA begins with a clear definition of the purpose and scope. Whereas the theoretical scope of a BIA takes an all-inclusive perspective, it is imperative that the scope of the actual assessments (impact and improvement) is defined clearly and limits, if any, are set at the beginning. BCM teams and the related practitioners determine what is to be analyzed, how many processes are to be examined, and the baseline for the assessment. A full BIA may not be necessary to gain a comprehensive view of the social, economic, and environmental aspects of the design, production, facility, community, and use of a product and the related processes. Moreover, practicality may compel the BCM program leaders to subdivide complex situations into manageable sub-programs that can be executed in a reasonable time frame (one or two years). BCM teams may limit the scope of the analysis by ranking the importance of the processes in the management systems and select the essential elements therein. Definition is an important phase since it identifies concerns and provides a preliminary sense of the potential opportunities for improvement. The findings of this phase help BCM program leaders determine the courses of actions for curing potential disruptions. However, it is implicit that discovered problems be rectified. Table 6 present insights about selected areas and elements.
Table 6: Selected Areas and Elements
Solutions to problems may require multiple levels of interaction to cure. Moreover, the required solutions may be expensive and unpleasant. Problems that are not found early often surface during incidents or they may be discovered by stakeholders who are impacted by the Company. The consequences then are often much more severe and costly.
Impact assessment examines the impacts and ranks them in importance. Prioritizing the results of the analysis provides a foundation for selecting opportunities for improvement. The inputs and outputs may create threats, risks, defects and burdens that require categorizing, characterizing, assessing, prioritizing, and decision-making. PRC’s approach is to evaluate the impacts of processes and systems according to the following categories: (1) human health; (2) social (community and customer) health; (3) economic health; (4) environmental health; and (5) operations. Human health involves process safety and employee well-being. The human health category includes assessing the impacts on the human physical system. The social health category covers the impacts on the stakeholders in social, economic and political terms. Community health involves ensuring the local community is not adversely impacted. Economic health involves the Company’s well-being. Environmental health covers the natural environment. Operations covers the use of materials and energy, processes, equipment, and accidental releases that affect the ecosystem. Environmental health is the broadest and most complex category. The impact assessment examines the impacts in these categories and the linkages between them. Table 7 provides the essential aspects.
Table 7: Selected Potential Impacts and Assessments
BIA can uncover issues pertaining to compliance with environmental laws and regulations or provide the means to withstand the scrutiny of customers and stakeholders (communities) who expect improvements and better solutions.
During the improvement assessment, BCM teams identify opportunities for changing the operations in ways that will lower the social, economic, and environmental defects and burdens. Improvements must be based on a systems perspective to ensure that the outcomes have positive outcomes. The improvements can cut across a wide range of elements in the operating system from waste minimization to fundamental changes in the practices used to produce the products and new product developments. Improvement assessment is the never-ending quest toward perfection. It involves actions for making the products and processes more ideal.
BIA generally invokes positive responses from employees and professionals within the Company. Reducing uncertainty and expanding knowledge facilitate effective management and improve the management system. Improvement assessment has the potential to reduce the number of problems and difficulties. In making improvements, BCM teams are to be guided by the Company’s criteria as listed in Table 8, especially in improving processes.
Table 8: PRC’s Criteria for Improvement Assessment
Uncertainty is an inherent part of business. While the greatest uncertainty usually pertains to the business environment, uncertainty about operations and internal processes is a major concern for PRC. The Company want to aggressively examine the implications of its processes and to develop the best solutions possible. Although BIA takes time, effort and money, the information it provides reduces uncertainties and improves confidence in decision-making, and ultimately makes investing in products and processes easier. One of the greatest challenges for PRC is selecting the right production processes or improving existing ones. By reducing uncertainty, the full benefits of each option can be seen and compared.
Risks are natural consequences of doing business. They are ever present. If there were no risks, rewards would be small, and the number of competitors would be large. Still, outstanding management must seek to mitigate risks to direct operations as successfully as possible. PRC’s main risks can be divided into the following categories:
While investing money in new technologies, products and processes was once viewed as risky, today, failing to do so carries its own significant risk. Risks are an inherent part of making decisions or failing to make decisions. Identifying threats and risks during the early phases of the BCM program allows PRC’s leaders and teams to take actions to address the threats and risks early when it is easier and less costly to do so. Protecting the reputation of the Company is perhaps one of the most important outcome of BIA and the resultant mitigation of impacts in its strategic positions and operational aspects.
PRC envisions a relatively stable business environment. However, there are multiple drivers that could disrupt its business. Its main concerns are potential disruptions due to severe changes in the economic viability of the local community. PRC depends on the success of the local economy, consumers and businesses who generate the residual materials that are processed by PRC. Four main scenarios have been developed to assess the potential consequences of the related impacts. The scenarios are: (1) business as usual; (2) dramatic growth in sustainable enterprises; (3) major concerns due to natural forces; and (4) major concerns due to economic forces.
The business as usual scenario involves only small changes in the business environment. While there may be several negative impacts (incidents and unexpected events), they are relatively small and may have no significant impacts. This scenario suggests that most factors stay the same.
The broad perspectives of sustainable enterprises examine the effects and impacts on a much larger scale, including all the driving forces of change. Current reality and future requirements are examined from multiple views involving more intensive determinations of the salient forces and more sophisticated understandings of the interactions and interrelationships between the forces. It is not just a simply matter of obtaining information and data and discerning what is happening; it also involves getting to the underpinnings of reality and ascertaining what can be done instead of just trying to understand what is being done.
Creating a sustainable enterprise involves a mindset shift from exploring what is to what could be. For instance, many of the strategic leaders of large corporations focus their efforts on existing products because customers have the money and can afford to buy the products. They are not engaged in developing recycled products because of the unknowns. However, such business leaders should view economic development as enormous opportunities to transform non-customers into customers at the same time help governments and societies alleviate waste problems. Such approaches may also involve uncovering the seeds of future problems and difficulties so that they can be eliminated in the bud and turn negatives into positives.
Sustainable enterprises are future-oriented and guided by a broader perspective of ensuring the success of the whole based on more sophisticated capabilities and approaches for realizing the desirable outcomes and long-term strategic positions. The aims include the social, economic and environmental aspirations of the people, the needs and expectations of markets, and the well-being and financial rewards of the participants. Sustainable enterprises focus on creating more opportunities and eliminating vulnerabilities. Sustainable enterprise development is inextricably linked with economic growth and technological development. Economic growth benefits employees, employees, and the community. Technological development provides better solutions and outcomes. Both require better education and training of people.
Environmental considerations and the effects and impacts of wastes, pollution, spills, residuals, and other aspects of human endeavors are major concerns in the business environment. They include wastewater discharges, solid and hazardous wastes, the use and disposal of toxic chemicals, accidents and spills, and the health and safety of workers and contractors. The potential consequences of environmental impacts like solid waste, toxic contamination, landfills, and catastrophic illnesses are among the most serious concerns. There have to be more systems for managing environmental considerations that result in reasonable accomplishments. Environmental effects and impacts have to be identified and they must be examined based on their impacts on the local communities, regional economies, and people in general. The possible destruction of the natural aspects of local environment and economic aspects are among the most worrisome of the potential impacts because the consequences are broad based and potentially irreversible. The natural environment provides the fundamental resources that drive success.
Residuals are the unwanted by-products of processes, pollution, discards, wastes, and end-of-life products that require collection, processing and disposal. Waste management includes efforts to reuse, recycle, refurbish, and treat wastes and end-of-life products. The ideal process would convert inputs into outputs without any waste. However, real world processes are less than ideal and generate waste streams. Traditional waste management protocols identify three categories of waste streams: air emissions (gaseous residues), water effluents (liquid residues), and solid waste. In each category, there are often many different types of wastes that are generated and released. Waste management includes all the regulated waste streams (wastes that are hazardous or cause serious concerns because of their negative effects) and other waste streams that are significant in terms of volume or impact. Most regulated waste streams are subject to regulatory controls, requiring pollution abatement devices, monitoring, and reporting. The prevailing approach is to evaluate the impacts of products and the operating system according to the following categories: (1) environmental health; (2) human health; (3) social and economic health; and (4) resource depletion. Environmental health is the broadest and most complex category. It covers the use of materials and energy, the residuals of processes, and ongoing and accidental releases that affect the ecosystem. The human health category includes assessing the impacts on the human physical system. The social and economic health category covers the impacts on the stakeholders in social, economic, and political terms. Heavy metals, synthetic chemicals, pesticides, plastics, and petroleum by-products are among the most challenging pollution problems affecting industrialized societies. A few of the most critical concerns pertaining to the use and disposal of such materials include cancers in human beings, extinctions of native species, and contamination of drinking water and waterways.
The economic concerns involve many other factors like the state of the economy, economic growth, living standards, people’s income and savings, concentration of wealth, land ownership, the availability of capital and labor, and application of investments. The state of a given economy depends on these factors and is the critical question relating to the economic dimension. Recessions and expansions are part of the normal cycles of macroeconomic conditions. Improved productivity and financial capital contribute to stability and growth, and long-term improvements generally help reduce unemployment and lower inflation. Improved standards of living and human happiness are also important factors within the economic dimension.
Effective economic development must include primary factors:
• A focus on increasing productivity.
• Improved competitiveness.
• Effective logistics.
• Reduction and reuse of wastes.
• Demand-driven economies.
• Development and maintenance of social, economic and environmental support systems.
• Risk management.
• Improved policy making and governance.
Economic development also focuses on the question critical mass of size, resources, distribution, and power of resources, systems and structures in a central location. Law of comparative advantage suggests that the focus is on exporting goods that can be produced relative low costs. Internal growth approach focuses on the local application of technologies with emphasis on potential for future growth.
Each of the scenarios provides opportunities for enhancements. PRC focuses on best practices, operational effectiveness, process efficiency, resource utilization, and waste reduction. The effectiveness and efficiency of the systems and processes are primary considerations because upstream inputs, conversions, and outputs have dramatic implications on downstream activities and outcomes. Understanding the flow of information, materials, and products from the raw materials to the final outcomes provides the means and mechanisms for leaders and practitioners to improve actions and outcomes, both direct and indirect, and provide insights into opportunities for further improvements.
Design and development of PRC’s processes and operations are the most crucial considerations for improving outcomes. If designers fail to focus on ways to maximize effectiveness and efficiencies, the abilities to make big improvements are often lost. The ideal process would convert inputs into outputs without any economic or environmental wastes; however, most real-world processes are less than ideal and generate waste streams that are inefficient use of resources. What drives PRC’s leaders, professionals, and practitioners to embrace each scenario is the pressing need for better responsiveness to customers, and stakeholders, to achieve continuous improvements, and to dramatically enhance the financial aspects of the organization, especially by reducing costs. Leaders, professionals, and practitioners are future-oriented and capable of dealing with uncertainty and unknowns. The company’s main approaches include:
Laws and regulations are mandates that must be complied with. Requirements that pertain to businesses represent the needs of social-political forces to balance the interests of business with those of society. Regulations are usually codified, documented, and readily accessible to practitioners. There are four broad categories of regulation: (1) mandated policies and practices within an industry; (2) standards for performance and outcomes; (3) reporting and information disclosure requirements; and (4) incentives and disincentives. From a business perspective, public policy and political decisions represent opportunities for the strategic leaders to determine how to deal with social and environmental aspects. There are many examples of failures of the business community to reach consensus on issues like acid rain and hazardous wastes, thereby forcing the political arenas to mandate the solutions.
Government mandates provide requirements for environmental protection. PRC simply follows the laws and regulations while trying to minimize the impact on its businesses and operations. PRC desperately tries to stay abreast of the mandates for reducing air emissions, improving water effluents, managing and reducing hazardous waste, preventing spills and accidents, and managing the cleanups of improperly disposed wastes. These challenges require significant investments in improving operations, processes, and practices, buying pollution abatement equipment, and managing remediation programs. Moreover, environmental management is considered an essential part of the business strategy.
Environmental requirements have become more challenging, requiring management methods to be more sophisticated. Emergency Planning and Community Right-to-Know Act (EPCRA) in 1986 forces businesses to disclose information about their operations and the waste streams they generated. As stakeholders’ rights to information expand, business objectives pertaining to social and environmental consequences have transitioned from simple compliance to waste minimization. Laws and mandates like EPCRA have sowed the seeds for the more inclusiveness, openness, innovativeness, and effectiveness regarding environmental considerations. Environmental management is a two-dimensional undertaking, dealing with laws and regulations and managing customer and stakeholder expectations. Although this represented a significant philosophical change in management thinking, corporations were still slow to change from viewing environmental mandates as business threats instead of discovering in them opportunities to excel.
PRC recognizes that it cannot resolve all environmental issues alone. In many cases, the problems require more resources than any corporation may have, even large and financially strong entities. Therefore, PRC supports solutions through cooperative efforts. Moreover, the governments cannot mandate effective recycling solutions unless products are recyclable. PRC cannot maximize the recyclability unless there is community or private sector recycling of post-consumer waste.
The lack of recycling infrastructure limits the usefulness of making packaging recyclable or makes producing products from recovered post-consumer waste more difficult and expensive. PRC is working with a multiplicity of public sector and private enterprise organizations to collect, separate, and encourage end-use markets. However, no single system would satisfy all the requirements. PRC seeks the help of as many allies as possible. It works with associations, industry groups, suppliers, and other to develop industry standards. Using a broad base yet loosely organized array of partnerships, PRC is building an effective infrastructure supporting its recycling strategies.
The major pitfall PRC’s strategy is its dependence on the external support systems. Without support, PRC is subject to constraints. Creating an effective infrastructure for recycling is a high priority. PRC’s aim is to work with community leaders and equipment manufacturers to expand research, activities, and operations. PRC is a strong advocate of education, knowing that misconception will influence its publics. Retailers, distributors, environmental activists, legislators, and consumers are targeted under PRC’s partnership program. PRC believes that solutions are realized when decision-makers have the appropriate information and knowledge.
PRC’s strategic approach has been to develop a comprehensive corporate strategy pertaining to solid waste management that forms an umbrella over all its businesses and products. The implementation of the strategy required the unfolding of action plans to achieve desired results. It is an evolutionary process since the dynamics of the external factors play an important role on the actual results. The basic action plan focuses on finding ways to develop synergy among the strategic allies to close the loop. The goal is to increase the amount of post-consumer waste being processed. The corporate strategy provides the direction by articulating viable operating strategies (product- and process-oriented) to the organization. Furthermore, it identifies the required external resources and determines ways to overcome strategic gaps. Most importantly, PRC’s recycling strategy is fully integrated into their overall long-term strategy. Total quality is the essence of their corporate strategy. PRC has artfully blended its recycling strategy into its overall long-term strategy. Both are market-driven. PRC seeks a sustainable competitive advantage in everything they do. Customer satisfaction is an important benchmark in measuring success. PRC has communicated its solid waste management position to customers, employees, and stakeholders through advertising, brochures, promotions, and public relations. It believes that environmental quality is critical to maintaining leadership positions in its products categories.
Corporate Management System
PRC created a corporate culture centered on sustainability and an integrated business model that focuses on maximizing business value and “value creation” opportunities. The intent was to have a strategic framework that provides a system approach for decision making. Based on the constructs of sustainability, PRC shifted its perspectives from internally-driven objectives and requirements to externally-driven issues, needs and expectations. PRC’s strategic leaders embraced the principles of integrity, accountability, trust, transparency and teamwork. It focuses on the well-being of employees, economic development of the local communities, the protection of the natural environment, and responsible use of resources. Moreover, the focus has shifted from “doing less bad” to the more positive perspective of “doing more good.”
PRC’s leaders are committed to the harmonious development of social, economic and environmental outcomes that are efficient, effective and enduring. The company has established the stage for sustainability and transitioned from the narrow perspective of environment, health and safety (EH&S) management to the more inclusive strategic leadership perspectives of cradle-to-grave responsibilities and actions. Its business model forms the foundation for company values, the corporate mindset, and short- and long-term objectives. The philosophical underpinnings evolved toward a more comprehensive view of facing the full range of issues and concerns across the business enterprise including those of customers and stakeholders. The company’s EH&S guiding principles included:
PRC’s management provided the frameworks/business models and the support mechanisms to achieve outstanding performance. Strategic leaders advocated “thinking broadly about issues and impacts.” Its sustainability approach involved examining in detail the EH&S issues and the direct impacts like emissions. It also included the indirect effects of the communities and the labor force.
PRC’s strategic management system provides the means and mechanisms to transform the corporation in the pursuit of sustainability. The key constructs include the analysis of issues and impacts, the determination of the effects that the products and the related processes have on the social and environmental aspects, and the development of sound business strategies. The strategic leaders realized that creating business value and providing social benefits are critical factors for achieving exemplary corporate reputations and superior strategic and operating results.
The operating system is geared to high-volume production of standard items (recycling materials). It is designed to be a low-cost process. Since the workforce and the equipment utilization are key factors in producing output, the following are viewed to be important: (1) workers learning on the job: (2) costs are reduced as workers gain in productivity; (3) hard work by workers and management alike keep costs down; and (4) management pressure will be used to get results. The production plan is designed to meet the forecasted accurate level of demand. The major variables associated with production planning for variable demand (not constant or uninformed) are (1) processing rate; (2) number of shifts; (3) workforce size; and (4) inventory levels. Some potential responses to demand fluctuation are as follows: (1) vary the size of the workforce, (2) expanded finished goods inventory, (3) utilize overtime, (4) add extra shifts.
The production strategy for absorbing demand fluctuations is to keep output level. Management will attempt to keep the workforce and production rate constant and allow fluctuations in inventory levels to absorb fluctuations in demand. If this approach fails to be appropriate for prevailing conditions, then using overtime or idle time may alter the production rate. More labor input is expected in principle generate more output, so workforce increases, overtime, and extra shifts can expand capacity. Similarly, inventory can act as stored capacity in periods of slack demand and assist in smoothing the impact of demand fluctuations on employment levels. During periods of low demand, fixed production rates result in inventory level increases; during high demand periods, inventory is depleted while fixed production levels are maintained.
Production control implements planning activities and is the focus of daily production decisions. It converts plans into action notices and schedules output for promised ship dates. Scheduling shipments is the greatest concern and requires the most flexibility. Sequencing the shipments requires priority rules and cost considerations. A major consideration in sequencing is the number of orders that must be processed. The goal is to ship products out to customers as soon as possible with the only constraint being full truck-load requirements. The rule for shipping these materials states that every week the quantities will be reviewed and all full truck-loads (FTL) will be shipped when possible.
Since the company’s major concern is the finished product, periodic sampling techniques are used to determine that the product meets quality standards. Simple checks are performed hourly and more detailed inspections are executed on a lot basis. Machine parameters are directly related to output quality; therefore, the operator ensures that all parameters are within the acceptable range. This, in most cases, ensures a quality product. Although not exactly the same, PRC’s approach is to control quality via statistical process control.
The process description is rather simple. The essential process path is linear in that a finished product is produced on a straight-line basis. The process decisions establish how the product is produced. The aim is to devise economical production techniques and work methods consistent with the equipment and workforce. The operation is a machine paced, linear flow assembly process that has the flexibility to produce multiple outputs.
Incoming materials are moved in relatively large lots via standard containers. Generally, there are multiple full containers at the input points to the production lines at all times. At the first work station, the worker unloads the materials from the containers and loads them onto a conveyor for processing at the first machine. The workers keep a running count of the material flow. The basic approach is to have a two-container system, one empty and one being filled. Like materials handling, finished products are put into containers that are periodically moved. Material handling equipment provides a constant flow of material to and from the various operations at the specified rates. The flow normally necessitates the use of conveyor type equipment powered by mechanical means. The paths of material movement are fixed featuring stationary equipment and a constant movement pattern. However, the pattern of flow of material from the equipment is not fixed. Variable path equipment will move materials and finished products to storage areas.
The BCM teams perform their roles and responsibilities in accordance with company policies, protocols and procedures and federal, state and local laws and regulations. The V.P. Operations has the authority to ensure that company’s requirements for the overall quality and performance of the operation are met and that all commitments including compliance with federal, state and local regulations are adhered to. It is the intention of the company to meet or exceed all requirements regarding environmental issues, safety and personnel health and welfare. The V.P. Operations directs the efforts of operations management team, which also comprises the fire prevention and safety committee(s).
The operations manager is second in command. The operations manager maintains proper relations with all stakeholders, including state and local officials, employees and others on the location. The plant engineer is primarily responsible for the safe operation of the equipment from a technical point of view, including maintenance, safety and fire protection. The plant engineer supervises the technical aspects of the operation including:
The production foreman supervises the operations. The operating crews report to the production foreman who is responsible for production. An administration manager reporting to the V.P. Operations is responsible for personnel and accounting. The supply chain manager is responsible for the evaluation, selection and maintenance of suppliers.
Communications is affected primarily by written work orders outlining the schedules, work to be performed, processes, and inputs and outputs on a daily and weekly basis. The facility office is the coordination center for all communications. The production locations have intercom communications with the office and the operations manager has a cellular telephone.
All personnel are required to fulfill a basic facility familiarity program, detailing procedures, machine operation and company policy. It is the position of the company that employee education is a priority matter. Safety seminars, truck driver training courses, equipment operations courses and basic first aid are all part of employee training. Periodic video tape demonstrations are held as well as ongoing training classes.
Fire protection is an area in which the plant engineer makes a significant contribution to plant operations. The plant engineer serves as the “fire marshal.” The plant engineer is responsible for fire prevention and loss protection. The plant engineer is familiar with the potential problems, fire-prevention methods and fire protection systems. It is important to note that the company’s processes do not require any flammable or combustible liquid other than those used in vehicles and fuel oil. Thus, it is important in controlling the fire potential to keep vehicles out of the processing area and to minimize the exposure of combustible materials. The principal fire prevention methods are: (1) exclusion of sources of fuel and ignition; (2) keeping the liquids contained; and (3) use of an inert gas. The storage of fuel oil is in approved containers only. Proper storage and handling of flammable liquids will be affected. Proper storage and handling of flammable and combustible liquids are necessary to prevent fire. Ventilation to prevent accumulations of flammable vapors is of primary importance because there is always the possibility of leaks in the storage and handling in a closed system. It is important to eliminate possible sources of ignition in an area where flammable liquids are stored, handled, or used. Ventilation of an area where flammable liquids are used can be accomplished by natural or mechanical means. Wherever possible, equipment such as compressors and motors will be in spacious, open areas.
Fire safety design includes three main objectives: (1) personnel safety; (2) property protection; and (3) continuity of operation. Most of the process operations will take place outside; moreover, all in-coming whole rubber tires will be stored outside in separate piles. Both inside and outside processes will have fire defenses (active and passive) designed so that access and fire suppression will be integral to operation. Manual fire suppression activities are available at every location. Fire department apparatus has access from the streets near the facility. There are adequate hydrants on location to provide sufficient water to fight any fire. Fire-detection and alarm systems are available in the building and on the process equipment. The plant water supply system is the primary fire-suppression system used by the plant fire brigade and/or the public fire department. Water is provided in quantity and pressure sufficient for supplying fire hoses. Dry chemical agents are available in separate containers. These agents consist of finely divided powders that effectively extinguish a fire when applied to a fire by portable extinguishers. Other types of fire extinguishers are placed at all strategic locations.
The plant engineer conducts periodic safety seminars and drills so that all employees are familiar with emergency procedures. The facility complies with all applicable state and local building codes and fire regulations regarding exit signs, fire extinguishers, and other fire protection measures. All exterior tanks are properly labeled.
The company maintains a log of the products produced per day and a log of the products placed in-storage or shipped. Shipments to customers initiate an invoice giving customer name, date, time, driver or carrier, trailer number, weight and other important information. A monthly report is generated summarizing the information in the daily reports. Although it shall be the policy of the company to provide precise data, information will be provided in general details.
PRC maintains a well-organized plant safety program that encompasses all phases of the plant environment and operation. From a management standpoint, the primary concern is safeguarding industrial hazards and preventing accidents. Production depends on the ability to maintain a continuous flow of materials without interruptions caused by spills or accidents. Engineering controls and safeguards will serve to protect workers from problems. The plant engineer is responsible for safety. The plant engineer is head of a safety committee that develops adequate inspection and control procedures to maintain a safe work environment and control safety devices. The plant engineer reports to the V.P. Operations who has the overall responsibility for safety and operations. A safety program is a management construct to develop specific safety objectives to assign responsibility and to obtain desired results.
Employee safety is a continuous process. A condition of employment with all employees is that they must understand the company policy documents, which include safety procedures. Employees are issued safety equipment based upon their jobs and responsibilities. Steel-toed shoes, hard hats, eye and ear protection and other individual safety devices are provided. The employees are also instructed on accident procedures, notification requirements, and basic first aid techniques. Once an employee is approved and hired, further safety education and awareness training is provided. Periodic classes are held by outside professionals, dealing with topics such as CPR, drug and alcohol awareness, safe equipment operation, etc. Those classes are held after operating hours and are both required for training pertaining to regulatory aspects and voluntary for all others. However, attendance is a prerequisite for advancement.
The process equipment has instrumentation and controls that continuously monitor the process to ensure safe operations and corrective action. The equipment has the capability to indicate an upset condition in the process and provide fail-safe actions to avert an accident. Each piece of equipment has its own manufacturer’s installed safety devices designed to protect the operators and observers. It is the policy to terminate any employee found tampering with safety equipment. It is also the policy of the company to purchase only equipment that has adequate safety devices installed.
The plant engineer is concerned with the safety requirements relating to fire protection, design, maintenance and use of fork trucks, tractors, platform lift trucks, motorized hand trucks, and other specialized industrial trucks. This includes:
Inspections fall into two classes: frequent inspections, daily or weekly intervals, and periodic inspections, monthly or quarterly intervals. Frequent inspections should include (a) all functional operating mechanisms for maladjustments interfering with daily operations, (b) deterioration or leakage in air or hydraulic systems, (c) hooks and hoist chains and ropes including end connections, (d) all functional operating mechanisms. Periodic inspections should include (a) all items listed under frequent inspections, (b) deformed, cracked or corroded parts and components, (c) worn, cracked or distorted parts, (d) excessive wear on brake system, (e) improper performance of power plants, and (f) excessive wear of chain drive sprockets and excessive chain stretch, (g) defective electrical apparatus.
PRC recognizes that it cannot manage potential disruptions alone. In many cases, the problems required more resources than it has. Therefore, PRC supports solutions through cooperative efforts. Its philosophy is summarized succinctly in the following statement:
“No individual company, institution, or group can effectively resolve potential disruptions alone. Similarly, no single answer will resolve the associated challenges. But, by working together, we can meet many challenges successfully.”
PRC teams work with a multiplicity of public-sector and private-sector organizations to collect, separate, and encourage end-use markets. However, no single system would satisfy all the requirements; thus, PRC seeks the help of as many allies as possible. It has support from associations, industry groups, and other recycling companies. Using a broad base yet loosely organized array of partnerships, PRC attempts to build an effective infrastructure supporting its recycling. PRC’s leadership believes that intellectual capital is its most important asset. People make the difference and having the best people provides the means to achieve outstanding performance. Leadership is based on vision and commitment. Leadership creates opportunities and eliminates barriers. Ownership engenders personal accountability. Integrity means being honest and straightforward; operating within the law and upholding values and principles. Trust suggests respect of everyone. It means that people have confidence in each other.
Managing potential disruptions involve many parameters, phenomena, and circumstances from multiple sides or views. There are many perspectives that can be viewed as dichotomies, thus dual-sided. However, one must examine every perspective from multiple points of view, especially when there are various points and counterpoints. The purpose is to avoid making decisions that are based on perspectives that support the prevailing views, are in keeping with mainstream thinking, or are based on long-standing assumptions of the organization and the business environment. For instance, many organizations have the tendency to focus on program and system aspects that are in line with the core capabilities and strengths of the organization. Such thinking limits decision making within existing perspectives and/or prevailing situations. However, the organization deals with potential disruptions, since such perspectives require mitigating weaknesses, building new strengths and core capabilities, and/or investing into new ventures. If the strategic leaders are not careful with their views of the realities, decision making becomes skewed toward what is perceived to be favorable to the organization or aligned with the prevailing situation. While it is sensible to exploit the organization’s strengths and core capabilities, strategic leaders must ensure that all situations are duly considered and are given appropriate treatment. They must ensure that situations, positions, options, and/or approaches that are perceived to be unfavorable are not simply avoided or categorically eliminated before a throughout examination is conducted.
Strategic leaders often try to keep things simple by avoiding complexities. Overcoming weaknesses or mitigating threats and risks tend to be more complicated than reinforcing strengths and exploiting opportunities; therefore, under the banner of simplicity, strategic leaders often bias decisions and actions toward the easier approaches and focus on what appears to be more predictable and more achievable. Again, such approaches are concerns since they are often single sided, i.e., strategic leaders often favor the simple and avoid the complex; they improve the strengths but fail to overcome weaknesses; they select related opportunities to avoid dealing with threats.
Strategic leaders must be cognizant of all the critical factors in the natural world and business environment, and deal with all aspects regardless of the complexities involved. They have an implicit, if not explicit, duty to assure that the broader social world and the natural environment are considered, including stakeholders and the people of the organization and enterprise. BCM teams focus on all sides of opportunities, situations, positions, and/or realities as well as the methods, techniques, and practices involving strategic leadership and management. They may require more time and effort in the present, but they may provide better solutions over time. They provide more holistic and inclusive perspectives for making decisions in the complex world of today.
Resilience and Resiliency Planning
Resilience
PRC integrates BCM, resilience, and emergency planning into the BCM system that focuses on cutting-edge constructs for managing threats, risks, vulnerabilities, disruptions, uncertainty, unexpected incidents and events, emergencies and the mechanisms for assuring business continuity. Resilience focuses on the company’s ability to tolerate significant disturbances without changing into different state that is controlled by a different set of processes or collapsing in uncontrolled situations. Resilience is linked the BCM systems (social-ecological-economic-technological systems) to tolerate adverse incidents and events and continue to be viable. A resilient system can withstand shocks and rebuild itself when necessary.
Resilience and emergency planning involve the capabilities to anticipate and plan for challenges and the fortitude to respond effectively by creating positive outcomes as quickly as possible. The BCM program focuses on the broad aspects and applications of incident management and business continuity. It provides a comprehensive, cutting-edge framework pertaining business continuity in complex and challenging environments.
The company’s resiliency planning perspective acknowledges that change is constant and predicting potential outcomes is complex and dynamic. Its BCM system is a resilient system that adaptable and diverse. It has many redundancies built in. Resiliency planning involves leading change, inventing new solutions, integrating the ecosystem and enterprise with the real world and future requirements, creating robust BCM systems and structures, and building solid and enduring relationships. Resiliency planning involves having engaging teams to create positive outcomes, moving the company toward more fruitful and successful strategic positions, and inventing a more sustainable future. It also involves exploring insights from the business environment, using imagination to contemplate what can be done instead of what is being done, being innovative in developing new solutions and systems, and ensuring the integration of whole business enterprise.
Background Situation and Prevention Aspects
Although Paterson, NJ has seen storms in the past, Sandy made history because of the timing, size and path, which created havoc within the city. PRC and the city are developing models to better predict weather patterns. The model represents the interactions between the oceans, atmosphere, land, ice, greenhouse gases, and pollutant concentrations. The projections are based on inputted expected changes. Using these models, analysts are producing updates of the flood zones to better prepare for floods in the future.
The city is also updating building codes to make buildings more resilient to flood damage. At the same time, PRC is incorporating the changes into its building to the extent possible. During Hurricane Sandy, the buildings that were previously updated to the new building codes sustained significant less damage than those that were using the older building codes like PRC’s building. PRC and Paterson have now many protection methods in place to protect itself. The highest risk locations have been evaluated and modified during the Phase 1 initiatives with the lower risk locations to be evaluated in later phases.
Another important factor to responding to a disaster like Sandy is the ability for leadership to take control of the situation. In the case of Sandy, the strategic leaders and the BCM teams immediately took control of the situation to mitigate as much of the damage as possible. BCM teams were assembled to help aid people and protect assets. The BCM teams were also working with the neighborhoods. The operations team was put in charge of generator placement, debris removal, shelter operations, and food and water distribution.
The BCM Program team provided as much information as possible though as many channels of communication as possible ranging from major TV networks, radio stations, and social media. They also provided information to local ethnic groups through broadcast over local television stations, newspapers and radio. The BCM program leaders also used a commercial mobile alert system (CMAS). This system was developed to provide an emergency text message notification to all text message enabled cell phones. This service was used three times during the storm to notify individuals on the situation.
Building Mitigation Action Plan
The building mitigation action plans involves assessing and modifying the building and the process equipment. In an emergency, the ability to respond more rapidly can translate into a gain in resilience and BCM. Historically, flood protection and fire protection were considered separate systems, but there’s a growing view that there’s no reason not to combine them, if there’s backup power and redundancy in the system.
Figure 10: PRC’s Integrated Buidling Modifications
With the new building systems, steps that increase resilience reduce ongoing facility costs and the risks of adverse incidents and events. For example, since the building that uses less energy and water on a daily basis it is also, in a passive way, ready to meet a disaster more effectively. If an incident comes, the needs for power and water is going to be lower to begin with. That pays dividends in emergency situations. What’s more, a new building automation and fire alarm system needs less maintenance, doesn’t need hard-to-find parts, and sets off fewer false alarms, while also being more reliable and thereby making the facility more resilient. Maintenance costs drop dramatically, simply by having a better building. There are ways of getting more robust buildings with current products.
The main concerns in an incident are the power and telecommunications networks since historically, these systems have not had a high degree of redundancy. The most common and well-documented cause of power outages and telecommunications failures in recent disasters has been the physical destruction of network infrastructure. Because of the time and funding needed to repair or replace systems, service disruptions caused by physical destruction tend to be more severe and last longer than those caused by disconnection or congestion.
Electrical distribution systems are by far the most important supporting infrastructure for the building and the telecommunications networks. The systems are highly vulnerable to physical destruction during disaster. Earthquakes and severe weather can sever cables and flood underground equipment. Newer telecommunications networks are designed to be more resilient to physical destruction. Historically, major disasters are the most intense generators of telecommunications traffic, and the resulting surge of demand can clog even the most well-managed networks.
The following are the company’s mitigation measures:
The BCM program team, the incident/crisis management teams and the emergency response team develop links with the police, fire department, public works, medical responders, and other. Police, fire, medical and public works departments provide first response (incident command system). The teams need to identify roles within incident command system. The following are some of the actions that may be necessary:
BCM teams have to know about the emergency plans that have been established in their areas and obey instructions from government agencies. They have to be capable of assuming responsibility for taking care of own basic survival needs for at least first 72 hours. The BCM program team with the subject matter teams have to determine if area is fit for habitation, and if not, relocate to an unaffected area while restoration is undergoing.
PRC’s number one priority in an incident or disaster is to preserve human life and second is to maintain or to reestablish contact and communications with: (1) government officials; (2) police; (3) fire; (4) emergency management; (5) utilities; and (6) water and wastewater departments.
Natural disasters and/or accidents can prove to yield harmful consequences not only to employees and the general population but also our natural environment. Harmful pollutants and toxins can be released into the atmosphere and or the already sensitive natural environment; broadly impacting large geographic areas depending on the situations.
Customer's Feedback Review
Published On: 01-01-1970
