Thursday, December 29, 2011

Centralized or Decentralized?

Does it make more sense to run EHS and sustainabity from a centralized corporate setting in a large business, or from the business/plant level?

There are at least two key parts of the EHS and Sustainability Program: strategy, vision and goals; and Executing projects. Ok, they're not mutually exclusive but it helps to have roles defined for each group.

A central or corporate group has to look across the enterprise, see what can be accomplished and then establish an overall roadmap to getting there. They're a fresh set of eyes, people who can bring resources and novel practices.

The plants need to provide input on what can be done, what personnel are available and then only they can work to meet the targets. It's critical to involve both; corporate staff setting targets without the plant won't work. Corporate staff have to be willing to work in a plant or on a project to help out. Each plant establishing its own goals and even capital leads to inconsistent execution. For example, one plant Controller I worked with approved energy efficiency capital as long as it was P&L neutral; savings>depreciation. But, that capital could have been put to better use in another facility. Thus the value of a strong, interactive, central group.

One without the other never works. It's the hard work and eyes at the plant level that can make things happen, identify gaps and find opportunity.

Working together--no matter who reports to whom--is the best way.

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