Application Of Environmental Management Systems In A Soap Production Plant

1.0 Introduction

The domestic and industrial soap throughout the world is improving very fast with diversifying through great innovation and quality with each day in its business into variety of products and services. Soap products like soap noodles, detergents, dish-wash bars, bath soaps, liquid soap, body shower, gel etc. have become an integral part of an individual’s day to day life. These products in their product line are the unique feature of selling throughout the globe value chain which comes up from various source of processing. Soap comes to the market after different set of processes such as mixer, duplex, steel frames for cutting cakes, pans for cooling for paste, bubbling cattle and packaging. The chain involves forward integration with transportation to supply the finished products to the retailers and finally to the customers. The finished product reaches the ultimate customer through a variety of production steps and industry involvements, along with supply value chain networking. The major importance of getting the know-how of the soap manufacturing value chain is to highlight the issues faced by the soap firms. In achieving idea level of quality which equally competes with the multi-nationals products and become aware of the constraints from the grass root level of raw materials purchasing to transforming it into highly quality finished products for the customers.

1.1 Background to the Study

Environmental Management System (EMS) is a concept based on continuous improvement in all aspects of a firm’s environmental performance. According to Khanna and Anton (2002) EMS “represent an organizational change within firms and a self-motivated effort at internalizing environmental externalities by adopting management practices that integrate environment and production decisions, which identify opportunities for pollution reduction and enable the firm to make continuous improvements in production methods and environmental performance”. Standards for environmental management systems have been developed and evolving for several years (Brorson and Larsson, 1999). The British Standards Institution (BSI) introduced the first standard for environmental management in 1992 (BS 7750). The International Organization for Standardization (ISO) introduced the ISO 14000 series in September 1996 and it specifies the requirements for an EMS (Clements, 1996, Brorson and Larsson, 1999).

Clement (1996) notes that the standard applies to “those environmental aspects over which the firm either has control or could be expected to have an influence on”. Aboulnaga (1998) pointed out that, the adoption and use of an EMS can be a source of competitive advantage to soap industries and organizations wishing to compete on the international stage. Roy and Vezina (2001) also show that environmental initiatives can be used to enhance a soap production’s innovative capability. Sheldon (1997) also shows that ISO 14001 has been heartily welcomed by people in government, business and academia. It is believed globally that the standard is useful and one that augurs well for the future of environmental management (Moxen and Strachan, 2000). Other proponents of ISO 14001 like Stapleton et al., (2001) argued that the standard could act as a framework for significantly improving organizational performance.

Soap is integral to our society today, and we find it hard to imagine a time when people were kept sweet-smelling by the action of perfume rather than soap. However, the current widespread use of soap is only a very recent occurrence, despite the fact that it has been made for more than 2500 years. The first recorded manufacture of soap was in 600BC, when Pliny the Elder described its manufacture by the Phonecians from goats tallow and ash, and it was known among the British Celts and throughout the Roman Empire. However, these people used their soap medicinally, and it was not until the second century AD that it was used for cleaning, and not until the nineteenth century that it began to be commonly used in the Western world.

Early this century the first synthetic detergents were manufactured, and these have now taken the place of soap for many applications.

Soaps are widely used in our society. Soaps are the product of the reaction between a fat and sodium hydroxide:

heat

RCOOR’ + NaOH R’OH + RCOO-Na+.

Soap is produced industrially in four basic steps. This study lists different steps because in the industrial processes described each of these is done over several process steps, but in principle it could be done in the three steps which are saponification, glycerine removal, soap purification and finishing.

All soaps contain a surfactant as their active ingredient. This is an ionic species consisting of a long, linear, non-polar ’tail’ with a cationic or anionic ‘head’ and a counter ion. The tail is water insoluble and the head is water soluble – a difference in solubility which has two important implications. Firstly, this makes the surfactant molecule a wetting agent: the tails migrate to align themselves with the solid: water interface, lowering the surface tension at that point so that it penetrates the fabric better. Secondly, it allows the oily dirt particles to form an emulsion with the water: the tails of many surfactant molecules surround an oily dirt particle, forming a micelle with a drop of oil in the centre and the ionic heads of the surfactant molecules pointing outwards and hence keeping the micelle in the polar solution.

The soap industry throughout the world is improving very fast with diversifying through great innovation and quality with each passing day in its business into variety of products and services. Soap products like soap noodles, detergents, dish-wash bars, bath soaps, liquid soap, body shower gels, etc have become an important part of every one’s daily life. These products in their product line are the unique feature of selling throughout the globe. These products are the best source of supply value chain which comes up from various sources of processing. Soap comes to the market after different set of processes such as mixer, duplex, steel frames for cutting cakes, pans for cooling for paste, bubbling cattle and packaging. The chain involves forward integration with transportation and packaging industry, to supply the finished products to the retailers and finally to the customers.

Vertical integration: is a strategy used by a company to control over its suppliers or distributors in order to increase the firm’s power in the market place, reduce transaction costs and secure supplies or distribution channels. Vertical integration has two dimensions backward and forward. In backward ties the raw material manufacturing firms are closely connected with their vendors and suppliers. Manufacturers and customers provide specifications to their subcontractors, vendors and suppliers. In forward ties, being the part of domestic value chain soap firms in Faisalabad is connected with distributors, whole sellers and retailers. Process of order flow and specifications starts from the buyers who order and specify the product after that manufacturing process is monitored.

Horizontal Integration: is a process where a corporate company usuallu acquires or merge with a competitor in a same industry. There are two types of horizontal ties as observed in Faisalabad, bilateral ties and multilateral ties; the former exist between two firms dealing in the same product. It is noted that such ties are rare in Faisalabad mainly because of lack of trust and fierce competition among firms and the latter exist among more than two firms to achieve mutual goals. There is strong evidence of multilateral horizontal ties among firms in Faisalabad soap clusters as its seen at different occasions in past formation of Faisalabad soap manufacturing association (FSMA) in 1990 by separating its entity from Pakistan soap manufacturing association (PSMA), facing challenges of quality by multi nationals, existence of dry port of International facilities and development of FIA (Faisalabad International Airport) through FCCI.

There is cut throat competition among firms in the cluster. Most of the firms are producing low quality products. The organizational structure of small firms is lack of facilities and operations are run by either the entrepreneur himself or by a low level supervisor. Entrepreneurs are not having any management and technical skills which are one of the reasons of no international linkages of the sector.

Soap Value chain. The stages of value-added chains are divided into two categories:

Primary Activities

Supporting Activities.

Primary activities include:

• Raw-Material accumulation (local, foreign or both)
• Manufacturing ( Mixer, Duplex, Cutting Pans, Bubbling Cattle, etc)
• Packaging and Quality inspection
• Distribution.

Supporting activities include:

• Equipment and Technology
• HRD and Administrative support
• Firm infrastructure
• Physical support

The major benefit associated with the value chain networking is that it continuously improves the performance and productivity of its members. The soap value chain is a perfect fit, thereby improving the structure, designs and supply of the soap industry. These primary and supporting activities add value to the process of transforming raw-material into finished soap product. Figure 1.1 highlights the process of soap industry’s value chain.

An Environmental Management System (EMS) is a systematic approach for incorporating energy and environmental goals and priorities (such as energy use and regulatory compliance) into routine operations. While some sort of de facto system is inherent to any organization that must meet energy and environmental requirements as part of daily operations, it is generally accepted as a valuable step to formalize the approach by documenting it. Not only does documentation of the system ensure consistency over time and across employees, there is a growing body of evidence indicating that there is considerable value in defining a systematic approach to managing energy and environmental goals.

1.2 Importance of the Study

Environmental management system is a tool for managing the impacts of organization’s activities on the soap production industry. It provides a structural approach and implementing environmental protection measures.

Concern for the environment can be traced as far back as the pre-biblical periods. However, Pickering and Owen (1997) were the first to give concrete meaning to it at the United Nations Conference on the Human Environment held at Stockholm, Sweden in June 1972. The next summit was held in Brazil “Rio Conference” or the “Earth Summit” of 1992. Pickering and Owen further stressed that, the earth summit offered world leaders the rare opportunity of building consensus on managing the planet. A major outcome of the conference was the 27 point principle that was adopted by all the 171 countries.

It was this awakening that gingered governments all over the world including Ghana to take concrete steps towards the protection, management and enhancement of the environment (EPA, 1994). The government of Ghana since the Stockholm conference established agencies to manage its environment. The purpose of environmental management according to the EPA (2002) is to “identify human activities that may threaten and affect the quality of the environment, implement mitigation measures at the appropriate time to manage these effects, ensure that anticipated effects are maintained within the levels predicted, manage anticipated effects before they become a problem and, optimize environmental protection”.

EMS monitors environmental performance, similar to the way a financial management system monitors expenditure and income and enables regular checks of a company’s performance. An EMS integrates environmental management into a company’s daily operations, long term planning and quantity management system.

Soap is designed as a product to be used once then flushed down the drain, so as expected the environmental implications of its manufacture are not nearly so great as many other chemical processes. There are two main areas of concern: the safe transport and containment of the raw materials, and the minimisation of losses during manufacture.

EMS are becoming increasingly important to both national and multinational production companies. Underlying its emergence and acceptance is the premise that improved systems associated with EMS can make achievement of strategic goals more likely.

Through the systematic approach of an EMS, an industry can define and implement the organization’s environmental policy, ensure compliance with relevant environmental legislation and regulations, identify and manage its environmental impacts, and achieve continual improvements in environmental performance. If an enterprise adequately designs and sizes its EMS for the scale of the business’s activity, then the EMS’s implementation will allow management to understand and track its environmental performance, and thereby develop and adopt measures to improve such performance.

An EMS dictates that an organization not only understands the regulatory framework in which it operates, but that the organization incorporates these specific requirements into the controls developed to manage specific tasks and risks. Adoption of an EMS can enable organizations to collect data that they did not previously have. Examples would be water use, energy consumption, and volume of waste generated. Additionally, these data can assist in responding to regulators as well as to markets. The challenge occurs, particularly in developing or transitional countries, when the environmental regulatory framework is still immature or under development. An important benefit of an EMS is its capacity to help improve an organization’s performance in developing countries where the regulatory framework and other drivers may not be as robust.

1.3 Statement of the Problem

According to the EPA, there are over 5000 manufacturing industries in the country of which half are classified as medium to large scale. About 60% of these are located in the Lagos Municipal area (EPA, 2002). These industries have had a large impact on the economy of the area and the country in general. The concentration of the industries in such a small area has aggravated the environmental stress caused by industrial activities. Some of the major problems include industrial liquid and solid waste, air and water pollution.

Soap manufacturing firms have to identify various sources of raw-material such as tello, animal skin, acids, oils, fats, silicate, toxics, caustic soda, etc from various parts of the world. The local sources of raw-material are widely available but it is not up to the mark to compete with major brands. There is a good market of local raw-material as many of the micro, small and medium sized soap firms work with them with huge volumes.

Input (raw-material) from different markets are supplied to the manufacturing units of soap firms for processing. The raw- material is treated with chemicals and equipment usually locally manufactured which process the raw-material and transform them into semi-finished soap which is then used by processing units. Soap production firms face major constraints of technical and financial problems. Lack of technical competence, financial sources, unskilled worker, etc are the major reason of restricting the process of finished goods as per the demand and market requirement. At this point, multi-national firms score with producing quality and standard soap product line in the market which helps them to extract lion’s share of profit from the market. In local manufacturer’s case, the finished goods are imported from various countries at higher price for domestic use creating imbalance.

The soap manufacturing firms lack in marketing activities as they use traditional mode of marketing through posters, cable-TV adds, etc but few of the large firms equally compete with the multi- national’s advertising approaches. The soap firms totally emphasizes on distributor’s wishes of advertising and promotions for the customers. The soap firms should concentrate on the competitive-edge through marketing and quality assurance.

The soap firms hardly invest on packaging of their products. Most of the soap firms outsource packaging. Mostly firms copy each other’s brand to compete in the market which gives a set-back to the local industry. The soap manufactures should expand both domestically and capture the international markets through exports. If manufacturers concentrate on marketing they can have international agents, intermediaries who have a great knowledge of the native markets, have wide network channel and manage value chain.

Despite of the large markets of suppliers of raw-material and buyers of soap products, the manufacturers failed to capitalize the opportunity and unable to capture the domestic and International markets. The main reason being the energy crisis which are haunting the industry from last one decade on continuous basis. The load shedding of power and gas shortage has turned this potential industry into a recession. Moreover, inability of local manufacturers, undeveloped infrastructure and support activities restrict them in improving the quality, making them compete with the multi-national giants soap products in foreign markets even in the domestic market. Supporting activities such as up gradation of technology and equipment are the major factors in soap value chain process. The lack of modern equipment, technology in the local market, restricts the firms in producing competitive products.

Nigeria does not have a vocational technical college which specifically gives the modern knowledge of soap machinery and equipment up gradation. The shortage in supply of skilled and experienced manpower to handle the soap units acts as a drawback for the supply value chain process. The irregular and costly supply of raw-material also create large problem leading to heavy loss and closure of firms. During the last few years, small firms have faced drastic recession because of costly raw-material, energy crisis and strikes. In a nutshell, weak physical supply, shortage of finance, no R & D facility, undeveloped IT support, and lack of knowledge related to modern soap units, unskilled labor, etc reduce the scope of growth and development in the soap industry. The value chain of soap industry to achieve maximum level of productivity and quality is based upon these supporting activities, which help to identify the potential of growth and expansion in local and International markets.

1.4 Aims and Objectives of the Study

The main objectives of the study are to examine the application of environmental management system in a domestic and industrial soap production plant.

1. To reach these objectives, the following will be answered:
2. Determine current environmental management practices in Nigerian soap production industries.
3. Show the current situation with respect to the adoption of ISO 14001 standards in Nigeria.
4. Identify the most important drivers to the adoption of EMS practices in Nigeria.
5. Identify the most important problems that companies encounter getting certified to ISO 14001.
6. Access the extent of compliance to local environmental regulations.
7. Conduct a focused baseline assessment to identity what really matters for the organization in terms of environmental performance
8. To review present state of the environment;
9. To review application of economic tools and its effectiveness for industrial environmental management.
10. Environmental Management Systems– provides an overview of environmental management systems, a discussion of the elements on the ISO 14001 standard, and describes three levels of EMS implementation.
11. Environmental Management Systems inorganisation–discusses the application of environmental management systems in a organisation setting, the benefits that municipalities can realize through an EMS, the key success factors to implementing an EMS in an organisation setting, and the level of effort required to complete an EMS implementation.
12. Complementary Systems and Tools: Growing industrial and government interest in energy and environmental management has led to the development of a number of concepts and tools that enable organizations to understand, evaluate and manage the environmental implications of their operations, services and products. Some tools are:Green procurement;

• Sustainable community planning;
• Life cycle management;
• Life cycle assessment; and
• Sustainable design.

1.5 Scope of Study

This study is limited only to Domestic and Industrial Soap production companies in Nigeria focusing on reviewing industrial compliance to existing main environmental regulations only and not included others environmental-related laws. Further, the study mainly reviews use of economic tools in industrial environmental management in Nigeria.