code of conduct management systems guidebook -...

Code of Conduct Management Systems Guidebook

GUIDEBOOK CODE OF CONDUCT MANAGEMENT SYSTEMS

© 2005 Levi Strauss & Co. of 57


Table of content SECTION I: INTRODUCTION ................................................................................................... 3

1. Introduction................................................................................................................ 3 2. How to use this Guidebook .......................................................................................... 3

SECTION II: THE MANAGEMENT SYSTEM FRAMEWORK ..................................................... 4 1. The Management Systems Framework............................................................................ 4 2. The Sections of a Management Systems Framework......................................................... 4 3. The Elements of a Management System.......................................................................... 5

SECTION III: BENEFITS AND KEY SUCCESS FACTORS OF A MANAGEMENT SYSTEM ....... 8 1. Benefits of a MS .......................................................................................................... 8 2. Key Success Factors ..................................................................................................... 9

SECTION IV: PHASES OF MS IMPLEMENTATION PLAN....................................................... 11 Phase I: Policy development and management commitment ...................................................... 11 Phase 2: Planning and information management ...................................................................... 12 Phase 3: MS implementation, training and manual preparation ................................................... 12 Phase 4: Implement continuous improvement of MS................................................................ 13 Phase 4: MS Monitoring and Follow-up (LS&Co Requirement) ................................................. 14

SECTION V: MS IMPLEMENTATION PLAN............................................................................ 15 Phase 1 - Policy Development and Management Commitment Checklists and Tools ........................... 16 Phase 2 - Planning and Information Management Checklist and Tools............................................... 20

MS Tool 1: Registry of Stakeholders and Their Expectations ..................................................... 21 MS Tool 2: Code of conduct Management Programs - Example of MS Tool 2............................. 24 MS Tool 3: Registry of Code of Conduct Management Programs ............................................... 25

Phase 3 - MS implementation, training and manual preparation Checklists and Tools.......................... 26 MS Tool 4: Example of Procedures for Operational Control ..................................................... 27 MS Tool 5: Measuring and Monitoring ................................................................................... 29

Phase 4 - Implement continuous improvement of MS Checklists and Tools........................................ 37 Phase 5 - MS Monitoring and Follow-up Checklists and Tools .......................................................... 38 SECTION VI: TOOLS FOR MS IMPLEMENTATION ................................................................ 39 1. Management tools................................................................................................................ 39 2. How and when to use the management tools........................................................................... 40

ANNEX 1 – Bar chart.......................................................................................................... 41 ANNEX 2 – Benchmarking .................................................................................................. 42 ANNEX 3 – Brainstorming .................................................................................................. 43 ANNEX 4 – Checklist.......................................................................................................... 44 ANNEX 5 – Control Chart................................................................................................... 45 ANNEX 6 – Flowchart ........................................................................................................ 47 ANNEX 7 – Indicator Matrix ............................................................................................... 48 ANNEX 8 – Pareto Analysis ................................................................................................. 49 ANNEX 9 – Prioritization Matrix .......................................................................................... 50 ANNEX 10 – SWOT analysis ............................................................................................... 51 ANNEX 11 – Fishbone/Ishikawa Diagram ............................................................................ 52 ANNEX 12 – 5W2Hs for Problem Analysis and Planning ........................................................ 54

SECTION VII: TEMPLATES FOR MS IMPLEMENTATION...................................................... 57



SECTION I: INTRODUCTION

1. Introduction

The Code of Conduct Management Systems (CoCMS) Guidebook for improving Code of Conduct performance at Levi Strauss & Co main suppliers was prepared in order to provide a tool that would guide suppliers through the CoCMS implementation process with a minimum of outside support. The multi-step process, tools and template documents contained in this Guidebook will be tested and refined through a Pilot Project during 2005. It is expected that, by using the tools and templates presented in this guidebook, a LS&Co supplier can implement a CoCMS without outside assistance. It is, however, recommended that any supplier interested in management systems seek out as much relevant information on the subject as possible.

2. How to use this Guidebook

It is recommended that the reader explores the main text in order to develop a general understanding of a management systems framework and their application to manage Code of Conduct issues. The reader who is unfamiliar with CoC management systems should start at Section 2. The reader who is familiar with management systems, but not their application in managing Code of Conduct issues, should begin at Section 3.



SECTION II: THE MANAGEMENT SYSTEM FRAMEWORK

1. The Management Systems Framework

A Management System (MS) is a systematic approach for incorporating code of conduct goals and priorities (such as labour rights and regulatory compliance) into routine operations. While some sort of system is inherent to any organization that must meet labour rights 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 code of conduct issues. We define a management system approach as a set of processes and practices that enable an organization to reduce its code of conduct impacts and risk, and meet code of conduct requirements. This focus on processes and practices is common to all MSs, which are generally founded on the “Plan, Do Check, Review” cycle of continuous improvement (see Figure 1).

Management Systems

2. The Sections of a Management Systems Framework

A Management System (MS) implies the same cycle of “Plan, Do, Check, Review.”. The MS framework we are proposing consists of five sections, Policy, Planning, Implementation & Operations, Monitoring and Corrective Action, and Management Review, as presented in Figure 2 below.



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Figure 2: The Management Systems Framework

The five major sections shown in Figure 2 are considered to be the basis of a Management Systems Framework. And they are described as follows:

• Policy – Establishes and communicates an organization’s position and commitment as it relates to code of conduct issues.

• Planning – Identifies code of conduct issues and requirements, and defines the initiatives and resources needed to achieve the policy and business goals.

• Implementation & Operations – Describes the procedures, programs and responsibilities necessary to implement the key initiatives to achieve the goals.

• Monitoring and Corrective Action – Regularly monitors and assesses the effectiveness of code of conduct management activities and programs; and compliance to code of conduct requirements.

• Management Review and Follow-up – High-level evaluation of the management system as a whole to determine its overall effectiveness in terms of driving continual improvement and achieving business goals.

3. The Elements of a Management System

The breakdown of the five major sections presented above is described as follows:

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requirements • Objectives and targets • Management programs

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• Roles & responsibility • Training, awareness &

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• Monitoring & measurement • Non-conformance,

corrective & preventive action

• Audits



POLICY

• Policy – The policy drives the commitment of the supplier to maintain and potentially improve its code of conduct performance. By documenting and publicizing the policy, the supplier demonstrates a commitment to the management of code of conduct issues from the highest management levels.

PLANNING

• Legal and Other Requirements – The legal and other requirements are those requirements the supplier is expected to comply with on a continual basis. Besides legal requirements, these could be the expectations of the local community or other stakeholders (e.g. Brands).

• Objectives and Targets – Objectives and targets form the goals of a supplier’s MS. Analysing

the impacts, risks and requirements the supplier develops the goals for improving its code of conduct performance regarding its activities.

• Management Programs – These programs define the plans and activities a supplier will use

to achieve its objectives and targets. IMPLEMENTATION & OPERATION

• Roles and Responsibility – Much like an organizational chart, the structure and responsibility of the supplier defines the authority structure in place. The definition of responsibility takes it another step further, defining who is responsible for what within the supplier’s operations.

• Training, Awareness & Competence – This element, one of the most important in a MS,

defines what training and minimum competence levels are required to ensure that code of conduct risks and requirements are managed appropriately, who receives the training, and how often.

• Communications – The communications element of a MS defines how internal and external

communications with respect to code of conduct requirements are handled.

• Documentation – The documentation element defines the structure of the MS itself. This is typically only needed if a full MS is implemented. The documentation has to be controlled and maintained. All employees need to have access to all relevant documents and be working with the same set of documents. The MS also needs to handle and control records related to the code of conduct requirements.

• Procedures – The operational control element focuses on the level of control that the

supplier has in managing code of conduct risks. It determines the operating procedures and working instructions. This MS element also outlines the procedures by which the supplier responds to emergencies, and the maintenance of a minimum level of preparedness.

MONITORING & CORRECTIVE ACTION

describes how the supplier monitors its code

• Monitoring and Measurement – This elementof conduct performance, what procedures are used to measure the appropriate data sources, which indicators are in place and how often they are measured. LS&Co will assess their suppliers every year through the TOE program.



• Nonconformance & Corrective and Preventative Action – This MS element outlines how the contractor investigates and corrects non-conformances. During the assessment, LS&Co will monitor against code of conduct requirements and analyse non-conformities. A corrective action plan (CAP) will be delivered to the company management.

• MS [internal] Audit – The auditing element of the MS outlines how the supplier audits its

code of conduct performance. MANAGEMENT REVIEW AND FOLLOW-UP

• Management Review – This element of the MS describes how the supplier coordinates performance reviews by top management and drives the process of continual improvement.

• Follow-up – This element is particular to LS&Co and describes how LS&Co will follow-up on the Corrective Action Plan (CAP) agreed by the supplier.



SECTION III: BENEFITS AND KEY SUCCESS FACTORS OF A MANAGEMENT SYSTEM

1. Benefits of a MS

Several implementation projects have been performed determining the benefits of a MS approach, especially in the area of quality and environment. The analysis indicates that the systems approach to managing code of conduct issues generates a deep, cultural shift in how the organization addresses these issues. Every employee (worker, supervisor, and management) must incorporate code of conduct concerns into their daily job functions. The benefits of implementing an MS range from improved compliance with code of conduct regulations (and often a reduction in fines) to increased management efficiency, and even a reduction in code of conduct non-compliances. The systematic MS approach to the daily management of code of conduct objectives leads to benefits that can only be created by an integrated effort across the entire organization, and are typically difficult to foresee prior to the implementation of the MS. A particularly useful element of a MS is the incorporation of internal & external stakeholder requirements and external communications. The increase in transparency and the ability to respond to the needs of main stakeholders improves relationships and trust. The main benefits that can be listed are the following: • Improving Code of Conduct performance • Ensuring legislative and standard compliance • Reducing Code of Conduct risk • Meeting Brand supply chain requirements • Capturing institutional knowledge; • Streamlining processes; • Improving emergency response procedures; and

Increasing awareness and participation. • Each of these benefits is discussed below in more detail. Improve Code of Conduct performance Using a management system framework in order to manage code of conduct issues, will allow the supplier to have control over their code of conduct performance. Setting clear policies and developing sound objectives and targets will allow the supplier to focus on goals and use resources more efficiently. Ensuring legislative and standard compliance Significant savings are observed through the avoidance of fines and costs that could have happened if the MS is not been in place. Specific cost savings result through reducing incidents due to improper maintenance, reducing the need for on-the-job training, and retaining and communicating of critical information over time. Also we can reach reduction in regulatory fines due to increased employee awareness from MS training programs. Reducing Code of Conduct risk

premiums are likely to be.

Code of conduct risk is a hidden risk for many companies. By undertaking risk assessments as part of the code of conduct management process it is possible to reduce the risk of the occurrence of events that could have adverse code of conduct consequences. Banks, insurance companies and investors all base their decisions on an assessment of risk. The higher the risk, the less likely a bank is to lend, the less likely investors are to invest and the higher insurance



Meeting Brand supply chain requirements

n increasing number of large organizations are requiring their suppliers to demonstrate sound to delist those that fail to do so. Having a code of

significant benefit recognized from the MS implementation process is to capture the e heads of employees. By consulting with employees and

y analysing the processes used to complete routine tasks, the supplier is able to reduce the in the process of Code of Conduct performance and compliance,

uppliers can benefit from making improvements to their emergency preparedness and response mplementation process.

uppliers can increase awareness of code of conduct issues and activities that have the potential munities and activities.

. Key Success Factors

Acode of conduct management and are preparedconduct policy is not considered sufficient proof of sound management and evidence is required that a company is taking action to meet the commitments set out in their policies. Hence, undertaking effective code of conduct management will increasingly be necessary to gain or maintain supplier status with large organizations. Capturing institutional knowledge Ainstitutional knowledge contained in thdocumenting the “how-to” of routine operations, the time required training new staff decreases, and the supplier is protected from the loss of critical operating knowledge when employees retire and/or leave the company. Streamlining processes Bnumber of steps involvedsaving time, energy and money. Further, the analysis process allows the supplier to standardize the way routine tasks are performed, improving processes and creating additional savings. The MS implementation process also forces companies to analyse and document training, compliance and maintenance schedules, which helps them to stay current with these items, plan staff schedules more effectively, and avoid schedule conflicts with other company activities. Improved emergency response procedures Splans that come about as a function of the MS i Increased awareness and participation Sto impact the employees, environment, com

2

The experience to date suggests that while there are many operations/facility-specific factors that S development and implementation, there are some key factors in

Assign team and dedicated responsible person; improve code of conduct performance;

plementation; r MS development.

implementation of a MS is perhaps ining the overall success of an MS. Without high-level

am will be constrained to the point of probable failure. This

influence the success of Mdetermining success that apply to almost all operations/facilities. Some of these factors include: • Senior management commitment; •• Communication of commitment to• Integration into existing supplier systems; • Recognition that a MS is a continuous commitment that does not end with im• Understanding of resource requirements fo These key success factors are described below in more detail. Senior management commitment The commitment of senior managers to the development and the most important factor in determcommitment, the efforts of the MS te



commitment must be based upon an understanding of the business value of an effective MS and the importance of integrating a MS into day-to-day operations. To be valuable, this commitment must also be effectively communicated so that the MS implementation team and other employees understand what is entailed by senior management commitment. Senior management support should go beyond initial statements and should include identifiable activities. Senior management can demonstrate its support by personally participating in training sessions, actively monitoring the MS implementation process, ensuring that adequate resources are available, and participating in the establishment of MS goals for the organization and for individuals. Assign team and dedicate a responsible person A team should participate in the implementation to balance workloads and to ensure continued

ovement when other commitments demand an employee’s time. A responsible person should o its stated milestones and deliverables.

are terested to work on procedures in their area, and have given considerable thought to the

o meet the requirements of a MS amework, although these frequently require additional development and/or documentation.

existing operational practices or systems in the company

management systems within the company and not the reverse. Fundamental to the ystems approach of code of conduct management systems is the integration of code of conduct

nefits of MS implementation are typically achieved through the continual provement of the MS elements. An effective MS should be predicated upon the principle of

inherently an on-going process. Completion of the MS

ey, minimize risk and improve overall code of onduct performance in the long run, requires a significant commitment of resources during the

rocess is an investment made to generate medium

moutline the schedule and hold the team accountable t Communication of commitment to improve code of conduct performance Internal communication will create awareness within the supplier. In many cases employeesindevelopment of procedures prior to the MS implementation. Integration into existing systems Most suppliers already have many of the elements needed tfrTherefore, it is important to identifythat the MS element can integrate, and focus on enhancing these elements rather than recreating them. It is also important to note that the MS related to code of conduct issues can be integrated into existingsconcerns into the daily activities of employees throughout the company. MS specific activities that need to be developed, such as the annual management review and evaluation of objectives, targets and performance improvement programs, should be integrated into the annual budgeting and planning cycle that already exists within the company. Similarly, training programs identified by the MS can be integrated into existing training programs already coordinated by the human resources group. Need for on-going commitment The strongest beimcontinuous improvement, which isinvolves establishing a system that provides for continuous improvement in code of conduct management, but many of the benefits that result from continuous improvement often occur after the system is implemented. The completion of a MS implementation is an important milestone, but it is not the end of the process. Understanding of resource requirements While a well-developed MS should save moncdevelopment stage. The initial development pterm and long-term benefits.



SECTION IV: PHASES OF MS IMPLEMENTATION PLAN This section will provide you the tools that will be useful in the implementation of a MS in the company operations. The Four Phase MS Implementation Plan The implementation plan is organized around four key phases: Phase 1: Policy development and management commitment Phase 2: Planning and information management Phase 3: MS implementation, training and manual preparation Phase 4: Initiate continuous improvement of MS Phase 5: MS Monitoring and Follow-up Each phase in the plan is broken up into a series of tasks that guide companies and/or organisations to develop the various elements of the MS in a sequential and systematic manner. Each task is described briefly for the reader in this section.

Phase I: Policy development and management commitment

• Task 1: Secure management commitment, resources & communication

This initial task initiates the MS process by generating buy-in from top management, identifying the scope of the MS and securing the resources required to complete it. By communicating this commitment, the entire company is notified and additional momentum is generated.

• Task 2: Assign and train core team

Identify a core team and assign responsibilities for MS implementation. Training the core team is the official MS kick-off, and ensures that the entire team understands the level of effort and timeline involved in the implementation process, as well as the potential benefits they should expect to see as a result of their work.

• Task 3: Define the MS scope Definition of the MS scope refines the MS implementation process agreed upon by top management and identifies the specific operations that take place within that scope. The core team will focus primarily on these activities during the implementation process.

• Task 4: Perform a gap assessment – Using Diagnostic Tool (Annex X)

This task is important to the MS process in that the core team will identify the elements of the MS that already exist in the company. By identifying these items, the core team identifies the existing systems in the organization that the MS will integrate into, and identifies requirement “gaps”.

• Task 5: Develop/review code of conduct policy

The Code of Conduct policy forms the core of the MS by communicating the company’s commitment to code of conduct issues. It also demonstrates management commitment to the MS, further aiding the core team in getting support within the organization.



• Task 6: Develop an implementation plan and schedule phases and milestones the core team

Phase 2: Planning and information management

The final implementation plan and schedule outlines thecan expect, and gives other members of the company an idea of what to expect in the coming months.

Task 7: Identify key stakeholders and legal and other requirements. Identify LS&Co code of

Task 8: Perform aspects and impacts analysis

rce intensive steps of a management system

Task 9: Develop objectives and targets

als set by the core team for creating specific benefits

nduct programs already in

implementation, training and manual preparation

•

conduct requirements (reference: Global Sourcing and Operating Guidelines)

•This is one of the most difficult and resouimplementation process. The aspects and impacts analysis involves identifying which of the activities performed within the MS scope have the potential to interact with code of conduct issues, and the potential impacts of those interactions. LS&Co has already performed this task and while analyzing the aspects and impacts of apparel manufacturing activities has developed the Global Sourcing and Operating Guidelines.

•Objectives and targets are measurable gowith the MS and exerting a greater level of management control over significant aspects of the company operations. Develop indicators to measure and track objectives and targets.

Task 10: Develop/revise code of conduct management programs •This task allows the core team to supplement existing code of coplace within the company and add new programs where appropriate for achieving the stated objectives and targets. The information gained in the gap analysis is particularly important in this task as the core team will look to existing programs first before seeking to implement new ones.

Phase 3: MS

Task 11: Develop procedures for operational control e gap analysis, the core team identifies

evelop monitoring and measurement procedures

ny to track the progress of the

ant upon the periodic reviews (or audits) of efining these procedures up front, the core team

ensures that future MS participants will continue to review the MS using the same process.

•

Again drawing upon the information generated in thwhat additional procedures will be required to ensure an appropriate level of operational control based on the potential impacts of the activities in relation to code of conduct standards.

Task 12: D•Monitoring and measurement procedures allow the compavarious MS programs in achieving their stated objectives and targets. There can be no confusion of success when the objectives and targets are clear and the method and frequency of measurement has been clearly identified. LS&Co has developed key performance indicators for suppliers to report on. This list of indicators has to be included company activities and monitoring and measurement procedures.

Task 13: Develop MS auditing procedures •The continual improvement of the MS is dependthe performance of the system. By clearly d



•

d either as a part of routine operations or in an MS audit, and that the lessons learned will be

•

A review of these materials allows the core team to ensure that they are clear, complete, and effective.

•

make adjustments. This is typically performed annually.

•

to date and determine if they are sufficient. Frequently, a small amount of additional documentation is required to draw the MS documents together into a complete

•

he process of rolling the MS out

les

oyees to the MS. Additional training modules may be developed in this ing.

•

s “in effect” and the core team has completed its task. ied by a formal announcement by top management and

on of the core team.

Pha

Task 14: Develop procedures for implementing corrective and preventive actions Similar to task 12 above, by clearly identifying corrective action procedures, the core team ensures that all MS participants will act in the same way to resolve issues that are discovere

incorporated into the MS.

Task 15: Develop emergency preparedness and response procedures Emergency preparedness and response plans are the most frequently encountered existing items in MS development.

Task 16: Develop management review procedure The management review procedure outlines the process by which top management will review the effectiveness of the MS and

Task 17: Assemble existing documentation If a MS manual is required, the core team must gather the documents that have been generated

system.

Task 18: Develop any necessary additional documentation (Self-explanatory)

Task 19: Assemble MS manual •By assembling a MS manual, the core team prepares for tinto the organization.

• Task 20: Develop training moduWhile this task may have been initiated earlier in the implementation process, the core team will want to complete their activities by preparing a general training module that introduces

ew and existing emplntask as well, such as procedural train

Task 21: Deliver training to staff (Self-explanatory)

Task 22: Implement MS •In this task, the MS is announced a

ently accompanThis task is frequpublic congratulati

se 4: Implement continuous improvement of MS

Task 23: Perform self-audit of the MS

This is the final step to completing the MS. A thorough self-audit (using the Diagnostic e system, and initiates the process of

review cycle

•

Tool) of the MS identifies any gaps remaining in thcontinual improvement of the MS.

• Task 24: Perform first MS management



Using the results of the self-audit of the MS, the next task is to provide a complete update to management on the MS. This initiates the cycle of continuous improvement of the MS and results in the development of an annual plan.

Phase 4: MS Monitoring and Follow-up (LS&Co Requirement)

Task 25: Report on indicators •

S&Co will require suppliers to report on a set of indicators.

LS&Co will assess their suppliers every year through the TOE program

• This element is particular to LS&Co and includes LS&Co follow-up on the Corrective

supplier.

L

• Task 26: LS&Co TOE assessment

Task 27: MS Follow-up

Action Plan (CAP) agreed with the



SECTION V: MS IMPLEMENTATION PLAN This section will guide you through the MS implementation process. The 5 implementation phases are divided by task and each task has information on the input, output, tools and points required to be fulfilled. Supplier should examine the steps and tools described in the next section, to determine the tools they need and the ones that are more appropriate for their activities. The Annexes provide many useful tools and evaluation processes for companies.



Phase 1 - Policy Development and Management Commitment Checklists and Tools Task 1: Secure Management Commitment, Resources & Publicize Input: None – this is initial task Output: Memorandum describing management commitment to MS development and

formally designating MS Implementation Leader, and team, description of responsibilities, the expected MS scope and commitment of resources.

Tools: None Question Completed? Identify managers within the company who need to approve of MS development in order to ensure resource allocation and implementation

Provide those managers with an overview of the MS and business benefits associated with implementation

Discuss what the scope will be for the MS. The MS scope will be finalized in Task 3, however it is important to identify this in a general sense as early as possible so that individuals’ expectations can be managed

Discuss resource needs and the schedule for implementation. This needs to be a frank and open discussion about the fact that MS implementation is going to be competing for people’s time with their other responsibilities and how that can best be managed

Get explicit and formal approval for MS development. The approval from the company manager should state the specific business rationale for development of the MS

Explicitly designate the individual who will have primary responsibility to ensure implementation of the MS. It is critical that this person be personally committed and enthusiastic about MS development and has the ability to communicate well with others who will be involved in the effort

Review with senior management the level of resource commitment needed from other staff who will be involved in MS implementation

Identify approximately 2- 8 individuals who will make up the MS Core Team, depending on the size of the operations. This team will provide the bulk of support for MS development. This team should be identified by the Team Leader and confirmed by senior management.

Discuss the time commitments needed from the Core Team members. Identify potential conflicts between MS implementation and other responsibilities

Resolve and identify conflicts with senior management to ensure that the necessary arrangements are made to allow all of the Team members to commit the time necessary for MS implementation

Meet with key staff throughout the organization to ensure that they know of management’s commitment to proceed with MS development

Publicize the MS commitment through newsletters, bulletin boards, discussion at meetings and other forums

Suggestion: The MS Team should include staff from a cross-section of the company, including, at a minimum, staff from the human resources and operational departments. Personnel from other departments such as maintenance, purchasing and marketing departments should also be involved.



Task 2: Assign and Train Core Team Input: Training requirements Output: Documentation of training, including listing of personnel attending each

training session, agendas for each training session and any training materials utilized.

Tools: None Question Completed? Train the Core Team on MS requirements, implementation, and business benefits associated with MS implementation, strategic code of conduct management, and management commitment to MS implementation. This training should stress the implementation process and understate the specific MS requirements since the Core Team needs to be able to understand and visualize how the MS will be developed over time.

Identify any additional staff that may require training. Suggestion: None Task 3: Define the MS Scope Input: Guidance from senior management from Task 1 and in-depth knowledge of

the company’s operations from the MS Core Team Output: Written description of MS scope Tools: None Question Completed? Develop the MS scope If issues regarding the MS scope become complex (such as whether or not to include (contractors) an acceptable option is to create a simple boundary initially, with the intent to re-visit the boundary periodically and make a decision about whether to add potentially complicated factors.

Suggestion: None



Task 4: Perform a Gap Assessment Input: Any documentation of existing energy and environmental management

practices Output: Documentation of results of gap assessment – graphs of Diagnostic tool. In

many cases the results are documented as part of the implementation plan developed in Task 5, along with their order of priority to be addressed.

Tools: Diagnostic Tool Question Completed? Conduct a gap assessment of current practices and procedures against the requirements for a MS and for Code of conduct requirements. During this analysis it is helpful to identify existing programs and procedures, which can be used in the MS. Existing programs or procedures may require some modification to be consistent with the MS requirements.

Review gap assessment results with MS Core Team. Note that the gap assessment results will not tell you directly how much or exactly what work needs to get done to complete your MS. It will, however, provide a sense of what existing programs, procedures and documentation can be utilized and where the most effort will have to be spent in MS development

Suggestion: None Task 5: Develop Code of conduct Policy Input: Existing code of conduct policy (if any) and direction from senior management

from Task 1 Output: Written Code of conduct policy, signed by appropriate senior management. Tools: • Policy section in Management System Template

• TOE Guidebook • Global Sourcing and Operating Guidelines

Question Completed? Develop or revise a code of conduct policy using policy requirements identified in LS&Co Global Sourcing and Operating Guidelines and TOE Guidebook .

Time should be spent in awareness building with key operations Based upon their feedback, revise and finalize code of conduct Policy Suggestion: None Policy



Task 6: Develop and implementation plan and schedule Input: Gap Assessment results from Task 4 Output: Implementation schedule identifying steps that must be accomplished, target

due dates and persons responsible for their implementation. A Gantt chart is often helpful to clearly outline the tasks, due dates, and meeting dates.

Tools: • Diagnostic Tool graphics Question Completed? Determine which MS requirements need further development or refinement Identify resource needs for completing all MS requirements Assign lead staff person for each step or each component of the MS to be further developed or refined

Identify key communication (e-mails, intranet, bulletin boards…) and information management approaches with responsible individuals

Develop a schedule for completing the remaining steps and all MS requirements, including follow-on activities, such as MS manual development, and training

We recommend a weekly meeting of the MS team to discuss actions, obstacles that may affect the ability of the team to meet deadlines, and actions to over come those obstacles

Suggestion: None



Phase 2 - Planning and Information Management Checklist and Tools Task 7: Identify Key Stakeholders and Requirements Input: MS scope from Task 3 and Code of conduct Policy from Task 5. Output: Listing (Register) of stakeholders and their key Code of conduct requirements,

and registration of regulatory requirements. Tools: MS Tool 1: Registry of Stakeholders and Their Expectations Question Completed? Identify key stakeholders, based on the scope of the MS and the knowledge of the company practices and policies. In developing the list of key stakeholders, consider internal groups (e.g. employees, specific departments), and external groups (e.g. unions, communities, and regulators).

Identify key Code of conduct requirements of each stakeholder group. For instance, regulators would be interested in compliance-related information

Identifying concerns for a variety of stakeholders does not mean that they all need to be considered equally within the MS. Obviously, compliance with the requirements established by a regulatory body need to be considered essentially without question, whereas issues of concern to another stakeholder group, like the local community, would be considered along with other factors in determining how to respond

As part of this process, assemble a list of legal or regulatory requirements associated with Code of conduct management, since these are requirements of a key stakeholder

Suggestion: None



MS Tool 1: Registry of Stakeholders and Their Expectations

Company: ____________________________________ Prepared by: ____________________________________ Date: ____________________________________ Page _________ of _________

Name of Stakeholder Group

Description of Stakeholder Group

Description of Code of Conduct

Expectations

Is it a Regulatory or Other

Requirement?

Note: An expectation is a Regulatory or Other Requirement if: it is a regulatory requirement or required under internal Policy or a Contractual Agreement. A list of citations should be developed for all regulatory requirements so they can be easily tracked for changes in the future.



Task 8: Perform Aspects and Impacts Analysis Input: Global Sourcing and Operating Guidelines. Output: Documentation of aspects and impacts analysis. Tools: • Global Sourcing and Operating Guidelines

• TOE Guidebook Question Completed? Determine activities, products and services that can impact LS&Co Global Sourcing and Operating Guidelines

Analyse the impact of Code of conduct aspects in activities and products Suggestion: The aspect and impact analysis, are critical elements of MS development because significant aspects and impacts must be considered in the determination of objectives and targets (Task 9), which in-turn lead to programs (Task 10) and procedures (Task 11). The scope of programs and procedures required in the MS is determined in the aspects and impacts analysis process. Note that this process tends to be one of the most resource-intensive components of the entire MS development. This process has already been analysed extensively by LS&Co and it is presented in the Global Sourcing and Operating Guidelines and the TOE Guidebook. Task 9: Develop Objectives and Targets Input: • Global Sourcing and Operating Guidelines.

• TOE Guidebook Output: Listing of objectives and targets Tools: None Question Completed? Consider all Code of conduct aspects. When objectives and targets are developed, one aspect may require one or more objectives to be managed appropriately, or there may be an objective that covers several aspects.

Ensure that all targets are measurable. Suggestion: None



Task 10: Develop / Revise Code of Conduct Management Programs Input: Listing of objectives and targets from Task 9 Output: Documentation of environmental management programs that address all

objective and targets established. Tools: • MS Tool 2: Code of conduct Management Programs

• MS Tool 3: Register of Code of conduct Management Programs Question Completed? Establish a Code of conduct management program for each objective and target established in Task 9. One program may address more than one objective or target.

Suggestion: None



MS Tool 2: Code of conduct Management Programs - Example of MS Tool 2

Document No:

Subject:

Page: 1 of: Facility:

Responsible Person:

Start Date:

Goal Statement: (Describe how this program meets the commitment made in the Energy and Environmental Policy) Objective:

Target and Completion Date:

Strategy: Tasks for Achieving Objective and Target: Metrics and Measurement: Importance relative to Other Environmental Programs: Comments / Process Towards Completion:



MS Tool 3: Registry of Code of Conduct Management Programs

Company: ____________________________________ Prepared by: ____________________________________ Date: ____________________________________ Page _________ of _________

Code of Conduct MS Requirement

Activity/Function Objective Target Operational Control

(Procedures)

Note: None.



Phase 3 - MS implementation, training and manual preparation Checklists and Tools Task 11: Develop Procedures for Operational Control Input: Description of code of conduct management programs from Task 10 Output: Written procedures Tools: MS Tool 4: Procedures for Operational Control Question Completed? For each Management Program established in Task 10, procedures need to be developed that describe how each program will be implemented, and who has responsibility for implementation.

Suggestion: None



MS Tool 4: Example of Procedures for Operational Control



Task 12: Develop Monitoring and Measurement Procedures Input: Significant aspects and impacts (Task 8), objectives and targets (Task 9) and

key stakeholder & regulatory requirements (Task 7). Output: Written procedures for monitoring and measurement. (When monitoring and

measurement is actually performed, the outputs will include the measurement results). Include LS&Co indicators and TOE program.

Tools: MS Tool 5: Measuring and Monitoring Question Completed? Develop procedures, as needed, for the main areas in which monitoring and measurement are required. The procedures should: • Ensure that objectives and targets are being met • Respond to stakeholder demands, to the extent these are not reflected in

the objectives and targets • Meet regulatory and legal requirements regarding performance tracking,

and reporting requirements. • Address the needs for operational control of equipment and processes • Respond to established key performance indicators The procedures should specify: • Means by which the appropriate data will be gathered. How that data will be transferred to the other processes in which it will be used, such as corrective and preventive action and management review.

Suggestion: None



MS Tool 5: Measuring and Monitoring

Table 1. Linking Operations, Aspects, Controls and Monitoring

Code of Conduct MS Requirement

Activity/Function Key Performance

Indicators

Associated limits

Associated Monitoring or Measurement

Sheets



Task 12: Develop MS Auditing Procedures Input: MS Scope (Task 3), Policy Statement (Task 5), Management Programs (Task

10), Procedures for Operational Control (Task 11), and Monitoring and Measurement Procedures (Task 12).

Output: Written procedures for auditing Tools: None Question Completed? Develop internal audit procedures goals which: • Ensure that the procedures incorporated into the MS are being

followed; and • Determine if the MS itself requires revision or restructuring. The auditing procedures must address the following: • The frequency of auditing; • What information will be gathered; • Who will perform the audits; and • How the audit results will be recorded and communicated. The MS internal audit procedure should include or provide for the following: • Review of the monitoring and measurement to determine, among other

things, that objectives and targets are being met; and Discussions with personnel to determine if they know and follow MS • procedures

Rev gulatory compliance auditing procedure to ensure that it is assessing the status of regulatory compliance, identifying corrective and preventive actions and that those actions are being completed. The outputs from the audit go into two separate processes: Management Review (where senior managers can review and approve any changes to the MS itself) and

iew of the re

Corrective and Preventive Action (where corrections are made to address non-conformances and to avoid future non-conformances).

Suggestion: None _



Task 14: Develop Procedures for Implementing Preventive Actions Input: Procedures for Monitoring and Measurement and MS Auditing (Task 12) Output: Written procedures for corrective and preventive actions. (When those

procedures are actually implemented, the outputs will be documentation of non-conformances and the resulting corrective and preventive actions).

Tools: None Question Completed? Develop procedures for implementing corrective and preventive action. The procedures should: • Define responsibility for collecting the results of monitoring,

measurement and auditing, and using them to determine what, if any, corrective and preventive actions need to be implemented.

• Specify how corrective and preventive actions will be taken when a nonconformance is discovered by the monitoring or auditing procedures

• Specify how corrective and preventive actions will be documented, so that changes to the MS (i.e. continual improvement) can be demonstrated.

Suggestion: None Task 15: Develop Emergency Preparedness and Response Procedures Input: Existing emergency preparedness and response procedures Output: Written emergency preparedness and response procedures. Tools: None Question Completed? The emergency preparedness and response procedures should include: • A process for identifying potential accidents or emergency situations. • For each identified potential emergency or accident, the measures to

reduce the risk of occurrence as well as what actions would be taken if the emergency or accident were to take place.

• How employees will be trained in these procedures and how drills will be conducted to test the procedures.

Suggestion: None



Task 16: Development Management Review Procedure Input: Code of conduct Policy (Task 5), Objectives and Targets (Task 9), and MS

Auditing and Corrective/ Preventive Action procedures (Task 14). Output: Written procedures for management review and follow-up Tools: None Question Completed? Develop Management Review Procedures. The purpose of the Management Review is to “close the loop” in the continual improvement process by ensuring that all components of the MS and its effectiveness are reviewed periodically by the senior management for the company. Management should review the suitability, adequacy and effectiveness of the MS because it represents the framework used by the company to control code of conduct risks that could potentially prevent the compliance with LS&Co Global Sourcing and Operating Guidelines. The Management Review Procedure should include the following: • A description of the scope of the review, which must include

consideration of any necessary changes to policy, objectives and targets and programs and procedures.

• A description of who is going to conduct the review, how often it will be conducted, what inputs will be reviewed, and how the results of the review will be acted upon.

• A listing of inputs into the review including results of any performance against objectives and targets, MS audits, compliance audits, reports on the status of corrective and preventive actions and concerns raised by relevant interested parties.

• A specific description of how the results of the MS auditing will be incorporated.

A written report (minutes which includes the results of the management review should be completed).

Coordinate with LS&Co the follow-up on Corrective Action Plan (CAP) as described in the CAP.

Suggestion: None



Task 17: Assemble Existing Documentation Input: Written documentation assembled during Tasks 1 through 16. Output: Compilation of written documentation regarding the MS. Tools: None Question Completed? Assemble existing documentation regarding the following activities/processes: • Code of conduct Policy (Task 5) • Register(s) of Key Stakeholders and Requirements (Task 7) • Code of conduct Aspects and Impacts Requirements (Task 8) • Objectives and Targets (Task 9) • Management Programs (Task 10) • Procedures and Instructions (Task 11) • Monitoring and Measurement Procedures (Task 12) • MS Auditing Procedure (Task 13) • Corrective and Preventive Action Procedures (Task 14) • Emergency Preparedness and Response Procedure (Task 15) • Management Review Procedure (Task 16)

uggestion: The documentation discussed in this Task and Tasks 18 and 19 may be electronic S

and/or in hard copy. In either case there must to be procedures to ensure appropriate access and control over the documentation.



Task 18: Develop Any Necessary Additional Documentation Input: Documentation compiled in Task 17 Output: Additional documentation of MS Tools: None Question Completed? Develop documentation (if it does not already exist) regarding the flow of responsibility for implementing and maintaining the MS and its procedures. Be sure to identify document owners.

Based on guidance regarding documentation requirements for an MS and the requirements for document control determine the need to revise or supplement the existing documentation regarding each of the areas above

Suggestion: None Task 19: Assemble MS Manual Input: Documentation assembled in Task 17, with additional documentation from

Task 18 Output: MS Manual. Tools: None Question Completed? Assemble the documentation into a manual. It is usually not a good idea to attempt to include every MS related document in the MS Manual. The manual should be considered a tool to identify and locate documentation.

Ensure user-friendliness of the manual by separating information with section tabs, and by referencing other documentation. Use of Intranet site or internal network as the location for the MS manual is an efficient mechanism for document control and access.

Suggestion: None



Task 20: Develop Training Modules Input: Listing of LS&Co Code of Conduct requirements and, work procedures (Task

11). In Addition, training requirements for all other sources, including legal requirements and emergency response.

Output: Training curricula for each type of training that will be implemented Tools: None Question Completed? There are two basic levels of training: 1) awareness training for employees; and 2) competency training for those whose jobs affect the company’s ability to meet its objectives and targets. Assemble a list of all Code of Conduct and MS training requirements. All employees will require basic awareness training. Other (competency) training will be provided as needed. To determine what competency training is needed: • Assemble a list of all staff that will play a role in MS implementation.

The listing of Code of Conduct requirements can help suggest what roles in the organization are involved in interactions these issues.

• Divide the list into categories based on the type and extent of responsibilities related to the MS.

• Determine the type of training needed for each staff category. It is important to recognize that senior management needs competency training (as well as awareness training), since they have an important role in the Management Review process.

• Prepare a Training Matrix with Training needs along one-axis and employee groups to be trained along the other.

Develop training curricula for each category, based on their needs for information. It is likely that some portion of the training will be the same for each category of staff, but that the extent and nature of the additional information provided will vary from category-to-category.

During Task 6, the MS team may decide that the awareness-training portion may proceed earlier than Task 20. This may be encouraged because it would begin to build awareness as new employees are hired for the company

Suggestion: Training materials for employees often include a description of the MS, why it is important to the organization, and the role of each employee. Use videos, staff meetings, new employee training modules, and PowerPoint presentations as mechanisms for this awareness training to occur.



Task 21: Deliver Training to Staff Input: Training curricula from Task 20 Output: Documentation of training Tools: None Question Completed? Deliver training sessions to all staff involved in the MS Prepare a training schedule for initial and continuing training. Include provisions for employees transferred to different positions and new hires

Maintain appropriate records regarding staff who received training, and the content of the training they received

Suggestion: None. Task 22: Implement MS Input: MS Manual (Task 19) and all supporting MS documentation Output: Documentation regarding notification of MS effective date Tools: None Question Completed? Establish a specific date on which the MS is considered effective. Communicate this date to all employees. Ensure this date is included in all Awareness Training sessions.

Publicize that the MS is now in-place through available avenues of communication: newsletters, e-mail, bulletin boards, etc

Suggestion: Often procedures may be utilized informally as they are developed.



Phase 4 - Implement continuous improvement of MS Checklists and Tools Task 23: Perform self-audit of the MS Input: Audit Procedure (Task 13) and MS Manual (Task 19). Output: A Self-Audit Report detailing the areas of the MS inspected and the employees

interviewed. In the case that the audit reveals any deficiencies in the MS, the corrective action log will be modified to include those items.

Tools: None Question Completed? Perform a self-audit of the MS according to the Self-Audit Procedure developed in Task 13.

Log any findings of nonconformance in a corrective action log and include them in the annual plan for continual improvement of the MS

Suggestion: None. Task 24: Perform First EMS Management Review Cycle Input: The MS Manual (Task 19), Management Review Procedure (Task 16) and

Results of the MS Self-Audit (Task 23) Output: MS Annual Plan for the following year. Tools: None Question Completed? Using the results of the self-audit of the MS, draft an Annual Plan for improvement of the MS over the next year, complete with objectives, targets, and management programs that will be implemented. Prepare a budget to accompany the plan that outlines the resources that will be required to maintain and improve the MS

Prepare a presentation for top management on the results of the MS implementation project, the results of the self-audit, and the draft annual plan. Use the results of the MS Self Audit as a starting point for discussion on the following year’s Annual Plan

Demonstrate the value of the MS to top management, recommit the top management team to supporting the Code of Conduct Policy, develop consensus on the resources needed to improve the MS over the next year, and get a commitment

Finalize an Annual Plan for the next year and distribute to the MS Team Suggestion: None.



Phase 5 - MS Monitoring and Follow-up Checklists and Tools Task 25: Report on MS and Code of Conduct indicators Input: Indicators developed and included in Task 12 Output: Data on indicators Tools: List of indicators Question Completed? Ensure that company has the systems to capture and report on indicators Submission of Report Suggestion: None. Task 26: LS&Co TOE Assessment Input: TOE Assessment Output: CAP Tools: • TOE Assessment form

• TOE Guidebook • CAP

Question Completed? Ensure that company is prepared to undergo LS&Co TOE assessment TOE assessment Agreement on CAP Suggestion: None.



SECTION VI: TOOLS FOR MS IMPLEMENTATION This section will guide you to tools that will be useful in evaluating opportunities for improvement within your company’s operations. The tools are organised relating to the four phases of the MS Implementation Plan. The tools have been developed in a way that they can be used independently. Supplier should examine the steps and tools described in the next section, to determine the tools they need and the ones that are more appropriate for their activities. The Annexes provide many useful tools for companies.

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Figure 3: The Management Systems Framework and tools

1. Management tools Significant management tools also exist that may be useful to the company needs to improve its code of conduct performance. Many of these techniques and tools utilize a systems approach, and can be useful for companies seeking to understand the key components of their operations, processes, management issues, etc. In Figure 3 you can see the link between the different tools and the management system elements. They include the following:

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check to see if it has been successful in meeting its objectives and targets

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TOOLS: • Fishbone Analysis • 5W2H Worksheet • Benchmarking • Brainstorming • Pareto Analysis

Prioritiz

• ation

• SWOT analysis matrix

TOOLS:• Small-Group

Leadership/Teams Pilot

• Brainstorming • Checklist • Flowchart • Control chart • 5W2H

TOOLS:• Checklist • Graphical Analysis (Bar

graph, etc) • Control Charts • Key Performance

Indicators (Indicator matrix)

• Prioritization matrix

TOOLS:• Graphical Analysis

(Bar graph, etc) • Prioritization matrix



• Root Cause Analysis (Fishbone analysis): This common problem solving approach often utilizes “Fishbone”, “Cause and Effect” or “Failure Mode and Effect Analysis” diagrams to reveal gaps in existing knowledge and help people reach a common understanding of organizational challenges.

• 5W2Hs: Any given situation or a problem in a factory can be reduced to seven (7) key or main questions. The seven questions are summarized by the acronym 5W2Hs

• Process Mapping: Primarily a visual tool that allows companies to identify their processes, inputs and outputs involved in completing a task, project, activity or delivering a service.

• Pareto Analysis: The 80:20 rule states that 80% of your results are produced by 20% of your efforts. This tool assists in determining which activities within a company represent the “vital few” and which represent the “trivial many.”

• Brainstorming: This approach to identifying a range of alternative solutions facilitates discussion and allows for constructive criticism while considering alternatives that

2. How and when to use the management tools The table presented below gives you more detailed information on the tools you can use in the different steps of a management system.

MS Elements

Tools

Planning & Analysing

Implementation

Monitoring &

Evaluation Reporting Review

Bar Graph X X Benchmarking X Brainstorming X X

Fishbone analysis

X

Checklist X X Control Chart X X

Flow Chart X Indicator

Matrix X X

Pareto Analysis

X

Prioritization Matrix

X X X X

5W2H X X SWOT

Analysis X



ANNEX 1 – Bar chart

What is it? A bar graph is used to graphically present data that you have gathered. The type of data represented in a bar graph is the number of occurrences measured in different categories of data. A bar graph is often used to graphically represent the information you have gathered in a table. For example, in the bar graph below, you can see a comparison of the number of users of different services by type of service. Who uses it? Team and managers. Why use it? It helps you visualize relationships among different categories of factors affecting processes. When to use it? It is used when the information corresponds to a nominal scale (a counting of occurrences), and when you want to compare two or more groups (no more than six). How to use it:

1. Draw vertical and horizontal axes. 2. On the vertical axis, create a scale to measure the frequencies of the variable (for example,

number of users or number of times). 3. On the horizontal axis, note the nominal scale (different qualities of the variable), for

example, male/female, compliance/non-compliance, etc. It doesn't matter in what sequence the data categories are listed.

4. Draw a rectangle for each quality of the variable. The height represents the frequency with which that characteristic was observed.

Workers in the facility

0

5

10

15

20

25

30

35

Male Female youngw orkers

# of

wor

kers



ANNEX 2 – Benchmarking

What is it? Benchmarking is a technique in which you compare the processes of one organization with those of similar organizations to study ways to improve those processes. Who uses it? Team and managers. It is important to include in the team someone who has expertise in the process you are comparing. Why use it? To develop new ideas about how to modify and improve the selected process. When to use it? For analyzing strategies to improve a process. How to use it: 1. Select another organization to use as a "benchmark." 2. Identify an organization that is in your same manufacturing sector or activity, or that is a

leader in the process. 3. Contact the benchmark organization to explain the purpose of your proposed visit, gain their

support for the visit, and to set a date. 4. Make a site visit to collect data: (you can also do it through phone interviews or known

leading practices) • Determine in advance the kind of information you want. • Send a list of questions to your benchmark contact so that he or she can prepare for

your visit. • Agree on an agenda for the visit. • Arrange a meeting, tour the benchmark organization, and obtain answers to your

questions. • Ask about the organization's future plans for the process you are investigating. • Be prepared to share comparable information about your own organization.

5. Determine any important differences between the process used by your organization and the process used by the benchmark organization.

6. Present your findings to the team, set new goals, and use the results to propose improvements in the process.



ANNEX 3 – Brainstorming

What is it? Brainstorming is a lively technique that helps a group generate as many ideas as possible in a short time period. Who uses it? The team members, the management, or the users can all participate in brainstorming. If you invite people with different perspectives to brainstorm, you are more likely to see innovative ideas generated by the group. Why use it? To identify problems, analyze causes, select alternative solutions, do strategic planning, generate ideas for marketing change, and handle many other situations. When to use it? In the facility, with community or user groups, in meetings. How to use it: 1. Explain the objective of the session: for example, to select problems, analyze causes, or

generate ideas. 2. Explain the technique to the group. Tell them that you are looking for a lot of ideas, and

that you want their thoughts and ideas to flow freely. There is no right or wrong answer. The idea of brainstorming is to produce as many innovative ideas as possible. In countries where participation in meetings is structured, brainstorming takes practice. (If you set up a brainstorming session in which many participants have no real experience in expressing their opinions and many levels of staff are present, it can produce a deafening silence.)

3. Silent reflection: Ask the participants to think about the proposed objective or topic for a few minutes. Time: approximately 5 minutes.

4. Brainstorm: The participants call out their ideas and add those that come to mind during the discussion. Annotate them on a flip chart in the order they are mentioned. Write down the ideas using the words of the speaker. Ask for clarification only if the meaning is not clear. Time: approximately 20 minutes. (For groups with little or no experience in brainstorming, it is often useful to have them practice in small subgroups before convening before the entire group.)

5. Once the list is finished, discuss it with the group to: • Clarify the meaning of some ideas • Combine similar ideas that are worded in different ways • Eliminate those ideas which are not related to the objective of the session

6. Do all this by group consensus. Time: 5-15 minutes. At the end of this stage, you will have reduced the list of ideas to those that represent most of the major ideas of the group.



ANNEX 4 – Checklist

What is it? A checklist is a tool you can use to systematically observe a process, using a list of closed-ended questions. Who uses it? The team, the manager. Why use it? To ensure that the processes implemented in your organization are complying with the stated standards. When to use it? When you are trying to analyze a problem, or when you are trying to find out if a solution to a problem has been implemented successfully. A checklist can be used also to check for the consistency of a process on the basis of a flowchart. How to use it:

1. Review the steps of the process that you want to observe. 2. Select the critical steps of the process. 3. Make a list of questions to check if the steps are performed. These questions should be

"closed," that is, able to be answered only by "yes" or "no". 4. Perform the observations and collect the data.



ANNEX 5 – Control Chart

What is it? A Control Chart is a tool you can use to monitor a process. It graphically depicts the average value and the upper and lower control limits (the highest and lowest values) of a process. Who uses it? The management, the team. Why use it? All processes have some form of variation. A Control Chart helps you distinguish between normal and unusual variation in a process. If you want to reduce the amount of variation in a process, you need to compare the results of the process with a standard. Variation can exist for two reasons: 1. Common causes are flaws inherent in the design of the process. 2. Special causes are variations from standards caused by employees or by unusual

circumstances or events. Most variations in processes are caused by flaws in the system or the process, not by the employees. Once you realize this, you can stop blaming the employees and start changing the systems and processes that cause the employees to make mistakes. When to use it? First, you need to define standards of how things should be. Then, you need to monitor (collect data) about processes in your organization. Then, you create a control graph using the monitoring data. How to use it: 1. Select the process to be charted and decide on the type of control chart to use. 2. Determine your sampling method and plan:

• Choose the sample size (how many samples will you obtain?). • Choose the frequency of sampling (months, days, years?). • Make sure you get samples at random.

3. Start data collection: • Gather the sampled data. • Record data on the appropriate control graph.

4. Calculate the appropriate statistics (the control limits) depending on the type of graph. 5. Observation: 6. The control graph is divided into zones:

______________________________ Upper Control Limit (UCL)

______________________________ Standard (average)

______________________________ Lower Control Limit (LCL)

7. Interpret the graph:

• If the data fluctuates within the limits, it is the result of common causes within the process (flaws inherent in the process) and can only be affected if the system is improved or changed.



• If the data falls outside of the limits, it is the result of special causes (special causes can include bad instruction, lack of training, ineffective processes, or inadequate support systems).

• These special causes must be eliminated before the control chart can be used as a monitoring tool. Once the process is "under control," samples can be taken at regular intervals to assure that the process does not fundamentally change.

• A process is said to be "out of control" if one or more points falls outside the control limits.



ANNEX 6 – Flowchart

What is it? A Flowchart is a tool that graphically represents the steps of a process or the steps that users have to take to use the service. Who uses it? Team, manager. Why use it? The Flowchart helps you analyze the number of steps and the time required for each step, to detect bottlenecks, unnecessary steps, repetitions, and other obstacles. When to use it? When you want to describe activities, identify problems, identify the causes of problems, detect "bottlenecks," and define indicators.

Timeline Function 1 Function 2 Week 1

Week 2

Week 3

Week 4

Week 5

Process starting point

Step 1

Step 2

Decision

END

How to use it: Different symbols are used in a Flowchart to indicate the different types of actions in the process: • a circle for the beginning or end of the process • a rectangle for a step in the process (activities) • a diamond for the decision points How to create a Flowchart: 1. Observe for a few repetitions the process you will be charting. Write down all the steps taken

and decisions made in the process. 2. Mark the path of the Flowchart from the beginning to the end. 3. Assign the appropriate functions/department responsible for each step in the process. 4. Add the appropriate timeline for each step of the process. 5. Record the last step at the bottom of the page, draw a circle around it, and connect the

primary path and any branching paths to the last step. 6. Review for accuracy.



ANNEX 7 – Indicator Matrix

What is it? An Indicator Matrix is a chart that will guide you as you construct key performance indicators. Who uses it? The team, the manager. Why use it? To help you analyse and organise the information you are collecting. When to use it? When you need to construct indicators to track performance or completion. How to use it: Create a chart (see example below). What to Measure?

Standard measured

Target/objective Description of Indicator

Formula/ Measurements

Units Source of data

1. Write the questions that you have about what you want to measure in the first column. For example: How many are there? When does it occur? Where does it occur? Who is most affected? How much time does it take?

2. Describe which standard you are measuring. 3. Describe if the organization has any targets or objectives regarding this standard. 4. Write the description of the indicator in the fourth column: for example, proportion of...,

time of..., percentage of..., rate of.... 5. Write the formula of the indicator (numerator divided by denominator, or number of events)

and its expression. 6. Specify the units. 7. In the last column, indicate the sources for obtaining the necessary data for the numerator

and denominator. The sources may include daily reports, files, surveys, observations, interviews, etc.



ANNEX 8 – Pareto Analysis

What is it? The Pareto Principle states that only a "vital few" factors are responsible for producing most of the problems. This principle can be applied to quality improvement to the extent that a great majority of problems (80%) are produced by a few key causes (20%). If we correct these few key causes, we will have a greater probability of success. Who uses it? The team, the manager. Why use it? For the team to quickly focus its efforts on the key causes of a problem. When to use it? After doing a fishbone analysis, to count the frequency of different causal factors, and to identify problems. How to use it:

1. Gather data on the frequency of the causes using a table

Rank the causes from the most to the least important, and calculate the cumulative percentage (the cumulative percentage is the first percentage plus the second percentage, and so on).

Causes Percentage of Total

Computation Cumulative Percent

A 20% 0+20%= 20% 20% B 18% 20%+18%=38% 38% C 15% 38%+15%=53% 53% D 11% 53%+11%=64% 64%

2. Draw a horizontal axis (X) that represents the different causes, ordered from the most to least frequent.

3. Draw a vertical axis (Y) with percentages from 0 to 100%. 4. Construct a bar graph based on the percentage of each cause. 5. Construct a line graph of the cumulative percent. 6. Draw a line from 80% on the Y axis to the line graph, and then drop the line down to the X

axis. This line separates the important causes from the trivial ones.



ANNEX 9 – Prioritization Matrix

What is it? A Prioritization Matrix is a useful technique you can use with your team members to achieve consensus about an issue. The Matrix helps you rank problems or issues (usually generated through brainstorming) by a particular criterion that is important to your organization. Then you can more clearly see which problems are the most important to work on solving first. Who uses it? Members of your team. Why use it? To determine what your team members consider being the most pressing problem in your activity. When to use it? When you need to prioritise problems, or to achieve consensus about an issue. How to use it:

1. Brainstorm: Conduct a brainstorming session on problems your team members have with the company’s processes or activities.

2. Fill out the Prioritization Matrix chart with the group:

Problem Frequency Importance Feasibility Total Points

3. In the first column, write down the problems that were mentioned in the brainstorming session.

4. In the second to fourth columns, define your criteria. Examples of some typical criteria are: o Frequency: How frequent is the problem? Does it occur often or only on rare occasions. o Importance: From the point of view of the users, what are the most important

problems? What are the problems that you want to resolve? o Feasibility: How realistic is it that we can resolve the problem? Will it be easy or difficult?

You can choose other criteria if they better fit the situation you are discussing. For example, for a more quantitative comparison, you could use cost, amount of time, or other numerical indicators as the criteria

5. Rank/Vote--Each participant now votes three times for each criteria. Each participant votes nine times in total?

6. Total all the votes together. The totals help you see clearly how to prioritise the problems.



ANNEX 10 – SWOT analysis

What is it? You can use a SWOT Analysis to identify and analyze the strengths and weaknesses of your organization, as well as the opportunities and threats revealed by the information you have gathered on the external environment. Who uses it? The team members, the managers. Why use it? To develop a plan that takes into consideration many different internal and external factors and maximizes the potential of the strengths and opportunities while minimizing the impact of the weaknesses and threats. When to use it? While developing a strategic plan, or planning a solution to a problem, after you have analysed the external environment. How to use it:

1. Internal Analysis: Examine the capabilities of your organization. This can be done by analysing your organization's strengths and weaknesses.

2. External Analysis: Look at the main points in the environmental analysis and identify those points that pose opportunities for your organization and those that pose threats or obstacles to performance.

3. Decide whether the answers or the data collected reveal external opportunities or threats. 4. Enter the information you have collected in steps one and two into a table as illustrated

below:

Positive Negative Internal Strengths Weaknesses External Opportunities Threats

5. You can use this information to help you develop a strategy that uses the strengths and opportunities to reduce the weaknesses and threats, and to achieve the objectives of your organization.



ANNEX 11 – Fishbone/Ishikawa Diagram

What is it? A graphic tool used to explore and display opinion about sources of variation in a process (causes of a problem or factors contributing to the effect). The resulting diagram is called Fishbone Diagram, the head of which is the ‘effect’ or problem, and the ribs of which carry the categorised possible causes. It is also called Ishikawa Diagram, owing to its inventor, Kaoru Ishikawa. Who uses it? The team members, the managers. Why to use it? To arrive at a few key sources that contributes most significantly to the problem being examined. These sources are then targeted for improvement. The diagram also illustrates the relationship among the wide variety of possible contributors to the effect. The figure below shows a simple Fishbone diagram. The first name is after the inventor of the tool, Kaoru Ishikawa (1969) who first used the technique in the 1960s.

How to use it? 1. The basic concept in the Cause-and-Effect diagram is that the name of a basic problem of

interest is entered at the right of the diagram at the end of the main “bone”. 2. The main possible cause of the problem (the effect) is drawn as bones off of the main

backbone. The “Four-M” categories are typically used as a starting point: “Materials”, “Machines”, “Manpower”, and “Methods”. The key is to have three to six main categories that encompass all possible influences.

3. Brainstorming is typically done to add possible causes to the main “bones” and more specific causes to the “bones” on the main “bones”. This subdivision into ever increasing specificity continues as long as the problem areas can be further subdivided. The practical maximum

Machines Materials

Problem

Methods Manpower



depth of this tree is usually about four or five levels. When the fishbone is complete, one has a rather complete picture of all the possibilities about what could be the root cause for the designated problem.

4. Once the entire fishbone is complete, team discussion takes place to decide what are most likely root causes of the problem.

5. These causes are circled to indicate items that should be acted upon, and the use of the tool is complete.

The Ishikawa diagram, like most quality tools, is a visualization and knowledge organization tool. Simply collecting the ideas of a group in a systematic way facilitates the understanding and ultimate diagnosis of the problem. How to Construct:

1. Place the main problem under investigation in a box on the right. 2. Have the team generate and clarify all the potential sources of variation (or causes). 3. Use an affinity diagram to sort the process variables into naturally related groups. The

labels of these groups are the names for the major bones on the Ishikawa diagram. 4. Place the process variables on the appropriated bones of the Ishikawa diagram. 5. Combine each bone in turn, insuring that the process variables are specific, measurable,

and controllable. If they are not, branch or “explode” the process variable until the ends of the branches are specific, measurable, and controllable.



ANNEX 12 – 5W2Hs for Problem Analysis and Planning

The 5W2Hs tool can be used in different ways during the MS implementation. These are the following:

• Problem analysis • Planning action items

Problem analysis Any given situation or a problem in a factory can be reduced to seven (7) key or main questions. The seven questions are summarized by the acronym 5W2Hs. 5W2Hs stand for:

• What? • Who? • Where? • When? • Why? • How many? • How much?

There is no set order for going through the questions. The only rule is that it should begin with what and the why should be the last question to be asked. Using the 5W2Hs, the investigator moves through the two main stages of problem analysis. FRAMING THE PROBLEM: A. Ident fying the Problem i Asking the first question WHAT? Defines the problem. The answer specifies the anomaly or deviance from the norm. The deviance is an observable event or series of event. For instance, a factory manager notices that more and more workers under him have been reporting late during the past two weeks. Based on this initial observation, he tentatively defines the problem as “Rising Tardiness”. To confirm his observation, he refers to the time record. B. Identifying the Manifestations of the Problem Assuming that his impression was confirmed to be correct, the manager can proceed to gather data about the MANIFESTATIONS OF THE PROBLEM (Scale, Stakeholders, Scope, Timing, and Cost). He does this by asking questions; The factory manager can ask WHO among the workers were late. Seeing if the problem concerns a few workers or distributed, more or less evenly, across several workers. If his factory consists of different sexes, he could check if the latecomers were male or female. Is there a pattern among the latecomers, such as all or most are living in the same neighborhood or the same area. Ask WHERE (Scope) he can localize or isolate the problem of tardiness. Or he may find that the problem is widespread in his factory. And if the workers report in shifts, he can pinpoint WHEN (Timing) it happens, during the day shift, the night shift or both. If the factory keeps good records, the factory manager can do a historical comparison. Comparing tardiness records



across the months and across the years he can see if the problem is seasonal: WHEN during the year or during a given month or week does this happen? Going a step further, he can ask HOW does his factory’s tardiness figures compare to those of other factories in the vicinity. Is the phenomenon peculiar to his factory or does it happen across the different factories in the vicinity producing the same product lines? Ultimately, the factory manager would have to calculate HOW MUCH the factory lost in production and in monetary terms as a result of the lost human hours. He can look at tardiness from the point of view of the workers: HOW MUCH in salary deductions they incurred as a result of their tardiness. C. Implica ons o the Problem ti f The implications of the problem need to be made clear. This is done by asking an adjunct of the “What” question. So what if tardiness is rising? If it is allowed to continue or if it worsens, what is its effects in the long run to the factory’s production, to its profitability, and ultimately to its survival? Taking the workers’ standpoint, so what if they are not coming punctually to work? What does it say about their morale? What does it say about the factory’s policies, the scheduling of its operations, its performance management system, its human resource management system? What does it say about working conditions? What does it say about the workers’ themselves?

5W2H Worksheet

Non-compliance

issue

What Who Where When

Why How many

How much



Planning action items The seven questions summarized in the 5W2H table can also be used as a planning tool. Usually it is used to plan corrective action items, assigning responsibilities, timelines, deliverables and resources. PLANNING: A. Identifying the non-compliance issue First we need to identify the non-compliance issue based on the implementation of our code of conduct in a facility. B. Identifying the causes of non-compliance Assuming that we have analysed the non-compliance issue and identified the causes, we can explain WHY this problems are happening. Knowing the cause of the non-compliance issue will help us finding the appropriate action to solve it. C. Planning solution to solve non-compliance The question WHAT will describe the action the team will need to perform in order to solve the non-compliance issue. Asking WHO will identify the responsible function, department or people that have direct accountability in performing the action that will solve the problem. The identified action will have a specific timing, WHEN will give as the timeline when the problem will be solved. We also need to specify the deliverable for each action, answering the second WHAT will give us that information. The necessary resources, in terms of people and money, will be identified in the questions HOW MANY and HOW MUCH.

5W2H Worksheet

Non-compliance

issue

Why (Problem)

What (Action)

Who (Responsibilit

ies)

When (Timelin

e)

What (Deliverable)

How many

(People)

How much (Cost)



SECTION VII: TEMPLATES FOR MS IMPLEMENTATION This section will guide you to templates that will be useful in implementing MS and Code of conduct requirements.


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