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Supply Base
Environmental Performance Management |
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Other themes in
this case study: |
For similar case
studies: |
|
- Prequalification of
suppliers |
Quantum Corporation |
|
- Promote exchange of
information and ideas |
Xerox Corporation |
|
- Lobby to change laws |
|
THE CHALLENGE
In 1994 Intel�s health and
safety performance was on a par with its industry-average levels. It
faced approximately three recordable injury cases per one hundred
employees and more than five recordable injury cases per one hundred
construction contractors annually. These were both, however, levels
that the company sought to lower. In the same year, approximately one
lost-day injury case occurred per hundred employees�a total of more
than 5,000 days away from work due to injury or illness worldwide.
This figure indicated not only harm and risk to employees but also a
loss in productivity for the company. This situation
spurred Intel�s development of a system of "design for environment,
health, and safety" (DFEHS).
The concept of "design for environment"
(DFE) is fairly well established, if relatively new. Intel has had
marked success in integrating environmental performance criteria into
their design processes. By combining both DFE and EHS enhancements at
the design phase, Intel has shown that it can further improve its
corporate safety record considerably.
THE SOLUTION
Intel has implemented a number of
programs and policies, beginning with the design stage, to improve
health and safety performance. Each of these is based on the company�s
commitment to employee and workplace safety and is addressed in the
corporate EHS policy (see box).
The company�s policy emphasizes both
corporate dedication to safety concerns and their expectation that
this is an employee responsibility. From the start, the broad goals of
a "healthful and safe workplace" and refraining from "conducting or
marketing a product without adequate safeguards" required specific
programs. Most important, the company emphasized that safety programs
should be incorporated from the design phase forward. The four
elements of the DFEHS program that are illustrated in this case study
are:
- The concept of DFEHS
- The Supplier Safety Prequalification
Program
- Contractual safety guidelines: SEMI
- Materials Supplier Day
The Concept of Design for
Environment, Health, and Safety
| For
Intel, DFEHS is a tool to facilitate an injury- and incident-free
manufacturing environment. DFEHS is an outgrowth of the emerging
trend in production processes of DFE. It represents a common-sense
approach to avoiding costly mistakes in the design process. EHS-related
retrofits can be avoided by incorporating end-user requirements in
the design phase. Indeed, the goal of the program is to need no
such retrofits at all after equipment arrives at Intel. By
addressing all aspects of EHS compliance during the design phase,
potential problems are avoided. This represents a comprehensive
design strategy originating in the design concept phase and
continuing throughout each subsequent phase. Intel notes that a
key to success is that the process is a closed loop. Lessons
learned from previous tool generations and facility designs are
incorporated into new designs, and new EHS requirements can be
introduced. |
1 |
"We
seek a healthful and safe workplace, free of occupational injury
and illness. We emphasize individual responsibility for safety by
all employees and at all levels of management. We expect employees
to report potential safety hazards and issues and be involved in
implementing solutions. We will not conduct any operations or
market a product without adequate safeguards. To maintain a safe
work environment, employees are prohibited from possessing or
using illegal drugs on Intel premises or reporting to work under
the influence of illegal drugs or alcohol."
�Excerpt from Intel's EHS Policy
|
The benefits of the DFEHS model
are that it:
- Promotes an incident- and
injury-free manufacturing environment
- Drives toward full regulatory
compliance
- Reduces product liability exposure
- Reduces time to market for new
equipment models
- Lowers cost of tool development
- Reinforces the convergence of
health, safety, and environmental considerations.
Keys for successful implementation of
the model include the following:
- Management accepts accountability
for program success.
- A single point of contact is
responsible for implementation across all divisions, product lines,
and so on. This individual is thoroughly linked to management and
organization responsible for engineering, quality assurance,
reliability, among others.
- Equipment and facility design
engineers are held accountable for application of DFEHS.
- The DFEHS model is applied
throughout the life cycle of the company�s products, projects, and
programs.
- The DFEHS process documents
knowledge gained during all projects, product life cycles, and so
on.
Intel has developed a careful analysis
of the tasks that are required at each phase to ensure that vital
steps are not overlooked. The success of the model, however, obviously
depends on carefully integrated processes, that is, prequalification
of suppliers and then contract specifications and strong lines of
communication among people involved at all phases of design and use.
Programs such as the supplier safety prequalification program provide
the assurances Intel needs. After that, strong relationships must be
built between equipment suppliers and Intel staff to ensure that the
full potential of the model is realized. Communication and outreach
tools, such as the Materials Supplier Day, help Intel to form the
supplier relationships needed to make the DFEHS strategy a success.
Intel also uses tools developed by industry consortia, such as the
Semiconductor Equipment and Materials International (SEMI) guidelines
for Safety (S2-93) and Ergonomics/Human Factors Engineering (S8-95).
SEMI�s Guidelines are a set of minimum expectations that every
manufacturing tool must meet before it comes into operation. Intel
applies a similar risk-based approach to evaluating any new chemical
or facility design before being implemented. The integration of these
programs allows Intel to deal with safety issues at the beginning of
the product design process.
The Supplier Safety Prequalification
Program
| In 1998
Intel noted that its existing policies designed to ensure
contractor safety on Intel sites were successful at achieving
reductions in injury levels, but inefficient. The policy had
required supplier personnel to attend Intel EHS training courses
prior to beginning work. This approach often duplicated the
suppliers� own training procedures. Supplier personnel sometimes
had to sit through redundant training programs, some for up to
thirty hours. This duplication did little to advance Intel�s
safety goals�and was costly in time and energy. Clearly,
refocusing was indicated. |
1 |
"In
the construction field, at any given time, we have several
thousand people building something somewhere. Contractor safety
has always been a real focus for us. In Malaysia, the Governor of
Malaysia asked for and we provided a copy of our video on
contractor safety. It really has been very well received."
�Larry Borgman,
corporate director, worldwide EHS, Intel |
That refinement came with the
company�s announcement of the Supplier Safety Prequalification Program
early in 1999. Intel wanted to ensure that supplier personnel received
safety training before beginning work, but through a new program. This
program would not only be more efficient but also drive improved
standards of performance within supplier companies. The new
prequalification program requires that contractors be prequalified
before they can start work. The prequalification process requires
contractors to confirm that their personnel working on site have
received the necessary safety training before they begin work. In most
cases, this means that Intel does not directly administer safety
training but does ensure that adequate training has been received. A
supplier who has not completed the prequalification process will not
receive approved status.
The program�s execution involves a
number of steps. After a supplier is selected, if it has not
previously completed the company�s prequalification package, it
receives the package from the procurement department. This package
includes a core booklet, a prequalification booklet, and an Intel
safety video. After reviewing the list of required safety training and
completing the questionnaire, the supplier returns the materials to
Intel, where the package reviewed by the corporate EHS
department. If all necessary training has been administered and no
other problems are raised by the responses, the supplier receives
approved status. If any lingering issues are raised by the
prequalification package, Intel EHS staff work with the supplier to
identify remaining needs and develop a closure plan. When all
remaining issues are resolved, the supplier receives approved status.
As a result of the prequalification
program, all suppliers complete safety training prior to receiving
their site badge with a minimum of repetitive training and
inefficiency. Intel continues to provide training that is specific to
its sites or the company�s requirements. The benefits of the program
are obvious: safety goals are met with a minimum of unnecessary costs.
Suppliers benefit as well: they spend less time in training without
any loss in training quality, and the improvements to their training
systems are proliferated throughout their projects�whether they are
working at Intel or not. Improved safety performance may also benefit
the supplier through a reduction in accident and insurance costs.
| Contractual Safety
Guidelines: SEMI |
|
|
|
|
|
Intel in
Asia |
| Intel is part of the
Sematech consortium of semiconductor manufacturers, which have
together generated a series of "Safety Guidelines for
Semiconductor Manufacturing Equipment." The member companies made
the guidelines contractual requirements for any manufacturing
equipment that they purchase. By offering industry consensus on
the subject to suppliers, the member companies gave equipment
manufacturers clear direction in the field of environmental and
safety features, providing suppliers a clear idea of concerns to
incorporate into the design process. The requirement of safety and
environmental standards in manufacturing equipment is closely
related to the DFEHS strategy. In both cases, the company is
taking a proactive approach toward environmental and safety
features in its manufacturing equipment. |
|
a |
Intel�s emphasis on safety extends to Asian facilities. In China,
in 1998, the factory site formally launched its first Safety Week.
Numerous EHS topics were promoted, and the site published an EHS
handbook for employees in both Chinese and English. The site also
implemented mandatory use of safety glasses in all manufacturing
areas, and contractor employees received training in planning for
preventing new site incidents, as well as training in incident and
injury investigation as well as first aid and CPR. |
| a |
|
|
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| Materials Supplier
Day |
|
|
|
|
|
Sematech
Member Companies |
| One outreach tool to
suppliers that Intel developed is a Materials Supplier Day, a
meeting with major suppliers hosted annually either in Asia or the
United States. EHS is integrated into this day-long conference,
which is intended to address a variety of supply chain issues.
Larry Borgman, corporate director of worldwide EHS at Intel,
reports: "We invite all our major suppliers. A major component of
the supplier day event is to address environmental issues. We have
display areas and presentations. This year, we focused on
designing for environment, health, and safety. It�s a good way to
get suppliers to be part of our team. We provided them with a
CD-ROM telling them what part we wanted them to play. It was very
well attended, and the suppliers took a lot from the event." |
|
Advanced Micro Devices
- Compaq
- Conexant
- Hewlett Packard
- IBM
- Intel
- Lucent Technologies
- Motorola
- Philips
- Texas Instruments
|
THE RESULTS
Intel�s focus on health and safety has
achieved significant improvements in safety and costs. The U.S.
Occupational Safety and Health Administration�s (OSHA�s) recordable
injury rate for construction contractors averaged a reduction of more
than 29 percent each of the last four years, dropping from more than
five to just more than one recordable injury per hundred workers each
year. These data do not incorporate results from the prequalification
component of the DFEHS program, but Intel hopes that injury rates will
continue to fall under the new program. Companywide, the number of
employee days away from work due to injury or illness worldwide has
fallen from more than 5,000 in 1994 to just more than 1,000 in 1998,
despite a doubling of total employee numbers.
| Global
recordable and lost-day injury case rates declined steadily and
dramatically from 1994 to 1998. Intel�s global recordable injury
case rate dropped from an average of three per 100 employees in
1994 to just under one per employee in 1998 (see chart). These
figures bring Intel in line with world-class safety performance,
as defined by the lowest safety figures in any industry, and give
Intel dramatically better safety figures than the industry average
among major semiconductor manufacturers. The company estimates
that its safety program will save the company $3.5 million in the
next two years, adding financial savings to the laudable goals of
the safety program. |
|
 |
"By
looking at environmental, health, and safety performance in its
largest context, you can remove barriers to successful implementation.
When we say "one EHS," we mean it. Our environmental programs have
benefited from the robust systems we have in place to manage health
and safety, and our health and safety programs have benefited from the
design focus of our environmental systems. Our success is built on the
integration of EHS into everything we do, from process and facility
design to community and shareholder relationships."
�Dave Stangis,
EHS regulatory issues manager
Intel is also involved in another
initiative to influence legislation aimed at improving safe disposal
of hazardous waste in developing countries, as described in the
following box.
|
Influence
Legislation to Facilitate Better SCEM Policies
Seeking to dispose
safely of hazardous waste in the developing world:
Intel Lobbies the
United States to Adopt the Basel Convention
In the United
States, Intel Corporation seeks to use waste
suppliers who recycle or reuse a high portion of the incoming
waste stream. Noting that only a limited number of American firms
provide the waste services that the company requires, Intel has
made a point of doing business with those service providers that
are able to offer a higher level of recycling. Some
of its American waste service providers have proprietary processes
that enable markedly higher levels of reuse and recycling, a point
that has become a source of pride for the company.
Intel, however,
does business in a number of countries with less advanced waste
disposal systems. These include Costa Rica, Philippines, Malaysia,
and China. In these regions, the company has found it difficult to
locate appropriate waste disposal facilities. Some of the wastes
in question are hazardous, making disposal a particularly
troublesome issue. Although facilities for disposal of some of the
low-level hazardous wastes exist in some of the countries, these
are limited. For example, no appropriate recycling or disposal
facilities for metal-bearing sludge exist in any of the developing
country regions in which Intel operates. This situation forced a
difficult set of choices: Intel could have considered any of the
following options:
- Dispose of the wastes within the
countries of operation in a manner that is legal but that might
not be environmentally sound.
- Store the wastes on site in the
long term in the hope that the situation will change in the
future.
- Arrange for the export of wastes
to facilities equipped to handle them.
None of the options
seemed ideal, but the first to be discarded was the first�disposal
in a manner that is not consistent with the highest environmental
practices available elsewhere. Having quickly eliminated that
possibility for ethical and prudent reasons, the company faced a
choice between storage and export for treatment. Because of
Intel�s emphasis on recycling and sound treatment and disposal,
the company chose to store the hazardous waste temporarily until
it could be exported, appropriately treated, and
disposed of, as necessary. This, however, was not simple.
To date, Intel has
only been able to find waste treatment providers and facilities
that meet the company�s standards in the United
States. Importing hazardous waste into the United States, however,
is legally difficult. The United States is not a signatory to the
Basel Convention, the international agreement ensuring that
hazardous waste crossing international borders is handled in an
environmentally sound manner. Consequently, importing waste to the
United States from countries that have signed the agreement
requires drafting and adopting a bilateral agreement between the
United States (importing the waste) and the country exporting it.
This is a long and difficult political process.
Intel has facilitated the negotiation of bilateral agreements
between the United States and Costa Rica and the United States and
Malaysia to advance its goal of sound waste management in keeping
with the company�s high waste treatment and disposal
standards. As a result of these bilateral agreements, Intel is
able to use the same waste service suppliers for some
international waste as for domestically generated waste. This
means that the company�s emphasis on environmentally sound
management of waste is maintained.
The time and
expense involved with negotiating bilateral agreements and the
shipment of wastes for long distances, however, is burdensome for
Intel. The company faces unresolved waste situations particularly
in China and the Philippines, as well as elsewhere. To aid
in these situations and as a result of its experiences, Intel has
actively petitioned the U.S. government to become a party to the
Basel Convention. Until that happens, however, the company will
continue to struggle with the challenge of how to use waste
suppliers that meet its high standards for reuse,
recycling, and environmentally sound disposal. |
COMPANY INFORMATION
Founded in 1968, Intel manufactures
computer chips, boards, systems, and software. In 1998 the company
ranked 125th of the Fortune Global 500. Intel has approximately 65,000
employees in more than forty nations worldwide and, in 1998, revenues
of $26.3 billion. Operations are based in Santa Clara, California,
USA, with other major sites in the United States, United Kingdom,
Central America, Malaysia, Philippines, China, Israel, and Japan.
CONTACT INFORMATION
The company�s web site is
http://www.intel.com. More
information on the material included in this case study can be found
at
http://supplier.intel.com and
http://www.intel.com/intel/other/ehs.
Sematech�s web site is
http://www.sematech.org.
Their address is: Sematech, 2706
Montopolis Drive, Austin, TX 78741 USA
| Contacts: |
|
| Larry Borgman |
David Stangis |
| Corporate Director,
Worldwide EHS |
EHS Regulatory Issues
Manager |
| Intel Corporation
CH10-22 |
Intel Corporation
CH10-22 |
| 5000 W. Chandler Blvd. |
5000 W. Chandler Blvd. |
| Chandler, AZ
85226-4709 USA |
Chandler, AZ
85226-4709 USA |
|
Larry.Borgman@Intel.com |
Dave.Stangis@Intel.com |
|
(480) 552-2771
|
|
