Managing Chemical Compliance With an ERP System

At a Glance

• $700,000: A proposed increase to the maximum Occupational Health and Safety (OSHA) penalty for willful or repeat safety code violations.
• $50,000: OSHA’s proposed hike in minimum penalties for these same willful acts.
• $25,000: California’s additional safety violation penalties that are added to the federal fees.
• $15,000: California’s maximum daily penalties for failing to fix these same issues.

Introduction

When used effectively, modern enterprise resource planning software (ERP) can help companies in several ways when it comes to chemical regulations:

• Financial components of a chemical firm’s regulatory compliance solution.
• Occupational Health and Safety Administration (OSHA) regulations.
• Gathering, storing and managing material safety data sheets.
• Gathering information from far-flung sources to create effective reports able to meet government criteria.

One study cited a multi-national corporation’s subsidiary using an ERP to comply with the Sarbanes-Oxley Act of 2002 (SOX).

“The findings demonstrate how managers can use an ERP to develop effective internal controls for the most common material weaknesses reported under SOX, thus providing insights into the crucial role of IT as a facilitator of control and reporting processes, and, more specifically, into the role, use and purpose of ERPs in relation to regulatory compliance,” according to the University of Greenwich.

Key points related to the chemical industry noted in this study include firms often failing to customize their ERPs for the specific requirements of the business, this applies specifically to chemical companies. Working with an ERP vendor experienced in the chemical industry helps ensure software works exactly as the company needs it rather than just installing an out of the box solution.

Unified systems like ERPs can help identify and evaluate hazardous substances. Manufacturers are then informed of the risk levels regarding the use and distribution of their chemical products. Identifying these hazardous substances early also allows manufacturers to act proactively, resulting in better safety.

Identifying Hazardous Materials With an ERP

Today, U.S. government regulations require the identification and labeling of hazardous materials. Modern ERP solutions can help create and manage safety data sheets (SDSs) along with any Globally Harmonized System (GHS) labels as required by the Occupational Health and Safety Administration (OSHA).

Each safety data sheet has 16 sections, 12 of which OSHA requires. These include:

OSHA also suggests-but does not require-data on ecological impact, including:

• The disposal of hazardous materials
• The transporting of hazardous materials
• Any other regulatory requirements, as needed

An ERP manages regulatory compliance by comparing your existing SDSs to OSHA’s requirements. Once your safety sheets are updated to meet federal requirements, they are stored in a central repository for reuse. A single update ensures that all SDS are accurate when the same ingredient is used in several products.

That information can then be “chunked” and converted into the GHS labels. One method where ERPs excel is their ability to generate QR codes for labels automatically. Simply scanning the label with a cellphone can provide internet links to complete safety sheets.

When every second counts, such as in exposure to potentially hazardous chemical, workers don’t have hours to pour through filing cabinets looking for the right SDS. They might have a few seconds to scan a label, tap a link and then know what type of first aid to administer.

Other Safety Features in ERPs

Because ERPs access information from multiple sources, one way they help promote safety is by limiting access. When data access cards or passwords are linked to an ERP, they can help prevent unauthorized—and untrained—workers from accessing dangerous or harmful chemicals.

Your ERP can be used to restrict access to based on the individual’s role. This helps protect their help while also ensuring your data remains safe from prying eyes.

Using your ERP to monitor safety also lets you identify areas where more training is required. It can be tied to a learning management system (LMS). This in turn reduces the risk of workers with expired certifications or lack of skills.

Your SDS chemical management can help pinpoint at-risk employee groups, document recurring injuries, map frequent injury locations and then help you create a plan to correct them.

For example, many production employees are required to earn OSHA 10 certification. This ensures they have at least 10 hours of safety instruction.

OSHA 30 certification goes into greater depth when it comes to safety. Among its enhanced requirements are the following:

• Hazard communication, which is useful in preparing and updating safety sheets
• Materials handling, such as hazardous chemicals
• Personal protective equipment (PPE)

Your ERP can identify which employees have active OSHA 30 certification, which have expired certificates and who lacks it. By denying access to unqualified workers, you reduce their risk of injury while also dropping your chances of being tagged for an OSHA violation.

Under a current proposal, OSHA provisions for willful and repeat violations could increase from a minimum of $5,000 to $50,000 per violation. The maximum fines would also go up ten fold to $700,000 per violation, Cal-OSHA states. These fines can change based on your location. For example, if a violation occurs in California, you can expect to pay as much as $25,000 for serious violations. These infractions can accrue daily penalties up to $15,000 for failing to solve the hazard issue.

ERPs and HazCom

OSHA’s Hazard Communication standard known as HazCom includes a checklist of 10 requirements.

These include the need to perform the following:

• Train employees on the hazardous chemicals in the workplace
• Instruct workers on how to recognize exposure to hazardous chemicals
• Provide training on container label elements
• Offer instruction on Safety Data Sheet (SDS) format and content
• Explain to employees how to access SDSs
• Update SDSs when new versions become available
• Update the written HazCom program as needed
• Explain to employees how to obtain a copy of the written HazCom program
• Train employees on any in-house labeling system used
• Make sure all container labels in the workplace are compliant

An ERP can ensure that data on any single chemical or hazardous material is thoroughly covered in your documentation. For example, each SDS can be linked to related labels and training materials. An update to the SDS ensures everything that flows from it is also current. That means your employees are safer as is anyone else who handles your products.

The Bottom Line

While some executives think of ERP’s, they consider ways to improve efficiency. The reality, however, is that ERPs can also be used to make workplaces safer for everyone. This is primarily achieved with constantly updated processes and carefully labelling and managing any goods and raw materials.

Creating and updating an SDS in your ERP, for example, allows you to link all critical information about a product including labels, handling guidelines, storage requirements, training materials, and more. Increasing the safety and handling for everything you store and work with not only reduces the costs of injuries and by ensuring OSHA compliance, but you also minimize the potential for fines and infractions, which further helps to increase profits.

Also read: 3 Ways to Manage Disruption in the Chemical Industry