Guide Estimating the Benefits of the Air Force Purchasing and Supply Chain Management Initiative

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It is uncertain that the efficiencies envisioned in the FY budget can be achieved. If these efficiencies do not come to pass, sizable impacts to fleet readiness should be expected. This funding level was not affordable, so the Air Force conducted a total review and prioritization of remaining requirements. It consists of four primary components: 1 depot maintenance, 2 contractor logistics support CLS , 3 sustaining engineering, and 4 technical orders.

Funding levels excluding funding for Overseas Contingency Operations , and the percentage of the requirement that is funded, for each of these areas is as follows:. Figure highlights the relative amounts of each of the four areas listed above in the WSS program. Although the Air Force considers these categories to be the components of weapon sustainment, there are other costs that should be mentioned within the context of sustainment.

Specifically, the categories of depot-level reparables and consumable supplies should be considered when viewing sustainment in the larger construct. Air Force Journal of Logistics. Accessed August 18, It is not intended to be fully burdened with medical, retirement costs, among other factors.

Infrastructure issues have a direct impact on the ability of the Air Force to sustain its weapon systems. The Air Force is actually exceeding the requirements of 10 U. Yet the facilities are neither optimized nor in some cases suitable for present and future needed capabilities. For example, s-era engine test stands that are marginally serviceable due to obsolete and nonsupportable instrumentation and fixtures are still being used, and computers in the B-2 Weapon System Support Center Software Integration Laboratory are no longer supported by the original manufacturer or sub-tier vendors.

In addition, there is a lack of availability of engine test stands to accommodate the F engine. There is tremendous capability at the ALC facilities. In some cases the capabilities exceed what is expected for local maintenance requirements and border on full-scale manufacturing. Some of this is needed, but in a modern facility with modern digitalized technologies, redundancy in the sense of manufacturing capability is not widely needed.

Improved planning in response to requirements, flexible manufacturing concepts with a focus on maintenance and repair capabilities, and integration of appropriate repair and maintenance technologies would allow the Air Force to find efficiencies and improve costs. In addition, the aircraft were affected by a less-than-optimal production environment because of distance from parts and lighting, among other factors.

These conditions do not generally exist in the top-performing echelons of industry but seem to be taken for granted by the Air Force to meet production needs. There is significant degradation of base infrastructure. Aging facilities have potential for catastrophic loss of heating, cooling, power, and other utilities systems that are essential for production.

Although these disruptions occur from time to time at all Air Force installations, in the depot production environments, where work center revenue accrual may be in the hundreds of thousands of dollars per day and millions over the center, the impact is real, immediate, and measurable. The ALCs provide support to long-standing platforms as well as to newer platforms that contain advanced technologies. Newer methods of repair and maintenance are often required to support these newer platforms. Reorganization of the maintenance and test areas is required to provide efficiency in returning the platforms to service.

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The facilities must be upgraded to ensure effective service. Available funds are not sufficient to keep up with the needs of maintaining, repairing, and updating old facilities and for providing new capabilities. A comparison of the cost of needed maintenance versus the budgets is shown in Table The maintenance needs shown in Table illustrate the disparity that exists between the resources budget available for infrastructure maintenance and the perceived needs for infrastructure maintenance.

These requirements are those that are foundational to maintaining infrastructure and include plumbing, electrical, and HVAC systems as well as the pavements, buildings, and test stands. Insufficient maintenance and upgrades can result in failures that are not easily repaired, resulting in delays to making airplanes available. Although OC-ALC has leased an updated, former General Motors facility, it is used primarily for manufacturing, component repairs, and parts replacement and not for testing.

The test facilities are old and cannot be utilized with the newer platforms that are a part of the future plans of the base. Although the ALCs have applied some amount of lean practices to optimize rate and flow, the facilities must be correctly aligned to allow for this optimization. The bases have accepted more and different work because of movement of work from other bases, but this desire for flexibility creates challenges, because current facilities that are inadequately maintained can be taxed by new test fixtures, equipment, and methods.

Newer platforms often contain new technologies, and the facilities must be updated to accommodate repair and maintenance technologies. This may not be possible with the current facilities because of the aged power, plumbing, and other systems. In short, the investment in facilities maintenance is not adequate to accommodate current workloads and to address future needs. Ground support equipment typically includes all implements, tools, and devices mobile or fixed required to inspect, test, adjust, calibrate, appraise, gage, measure, repair, overhaul, assemble, disassemble, transport, safeguard, record, store, or otherwise function in support of a platform, either in the research and development phase or in an operational phase.

Different equipment is used to assess, repair, or provide maintenance, and test for the quality of operational outcomes. Although the ground equipment tends to be old, it is adequate to provide these functions for current needs. Several critical plant and equipment investments will be needed in the near future. Without these investments, the Air Force will not be able to fully support current and future organic workloads, and thus will face longer periods of CLS with the inherent 10 U.

Recommendation The Air Force should continue funding depot plant and capital equipment and, at the same time, be guided by focused analyses to ensure that constrained funding is provided to the most critical sustainment needs to avoid future support impacts and to meet 10 U. The following section provides a broad review of Air Force sustainment processes.

Some of these processes are addressed in detail elsewhere in this report. Covered in this chapter, however, are workforce, 21 acquisition, the supply chain, maintenance processes, resourcing efforts, Fleet Viability Board efforts, logistics. This section discusses knowledge and skill sets, engineering staff focus, and personnel allocation.

The ALCs expressed concern about present-day workforce knowledge and skill sets and the ongoing retirements of many senior employees. At one of the ALCs, the average employee has only 5 years on the job. Harvesting and maintaining knowledge and lessons learned might be further improved by making information-sharing systems, such as SharePoint, available on the shop floor. Knowledge accumulation, editing, and distribution would, of course, need to be addressed when implementing these systems.

Continued use of formal training programs is another useful investment, especially as technology insertions occur. At the same time, there are real concerns with the evolution of CLS platforms to organic support, such as where the technical workforce will come from an era of constrained workforce levels and new technology introduction. The belief is that the workforce applied to current legacy systems will easily transition to the newer platforms or support concepts. This may be more theory than reality in practice. In addition to airframe and other logistics issues, questions exist regarding software sustainment over the lifetime of a weapon system.

At the current time, the ALCs are doing an adequate job of personnel recruitment and knowledge retention. However, long-term concerns exist as retirements increase and systems move from CLS to organic support. Equally important to the overall sustainment activities is the engineering staff for depot maintenance support.

A common issue for the three ALCs relates to. Litchfield, personal communications to committee members on January 11, Engineering support is provided by the program offices and the commodity management offices. The engineering staff in these offices has conflicting priorities between depot support, evaluations of field requests, requests for manufacturing first article tests, and so on. In fact, engineering disposition for issues on the aircraft, engine, and commodity repair lines is delayed from time to time with the attendant impact to production schedules. As manpower resources were constrained over the past several years, the Air Force eliminated Combat Logistics Support Squadrons at the ALCs, an action with unintended consequences.

These squadrons provided deployable military maintenance specialists to perform depot-level tasks at field locations. One depot maintenance supervisor explained that this change has created her most pressing challenge: although she has a full complement of specialists, many are temporary or contract employees who have backfilled the skilled workforce.

The learning curve for these new employees has been high, and times to complete tasks have been higher than they should be, which has routinely impacted the schedule. The ALCs have a great demand for engineering support. At the same time, the engineering staffs have conflicting priorities. The Air Force should establish clear priorities for engineering activities and consider examining lessons learned and the applicability of the Navy model of workforce issues.

A key message repeated by Air Force officials is that sustainment must be considered at the outset of the acquisition life cycle. During the acquisition process, a systems view of the platform with a definition of the total life cycle is required to accurately reflect realistic requirements. Lessons learned from current plat-. Moreover, documented findings and trends related to aging aircraft, condition-based maintenance, exposures to extreme environments, and product disposal can provide a more accurate picture of the processes and costs related to the acquisition process.

As pointed out earlier in this chapter, Figure highlights the gaps with respect to the consideration of logistics in the early planning of programs. Further, long-term sustainment needs are often minimized early in the acquisition process in favor of performance or shorter-term financial considerations. Specialists employed in a public hospital receive a salary.


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Patients are able to access specialists in hospitals and private practice directly. Secondary and tertiary care is provided by a mix of public including private not-for-profit hospitals, covering two-thirds of hospital beds, and private for-profit hospitals. Hospital care is financed through an activity-based funding system using diagnosis-related groups, which became fully operational in Private for-profit hospitals have been paid entirely through diagnosis-related groups since In , the government launched a continuum of initiatives that sought to strengthen efficiency in the French public sector, in particular the introduction of nationally and regionally grouped procurement strategies.

Bringing together 10 working groups from the hospital community purchasers, pharmacists, more In brief, the French public sector procurement co-operative UniHA represents 56 hospitals across France, including 30 university hospitals; it represents half of all public hospital procurement in France. Operating in close collaboration with the regional health agencies as facilitators of strategic procurement at regional level, this has involved, for example, the organisation of two inter-regional conferences to enable networking and information exchange.

Since the inception of the PHARE programme in , reported progress has included an initial pilot phase that sought to demonstrate potential savings with one region and one facility as well as encouraging key actors to engage in the programme, and a subsequent expansion of the activities to cover a larger number of regions at least 10 and facilities 20— Given the ongoing roll-out of the programme, it is too early to assess its overall impact. Important achievements of the programme could be seen as having placed procurement as a strategic issue on the agenda, and its facilitation of the networking of actors within and across regions Fr KI.

A key feature of the French approach to public procurement in the health sector is the emphasis on the region as a hub for group purchasing activities. These two findings are not mutually exclusive, however, and highlight the need for further research to understand the impact of GPOs and collective procurement more generally on innovation. Turn recording back on. National Center for Biotechnology Information , U. Search term. Chapter 4 Experience of procurement and supply chain management in the health sector in selected high-income countries.

Centralisation of the procurement function in New Zealand Main features of the New Zealand health system Health care in New Zealand is financed largely through public sources, mainly general taxation Ministerial review of New Zealand health system performance In , amid concerns about the future direction of health-care provision and financial sustainability, and a new commitment to create more efficient and accessible public health services, the newly elected government commissioned a Ministerial Review Group to review the performance, quality and sustainability of the New Zealand health system.

Collective national procurement activities National procurement centres on identifying procurement opportunities across the health sector, including engaging with suppliers and negotiating contracts.

BOX 2 National procurement agreements: non-sterile gloves Reviewing the procurement arrangements for non-sterile gloves, HBL identified that there were 18 suppliers to the 20 DHBs, while noting that these supplied gloves from two manufacturers worldwide. Finance, procurement and supply chain programme Health Benefits Limited has been working with DHBs on the design and implementation of a national finance, procurement and supply chain FPSC operating model, and by mid a single provider for warehousing and distribution services to all 20 DHBs had been agreed upon.

Group purchasing in European countries Group purchasing in the publicly funded health-care sector has become an increasingly important feature in some European health systems from the late s onwards, in response to a perceived need to reduce fragmentation, inefficiencies and lack of transparency in procurement activities; examples include England, France, Germany and, more recently, Italy. The hospital sector in France Secondary and tertiary care is provided by a mix of public including private not-for-profit hospitals, covering two-thirds of hospital beds, and private for-profit hospitals.

This work was produced by Hinrichs et al. This issue may be freely reproduced for the purposes of private research and study and extracts or indeed, the full report may be included in professional journals provided that suitable acknowledgement is made and the reproduction is not associated with any form of advertising. Chapter 4, Experience of procurement and supply chain management in the health sector in selected high-income countries.

In this Page. Companies will be required by local communities to do their share in reducing waste. This can be done at all levels of product development and production: by designing for frequent reuse and recycling, by producing with less waste and fewer emissions, by reducing transportation and packaging, and by promoting recycling in local communities.

Many of these measures also reduce costs because they require using less virgin resources and production inputs. It is promoted both by general duty clause requirements of prudent management as well as by specific requirements, such as the Process Safety Management Standard under OSHA. Often, employees are the first victims of poor safety standards that later evolve to environmental dangers. Improved employee health reduces costs associated with sick leave and health insurance. Worker relations may also be improved when health concerns are minimal, and safer conditions can boost employee morale, ultimately leading to greater productivity.

These factors should be true both for the companies that promote product stewardship and for their clients. Such understanding also enables companies to offer their customers suggestions on ways to reduce their emissions or product liability. In cases where accident prevention is of interest both on-site and to customers , learning the causes of accidents enables companies to take steps to reduce risks.

To this end, MSDSs are helpful in explaining proper usage. Understanding product usage also helps in eliminating waste by encouraging source reduction and reuse Willums and Goluke, As noted above, several important tools have emerged in the past decade to promote stewardship in the supply chain and overall economic efficiency in the extended supply chain. Each of these tools is directed toward two complementary drivers of economic value in environmentally sensitive activities: 1 measurement and assessment of environmental impacts throughout the supply chain and 2 reduction of either impacts or capital and operating costs by product and process innovation.

Life-cycle analysis assists in identifying the sources of waste and pollution from cradle to grave Dillon, One advantage is the reduction of excess inputs and wastes throughout the supply chain, thereby lowering costs and promoting sustainable development. Other benefits include reducing accident risks and lowering emissions, each of which leads to lower costs in the long run. Reverse logistics is an additional tool to reduce costs, through recycling and reduced source inputs see Box 1 for an example.

This typically requires modular design from the beginning of product design, which also enables maintenance and upgrading at different stages. Such design for disassembly, on and off site, is becoming widespread and allows for increased use of reverse logistics Council of Logistics Management, Reverse logistics is especially well known for its applications in the reuse of packaging.

Instead of single-use boxes, many companies are turning to nondisposable packaging to improve environmental impact and costs. One commercial example is the reuse of wooden pallets between distributors and clients. In the transportation of hazardous materials, reuse is especially important. IT plays an important role in tracking container location, materials within containers, and verifying that containers are not filled with substances that may react with residue.

An Illuminating reverse logistics initiative, born of the sustainable development philosophy at DuPont, is the methanolysis of polymers and plastics, popularly termed unzipping polymers, to recover near-virgin material. Currently, with shortages of DMT, the ability to recycle polyester materials is extremely worthwhile. The facility should have the capacity to produce million pounds of DMT and 30 million pounds of E6 per year. The process is extremely robust, and it can accept polyester with a variety of contaminants at higher levels than acceptable in other processes.

An important market for polyester is auto manufacturing. With the growing awareness of design for disassembly and design for environment, technologies that offer to reduce the environmental impact of cars seem promising. Research is under way to produce cars that have a large percentage of recyclable material. With Petretec there is a new interest in attempting to design the entire interior of a car with polyester materials.

This will allow car manufacturers both to reduce the costs of building cars and to increase the ease with which cars can be recycled. Another important market for recycled polyester is food containers. The Petretec process is approved by the Food and Drug Administration, so a syrup bottle can become a computer tape, then an x ray, then a videotape, then a popcorn bag, then an overhead transparency, then a polyester peanut butter jar, then a snack food wrapper, then a roll of film, and then a syrup bottle again.

Optimizing the needs to transport material, or using more energy-efficient means, promotes environmental prudence and lower costs. In the logistics domain, transportation is a crucial environmental factor, accounting for 11 percent of U. Promoting improved environmental transportation can have a positive impact on the bottom line. For example, transportation costs may be reduced by using efficient loading, scheduling, and routing techniques, including consolidation of freight and balancing of backhaul movements. IT obviously plays an important role in any attempt to minimize the environmental effects of product transportation.

Another cost-effective means of reducing transportation-associated environmental effects is the use of alternative fuels. The U.

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The Energy Policy Act of requires that, by , 50 percent of all purchased federal cars must be powered by alternative fuels. One of the alternative fuels being examined by the U. Postal Service is compressed natural gas, which is 40 percent cheaper than gasoline and has a substantially lower total impact on the environment. Another example of the use of alternative fuels is the testing of liquefied natural gas by Union Pacific Railroad to power its locomotives. Again, the driving force behind this transformation is the need for cheaper, safer, and cleaner sources of fuel Wu and Dunn, Environmental prudence throughout the supply chain lowers costs not only for the company, but also for customers and vendors.

With life-cycle analysis, all processes that a product goes through are examined, and more efficient processes 13 are developed, regardless of their position in the supply chain. This is especially true for source and waste reduction techniques used in life-cycle analysis. When new processes are developed that minimize waste, often the final customers are those that benefit most.

Some of these benefits are derived from less waste being generated, but lowering emissions also gains customer approval. Enhanced use of reverse logistics also reduces costs for customers. Companies may offer different prices for modules that are reused, which may be a major advantage to certain customers. Promoting reverse logistics reduces on-site waste for customers and relieves them of the need to process such waste. With hazardous waste, this benefit becomes extremely important for some customers who do not have the means or the desire to deal with such waste.

Ashland Chemical, a large chemical producer and distributor, is offering more services to customers who want to minimize the amounts of chemicals on site Chemical Week, Figures 1 and 2 show the internal and extended supply chains, respectively, in relation to the drivers of economic value and environmental excellence noted in the above discussion. The key insight derived over the past decade is that the supply chain, from materials procurement to manufacturing to logistics to recycling and disposal, should be viewed holistically where the environment is concerned.

Each stage gives rise to its own effects, impacts, and opportunities for improvement, but effective environmental strategies require an analysis that encompasses the entire supply chain. This not only reduces sources of risk and liability by reducing pollution, wastes, and hazards, it also promotes reduced costs and better products. This expanded view of product stewardship and supply-chain management is gradually transplanting the traditional view focused on internal environmental excellence and caveat emptor. In addition to the above-mentioned specific tools to promote this emerging concept of product stewardship, an important.

We now consider in more detail the use and management of environmental information to add value in the extended supply chain. To ensure that proper care is taken, life-cycle analysis and other techniques may be useful. In this analysis, environmental information plays a key role in a number of dimensions including source reduction, transportation optimization, emission analysis, and reverse logistics. Utilizing environmental information to reduce the use of inputs can be accomplished as a part of material balances incorporated in life-cycle analysis.

Coupled with simulation of alternative options for product and supply-chain design White et al.

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The business process for accomplishing source reduction and life-cycle analysis consists of overlaying the new product development process with a series of screens that subject new products and processes to a detailed assessment. Allenby states that information should be collected on at least four dimensions in analyzing the life-cycle environmental impacts of a product. Information on these impacts then is coupled with the company-specific, multiphase product development process.

This coupling ensures that environmental considerations are taken into account in addition to customer demand, manufacturing processes, engineering design, and profitability. The primary type of IT used in the design stage is the database with information regarding the uses of different materials. These databases include information on the hazards of certain materials, their toxicological properties, and other relevant environmental information.


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With the active assistance and participation of safety, health, and environment SHE experts and product stewardship representatives on the new-product development team, the indicated multiphase approval process helps to minimize PBT content of new products as well as to develop, during the. In optimizing transportation methods at the design stage, IT plays an important role. Deciding at which stage to implement certain production processes determines the amount and types of materials to be transported.

The analysis of energy and environmental intensity of alternative supply-chain designs is in its infancy, but this can be expected to grow rapidly as sustainable management practices take root Hart, , especially if concerns about global warming intensify. Minimizing energy intensity and environmental impacts of alternative supply-chain designs is, in principle, a straightforward simulation exercise if data are available.

Doing something about these impacts requires that this analysis be undertaken at the design stage. In addition to using IT to determine optimal transportation schemes, the design stage requires development of IT methods that will assist in coordinating the movements within the supply chain. This is true for forward logistics, such as product tracking, as well as for reverse logistics.

Bar-coding of containers, for example, is important for tracking containers and materials throughout the supply chain. In addition to the recognized benefits of vehicle routing and replenishment improvements that such information can enable Fisher et al.

At present, however, such information is gathered primarily for business purposes, and its use for the environmental assessment of alternative transportation and distribution systems is secondary. Emission analysis is an important part of supply-chain design. Different production processes emit wastes using different media such as air, water, or land which also are regulated under quite different laws and regulatory standards, although the current Sectoral Initiative of the U. Also, these emissions are at different physical locations and under the responsibility of different parties in the supply chain.

IT plays two major roles in the design stage with regard to emission analysis. First, information is needed to understand how certain processes affect risks and emissions, as was stated in the discussion of life-cycle analysis. Second, means to monitor emissions must be put in place while designing processes throughout the supply chain.

These are important for material balances ex-post. Measuring inputs and outputs of a process are crucial for those who wish to validate hypotheses. Currently, industry environmental leaders are quite proactive in reducing emissions, with specific, measurable targets set for each business unit and each facility. These include emission reductions as well as recycling and reuse. IT is clearly a foundation for all of this activity.

A final use for IT in the design stage is in the reverse logistics aspects of the supply chain to design the entire product life cycle from cradle to grave. Tracking the location of products and packaging is an important part of a reverse logistics network. Reuse of packaging is an important and cost-effective means of reducing environmental impact.

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To fully utilize this method, tracking of packaging location is important. This may be used to optimize backhaul routes or to optimize the transportation of hazardous materials. Tracking products is crucial in optimizing the reverse logistics process. In many areas, reused or recycled materials are, or are perceived to be, of lower quality than new items, and companies must be able to differentiate between them.

This can be done by bar-coding products or implanting invisible footprints. Data on the number of reuse cycles that a product has gone through may influence product quality, perception, or price. For example, BMW has a longstanding policy to reuse and recycle parts from old cars. To expedite the process they code each recyclable part Wu and Dunn, Coordination of the supply chain is facilitated by electronic data interchange EDI. This allows different parties in the supply chain to gain knowledge about product use, product and packaging location, emissions, stock on hand, and customer use.

Product use can be facilitated by making MSDSs electronically available.


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  4. Stock on hand at different sites or at customer locations is, of course, also beneficial for optimizing shipments of material. The great advantage of EDI is that it greatly reduces the costs of information transfer and allows multiple parties, including those with product stewardship responsibilities, access to all relevant data. Another important advantage of implementing environmentally oriented IT systems throughout the supply chain is the ability to gain feedback concerning actual behavior to further improve the supply chain.

    This information may be useful in product environmental audits, ex-post investigations of accidents, reviews of near misses, establishing guidelines and verifying their adherence,. Without such information, auditors may only examine the process design and hypothesize about whether original targets were met.

    Using actual data, original targets can be assessed, assisting to establish improved processes and to validate engineering designs. Moreover, in case of accidents and near misses, viable information is key to learning what went wrong and how to correct it. In addition to the business performance uses of environmental IT noted above, IT is also central in allowing senior management to measure progress for its employees, investors, and external stakeholders in achieving environmental improvements.

    Many companies have utilized IT to track and reduce their TRI and other key environmental indicators over the past few years. The company also monitors other environmental impacts and measures its improvement over time against targeted commitments. Currently, they recover 99 percent of all bottles, 83 percent of all beer cans sold, and Coupled with an overall environmental policy review board as part of the executive committee, the PSRB can be a powerful instrument for ensuring that environmental commitments are embodied in the new-product development process and in the operation of the extended supply chain.

    Integrating the supply chain to ensure environmental excellence requires integration with key business processes, measurement of results, and commitment from top management. A number of managerial concepts exist that promote these steps toward environmental prudence; collectively, they are called environmental management systems EMSs. These managerial systems require IT to. We review here the ISO standards and their relationship to supply-chain environmental information. ISO is actually a series of environmental management standards.

    These standards are voluntary, and, taken together, they provide guidelines for the development and maintenance of an overall management system, designed to meet individual company needs, but comporting with general requirements for effective environmental management. The standards themselves were written by international cooperating industrial groups and government environmental and standards organizations under the general guidance of ISO, a private-sector, international standards body based in Geneva.

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    Founded in , ISO promotes international harmonization and development of manufacturing, product, and communication standards. ISO was set up as a management system standard in the s and spread rapidly throughout the world, as organizations found that standardization of documentation, training, and data structures for quality could promote significant improvements not only within the boundaries of a single organization but across national and international supply chains. Indeed, many organizations recognize synergy between ISO and ISO , and they hope to achieve superior environmental performance by extending their ISO experience and management systems to incorporate additional environmental features required by ISO EMSs help an organization to establish policies and meet its own environmental objectives through documented accountability and responsibility structures, communication and training programs, and management control and review functions.

    Companies may choose to be certified for either specific facilities or for the company or division as a whole. EMSs may not set specific requirements for environmental compliance, but they do call for a commitment to compliance with environmental laws, prevention of pollution, and continual improvement of environmental performance. Thus, ISO could provide additional assurance of compliance with those laws and regulations with which the EMS asserts compliance. The following standards are the initial standards foreseen in the ISO series 20 :.

    Companies meeting these standards may place an EU-approved logo and statement in their publications and letterhead. EMAS became operational for participation in April