Q: Mr. Wysong, you explain the management rationales for and the implementation of CSTCM pretty thoroughly in your book, The Nontoxic CEO. But if you had to pack a couple hundred pages of business advice into a high-concept sentence or two what would that look like?

A: Well, it’s not really hard to explain. Simply put, Compliance-Side Total Chemical Management leverages the EHS departments—the compliance people in a company who have to satisfy OSHA and EPA regulations—and finds a way to turn those EHS people into big money savers.

Q: Really?

A: Absolutely. But I want to make sure that I fit in the other important pieces of the puzzle and that’s that CSTCM, at the same time it saves companies lots of money through their EHS efforts, is also going to do a great job protecting workers and keeping the environment clean. I don’t want to forget to mention that.

Q: No, I was going to ask you about that. But first how is it even possible to turn EHS departments into money saving operations within a company?

A: Well, that was the original inspiration for CSTCM. It’s all about saying to corporate decision makers, “Stop looking at EHS as something you’re forced to do and tap the hidden power that your EHS department doesn’t even know it has.” The power is in the information they deal with every day, and it can be turned into increased corporate safety, environmental cleanliness and bottom line benefits.

Q: Why do you call it “compliance side?”

A: Because it works through the compliance-mandated, data gold mine in Material Safety Data Sheets (MSDSs) that every company dealing with hazardous chemicals must have access to in order to satisfy federal and state regulators. So companies don’t have to create a new department, they work CSTCM right through their existing EHS efforts.

Q: Why was a book needed?

A: I thought that a concept this new and robust, which has already saved some big companies money, and has the potential to revolutionize the way people approach their EHS and chemical inventories and profits—needed to have a book as a resource. And then, I knew I wanted the book to also be a how-to workbook. As I say in the book, there are some three million companies in the U.S. alone dealing with hazardous chemicals and having to comply with OSHA and EPA.

Q: You say a company is still in satisfactory compliance if they do CSTCM?

A: If they do CSTCM properly, they’re in better compliance than ever. Their people, the workers, are safer. The environment is cleaner. That’s because CSTCM is all about reducing the number and volume of hazardous chemicals a company buys, stores, uses, and disposes of. They do that through the treasure chest of information in those MSDSs that they have to have in the first place. And that reduction of extreme chemical liabilities benefits companies’ people, planet, and profits as I like to say.

Q: What kinds of businesses does CSTCM work best for?

A: CSTCM can be applied to any company that uses a lot of chemical products from a lot of vendors. That’s the key. Specifically, we’ve found that forest products, pharmaceuticals, automobile manufacturing, defense contracting, and power utilities are great CSTCM candidates. Those complex processing and manufacturing companies can be really good CSTCM users.

Q: Those aren’t small companies.

A: No. The CSTCM concept gets sold on a relatively high level. It has significant potential impact on the bottom line, so C-level people are usually involved in the initial concept adoption. Then there’s a coordination with the compliance staff, and with procurement, and a tight tie to the operations managers who have profit responsibilities.

Q: Why not just go with a supply-side solution, working with a chemical vendor or two, instead of through the compliance side?

A: Well, it’s true that purchasing organizations are set up to deal with supply-side solutions. But those tend to focus on the largest chemical vendors, volumes, and financial impacts. If a large company has 40,000 chemical products enterprise-wide, a supply-side solution would only be set up to look at 10% to 20% of the largest volume chemicals, say. Supply-side solutions are not set up to look at those many thousands of potentially dangerous and costly smaller chemical volumes and purchases. We’re talking about individual chemical purchases that might average from $100 to $5,000 on an individual transaction and an individual site. Those transactions don’t tend to be handled through central purchasing. They don’t carry enough weight to assign a purchasing manager at headquarters to deal with them. Supply solutions aren’t currently set up to deal with those.

Q: So who’s buying all those chemicals?

A: Well, in a large corporation that has maybe 100 purchasing people spending billions of dollars at headquarters, there may be another couple thousand purchasing points, using Purchasing Cards, or P-Cards, which are like credit cards, at remote sites. Those people on the ground buying chemicals tend to be maintenance managers, or local site purchasing people. These P-Cards are intended to lower the transaction costs of acquiring the products. But what it actually does is create hundreds and thousands of “purchasing managers” who may be unknowingly adding to toxicity, product redundancy, and who certainly aren’t getting enough aggregated volume to get price discounts. Central purchasing can’t really “see” what all these thousands of purchasing points are buying. You end up with thousands of products that are intended to do similar functions within a company, but the products are not really that similar. Until you automate the compliance data that is required for each of those products—no matter how small a volume—you can’t understand the threat the chemicals pose. That’s a financial, and potentially a safety and liability nightmare. I’m consulting with a utility that is buying 1,000 different types of oil through mostly unmonitored P-cards.

Q: What’s the real problem with having 500 or 1,000 types of a supposedly similar product?

A: From an EHS standpoint the individual chemical components of those products will be different. Some of them may be more dangerous than others, and the EHS personnel are not aware of what’s coming on site, so there isn’t really, for most companies, a carefully screened method of keeping those toxins off the site.

Q: So, there are potential dangers from a safety and environmental standpoint. Is this kind of purchasing also more expensive?

A: Absolutely! We find that 20 percent of the chemical products—which constitutes thousands of products from thousands of vendors—in the aggregate, represent tens of millions and hundreds of millions of dollars for some companies. Better control can bring literally millions of dollars to the bottom line. With CSTCM, through the compliance data for OSHA and EPA, we see the chemical usage. It’s beyond what any ERP, or enterprise planning system can see, because CSTCM picks up all those little local purchases. ERP systems are usually looking at bulk or high leverage opportunities. CSTCM has data on every chemical. Through that information, you can look for patterns that would, in fact, streamline procurement, or purchasing.

Q: What types of savings could a single-site facility realize?

A: It depends on the type of industry. A small company might have $10 million to $20 million tied up in miscellaneous chemical inventory. Twenty to thirty percent savings there through CSTCM would liberate capital between $2 million and $6 million for other uses. That’s for one, site-specific, good-size manufacturing or process site. It’s big. When a CSTCM team goes in they show companies what they’re actually buying, and storing on the shelves, and how they can make people safer, and the compliance better, and how they can save literally millions. People are shocked at first. And then they get excited.

Q: All right, then let’s talk about what you call the “people and planet” benefits of CSTCM, OK?

A: I love talking about that because it fits in so well with the idea of corporate responsibility. And CSTCM is definitely one of those “right thing” ways of doing business. I mean, who would not want to do this? Any nontoxic CEO, or nontoxic V.P. of EHS is going to want to prevent exposing Joe in the maintenance department to solvents and other products that we know to be carcinogens. If you are a nontoxic leader, you’d want to know what’s in your facility, and you’d want to do something about it. A lot of what I see in my daily business, and early comments I’ve gotten on the book prove to me that people really do care, and they are working to make things safer. CSTCM is going to lead the way for a lot of companies to clean up their chemical inventories, and save money at the same time. That’s the beauty part.

Contact Mark Wysong at Dolphin Software (800) 275-6737 or mark@nontoxicceo.com