A message from the CMS Forum Director

Welcome to the Winter 2008-2009 issue of the CMS Insider.

As we move into the New Year with a new administration and uncertain economic climate, it is increasingly clear that sustainable savings, close relationships, and innovative ways of doing business will be incredibly important going forward. We have seen strong evidence of this as we reviewed trends for this newsletter; for example, a report below highlights lessons learned on supplier relationships in the auto industry, with emphasis on several “tips” that are inherent in the CMS model.  In addition, a new EU report on servicizing business models, including CMS, highlights CMS Forum members and provides market data on expansion in Europe. We have also seen an increase in coverage on regulatory trends over the past quarter, particularly with the new administration and California’s new chemicals regulations, which we have highlighted in our feature and in several articles below.

We are happy to be able to offer our second in-depth CMS Training Program in Boston on February 24th-26th.  The program will offer a unique forum for CMS suppliers and customers to interact through a series of role-playing activities and lectures and is produced in partnership with the Massachusetts Toxics Use Reduction Institute. Registration is open – check our website for frequent updates.

We'd also like to welcome our newest member to the CMS Forum: Tetra Tech. We are looking forward to weathering 2009 with you.  
Best wishes for a happy and prosperous New Year.

Warmest regards,
Jill Kauffman Johnson
CMS Forum Director



The New Green Chemistry Law - REACH in California?
by Doug Lockwood, WSP

With California's new green chemistry law officially in place as of the end of 2008, a process has been set in motion to regulate "chemicals of concern" in consumer products sold in the state.  While there are no immediate compliance obligations for businesses in California, the long term implications include the potential for restrictions and bans on chemical substances in every day products which will send manufacturers in search of data to comply and stay ahead of the regulatory wave. Read the full article.



12th Annual CMS Conference Presentations Available Online
We’d like to extend a huge thanks to all those who participated in the 12th Annual CMS Conference. A number of presentations from the conference are now available on our website.
Save the date! The 13th Annual Conference will take place on November 3-5, 2009 in Dallas, Texas.

Haas TCM Inc. Forms PCM Solutions, LLC, a Joint Venture with Nalco Company, to Provide Chemical Management Services (CMS) to the Process Industries
Haas TCM Inc. has formed a joint venture named PCM Solutions, LLC, with Nalco Company to provide chemical management services (CMS) to customers in the process industries, such as chemical and petrochemical manufacturing, petroleum refining and energy exploration and production, pulp and paper manufacturing, food and beverage production, and various other industries such as textiles, cosmetics and pharmaceutical drug manufacturing. The name of the joint venture company means “process
chemical management solutions” and is majority owned and managed by Haas TCM. Leigh Hayes, Executive Vice President at Haas TCM, will be PCM Solutions’ inaugural Manager. “In this configuration”, says Hayes, “Haas TCM will extend to the joint venture its CMS operating model, including tcmIS™, its world class technology platform”. Read more...

Move to strategic MRO sourcing puts new focus on relationships
Purchasing
An uncertain economic environment presents new opportunity for MRO purchasing professionals to differentiate themselves and their companies by taking the function to a new level.

Terry Wahlgren, director of global indirect materials and services at Eaton Corp., shows that at Eaton, the objective of the sourcing strategy for MRO and indirect is to satisfy plant sites' material and service requirements by aligning with leveraged core competent suppliers who help ultimately minimize total cost. In another case study , Steve DeFord, commodity manager for indirect operations at Rockwell Collins, talked about their effort to centralize MRO and indirect sourcing to realize efficiencies. He noted that a key challenge was in implementation. "It all comes down to putting good tools in place, using them with great suppliers and continually improving processes to benefit internal customers," he said. Read more...

New Report - Innovative Business Models with Environmental Benefits
EU Commission – DG Environment
A new report, produced by COWI on behalf of the EU Commission provides a useful primer on innovative business models that produce savings and environmental benefits, including Chemical Management Services and related models such as Resource Management and Energy Service Companies. The report also provides detailed case studies of CMS Forum member companies PPG Industries, Houghton International, and General Motors in Europe as well as excellent background on the CMS business model, market size, and keys to success. Chemical Strategies Partnership Deputy Director, Tom Votta, was interviewed for this study. Read the report.

Lockheed Martin's Environmental Focus Earns 'Green' Awards at Company Operations in Texas, Georgia and California
Environmental Leader
Lockheed Martin has invested more than $40 million since 2001 in capital improvements to increase energy efficiency and lower emissions from its business operations. As a result, Lockheed Martin saves more than 125 million kilowatt hours of energy annually - enough to power 10,000 homes for a year.

In 2007, the Corporation launched a comprehensive environmental program with the long-term goal of eliminating adverse impact on the environment as a result of its operations. This includes annual carbon, waste, and water use reduction goals and an aggressive 2012 target of an absolute 25 percent reduction in each of those areas. The company recently won several awards for environmental stewardship at its operations in Fort Worth, TX; Marietta, GA.; and Palmdale, CA. Read more...

United Technologies increases diverse supplier spend
Purchasing
United Technologies Corp. has spent more than $367 million with minority suppliers in 2007 and expects this figure to increase this year at a double-digit clip. In five years, the company has spent more than $1.3 billion with minority business enterprises. Earlier this year, UTC was named the 2008 Connecticut Minority Supplier Development Council Corporation of the Year. Read more...

Regulatory Challenges: Policies in Transition
Chemical Week
The U.S. regulatory landscape will change dramatically next year as Democrats take control of both the White House and Congress for the first time since 1994.  Key policy decisions facing Congress and president-elect Obama, including economic recovery and climate change, are also industry’s top priorities. The incoming administration is already being closely watched in Europe and the rest of the world because it has pledged that the U.S., for the first time in nearly a decade, will take a leadership role in international negotiations for reducing greenhouse gas (GHG) emissions. Some tough decisions on the environment will coincide with one of the most challenging economic situations that the industry has experienced, executives say. Even so, Obama has reiterated his commitment to curbing climate change. Read more...
Note: you must subscribe to Chemical Week to view this article.

Supplier management: Survival lessons from automotive buyers
Purchasing
In the midst of their most challenging market ever, automakers begin to really look at total costs while conceding that suppliers need to make money too if they're both to survive. The North American automotive industry has been sideswiped by a convoy of unexpected challenges in the past year and the purchasing organization may have one of the keys to getting the industry back on track.

In the not-so-distant past, automotive OEMs were often accused of driving suppliers too hard on price. In a presentation earlier this year, Tony Brown, Ford's group vice president of global purchasing, summed it up by saying: "The relationship between suppliers and domestic OEMs in the past has been just short of all-out warfare. It's tragic, but true." But in the dramatically shifting North American automotive market, even the most hard-nosed OEMs have learned there's a lot more value to be gained from suppliers than just lower price and that a healthy supply base means a healthy OEM. And those lessons can be applied to nearly any industry.
Read the full article for 6 “lessons learned” which highlight many of the benefits of the CMS model.

Government program provides Lean and Green supplier assessments
Purchasing
For years, manufacturers have been trying to get their suppliers to operate more Lean, in order to achieve cost savings and efficiency improvements from which all parties could benefit. More recently, the effort has been to encourage suppliers to operate more Green. In some cases, though, Lean and Green end up being in conflict, because going Green sometimes adds cost and cuts efficiency. Buyers weighing these considerations have cheered the introduction of the Green Suppliers Network (GSN), a program co-managed by the U.S. Department of Commerce and the U.S. Environmental Protection Agency, now being offered to U.S. industry. GSN is designed to help small and medium-sized businesses, which often lack the expertise and resources to engage in Lean and sustainability initiatives, to do just that. Suppliers interested in receiving GSN assessments can contact the GSN organization. In addition, manufacturers can nominate their suppliers for the assessments. Read the article...

EPA: Accepting 2009 Green Chemistry Award nominations
The U.S. EPA is accepting nominations for the 2009 Presidential Green Chemistry Challenge Awards, which recognizes innovative chemical technologies that incorporate green chemistry into chemical design, manufacturing and use, as well as have broad applications in the industry. Information about applying for this award...

Candidate List of Substances of Very High Concern brings new duties for companies
ECHA
ECHA has included 15 substances in the Candidate List of Substances of Very High Concern (SVHC) for authorization. The list was published on October 28th on the ECHA website. It will be regularly updated when more substances are identified as SVHC. ECHA urges companies to check their potential obligations resulting from the Candidate List. ECHA’s Executive Director Geert Dancet said: “All companies should take note of the Candidate List. It is critical they know that the inclusion of the substances in the list generates immediate new legal obligations for communication in the supply chain.” Read the press announcement...

Aerospace industry sets list of 100 declarable substances
AeroSpace and Defence Industries Association of Europe
Sector wants supply chain to report presence of substances by end-2009
The Aerospace and Defence Industries Association of Europe (ASD) has published the first version of a Priority Declarable Substances List (PDSL) in an attempt to provide a longer term view of substances the industry considers particularly hazardous and relevant to its processes. For ASD –Europe, the list containing 100 substances, is a minimum requirement in terms of substances declaration. It was borne out of the ASD’s Declarable Substances List, which contains 3,300 chemicals of concern aggregated from a wide range of public lists. ASD-Europe wants companies to be able to calculate if PDSL substances are present in the articles they make in quantities greater than 0.1% by weight. It is recommending companies at the top of the supply chain contractually request such information from their suppliers by the end of 2009. Read more...

Founding Member
Haas TCM

Members
The Boeing Company
Castrol Industrial North
America
Chemical Lifecycle
Management
Chemico Systems, Inc.
Delphi Corporation
General Motors Corporation
Henkel Chemical Management
Houghton International, Inc.
Illinois Sustainable
Technology Center
Ithaca College
Lockheed Martin Corporation
Morrison & Foerster LLP
PPG Industries
Quaker Chemical Corp.
Raytheon Company
Rockwell Collins, Inc.
SAIC
Seagate Technology LLC
Tetra Tech New!
United Technologies
Corporation
Yorkshire Chemical Focus


2009 Event Highlights
CMS Forum members and the Chemical Strategies Partnership speak at or participate in many conferences each year. A list of 2009 conferences of note include:

In-Depth CMS Training Program
February 24-26
Boston, MA

REACH USA 2009
January 20-22, 2009
Houston, TX

LogiCon 2009
January 26-28, 2009
Atlanta, GA

IPC Environmental Symposium: "It's Not Easy Being Green: Compliance with Legislation and Customer Requirements"
February 4-5, 2009
San Jose, CA

CMS Round Table Meeting
February 10, 2009
Huddersfield, UK

CMS Workshop in Korea
March or April 2009
Korea

Chemical Week's 14th Annual Transportation, Distribution, and Security Conference for the Chemical Industry
March 16-17, 2009
New Orleans, LA

Cost Savings and Performance through EHS Management Information Systems
April 2-3, 2009
Tampa, FL

Aviation Week MRO Conference
April 21-23, 2009
Dallas, TX

NDIA Energy, Environment, & Sustainability Symposium
May 4-7, 2009
Denver, CO

Second session of the International Conference on Chemicals Management (ICCM2)
May 11-15, 2009
Geneva, Switzerland

13th Annual Green Chemistry & Engineering Conference
June 23-25, 2009
College Park, MD

Campus Safety, Health, and Environmental Management Association Conference
July 12–15, 2009
New Orleans, LA

Chemical Purchasing Summit
September 17-18, 2009
Boston, MA

13th Annual CMS Conference
November 3-5, 2009
Dallas, TX