You are employed as an Environmental, Safety, and Health manager for OCMS Manufa

Question

You are employed as an Environmental, Safety, and Health manager for OCMS Manufacturing. Among your responsibilities is reviewing existing contracts with outside vendors (for ESH product/service bundles, etc.) and evaluating potential contractors for special tasks on site. In this case study, you will review the cost of each potential contractor’s bid and compare your company’s needs and values to each potential contractor’s areas of emphasis (use your judgement to ascertain values for each). Note that the lowest cost contractor may or may not be the best option. Also, there may or may not be a ‘right’ answer to this problem – I am interested in understanding your thought process It has come to the attention of the ESH group that a (very recently) terminated employee has been dumping waste in a back corner of OCMS’s property for an undetermined amount of time (marked on map below).

The former employee’s lawyer has advised them against saying anything, so you cannot be sure if the transgression was a one-time event, or if the dumping has been happening for some time. The waste (mostly organic solvents) has yet to penetrate the watershed, and the bulk of the contaminated soil has already been remediated. Your supervisor (Alison Krauss) has notified local and Federal EPA of the incident and their primary concern is migration of pollutants to a nearby wetland, which is fed in part by a small stream that runs adjacent OCMS’s property. Due to OCMS’s diligence and transparency, the agencies are giving the company a probationary delay on fines, provided a monitoring program is implemented for the nearby stream (to ensure no delayed seepage intrudes into the watershed).

The EPA has identified two sampling locations to be monitored (labeled on the map below), and has mandated at least 6 months of monitoring at both sites (concurrently). Water and sediment samples must be taken at least twice (2 times) per week for the duration of the monitoring program. Reports will be evaluated every 6 months to determine whether further monitoring or remediation is required. The EPA warns that any intrusion of pollutants into the wetlands will result in penalties regardless of OCMS’s transparency. Ms. Krauss has instructed you to select an environmental monitoring contractor to perform the monitoring. Map of the OCMS site and adjacent waterway

Case Study 1: Using what you have learned in class, calculate a ‘Value’ for each potential vendor (contractor) by evaluating each for the cost of their services as well as their performance characteristics. You should assume that all providers have met your order qualifiers. Your emphasis should be in describing the attributes that define a particular performance characteristic, and why its contribution of the value for a particular service is important or not important (these are the specific ‘order winners’ that caused you to choose a particular vendor over the others).

Things to think about:

When is speed important (and how important is it for your company’s particular issues)?

How do you evaluate ‘quality’ in an ESH service?

When is flexibility important? In what ways might a vendor customize their products/services/bundles to fit the specific needs of your company?

When might performance characteristics be emphasized over cost?

Is this one of those instances?

Your Assignment: Prepare a letter to Ms. Krauss recommending one of the vendors for the specific product-service bundle package you select from those listed (details below). The letter must be no more than 2 pages long, but must convey all of the pertinent information to justify your choice. Hint: you should not really use ‘order qualifier’ or ‘order winner’ in your letter, since these may not be in common use among the management of your company. Treat the letter as if you are writing it to your supervisor. Accompanying the letter, you should include an additional document that includes all of the cost and value calculations you used to justify your decision. This additional document can be of any length, and is to satisfy my need to evaluate you as an educator, so that I know you actually understood the material.

NOTE: This is not a trivial paper. If you do not have experience, you may have trouble picturing the services being offered and ordered, which may seem to make the assignment more difficult since a clear idea of the services may help you understand and explain your company’s particular needs and values.

I expect, though, that in a Graduate Program individuals should be able to:

1. Conduct research to be knowledgeable about the topic and the needs of the company

2. Determine and visualize the type of equipment and personnel the project would require, making some assumptions on your part

3. Compare relative costs and performance characteristics for this program

4. Based upon the descriptions below, determine the service/product bundle description with the best value for your company’s needs and values

5. Communicate in an articulate manner to senior management If you are at a loss for where to start, you probably have not looked at Module 3’s materials on ‘value’ from an OM

Vendor Information

1: McCoury Environmental Company History: McCoury Environmental was founded by Del McCoury in Watson, NC and has been in business for almost 40 years. Its CEO was an early entrant into the realm of RCRA monitoring, and has been building his business steadily over time. The firm itself is well established and personnel, on average, have 11 years’ experience. They currently have 120 full-time employees, including 95 field personnel. Half of the field personnel have a college education, and 13 have either advanced degrees or certifications (including: CIHs, PEs, and/or Masters degrees in ESH Management, Engineering, or Chemistry). McCoury’s home office also houses their Analytical Unit, who perform all sample analysis for the field teams. Analyses are performed by 10 certified individuals, overseen by a PhD in analytical chemistry. Due to the size and scope of this company, this vendor cannot respond very quickly to new work (largely because of existing commitments), though they have their own equipment for both sampling and analysis, which is maintained at their home office. ME has extensive QA/QC documentation for their Analysis Unit, and provides documentation with every sample. Caveats in their proposal: Start Time: Work can be scheduled 6-8 weeks after contract has been signed Customization: Flexibility in scheduling. ME can complete work during night shifts as needed for the contract, but with an hourly surcharge. Their project planners and technicians have extensive experience with any number of EPA and ASTM standard reference methods (SRMs), and have company SOPs in place for them. If methods not already in ME’s catalog are needed, a surcharge will be incurred. Equipment: This company can use most of its own equipment, though there will be consumables involved (included in the price). Use of reusable equipment includes a small surcharge for instrument wear (negotiable, based on size of contract and history). References: References from other sources (previous contract awarders) have indicated satisfaction with work. The highest praise was with the quality of the work, and the knowledge of the employees regarding the project. The only dissatisfaction was with the cost of the contracts and surcharges to fully customize specialized needs. Work that was scheduled in advance (as part of the original contract) was completed on time, although at least one reference indicated that start time was delayed after mutual consent and price adjustment. Employees of the company are sometimes heard grumbling about their own dissatisfaction with their employers, though their work output has been satisfactory. Cost: The total cost per sample (collection and analysis) for water is $99, and $183 for sediment samples.

2: Rubber Knife Remediation Company History: Rubber Knife Remediation was founded in Cincinnati, has been in business since 2001, and has been a regional leader in environmental remediation almost since its inception. About 5 years ago, RKR moved its headquarters to Rubber Knife, OH and merged with a small environmental monitoring firm to bring the monitoring side in-house. RKR currently have 200 full-time employees, but only 28 of them are environmental monitoring (EM) field personnel. Typically RKR keeps its EM personnel tasked with its remediation teams, but it has recently begun freelancing some of its teams. ‘Most’ of the EM field personnel have college educations (or equivalent training and experience), and each team is overseen by someone with an advanced degrees or certifications (including: CSP, CESCO, and/or Master’s degree in ESH Management or Chemistry). Caveats in their proposal: Start Time: Work can be started 2-5 weeks after contract has been signed, depending upon the services needed and availability of personnel. Customization: Since RKR specializes in remediation and monitoring, its familiarity with SRMs and SOPs are focused in that direction. Equipment: The firm has its own equipment, and will provide certification of annual/semiannual calibration and preventative maintenance. If additional equipment is needed, the cost of rental will be passed on to OCMS. References: References are very enthusiastic with the remediation work performed by RKR, but somewhat mixed on the monitoring side. There have been no major complaints, but some references perceived that the monitoring side was being performed ‘on the fly’. Cost: The total costs per sample collected are: $35 for water, and $65 for sediment (as long as additional equipment is not needed). RKR does not have an association with any particular analytical group, but has included the cost of shipping in the per-sample price. NOTE: Do not forget to calculate the cost of analysis for your samples. To estimate the cost of analysis per sample for RKR, use the non-discounted price for TBT Analytics.

3: TDM3 Consulting Company History: TDM3 Consulting has been in business since 2013, and was founded by three former McCoury employees. The firm has an excellent reputation for both performance and talent acquisition (their CEO jokes about being made of the ‘best and brightest’ from ME). The group is relatively small at 30 full-time employees, 20 of which are field personnel. Of the field personnel, 16 have a college education, and 6 have either advanced degrees or certifications (including: CIHs, CSPs, and/or Masters degrees in ESH Management or Chemistry). Santa Cruz, CA based TDM3 prides themselves on their ability to deploy quickly when a task comes up. While TDM3 does not have its own analytical unit, they have a cooperative agreement with TBT Laboratory Analytics in Duluth, MN. TBT has agreed to provide expedited analysis and discount pricing (15% off) to any customers of TDM3 that elect to have their samples analyzed by TBT. They will also provide any documentation needed. Caveats in their proposal: Start Time: Work can be started 1-3 weeks after contract has been signed, depending upon the services needed. Customization: TDM3 has broad familiarity with SRMs from EPA and ASTM, and has SOPs in place. In addition, TDM3 will design SOPs for your location if requested (this option may delay start of work by a week). Equipment: The firm has some of its own equipment, but focuses on agreements with several major instrument suppliers (Vernier, Drger, etc.) to deliver any equipment required (on-site) within 3 business days. As the equipment comes with preventative maintenance and calibrations already performed, TDM3 assures you that the short-term leases provide cost-savings to its customers. Equipment rental is included in quoted price, though any unanticipated equipment or supplies may result in a small additional charge. References: References are all very satisfied with the work done by TDMs/TBT, and recommend them ‘without hesitation’. The only negative complaint was a reference that indicated that there was an apparent clash of personalities between the contractor’s representative and the company’s ESH manager (regarding the best approach to a particular task). The issue was resolved (per mutual consent) by switching out the contractor representative with another representative the next day, at no additional cost. All of the references that opted to use TBT Analytics recommend that you elect to use them as well. Cost: The total costs per sample collected are: $60 for water, and $91 for sediment. If you opt for TBT Analytics’ analysis, the discount pricing is (per sample): $50 for water, and $74 for sediment

Explanation / Answer

Though costs are high, PureFit is the perfect partner for the company going in future. Some highlights are one stop solution to all PPE's, very good option of customization. Exemplary customer base and very good referrals in service. They especially like ease with which inventory can be evaluated based on the kit format, and the ability to customize kits based on job specifics. When asked about delivery time and interactions with subcontractors, neutral or positive feedback was given.

Company requirements:

Company does business at all locations in US; 30 – 40 specialists and technicians in the field every week, working in teams of 3 – 6 employees per site. Over the last several years, uEff has averaged 2 contracts per year that require Level A personal protective equipment (PPE); 5 per year that require Level B PPE; 7 – 10 per year that require Level C; and 25 per year that require Level D

Field employees typically require two sets of PPE per day (morning and afternoon), and that the PPE becomes waste that must be disposed of appropriately.

Advanced Environmental Supplies and Logistics does business with company for a number of years, but the CFO of uEff has voiced concerns about pricing

Advanced Environmental:

Advanced Environmental has been in business for over 40 years, and has been uEff’s contracted supplier for the last 10. AE’s home office is in New Orleans, but they have regional offices around the country. In addition, they have a number of large regional warehouses, and smaller local offices to which materials may be delivered. Emergency supplies can be rush-ordered in 3 days for a fee of 10% of the total price (as long as the required materials are currently in stock). Personal protective equipment from Level A to D. Regional warehouse facilities recharge SCBA tanks and deliver them to the local offices several times per week. All other equipment is delivered to you in packaging from the manufacturer. Extensive stock is kept on hand in their warehouses, though experience has demonstrated to you that supplies are not always uniform across their regional warehouses. In addition, specialty items can be ordered with sufficient notice. Given your longstanding relationship, AE is willing to split cases for you (you don’t have to purchase an entire case at a time).

Dave’s Really Great Environmental Supply Company

This is a relatively new firm, but its management team has extensive experience in various business and logistics fields. They have been aggressively pursuing your firm in the hope of expanding their client base. The firm’s office (and attached warehouse) is only a mile from your main office, but they do not have facilities in other locations. To keep their overhead low, however, items are sold by the case (single items are not available). The exception is SCBA tanks, which are ordered on a per-unit basis. Referrals- One or two have stated that sometimes the promises of the sales staff doesn’t meet the actual scheduling ability of the warehouse to provide materials.

PureFit Environmental

PureFit Environmental has been in business for about 23 years. PE’s home office is Salem (OR), and the supplies ship from their facility located there. Emergency supplies can be rush- ordered in 4 days for a flat fee of $300 (subject to materials currently in stock). Personal protective equipment from Level A to D. Local subcontractors supply and recharge SCBA tanks as needed. In addition, PureFit has a contract with a nation-wide DIY retailer, and will supply you with a discount on tools (hammers, prybars, shovels, etc.) on a per-order basis. This will facilitate the disposal of some tools at the end of a job as needed (rather than bringing them back to the office to be decontaminated).

Calculation:

Requirement AE Dave Purefit
3-6 employee Order Lead time 1 week 2 week 1 week
Price,$ /set
Level A 2 4500 9000 5000 10000 2100 4200
Level B 5 3500 17500 3500 17500 1700 8500
Level C 8 5 employee avg, total 40
for level c, two times in a day 80 employee
Coverall, 10$ each 800 Coverall 600 Kit with respirator 7400
Glove, 75$ for 50 pieces 150 Gloves 250 Individual SCBA mask 16000
Boot, 90$/ boot 3600 Boot 4000
Respirator, 65$ 2600 Respirator 5250
Level D 25 5 employee avg,total 125 Kit- 40$ 5000
Coverall, 10$ 1250 Coverall 1000
Glove, 25$ for 50 75 Glove 200 SCBA rent- 2 days 4375
Mask, 10$ 1250 Masks 1250
Boot cover, 50$ for 50 150 Boot cover 150
Total cost 36375 40200 45475
Delivery to local office 10% Delivery 12%0

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