SMOM5103

FACULTY OF SCIENCE & TECHNOLOGY (FST)

JANUARY 2016

SMOM5103
MANAGEMENT SYSTEMS

MATRICULATION NO:

CGS01304730

IDENTITY CARD NO.

811102115175

TELEPHONE NO.

0167151981

E-MAIL

shahazmi@oum.edu.my

LEARNING CENTRE

PAHANG LEARNING CENTRE

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CHAPTER 1

INTRODUCTION

1.1

Introduction

International Labor Organization (2011) defined OSH Management System

(OSHMS) as a the notion of management systems that used often in decision making
processes in business and unknowingly in daily life, whether it is in purchase of
equipment, the extension of business or simply the selection of the new furniture. The
application of OSHMS is based on relevant OSH criteria, standards and performance.
The aims of OSHMS are to provide a method to asses and improve performance in
the prevention of workplace incidents and accidents via the effective management of
hazard and risk in the workplace. It is a logical stepwise method to decide what needs to
be done, how best to do it, monitor progress toward the establish goals, evaluate how well
it done and identifying improvement areas. It must be capable of being adopted to change
in the business and to legislative requirements.
1.2

Current Situation and Driven Factors

The company as it now is still using the traditional way of managing the OSH and
some of the OSH policy need to be review. The OSH management within the company
itself is not implemented holistically because some departments in the company tend to
work in silo and not following the rules which been lined by Department of Occupational
Safety and Health (DOSH).
Listed below are the analyzed factors of the drivers that inspired of adopting
OSHMS into the company.

1.2.1 Number of accident/incident 2009 - 2013

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Figure 1: Analysis of Accident/Incident for Company

Figure 1 shows a graph of accident/incident from 2009 to 2013. The
trend of
accident/incident occurred at company has been steadily increase from
year to year.
From the graph we basically know that the trend and the awareness of
safety in employees are decline. This is the prove that the communication and
cooperation between Production Department, Maintenance and Human
Resource are lacking in term of supervising, training providing and maintaining
the machinery even though there are no signs of production problem.
The worse case was the explosion of heavy machinery at production
factory which nearly kill 5 employees in 2012. Luckily the 3 of them just got a
scratch wound and admitted to the hospital for 3 days.
1.2.2

DOSH Recommendation

DOSH is one of the main important elements who sell the idea of adopting
OSHMS. In the previous meeting they have been highlighting the OSH issue and
remind the company to take action in order to increase the standard of OSH in the
company.
DOSH have listed down all their observation regarding OSH and find out
why the OSH standard is not up to their expectation. The reasons are:
a.

No investigation and corrective and preventive action once the

accident/incident occurred.
b. No proper record keeping on the UPV License
c. No tracking on the UPV Renewal
d. Outdated Standard Operation Procedure for ERP.
e. Maintenance record is not updated properly and regularly
f.
Lack of training.
1.3

Effect to the Company

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Issues which have being raised above may cause a lot of negative impact to the
company in short term and long term if not handled properly. The anticipated impacts are:
a.

Bad Reputation

b.

Rising Cost of Operating Expenditure

c.

Loss of Business Opportunities.

d.

Employees Morales

Bad Reputation. If the safety performances continuously decrease and something

bad happen which involve the life of employees. The incident/accident will notify the
media and in a blink our company will be well known across the country not because of
our good achievement but by the accident happened and DOSH wont silence. They will
come for inspection regularly and surprisingly. This will ruin our reputation and indirectly
kill our business.
Rising Cost of Operating Expenditure. Company has allocated the budget
annually to ensure the factory run. However the cost of operating might off the budget
when something happen to the machinery. The company will has to spend a lot of money
to rectify the damage and definitely increases the

budget. The totals of accident which

increase over the year also contribute to the rising cost of operating expenditure.
Loss of Business Opportunities.

The incident/accident occurred is bad to our

company but it is good to our competitor. When the reputation of our

company

is

ruin, client whether they are loyal customer or not will lose their trust to buy our products.
Employees Morales.

When a lot of incident/accident occurred at a workplace,

this will indirectly disrupt the morals of the employees. Employees are obviously
concerned with their safety at workplace. As a result, they wont do their job whole
heartedly and when this happen, we believe our product quality wont be up to the
standard and the worse case employees might submit their resignation because they dont
want to take risk.
The current safety situation and the effect stated above are the main factors or driver
why we need to have a management tool to facilitate the OSH in the company so that all
the incident/accident can be reduce and in the same time to avoid the loss to the company.

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CHAPTER 2

PROPOSAL

2.1 Introduction
This chapter will discuss about the proposal on how to intervene into this problem
so that the OSH management within the company can be strengthen and well managed.
This chapter will also discuss on the role of major department in company which related
to the safety and also the pros and cons on adopting OSHMS into the company.
2.2

Department Roles

Even though the incident/accident happened a lot at manufacturing site it doesnt

mean the safety is the responsibility of Production Department. OSH is everybody
responsibility no matter what department you are. After discussing and addressing the
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OSH problem inter department. We have identified the major department who can
facilitate the OSHMS with it current roles. The Departments are:
a.

Production Department

b.

Human Resource

c.

Maintenance

d.

OSH Department.

Departments stated above are the main character in order to ensuring the smoothness
of OSHMS. In term of OSH their roles are as follow:
a.
Production Department - Supervising the production process and
to report to maintenance department of any problem with the machinery. Look into
the welfare of employees at their department in term of PPE
providing.

b.
Human Resource - Human Resource department will look into the
need of putting the right man for the job. So that the levels of proficiency
among
the employees are well develop.
c.
Maintenance Maintenance Department will do their maintenance
according to the plan which has set for the machinery. all the maintenance record
will be keep and they will need to brief the management on their
progress
every month.
d.
OSH Department OSH department will do their regular and
surprisingly inspection to all department within the company and they will also
plan the training to the employees so that the awareness of safety and health
among the employees are current. This department will also be the liaison
between company and DOSH.
2.3

Pros and Cons on Adopting OSHMS into the Company

To justify the need of adopting OSHMS into the company, SWOT analysis have
been done. SWOT is the best way to justify the need of OSHMS because in SWOT
analysis it will cover the four elements which directly can tell the benefit of adopting
OSHMS. The four elements in SWOT are as follow.
a.
Strength Internal factors which will be positive for the OSHMS
implementation.
b.
Weakness - Internal factors which will be negative for the OSHMS
implementation.
c.
Opportunities
implementation.

External conditions

favorable for the OSHMS

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d.
Threat implementation.

External

conditions

unfavorable

STRENGHT

WEAKNESS

a.
Improve
management
of
occupational health and safety risks.
reducing the probability of accidents
in the workplace
b. Achieve cost reduction by
minimizing work related hazards and
injuries, thus boosting profitability.
c. Continually improve safety and
health
performance,
including
compliance
with
regulatory
requirements.

a.

d. reducing the probability

accidents in the workplace.

for

the

OSHMS

Increase the cost of PPE

b.
Increase the workload since we
have to maintain the system and to
prepare the company toward the
certification.

of

OPPOTUNITIES

THREAT

a. Increase company reputation.

a. Audit and NCR

b. Certification acquired is an asset for

a wider product market

Table 2.1 SWOT analysis on adopting OSHMS into the company

From the SWOT table above we can justify that the company need the OSHMS in
order to keep the company save and competitive.
2.4

OSHMS Standards
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There are a lot of OSH Management System standard available such as:
a.
b.
c.
d.
e.

BS8800:2004
ILO-OSH: 2001
OHSAS18001:2007
OHSAS18002:2008
MS1722:2011

From the 5 standard listed above, only 2 are common in our industry which is
OHSAS 18001:2007 and MS 1722:2011.
2.4.1 OHSAS 18001:2007
OHSAS 18001 is an Occupation Health and Safety Assessment Series
for health and safety management systems. It is intended to help organizations
to control occupational health and safety risk. It was develop in response to
widespread demand for a recognized standard against which to be certified and
assessed.
OHSAS 18001 was created via a consortium of 43 organizations from 28
countries involving world leading national standards bodies, certification bodies
and specialist consultancies. A main driver for this was to remove confusion in
the workplace from the proliferation and certifiable OSH certification.

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Figure 2.1: OHSAS 18001 Model

2.4.2 MS1722:2011
MS1722:2011 is a Malaysian standard that provides requirements on
OSHMS and basis for the development of sustainable OSH culture in an
organization. This standard based on International labor Organizations
Standard ILO-OSH 2001. As the requirements of this standard are equivalent to
OHSAS 18001, auditing and certification to this standard can be carried out
simultaneously.

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Top Management Approval

CHAPTER 3
Start
ESTABLISHMENT PROCESS
Define Scope
3.1 Introduction
Process
This chapter will discuss about
the Involve
step to take in order to establishing and
certification of OSHMS Standard into the company. This chapter will also show the flow
chart on process to acquire the OSHMS certification and also the time line plus the total
cost of whole processes.
Gap Analysis
3.2 Flow Chart
Gap Bridge
9
Apply for Certification

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Figure 3.1: Flow Chart to OSHMS Standard Certification

3.2.1 Flow Chart Explanations

a.
Top Management Approval Top management is the key to a
successful safety culture. Management attitude, behavior and style have
a powerful effect on workplace safety, and help separate good from
excellent organizational Occupational Safety and Health (OSH)
performance.
b.
Start Once the green light from the top management received,
a team who should handle the certification must be form. This team
must consist of the Management Representative and the staff from
involved department.
c.
Define Scope This team will work together to define the OSH
scope.
d.
Process Involve Once the scope is defined, the team should
investigate and justify how many department/process/function involve
within the scope.
e.
Gap Analysis After all the process involve have been justified,
the team need to carry out the gap analysis to indicate the current
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situation and wanted situation. The team also required to do PDCA

so that they dont miss any fatal issues
f.
Gap Bridge The team then should plan on how to bridge and
rectify the gap that being found out..
g.
Certification Apply - Once the gap and the process have been
taken care of. The team will engage with the certification body for the
endorsement and certification award. The common certification bodies in
Malaysia are such a SIRIM QAS and NIOSH Certification Sdn Bhd.

3.3

Timeline

Table 3.1: Timeline

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Figure 3.2: Timeline for Certification

Table 3.1 and figure 3.2 is the proposed time taken for a company to execute the
OSHMS Adoption. Figure 3.2 is separate timeline because by the time company engage to
the figure 3.2 timeline, the team already engages with the certification bodies. From the
figure 3.2 we also know that this certification only last for 3 years and the OSHMS
Standard need recertification after gone through an audit by the certification bodies.
However, surveillance audit is still conducted once a year by certification bodies.

3.4

Estimate Cost

Estimate cost for OSHMS Standard can be divided into two. It is on how we choose
to work on certification process. Process of acquiring OSHMS Standard can be done in
two ways. It is by:
a.
Run the process of acquiring OSHMS Standard without an external
consultancy and only engaging the certification bodies for endorsement, audit
and certification.
b.
Engage the external consultant who will assist the company to develop
their OSHMS Standard from zero until certification.
The costs for these two ways of acquiring OSHMS Standard are as follow:
3.4.1 Without Consultant

No.

Subject

1.

Registration Fee

Auditorday(s)

Amount
RM

500.00
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2.

Certification Audit

RM 4,800.00

3.

Incidental Cost

RM 1,408.00

4.

Anually certification Fee (3 years)

RM 1,500.00

5.

1st Surveilance Audit

RM 4,000.00

6.

2nd Surveilance Audit

RM 4,000.00

7.

Technical Specialist (3 years)

8.

Recertification Audit

RM 1,500.00
4

RM 4,200.00

Totals

RM 21,908.00

Table 3.2: Estimate Cost of Adopting OSHMS without Consultant for 3 years

3.4.2 With Consultant

No.

Subject

Auditorday(s)

Amount

1.

Registration Fee

2.

Certification Audit

3.

Incidental Cost

RM 1,408.00

4.

Anually certification Fee (3 years)

RM 1,500.00

5.

1st Surveilance Audit

RM 4,000.00

6.

2nd Surveilance Audit

RM 4,000.00

Technical Specialist (3 years)

8.

Recertification Audit

9.

Consultancy Fees

RM
4

500.00

RM 4,800.00

RM 1,500.00
4

RM 4,200.00
RM 20,000.00

Totals

RM 41,908.00

Table 3.3: Estimate Cost of Adopting OSHMS with Consultant

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The Consultancy fee in the Table 3.3 is only paid on the first year from
the process of acquiring OSHMS until the certification. The fees are including
the consultancy and the training provided to the OSHMS Team.

CHAPTER 4

CONSTRAINTS AND RECCOMENDATIONS

4.1

Introduction

This chapter will discuss on the potential hindrances to OSHMS introduction and
the recommendations to the company in order to adopting OSHMS.
4.2

Constraints

To introduce a new thing or a new management process within the company might
bring an awkward situation and confusion among the employees. Here are the anticipated
potential hindrances to OSHMS introduction in the company:
a.
The Lack of Expertise The lack of expertise can be a fatal hindrance
to OSHMS introduction since it is a new thing in the company.
b.
The High Cost The cost of adopting the OSHMS is quite high and
will increase the company budget.
c.
Scope Expansion The scope of job in every department involved will
expand and a lot of paperwork needs to be prepared and submitted which directly
increases the employees workload.
d.
Management/Employees The management and employees
understanding toward OSHMS is also found as a hindrance since it takes time
for them to understand the new management requirement.
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4.3

Options

After discussing and addressing all the benefits and hindrances of adopting OSHMS
into the company, there are two options can be taken in order to adopting OSHMS into the
company. The options are:

a.

Option 1

For the start we would like to recommend the company to adopting the
MS1722. Compared to OHSAS 18001, MS1722 is not recognized internationally
but its a good start for company to have it own proper OSHMS.
Once the certification of MS1722 is done, the same template of MS1722
certification can be use to apply on OHSAS 18001. The reason why MS1722 is
recommended to be adopting first is to avoid the culture shock among
employees and in the same time to reduce their workload. Once the MS1722
certificated, by then all the employees are aware of OSHMS and ready to take
on MS18001. The cost on adopting MS1722:2011 will be RM 21,908.00 without
consultant and RM 41,908.00.
The company should engage the consultant since the company is lack in
term of OSHMS Standard Expertise. The total cost for using the option 1 will be
RM 63,816.00.
b.

Option 2

Since the process of certification and auditing MS1722:2011 and

OHSAS
18001:2007 can be done simultaneously. The company is suggested to
take on both of
this OSHMS Standards as an Integrated Management System
(IMS). This standard
will benefit the company market locally and internationally. However, the cost of applying
this standard will be multiply since there are two standards. The cost without consultant
will be RM 43,816.00 and with consultant is RM 83,816.00.
If the company decides to choose an option 2, the end result will be
tremendously good to the company but in term of work load and costing it wont
favor the company. Since the company lack in OSHMS Expertise and
have
to
engaged with the consultant it will cost the company about RM
83,816.00.

4.4

Recommendation

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From the options stated above. After taking into company current budgeting and
situation, Options 1 are recommended to be taken as a company OSHMS Standard. The
company is advice to go for consultancy since the company is lack of expertise. Once the
company has acquired the MS1722:2011 certification, the OHSAS18001 certification will
be easier and cheaper since the team is trained. Even though both options may give the
same outcome to the company but the option 1 will save about RM 20,000.00.

REFERENCES

Kadir Ariffin, Jamaluddin Md Jahi & Add Rahim Md Nor 2006, Perlaksanaan ISO
14000 dan kesanya terhadap peningkatan kos di kalangan organisasi di Malaysia.

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Finazianto dal minister Del lovoro e delle politche socialli 2011, Isistemi
Diqualificazione delle imprese.
Lorne Donquette 2010, The implementation workbook Integrating the ISO 14001
and OHSAS 18001 management System.
Jacques Whitford 2002, National Energy Board Safety and Environmental
management System ISO 14001 and OHSAS 18001 Gap Analysis.
Australian Government 2005, The Principles of effective OSH Risk Management.

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ATTACHMENT

REFERENCES
Authors name (year). Book, Title, Publication

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