ENERGY MANAGEMENT SYSTEM

LEAD AUDITOR
TRAINING COURSE

Case Study 1

(Issue 1)

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 2011 SGS Socit Gnrale de Surveillance SA
All rights reserved

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 PILLS LTD.
Organisation Description
Pills Ltd is an international organisation dedicated to the production of pills related to
pain relief. The organisation was first founded in England about 120 years ago and
steadily grew during the 20th century, building new manufacturing facilities in several
countries, including Poland, Hungary and Morocco.

The organisation develops its own active principles and has several patents concerning
pain relief. The products are developed in the main site research laboratory.

The main site is located in Surrey, where there are about 250 employees and it
comprises several activities: administrative, manufacturing, laboratory and distribution.

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Energy Management System
The Energy Management System (EnMS) was implemented during 2010, by a
multidisciplinary team, comprising the Environmental Manager, the Facilities Manager,
the Maintenance Manager, the Manufacturing Manager, the Laboratory Manager, the
Distribution Manager and the Fleet Manager.

The EnMS was integrated into the Environmental Management System, already in
place and certificated. The main documents of the Environmental and Energy
Management System (EEMS) are:

Environmental and Energy Policy

Environmental and Energy Management System Manual
List of Significant Environmental Aspects
Energy Review
List of Significant Energy Uses
Objectives, targets and indicators
Investment plan
List of legal and other requirements
List of people whose functions may lead to significant changes in energy
consumption
Environmental and Energy Monitoring Plan
Procedure for the Identification and Evaluation of Environmental Aspects and
Energy Uses
Procedure for Document and Records Control
Procedure for Internal Audits
Procedure for Corrective and Preventive Action (includes improvement
opportunities)

Pills Ltd rely on awareness posters, stickers, diagrams, etc to communicate operational
controls to their employees. All these documents are controlled by the Management
System in place.

The PILLS Ltd certification audit

Pills Ltd, at its headquarters located in Guildford, is being audited by an Audit Team to
verify conformance with ISO 50001:2011. The audit is conducted by a Lead Auditor and
an Auditor.

The audit follows two paths. In this case we will just follow the path of the Lead Auditor,
according to the following plan:

Time Function ISO 50001 requirements

08 30 General Manager and Opening meeting
other Managers
09 00 General Manager 4.4.6 Energy objectives, energy targets and
energy management action plans
4.5.2 Competence, training and awareness

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Time Function ISO 50001 requirements
4.7 Management review
10 00 Facilities Manager 4.4.3 Energy review
Environmental and Energy 4.4.4 Energy baseline
Manager 4.4.5 Energy performance indicators
4.4.6 Energy objectives, energy targets and
energy management action plans
4.5.5 Operational control
4.5.6 Design
4.6.1 Monitoring, measurement and analysis
12 00 Lunch break
13 00 Procurement 4.5.7 Procurement
13 30 Human Resources 4.5.2 Competence, training and awareness
Manager
14 00 Manufacturing Manager 4.4.3 Energy review
4.4.4 Energy baseline
4.5.2 Competence, training and awareness
4.5.3 Communication
4.5.5 Operational control
4.6.1 Monitoring, measurement and analysis
15 30 General Manager 4.6.2 Evaluation of compliance with legal
Environmental and Energy requirements and other requirements
Manager 4.6.4 Nonconformities, correction, corrective
action and preventive action
4.6.3 Internal audit of the EnMS
16 30 General Manager and Closing meeting
other Managers

After the opening meeting, the Lead Auditor, in accordance with the audit plan
interviews the Pills General Manager (GM), who is the top management
Representative for Environmental and Energy issues.

The Lead Auditor asks the GM to explain who is accountable for the Energy
Management in the organisation, and he replies that the Environmental and Energy
Manager (EEM), who is very knowledgeable about energy issues. He is responsible
for Environmental and Energy policy and its implementation. He reports to me on a
three months basis and puts me up-to-date about the system in the organisation, says
the GM.

The Lead Auditor asks the GM to explain how the energy management is organised in
Pills.

The GM explains that energy management is assured by each Department Manager in

the organisation, under the coordination of the EEM. Every Manager is responsible for
the Energy Management of their Department and for the identification of energy
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improvements opportunities. The Energy Performance Targets are part of the business
management just as profitability. For us, energy costs count and every reduction is
welcomed.

Are the energy targets documented? asks the Lead Auditor.

Yes, replies the GM.

Can you show it to me, please? asks the Lead Auditor.

I do not have a copy with me right now, is the GMs answer.

The Lead Auditor asks the GM to explain him how have they set the objectives and
targets. The GM tells him that they have undertaken a thorough energy review, with
the participation of all managers and the support of external consultants. The Energy
Review identified the main energy usages and the most important energy improvement
opportunities. The Financial Manager and the EMM analysed each one of the energy
improvement opportunities and defined a 5-year investment plan with the main actions,
budget needs, responsible and time frame for each action.

Energy efficiency says the GM, is paramount to our activity. Implementing these
actions will bring important revenues in the long run and provides a framework for other
resource saving projects, such as water and packaging materials.

Ok. Thank you for that, says the Lead Auditor, Please can you show me this 5-year
investment plan?

I do not remember if I have the most recent version replies the GM, but it was
distributed to all Managers, anyway. Also, there is an awareness program which
ensures that all employees are aware of how they contribute to the achievement of the
organisations Energy Performance Targets.

Following his audit plan, The Lead Auditor goes to interview the Facilities Manager,
accompanied by the EEM. When he enters the office, the Lead Auditor notices that on
top of the Operations Managers desk, there is a report that has as a title Energy
Review. Is that the Energy Review done last year? asks the Lead Auditor.
It is, replies the Operations Manager. The Lead Auditor notices that the report does
(4.4.3.a) not have any of the usual characteristics of a controlled document. Puzzled,
he asks the Facilities Manager whether the report is controlled in terms of the Pills
documentation controls. No is the reply its a technical document.

Thank you replies the Lead Auditor then, moving on, Could you explain me how you
use energy management procedures in your activity?.

Sure, says the Facilities Manager, the main purpose is to maintain the buildings,
equipments and piping in perfect conditions so that no energy is ever wasted.

How exactly do you do that?

Well, says the Facilities Manager, I have a list of all equipment and plants of the
piping network. I define the maintenance operations to perform in maintenance plans
and inspection routines, which are implemented continuously.

Ah exclaims the Lead Auditor, please could you explain that in more detail?
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Yes, says the Facilities Manager. I have a team of technicians that have to do a list of
tasks printed each morning from our Facilities Management software.

How is that fed? Who introduces the information in the system? asks the auditor.

Well, I do. I take equipment manufacturers recommendations and good practice and
determine what operations to perform, when and how.

And how do you choose the technicians that will perform each task?

Well, I know every man, what he knows and what hes able to do, comes the reply.

I see says the Lead Auditor, and where are the competence requirements defined?
asks the Lead Auditor.

The Facilities Manager begins his reply, Human Resources have a personnel file
where they file all the training records, experience evidence and that sort of things.

(The auditor takes a note on this, in order to confirm the human resources competence
records).

Can I have a list of equipments when we start our site visit? asks the Lead Auditor.

Im not sure I can print these out., replies the Facilities Manager.

Ok. Are there any new machines in place? asks the Lead Auditor.

Yes, says the Facilities Manager, We do have a new packaging machine.

Can you explain to me how energy efficiency criteria were embedded into the
purchase process, please?, asks the Lead Auditor.

Well, these equipments are all alike. Theres no point considering energy criteria. We
work with the same supplier for 8 years and he didnt tell us anything about energy.
(4.5.7) - minor finding

The Lead Auditor looks at the EEM and asks Were you involved in the purchase
process?.

The EEM replies To be perfectly honest I didnt even know there was a new packaging
machine! Where is it, anyway? (4.5.7)

We bought the machine last year to replace an obsolete one., continues the Facilities
Manager, We asked our regular supplier to sells us a standard, good value machine,
and that was it.

The Lead Auditor makes a note on his checklist.

We will now proceed with the audit plan, about the Energy Review., says the Lead
Auditor. Can you please explain to me how you identified and evaluated the Significant
Energy Uses?, asked the Lead Auditor to the EEM.

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We formed a multidisciplinary team, held several meetings where we identified all
Energy Uses related to our activities, facilities and services. Each participant prepared
a list, in a form I prepared myself. We then compared lists to check if there were
duplicated Energy Uses or missing ones. We went trough the list to reword the Uses
and tried to put numbers on it, with the information we had available. Thats when we
realised we didnt have a lot of data on energy consumption. The Facilities Manager did
an excellent work on metering systems, added the EEM. We then evaluated, in
discussion sessions, how we could improve our energy efficiency in every Energy
Aspect. We werent able to do this in one or two sessions as you can imagine because
we had to talk with suppliers to identify all technological possibilities, costs involved,
organisational constraints, etc. At the end of three intensive months, we were able to
reach a consensus and have our Significant Energy Uses list prepared and the
Investment Plan for five years.

The EEM passes him the List of Significant Energy Uses and the List of Objectives and
Targets. The auditor notices that many Targets arent quantified, so he asks the EEM
why this should be. The answer is that the information on detailed energy consumption
dated back to 6 months and it was not possible to define more accurate reduction
targets because they dont know how each Energy Aspect impacts the overall energy
consumption. (4.4.6)

The Lead Auditor makes a note to remember to check this specific issue in the Energy
and Environmental Management Review and in the first surveillance audit.

Following his audit plan, the Lead Auditor asks the EEM and the Facilities Manager to
take him visit the site. He keeps the List of Significant Energy Uses and the List of
Objectives and Targets with him.

During the audit, the Lead Auditor approaches an employee and says Good morning.
My name is Alan. Im doing an audit on Pills Energy Management System. Whats your
name?.

The employee replies Im Ali. I operate this packaging machine for more than 25
years! You still wore short trousers I was already dealing with this beauty.

The Lead Auditor continues I imagine you know it quite well. Can you tell me how can
you save energy while operating this machine?

Ali answers, scratching his head: Errr save energy? Well, when I finish work, if
theres no other shift after mine, I always turn it off. But then, thats what you do at your
own home, right? Errr. If I see there are not enough pills to pack, I regulate the
conveyor speed so that motors dont work for nothing.

Where did you learn all that?, asked the Lead Auditor. (4.5.2)

I already knew all this, you see. I dont like wastage! And we talk about this all the
time. We had these talks at the canteen a few months ago and said what we thought
about this stuff. The EMM said we are going to receive a prize by this big organisation.
Is that you that give the prize? And whenever I have a good idea, I tell it to my boss.
Adds Ali.

The EEM explained that they organize meetings with personnel every 3 months and
exchange ideas on what can be further improved in the factory. Weve had really
valuable solutions coming from our personnel. They know the equipments very well.
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Please explain to me how you treat these improvement opportunities? asks the Lead
Auditor.

Sure says the EMM. I have a specific form where I record every improvement
suggestion. We discuss all these in regular meetings of the Energy Team. Then, we
communicate the decision to people who suggested them in the first place. We always
give feedback on employees suggestions, even if we decide not to do it.

Ok. Please can you give some examples of improvements you implemented by
employee suggestion? asks the Lead Auditor.

The EMM begins to detail several housekeeping practices they put into place, posters
they created and work organisation changes that were suggested by employees.

The Lead Auditor makes a note to remember to ask for the employees improvement
suggestions, when auditing Nonconformities, Corrective and Preventive Action.

They approach an electrical board and the Lead Auditor sees that theres a meter
inside. He says to the Facilities Manager Can you explain to me how do you manage
the meters and the readings?.

We have a facilities management software that gathers and treats all the information.
All the meters are connected to this software. Periodically, maintenance technicians
read the meters and record the consumption in a form. When we receive the energy
invoices we compare the software information, our own readings and those from the
supplier. This way, we can assure that the information is complete. explains the
Facilities Manager.

How do you assure the information is accurate, complete and precise? asks the Lead
Auditor.

The meters have manufacturer assurance on accuracy and the software was tested by
the supplier with our own data explains the Facilities Manager.

Did you ever have a problem with the metering system? asks the Lead Auditor.

(laugh) Yes, we did come across a really unusual problem. Last month we recorded a
record peak in gas consumption. We didnt understand what was happening. After
talking to several people we realised some technicians had found some meters not
connected to the metering software system, and so, they decided to connect it. What
they didnt know was that those meters belonged to another organisation! A few years
ago, Pills decided to sell a building not suitable for the pharmaceutical industry, after
new stringent regulations were published. This other organisation works inside our
premises, but in a separate building. The thing is their gas meters are next to ours, in
this part of the factory.

I see. What did you do about it? asks the Lead Auditor.

We solved the problem says the Facilities Manager.

Facing the EEM, the Lead Auditor asks I mean how you treated this occurrence in the
Energy Management System?

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The EEM refers that they didnt treat it. The Lead Auditor questions the EEM Wouldnt
you say this is a nonconformity?

The EEM agrees with the Lead Auditor.

The Lead Auditor makes a note on his checklist.

The Lead Auditor thanks the Facilities Manager for his time and goes to the Human
Resources Managers (HRM) office. Among other things, the HRM is responsible for
collecting and maintaining personnel competence records and for managing training
programmes. The auditor asks the HRM to explain him the methodology used to
identify training needs.

She begins explaining how she demands to all Managers their Department training
needs. We wish to develop our people in a way beneficial for them and also for the
organisation, she says. The training needs are then analysed by the Managing
Team.

Sounds great, says the Lead Auditor, please could you explain some of the overall
training objectives that your organisation has developed?

The HRM begins, explaining that, training needs focused mainly on technical subjects,
for instance, metering systems and energy audits. Afterwards, we developed an
employee awareness programme that keeps personnel continuously motivated.

Its always difficult to figure out how to reach people. Everyone agrees with good
energy management practices but the everyday life actions arent always the best
ones she says.

I see, says the Lead Auditor and then asks, How do you evaluate the training and
awareness programmes adequacy and effectiveness?.

Well says the HRM, we measure our awareness programme success by the number
and type of energy improvements suggested by workers. I can tell you its been very
successful until now.

Good. And do you have any records related to training courses?

No, I dont. she answers, You see, they were carried out by an external trainer. That
way, we assure a certain level of independence.

So, you mean you dont keep training records if the courses are implemented by an
external organisation?

Yes. If we need them in the future, well ask the trainer, right?. The HRM continues.
We only have a personnel personal file where we keep each persons details.

How do you manage subcontractors? asked the Lead Auditor.

We use them when we face production peaks, typically during winter time, when
people consume more pain killers., answers the HRM.

What kind of work do they perform?, continues the Lead Auditor.

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She explains All sorts of work, actually. Sometimes its just machine operating, other
times we also contract drivers, maintenance people and even admin personnel if we
have a high sickness absence rate.

And how do you assure that these people have the right competence requirements
concerning your energy management system asks the Lead Auditor.

What do you mean? They are not our workers, you see? We dont have any control on
the people the external organisation gives us. Today its Manish and tomorrow might be
Sharon. We never know who shows up!, she adds. (4.5.7)

The auditor makes a note on his checklist.

Thank you for your time says the Auditor, well move on to the Manufacturing
Department, now.

Good morning, my name is Alan. Can you explain to me how do you consider energy
management considerations in your Department activity, please?, requests the Lead
Auditor.

Of course says the Manufacturing Manager. All the machines have regulating
systems that allow us to control the energy consumption rate according to production
daily targets. Whenever a machine is not necessary, we simply turn it off. I work closely
with the Facilities Manager in order to assure that our machines and infrastructure are
always working properly and we hold regular meetings with personnel to analyse
energy improvement opportunities.

Very well, says the Lead Auditor. How do you evaluate your Departments energy
performance?

We have these indexes that the EEM calculates. We go trough the monthly results at
each Management meetings, says the Manufacturing Manager.

Ok. So, are you at a good level of performance? asks the auditor.

I dont know anything about these indexes. The EEM looks at them and makes his
own evaluation. In the last meeting he talked about err wait a minute, I think I have
the minutes somewhere in my deskerr dont find them right now, but I think were
ok. Were on the industry average, answers the Manufacturing Manager.

Average of what?, demands the Lead Auditor.

Well, he says, of energy consumption, I suppose. The formulas are rather

complicated. He takes care of that.

I see. And did you install any new machines, recently? asks the Lead Auditor.

Yes we did. He gets the purchasing file and handles it to the Lead Auditor, he replies.

Can you tell me how you considered energy efficiency in the purchasing process?
asks the Lead Auditor.

What do you mean? All these machines consume electricity and we had already
similar ones, but of an older model, he replies.
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The Lead Auditor reads the procedure (EEMSP 6) and notices that it requires the EEM
involvement in all equipment purchasing. He asks the Manufacturing Manager about
this, and he responds by saying that surely that only applies to new type of equipments
and not for the replacement on an old one.

Why do you think it should happen that way?

The Manufacturing Manager explains that these equipments have all the same energy
consumption profile and theres no point in undertaking a complex purchasing process.
The Lead Auditor notices that the purchasing documents have a red remark on them
Urgent! and asks the Manufacturing Manager for an explanation and he replies We
had to buy that equipment in a very short notice so that we could start the production of
a new medicament.

Ok, says the Lead Auditor, Well, thank you for your time. We must move on, now.
.
Ill be at the closure meeting says the Manufacturing Manager.

The Lead Auditor asks the EMM to take him to the GM office to discuss Internal Audits
and Management Review.

Looking at his checklist, he starts, I would like to see the last internal audit report,
please. The GM shows him a report dated a year ago. The auditor notices that the
report is quite simple and doesnt mention the lack of information related to Objectives
and Targets. The Lead Auditor asks who did the audit.

Oh, it was the EEM and the Facilities Manager, right at the beginning of the EEMS
implementation. We wanted to know how much we had to do to achieve certification.
The Lead Auditor questioned about the competence of the Audit Team. The EEM
intervened Me and Kelly, we did this training on the standard. We made the audit just
afterwards.

Ok, says the Lead Auditor, Can I see the EEMS competence requirements for
internal auditor, please?

Pardon? The internal auditors competence requirements? We didnt define that.

replied the EEM. We didnt know we had to! Because, after all, its just an internal
audit., he added.

Alright, I can see that you didnt fully understand the standard requirements says the
Lead Auditor You have the competence requirements with you, dont you? Can I see
the EEM competence requirements?

The Lead Auditor verifies the competence requirements and reads that the only training
requirement is an 8 hour training course on the standard.

Well the EEM says, I suppose I didnt know the standard could be so complicated.

The Lead Auditor adds You really must improve the internal audit process. Its one of
the most important continuous improvement mechanisms.

Could you explain me the situation of the preventive and corrective actions related to
audit findings? the Lead Auditor asks.
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Well says the EEM, we have written procedures for handling the corrective and
preventive actions. I also have a system to control the status of the preventive and
corrective actions.

Thats good says the Lead Auditor, please could you show me the system you use to
control the preventive and corrective actions?

The EEM shows the Lead Auditor on the computer screen, a matrix called Matrix for
Preventive and Corrective Actions.

The Lead Auditor notes that the audit findings originated thirty four corrective actions,
of which twenty eight were opened and six had been closed. The average time of the
corrective actions being open was approximately seven months. Why so many
corrective actions are remaining opened for so long?

The EEM replies that that is a normal situation given the organisations culture. The
Lead Auditor makes several notes on his checklist.

How about the top management EEMS review? Can I see the minutes of the last
one?, he said, turning his head to the GM.

He handles him the meeting records. The Lead Auditor goes through the records and
notices theres nothing on Objectives & Targets, EEMS audit results nor any energy
consumption projection.

The GM starts by explaining that the members of the management team prepared a
text on the EEMS implementation in each Department, the new Significant Energy
Uses identified in the last quarter of the year and a compilation of personnel energy
improvement suggestions. They then met to discuss all this information and update the
Investment Plan they had already defined. It was a very interesting meeting, he
added.

After youve discussed all that information, what did you conclude about the
effectiveness of the EEMS?

Well, we will be able to improve the effectiveness of the EEMS through the taking of
preventive and corrective actions. Thats recorded.

But most of them were not implemented, yet. Also, I see that you didnt analyse the
Objectives & Targets. Why is that? ask the Lead Auditor.

Were not completely happy with the data we have so far. The metering system started
fully functioning only six months ago and were not able to define more accurate
Targets., explains the EEM. Thats also the reason why we didnt make any
projections on energy consumption. We prefer to wait until were more sure about
these figures and then try to predict future energy consumption., he added.

I understand your concerns, but the matter should have been discussed in the review
meeting and recorded in the minutes, says the Lead Auditor. There is no mention of
the Internal Audit findings and main conclusions? continues the Lead Auditor.

GM starts Well, the audit was done so long ago! We thought its findings were no
longer useful, now that the System is completely implemented then he adds, We
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really didnt understand we had to do all that. Can this compromise the certification?
looking concerned at the EEM.

The Lead Auditor made some notes on his checklist and went to prepare for the closing
meeting.

_________________________________________

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