Lean and green: Platitude or possibility?

Posted on 7 Mar 2011 by The Manufacturer

The benefits of aligning lean thinking with green intentions are touted by some practitioners and consultants as a new paradigm for lean and green success. Proponents of the pairing argue that the combination will extend all boundaries previously considered possible for each alone. But to what extent is this simply lobbying from green activists who want to see environmental considerations pushed higher up the corporate agenda?

The concept of lean and green as a serious driving force in business strategy is not new. However, for most the extent to which environmental responsibility has been able to impact operations has been limited to implementing more energy efficient lighting or similarly obvious green actions. In addition, there are still many sceptics who dismiss the framing of environmental excellence in the language of operational excellence as an advanced form of green washing.

According to Keivan Zokaei, consultant and lean and green advocate at SA Partners, however, both of these approaches are simplistic. Writing for The Lean Management Journal, Zokaei explains: “Lean firms see every problem as an opportunity to surface limitations to competitiveness. They have learned to create engaging environments where every employee is empowered to bring about change and to sustain it. Environmental management, on the other hand, has been more concerned with technical fixes and top-down implementation.

Lean’s greatest contribution to environmental management is in creating engagement and alignment. Lean companies across different industries have the potential to leverage continuous improvement knowledge behind the implementation of the ‘green’ objectives.” By so doing, such businesses would benefit by magnifying the returns on investment from both.

Brewing a lean and green revolution

Adnams brewery is one organisation which has long held environmental and social responsibility at its core but which has recently begun to reap even greater benefits and greater strategic coherency in green activities by applying a leaner methodology to their implementation. Andy Woods, Adnams’ MD, says: “Our long-term approach and natural respect for our environment was evident when we started out in 1872 and, more recently, our focus has been to combine this approach with efficient business practice and continual innovation. In our opinion, being lean and green makes perfect business sense. We think strong ethics and values, allied to operational effectiveness, will be a key differentiator for business success in the future.” The Adnams perspective on the value of green investments is long term and based on a belief that the world is morphing into a place where, as Woods put it, ‘the polluter will pay.’ This perspective means that the sustainability of green investments and an ability to continuously improve on them for a confident business outlook are extremely important.

The scope here for leveraging lean thinking around innovation, continuous improvement and sustainability is obvious. This extends to the need for understanding, collaboration and, ideally, complete integration of responsibility for green agendas and lean agendas.

Of course not all companies have the advantage that Adnams has of an existing green culture upon which to build lean understanding and integration.

Rexam, an international consumer packaging company with revenues exceeding £4.5bn, has, however, shown that the bridge building can begin at either side.

Jon Alder, director of group lean enterprise at Rexam, explains: “To give some scale to the opportunity we have for improving our sustainability position through applying lean enterprise we make 60 billion cans each year. End to end they would stretch for 7 million miles, or 165 times around the earth. It is crystal clear in our minds that if we improve the way we make our products then the leaner we become the greener we become and the more ‘green’ in monetary terms we save.

“This lean equals green philosophy has many advantages: it was easy to get consistent understanding of it across an organisation comprising of nearly 100 manufacturing facilities globally, since the activities within it are instantly recognisable as part of the continuous improvement program that has been underway for over a decade.” In terms of operations, Rexam’s lean and green activities have focused on recycling and reducing.

Recycling represents a twofold opportunity for managing their product post consumer use but, perhaps more importantly, how to effectively and economically increase the recycled content of raw material stock. Alder explains that all recycling initiatives are driven by a desire to “understand the value stream potential of all of our waste streams and, through effective mapping, extract back the maximum economic and environmental value.”

Nuts & Bolts

Key points raised and investigated in this article are as follows:

● Lean and green agendas can mutually benefit one another

● Lean tools can be leveraged to create a strategically coherent structure for green initiatives

● Environmental efficiency and green capabilities are becoming increasingly influential as competitive differentiators

● Collaborating for lean and green throughout supply chains is necessary if the full potential of lean and green as a competitive differentiator and cost saving approach is to be realised.

A climate for competition
Having a structured strategic and sustainable approach to the implementation of environmental initiatives has been proven to reap great benefits not only at a local level but also up and down supply chains. Zokaei cited one extended value chain project, spearheaded by a multinational food manufacturer, which indentified in excess of £6m in potential cost savings and similar figure in potential sales uplift through the lean implementation of green initiatives.

Of course, often environmental initiatives are not driven primarily by manufacturers themselves but by key customers, particularly consumer facing organisations and this in itself creates a lean and green integration imperative. With the first and leading principle of lean activities to be the perception of value from the customer’s eyes it is inevitable that rising expectations from major customers for their suppliers to operate with environmental efficiency will gain increasing influence.

Marks & Spencer has been a mover and shaker in this respect. The iconic British retailer has introduced a scorecard for all its suppliers that measures their performance across commercial, technical, new product development, service and sustainability standards. The sustainability measure, called ‘How we do business’, consists of lean manufacturing, ethical trade and environment and demonstrates an awareness of lean and green symbiosis. The programme aims to challenge the environmental performance of organisations competing to maintain or achieve a position among the ranks of M&Ss 2,000 suppliers servicing 21 million weekly shoppers.

For those keen to see the prioritisation of corporate responsibility and manufacturing practices which seriously consider issues such as resource scarcity carbon footprint, the pressure which M&S is putting on its suppliers to live up to environmental expectations is extremely positive.

However, for Peter Watkins, global lean enterprise and business excellence director at GKN, simply measuring suppliers on performance is not enough to embed green values. “A systematic approach to supplier development is key. This must actually support suppliers in doing and learning to apply lean and green – not just measuring them on it!” He says.

Looking forward, Watkins suggests some techniques and requirements that must be addressed if lean and green are to be leveraged to the full extent of their potential: “Using extended value stream mapping as a method for partnering with suppliers is crucial. Activities here should equally focus on risk, as well as environmental impact, cost , lean flow and ethics. Risk is a diverse factor including: political, logistical, importing, currency, transportation risk and so on. If the risk is high the whole supply chain can breakdown. EVSM helps to understand and address this.

Whatever the methodologies used, the consensus across industry from improvement professionals, operations representatives, production managers is that a more strategic approach to the integration of green values and the exploitation of green opportunities is becoming an increasingly pressing need. While some sectors have more obvious opportunities in this area, particularly those with consumer facing brands or products, it is becoming more and more common to see those who fail to be intelligent and creative in offering new environmental capabilities as being out of touch with their customers. Businesses seen to be failing their environmental responsibilities may be left vulnerable in a business environment where waste is not only undesirable for reasons of efficiency but punishable through regulation, unforgiving competition and the dynamics of macro socio-economic shifts such as global resource availability.