Lean to be green

Posted on 10 Jul 2009 by The Manufacturer

Paul Albone, MD of Environmental Lean Solutions, says manufacturers must integrate lean and green thinking to optimise sustainable business benefits and claim true environmental responsibility.

Recently I came across a phrase in an article, which lends itself perfectly to the 21st century business environment – the ‘Responsibility Revolution’, whereby stakeholders, including employees, are demanding that their employers concentrate on their social and environmental responsibility.

Historically, for the majority of organisations, being green has meant a preoccupation – almost an obsession – with cutting carbon emissions to meet their environmental obligations. But increasingly companies are beginning to look at the business case for sustainability and the pursuit of the win-win scenario – enhanced environmental and business performance.

This trend is giving fuel to the notion of integrating lean and green business thinking. Lean relates to increased efficiency, profitability, agility and eliminating waste, while green relates to measures that minimise environmental impact, such as reduced energy and raw materials usage and sustainable products and processes. Harness the power of the two and organisations can realise substantial savings and therefore bottom line benefits. Not only that, it can greatly enhance the ‘greeness’ of the organisation by reducing environmental waste in business processes.

However, the integration of lean and green activities within an organisation presents a significant challenge. Historically lean and green thinking silos have existed – while lean practitioners have focussed on eliminating waste from business processes, they have largely neglected environmental related waste. In addition, environmental professionals have not been involved in their organisation’s lean programmes. Effectively what you get is lean and green thinking silos within organisations.
Instead a more holistic approach is required.

Reliable Plating Works

An example of how this can pay dividends comes from Reliable Plating Works, based in Milwaukee, USA. The company provides decorative nickel and chrome electroplating for customers in the motorcycle, furniture, point of purchase display, appliance and medical equipment industries.

Through integrating lean and green business thinking, the $12m turnover firm has saved a staggering $1m dollars by reducing raw material usage, air emissions and energy costs.

The firm discovered that it had bad metrics and was understating its costs. Products enter the company’s electroplating machinery on a flight bar, and the labour cost metrics didn’t fully take into account whether the flight bars carried products or were empty. The company revamped its heat intensive plating operation to run three days per week instead of five. That sparked a 25% reduction in energy costs and annual savings of more than $100,000. Employees now work 12 hour shifts over three days, which means fewer commutes. The adoption of lean and green strategies now gives the company vital competitive advantage in its marketplace.

To give another example, many companies fail to convince employees to turn their PCs off at the end of the day because it takes too long to reboot the following day when they all try to log in simultaneously. But simply ’leaning’ the system to allow more simultaneous log ins – a process initiative – enables the behaviour change with the employees and the switch-off protocol – a sustainable initiative – succeeds.

So how can you harness the full potential of merged lean and green thinking for your manufacturing organisation?

• Ensure you have an organisation aligned to delivering your business objectives and that this alignment is applied and understood by all – from board room to shop floor.

• Your business objectives must be aligned to your customer both in terms of the products/services you offer and how you maximise your long term profit in order to provide benefit to the customer and society for years to come. Remember your objectives should not be static but need to change as the market/customer decrees and to meet legislative requirements. Ensure you review and modify regularly at all levels.

• It is these business objectives that must dictate your change programme, not the other way around. This ensures that your change programme will drive your business towards meeting the needs of your customer and deliver a profitable sustainable business.

• Your change programme must consider all business elements, not just one facet, and must be aligned to specific business metrics to enable real time monitoring. Metrics may also need to change: don’t just continue to do what you have always done or you will get what you currently have and this may not be what the customer wants now.

• In your change programme, use the Lean “value stream mapping” tool to understand your organisation’s current state. Make sure it contains energy usage and waste outputs throughout the value stream. Use this tool to understand & measure the “true cost of poor quality” and the “true cost of your waste streams” to your business.

• Use “future state mapping” techniques to define where your organisation needs to be, defining the steps, measures and timescales to get there. Review regularly at all levels and face up to the many roadblocks that your organisation needs to resolve in order to make the change process successful.

• Develop your change programme with multi-function teams to ensure that all areas are considered and incorporated at the same time. But don’t change everything at once, prioritise your work according to resources and ability to manage change and debrief regularly at all levels. By doing this you will be able to develop Lean Green processes and systems aligned to your customer, backed by your people.

Lean is not a magic bullet or a conjuring trick, it requires disciplined work using data collected on the shop floor and not by using data generated by people who do not do the work. This can be applied to any size or type of organisation; it’s all about committing to change.

Paul Albone has experience of practical lean business implementation within manufacturing as well as in engineering product design, design for assembly and production system development.

Environmental Lean Solutions (ELS) is a sustainable business consultancy.