Reaping the Green Rewards

Manufacturing sustainability means good business as well as good citizenship, reports Colin Chinery. But is the message getting through?

Sustainability – triple bottom line of economic profitability, respect for the environment, and social responsibility – may be the buzzword of corporate annual reports, but many UK manufacturers are sidelining implementation and
missing out on its benefits. So concludes a study by Arup and Warwick University. And the chief reason, says Dr Kerry Mashford, Arup’s head of sustainable manufacturing and construction, is a basic misunderstanding of the principles: “The majority perceives sustainability to be synonymous simply with climate change.” The reality, says Dr Mashford, is taking issues like climate change, environmental protection and recycling, and turning them into business opportunities that differentiate companies from their competitors: “The firms that are doing this are seeing real benefits.”

And in a call for manufacturers to make a commitment to sustainability, David Wright, chief executive of MAS West Midlands, says “many only see it as an additional cost – this is simply not the case.”

The Saint-Gobain Glass (SGG) plant at Eggborough, east Yorkshire,
is a role model for the Wright/Mashford argument. Opened at the start of the decade and with a 200 payroll, it has a notably strong performance in the areas of waste reduction, minimisation of C02 emissions, and use of recycled glass in the manufacturing process – in which it is sector leader. SGGUK came eighth in
this year’s Sunday Times 50 Best Green Companies list, also winning the Sunday Times national award for training and motivation of staff on environmental issues.

Green laurels indeed, but says site director Dr Alan McLenaghan, sustainability is largely a matter of good business: “If you do it because you want to be green
you won’t do it for long. You are doing it for the wrong reasons. If you are doing it because it makes some sense for your business, you’ll keep doing it.

“We reduce waste because it makes sense for our business; we use other people’s broken glass because it makes sense for our business, and we produce products which save energy or water or air conditioning – we can go on and on – because that’s what people want. And that’s good for business.”

The company uses five times more recycled glass in its manufacturing than any competitor. Every tonne of recycled glass heated in the furnaces saves 1.2 tonnes
of raw material being quarried. The firm uses 3,000 tonnes of waste glass every month. An environmentally enthusiastic workforce also helped reduce waste from
7,000 tonnes in 2001 to 1,500 tonnes in 2008.

Other key achievements include a reduction of waste sent to landfill of 75 per cent in just six years, a 12 per cent increase in the amount of waste recycled in the last 12 months alone and the lowest C02 emissions of any flat glass plant in Europe. In addition, SGGUK makes 28 per cent of its product from recycled cullet
(glass) – more than any other glass producer.

The industry has an excellent record in the recycling of container glass; not so flat glass. But in 2001 Eggborough took a lead, pioneering a system of picking
up broken glass from the customer and returning it to base using modified, back-loading vehicles. As a result, customers who were paying for land filling can
now dispose free of charge.

“We’ve reached the point where any glass you buy from SGGUK now contains 30 per cent recycled glass.” And the Saint-Gobain example is catching; many customers are now bringing back recyclable material from their customers.

“When old windows are removed they mostly go to landfill. But the forward-thinking guys will take them back to their depot, sell the glass back to SG, the aluminium to the aluminium supplier, and begin to generate revenue from the waste,” says McLenaghan. “As a result, many customers have moved from something that was costing them £30 a tonne, to something giving them £30 a tonne.”

In addition, SGGUK customers are provided with simple rules and guidelines on how to keep the glass free from metals and ceramics, while at Eggborough,
sorting mechanisms and metal detection systems were developed to remove even the minutest contaminant.

“We make glass, but we are now making money out of our waste stream.”
Mike Jones, MD of British Gypsum, winner this year of two major construction sector sustainability awards, says Britain’s leading supplier of plaster, plasterboard and dry lining systems takes a holistic approach to waste.

“We use our expertise to design systems that reduce the amount of waste generated, taking the onus of managing any waste that is produced off the shoulders of the client.

“Our approach not only reduces cost for the client and provides data to support their ongoing waste reduction programme, it provides spin-off benefits including
improved site safety, reduced landfill, and preservation of natural resources, as we are now feeding up to 18 per cent recycled material back into our production processes.”

Ford’s Dagenham Diesel Centre (DDC) has been a leader in green manufacturing since it was built in 2004, last year winning a national excellence award singling out its comprehensive environmental efforts, including reducing CO2 emissions through wind energy, facility energy efficient improvements, reducing waste and using green materials, and a fuel efficient product line-up.

DDC is powered totally by renewable energy, using two onsite wind turbines producing seven million kWh of power. “As a result Dagenham avoids approximately 3,000 metric tonnes of CO2 a year,” says Andy Taylor,
director of sustainability, Ford Europe.

“Next year we are adding a third wind turbine to remain 100 per cent wind powered following the installation of a new 1.4/1.6-litre Duratorq TDCi engine line. This third turbine has the capacity to produce 3.5 million kWh of green electricity – the equivalent of powering 1,000 homes.” Parallel with this, gas and electricity bills have been cut by 12 per cent through energy efficiency actions such as optimising energy-intensive operations.

Dagenham has also prevented more than 12,600 metric tonnes of waste being sent to landfills for disposal, via waste reduction and increased recycling. Metal
filings and other waste from the machining process for example, are squeezed dry of lubricants and sold as briquettes for recycling.

The plant’s manufacturing processes use green materials, green vegetable oil for metal working and other fluid actions for example, reducing the use of oil
and other lubricants. In addition, coolant consumption has been cut from 350,000 litres in 2003 to 204,000 litres last year.

And sustainability is taking to the roads – and making some unlikely partners – with grocery think tank IGD’s online toolkit to help manufacturers.

The sustainable distribution toolkit includes a guide to consolidated distribution and a savings calculator – an interactive tool which can be used to reduce road miles individually or by assessing the viability of shared transport resources. The aim is to reduce the environmental impact of transporting food and groceries in Britain by taking 900 lorries off our roads – equivalent to 53 million miles.

Other functions include a transport collaboration guide and a sustainable transport roadmap designed to help food manufacturers identify potential partners in their area. “Through ECR, Nestlé was able to identify that United Biscuits was running empty trucks from close to Nestlé’s factories in the north to the Midlands,” says G D president and Nestlé UK CEO, Alastair Sykes. “If you had said to us in the beginning that we would be sharing the same delivery vans as our direct competitor, I would have laughed.”

Now United Biscuits trucks collect product consignments each day from Nestlé’s factories in York and Halifax, delivering them to the Midlands while, says Sykes, “generating significant environmental and cost savings.”

Previously Nestlé UK would deliver over 15 loads a day from its factories to its distribution centre, but with 20 per cent untied to a return journey, two or three
trucks would return empty. Yet among many companies there’s a perception that
sustainability doesn’t make business sense, says EEF environmental advisor Vanessa Fandrich.

“On cost reasons, for companies to get involved, there has to be a business case. This is often a perception issue, and here we find an information-knowledge
market failure with companies not always taking full account of their environment and costs. This is because they do not know to measure – and if you don’t measure these issues you can’t manage them.”

In measuring environment and costs, companies can obviously look at their energy bill and their waste disposal costs, says Fandrich. “But this will not take account of many aspects of what might be called the hidden environment – items such as materials, processes, the labour costs of re-working, energy used when not needed and machinery not working efficiently.

“Companies that have identified the need to measure more closely what’s going in and out of their processes have identified the most cost saving opportunities.”

And cost saving is a core issue, with the landfill tax for example, increasing waste disposal charges very significantly over the last two years, and energy prices a major issue.

But measuring must be operation specific – “not just the energy costs of a factory but rather of each separate process. This should lead very quickly to the
identification of opportunities,” says Fandrich.

“An energy survey for example might reveal 20 per cent unaccounted for. And it’s not just about reducing your own impacts, but also developing products and
services to aid other businesses and consumers to make a transition. We very much see a market for more efficient products.”

Nor does resource efficiency stop at the factory gate. “It’s also about looking up and down your supply chain and working with your customers. We are seeing
more and larger companies in particular using their procurement process to drive innovation through their supply chain.”

She agrees that much of sustainability is about business improvement, with the environmental benefits as a consequence. “A lot of companies will implement very specific environmental programmes. You might not do it with a ‘green’ mind, but there are a lot of simple business improvement processes
that will have environmental benefits.”

Lancashire furniture maker HJ Berry of Chipping, near Preston, makes high quality tables and chairs for the UK’s commercial and retail sector – 1,500 pieces a week.

Since 2005 it has been working with MAS North West, resulting in dramatic improvements in productivity and reduction in waste. But the collaboration has also included a continuing programme to find environmentally friendly alternatives for all processing and cleaning, lubrication, packing and communication materials, as well as separating out waste into renewable, recyclable, compostable and burnable materials.

Wood shavings, chippings and sawdust and other waste wood provide all heating and hot water for the factory, its drying kilns and drying tunnels. As a result,
heat is generated from the current carbon cycle rather than from the burning of fossil fuels. Electricity is also sourced from renewable sources.

More than 95 per cent of the temperate hardwood used in production is sourced from the UK’s managed woodlands. And for every four chairs that are bought,
the company plants a tree. “We believe all human activity should be in harmony and sympathy with nature. Our goal is to be an ecologically sustainable, environmentally beneficial and non-polluting business,” says chairman, Andrew Berry.

MAS activity across every region has broadened beyond shopfloor lean towards a greater understanding of what David Wright calls “Manufacturing with a Big
M” rather than just the production process. “Many of these technological improvements we’ve been able to help people access and realise contribute to the sustainability agenda.”

Wright cites an example from the ceramics industry. “Two years ago we helped a company whose main reason for inviting us was an ongoing quality problem. It turned out that the root cause was poor control of the kiln through the firing process. And in solving the process problem the company noticed a massive
improvement in its energy costs.

“Now, at the time the value added impact on the company would have ticked against the quality box, not necessarily as a sustainability project. But sustainability isn’t something to be done ‘instead of’, it’s something that comes as a consequence of and complementary to other business improvement activities.”

Virginia Seaward, head of operations at Boss Design of Dudley, a market leader in the UK seating industry and a major player on the international scene, agrees.
Sustainable Manufacturing award winner at this year’s The Manufacturer Awards, Boss Design uses environmental monitoring and measuring as an indicator on business success alongside KPIs and financial indicators.

“Our journey into sustainability and environmental issues was never viewed as a tick in the box, and often that can be where others get it wrong.”

Seaward distances herself from the view that an environmental ‘feel good’ factor is a lesser driver than the knowledge that sustainability can lower costs, increase competitive edge, and increase profits and market share.

“My opinion is that the feel good factor is an important driver to the workforce. The intention to increase profits should not be the driver for applying a robust
sustainability plan, but an active plan to lead in the market place and gain market share, if done with responsibility and dignity, is in my opinion acceptable.”
SGGUK’s Alan McLenaghan demurs. “My number one point to manufacturers who are not taking sustainability seriously would be that they are not managing their business properly – and I don’t mean the carbon footprint.

“If I’m honest I’m not interested in carbon footprints and CO2
emissions and so on. I am very interested in the environment, but I don’t
think that’s the way to go about it. We’ve reduced CO2 emissions by 40 per cent at this plant, but this is because we’ve been recycling cullet, and we’ve been recycling cullet because it makes good business sense, not because we’ve sat
down and said, how do we reduce our emissions by 40 per cent?”

McLenaghan has some sympathy for manufacturers seemingly resistant to the challenges and opportunities of sustainability. “There are times when there’s enough on managing on a week-to-week basis without worrying about what might seem issues for the future. And when you put them in priority I can understand that they don’t stack up that well.

“But this is probably because they are looking at sustainability as a necessary evil that has to be solved here and now. Instead they should be looking at it to
see if there is a way to make it cost neutral or cost positive. And if so they should be doing it.”

He recalls outlining SGGUK’s return of broken glass concept to a customer losing £100,000 a month, pointing out it would put £6,000 of SG money in to his business, with a total saving of £8,000 to £10,000.

“He told me, ‘look I’m losing £100,000 a month and a £10,000 solution isn’t what I need.’ I remember thinking; if you are waiting for one £100,000 solution you will be dead in months. You need to find 10 of these little £10,000 ones, and I’ve just given you one on a plate and I can’t believe you are ignoring it.”