Beyond Lean towards Green

HISTORY has a tendency of repeating itself, so faced with the need to reduce their carbon footprints, the question for local manufacturers is what can they learn from past improvement initiatives to meet current and future environmental demands?

HISTORY has a tendency of repeating itself, so faced with the need to reduce their carbon footprints, the question for local manufacturers is what can they learn from past improvement initiatives to meet current and future environmental demands?

In the 1980s the focus of many improvement programs was on ‘Just-In-Time’ (JIT) and the emphasis was on the reduction of inventory. It has taken several reincarnations of improvement programs since for organisations to focus on maximising flow by eliminating waste – in a word, ‘Lean’. A reduction in inventory has been an outcome achieved by most Lean organisations.

A key learning from lean enterprises more recently has been the need to focus on the systems and processes, not just the future desired state.

Thirty years on from the JIT era, history is repeating, but instead of focussing primarily on throughput and productivity to reduce inventory, Lean principles are the foundation, and the focus is on the environmental impact of manufacturing organisations.

In 2007, four process improvement teams from Melbourne-based manufacturing operations, including Davey Water Products, came together to participate in a pilot Lean to Green MasterClass.

From four different industry sectors, each recognised as exemplar ‘Lean’ organisations, process improvement teams met for one day every three weeks over a nine month period. Each organisation developed a triple bottom line deployment plan, established key consumption measures, and implemented a range of initiatives to involve teams in reducing consumption of water, carbon footprint and waste to landfill.

Davey had been ‘doing’ Lean for some time and said it was really easy to transform into Green.

Simon Arnold, continuous improvement manager with Davey said when the Lean to Green strategy was announced 35 people volunteered to participate in a team.

“Some of our main achievements have been to reduce landfill by more than 80% and to increase the awareness of all of our people on the future of our environment,” Arnold said.

Most manufacturers are now under pressure to reduce their carbon footprint – similar to previous pressures to reduce inventory.

A more considered approach is to focus improvement efforts on the systems and processes to better understand consumption of each and every step in the value-adding process: consumption of energy, fuel and water, as well as raw materials, packaging and other consumables.

With Lean as a foundation, and by understanding how each of the seven wastes translate into consumption wastes, process improvers have adapted their Lean tool-kit to achieve fantastic results. The following are an amalgam of the four companies that participated in the program:

reduction in waste to landfill by up to 80%;

reduction in consumption of materials and toxic chemicals by up to 25%;

reduction in transport costs by up to 15%;

savings (and donations) of millions of litres water; and

reduction in energy and carbon footprint per unit by up to 35%.

The reduction in consumption of key resources has ultimately resulted in a reduction in their carbon footprint.

Manufacturing organisations need to focus less on reducing their Carbon Footprint, and more on reducing consumption of all resources.

Following the JIT era was the Quality ‘revolution’. Many organisations refocussed their improvement efforts to implement an ISO9000 Quality Management System in the belief that a formally documented system would improve the quality of their products and services.

Some organisations successfully used this approach to better understand and streamline the capability of their processes, and ultimately build a better business, while others simply overlaid a bureaucratic system. Either way, the legacy of these systems still remain today.

Organisations are faced with the same challenges and options today implementing ISO 14000. The leadership team of some organisations will use the development of an environmental management system as the catalyst for change and adopting best practice, others will focus on simply meeting compliance and minimising bad practice.

With quality and production mangers already integrated within operations, the challenge is now to do the same with those responsible for resource management.

The leadership, the discipline and the organisational development skills to implement Green initiatives are no different to Lean ones. Matt Nettleton, CI Manager Corex Plastics says the company is getting much more traction with his people: “By doing Green, we are becoming Lean”.

About the same time that organisations wrestled with implementing JIT, Philip Crosby published a book in 1979 titled ‘Quality is Free’. It was a key ‘how-to’ reference for the quality revolution that outlined a change in leadership mindset. By improving process capability and developing a culture of ‘quality’, an operation could translate ‘quality’ into a better business. Quality was not an additional cost of manufacture, it in fact translated into significant cost reductions.

If we limit the definition of sustainability to ‘reducing consumption’ – the same might be said thirty years on, but instead of ‘Quality is Free’ – ‘Sustainability is Free’.

An organisation shouldn’t focus on outcomes alone, nor should it rely on a certified management system. A change in leadership mind-set is required to ensure that sustainability is a pathway to making the business a better business.

By staying focussed on reducing consumption, sustainability will not only help guide the business through the short to mid term financial crisis, but place the organisation in a strong position for when the global warming issue returns to the top of the agenda.

* Ian Young is a Director of Insights to Excellence a Melbourne-based ‘not-for-profit ‘organisation established to foster and promote an awareness of manufacturing excellence and best practice, 03 9372 3033, www.i2e.org.au.