Driving waste to the bottom line

LAST week I travelled to the airport from my home in the suburbs of Melbourne on a SkyBus rather than taking my car.

LAST week I travelled to the airport from my home in the suburbs of Melbourne on a SkyBus rather than taking my car.

“It’s a greener way to travel,” touts SkyBus. “We help you lower your carbon footprint, and we plant 100,000 trees per year to offset our emissions.”

Clearly SkyBus understands that its customers are largely environmentally conscious and is responding to their demands.

Environmental stewardship and sustainability is now a hot topic across all manufacturing sectors. How a product or service gets to market is becoming as important as its cost performance.

How we live, get around, eat, and generally consume is increasingly becoming part of how we define ourselves. Avoiding waste is not only good for the soul and the environment, it’s also good for the bottom line. Never has there been a better time than now to get rid of the costs you don’t want in your business.

Taking a cynical view and deciding to simply play to public perception is one way of addressing this responsibility–but consider too that making your company environmentally conscious is good business practice and absolutely meshes with a lean and sustainable philosophy.

But before we are able to eliminate or reduce waste we need to be able to see it. That might sound a little odd, but in my experience organisations have become so accustomed to working and living with waste that it’s now just part of “how we do business”.

Eliminating waste

The key to eliminating waste is to be able to identify it.

Waste can be defined as something that does not add value to a product or service, and it materialises in one or more of seven forms:

rework;

over-production;

transportation;

waiting;

excess inventory;

unnecessary or excess motion (human ergonomics); and

over-processing.

These seven wastes are traditionally applied to manufacturing processes, but they can also be viewed from an environmentally conscious standpoint.

Let’s focus on over processing, which is putting more effort into a product or service than the customer is willing to pay for.

Electricity, water, wastewater, waste removal, and raw materials are a large part of business operating expenses.

Using more than you need – for whatever reason – is a form of over processing and adds significantly to the cost of doing business, not to mention the cost to the environment.

Looking for ways to reduce such over processing can save your business money as well as help save the environment.

Take for example, a manufacturer of ceramic plumbing fixtures. Ceramics manufacturing requires vast amounts of water that eventually must enter wastewater treatment facilities.

If you generate wastewater that needs to be treated before being returned to the public water system, you have to pay for the water at the point of use and then pay for the facilities, chemicals and processes, and personnel to do the treating.

Finding ways to reduce your use of water and to reuse it when possible not only cuts costs for your business but also frees water for use by other consumers, thereby cutting overall demand for water from all sources.

Although some resource losses can’t be entirely avoided, if you can find ways to reduce the amount of waste and increase conservation, you will realise significant savings and be viewed as a good corporate citizen by your customers.

Examples of waste abound in manufacturing – waste that costs money and has an adverse effect on the environment.

Consider energy use as an example. In these times of high energy costs and dwindling finite resources, you can gain energy savings of 10-15% by standardising operating procedures and taking a proactive approach to factory maintenance.

Typically, for every 100 units of energy used, fewer than 10 units become useful. A single compressed-air leak can cost about $12,000 a year in wasted energy.

Likewise, a failed trap on a 6mm steam line can cost approximately $1,200.

Additionally, motors use 60% of all industrial electricity. A 20% saving on energy can be gained through motor management – motor and starter maintenance. Additional savings can be realised through drive or belt alignment. And all that monetary savings also translate into a lowered environmental impact.

So when you look at your business through a lean lens, keep the “Three Rs” of conservation in mind – reduce, reuse, recycle. Make it a part of your organisational culture.

Creativity and innovation can be put to good use in addressing these issues. Doing so will provide a dual benefit – you will save money and you will be doing your part to help the environment. When manufacturers go green, everyone wins.

*Carl Deeley is Managing Director of the TBM Consulting Group.