LOOKING at supply chain management from the perspective of ‘lean manufacturing’ can provide important benefits for company performance as well as the environment, according to Professor Peter Hines, a UK-based specialist and consultant in the field who recently conducted a series of workshops in Sydney and Melbourne.
“A large part of lean processes is about the best use of resources and inputs,” Hines told Manufacturers’ Monthly.
“So it is really only a short step to incorporate thinking about sustainability issues as well.
“Overall, I would say that about 90% of lean processes are good for the environment.”
Hines is Professor of Supply Chain Management at the Cardiff Business School in the UK, and is Director of the Lean Enterprise Research Centre at the CBS. He was in Australia as a guest of InteLog.
A key aspect of linking lean processes to environmental sustainability is to consider the supply chain as a whole, according to Hines.
He nominates transport as an area where positive changes can often be made, both to reduce fuel costs and greenhouse gas emissions. In the UK, he says, retail giant Tesco recorded cost reductions of 30% by redesigning its transport and delivery systems.
In Australia, Hines points to the case of food canner Golden Circle as an illustration of problems and solutions in the area.
“When we looked at the total production cycle, we saw that there were a series of issues going right down to the farmer level,” he said.
“Pineapples producers were using a great deal of irrigation water and nitrate-based fertilisers to create the largest possible pineapples. That made sense for them, since they were paid by the tonne and without regard to the taste of the product.
“The problem was that large pineapples weren’t the best for Golden Circle, which actually wanted smaller, sweeter pineapples.
“In fact, Golden Circle was having to import special steel to deal with the acidity of the pineapples they were receiving, and were having to add sugar as well.
“After a series of meetings, the farmers agreed to re-design their processes, and Golden Circle agreed to change its payment methods.
“It meant that Golden Circle got the product it needed, and farmers did not have to use such a weight of inputs. Identifying the right processes and setting up the right incentives meant that everyone won — and so did the environment, in the savings of water and the reduced use of fertiliser.”
Hines believes that the past year has seen a shift in attitudes in Australia. While Australian manufacturers have long been interested in lean processes as a means to improve performance, they are now seeing that environmental issues are also important.
“In the UK, we have seen many companies starting to advertise their environmental credentials as well as their products and prices,” he said.
“I expect that will start to happen in Australia as well. There is a dividend in terms of reputation.
“The public are starting to expect companies to consider the environment in their business decisions.”