Dermot Freeman & Associates.

Topic:

Lean is Green

Submission:

Lean is Green

(How to use your Lean program to reduce energy usage, waste creation and ultimately costs while enhancing your Green Reputation)

For the last 30+ years, general manufacturing has been involved in continuous improvement in one format or another. In recent years, Lean is now being applied in the service, knowledge, financial and backroom support sectors. Any and all elements of businesses are being reviewed for waste and excess cost. This is also starting to apply to energy and the Green aspects as long as it does not required capital. In most decision makers minds, investing in Green initiatives is still not seen as being value for money. It’s not “sexy” enough!

However, some multinationals are driving the Green agenda with the Corporate Social Responsibility objectives within their strategies and by using the significant purchasing power as a lever, they are forcing many of their suppliers to become Greener. Up until now, most SME enterprises have viewed the Green agenda as being an additional cost and so it has been left to the larger companies to pursue.

A Fundamental of Lean is the elimination of waste, in all of its forms. What if by doing this, you can also become Green. With every initiative, simply ask the question “Is this a good Green idea?” It needs to become a standard question. Simple initiatives can reap significant benefits.

• How can you make your product or its packaging more environmentally friendly. It is often the case that the customer does not require expensive packaging. Ask your customer “What do they want, are they prepared to help being Green?”
• Waste disposal is becoming a significant cost for some organizations and this can be addressed through the 3Rs – reduce, reuse & recycling, with recycling being the last resort as often it is dearer to recycle that it is to dump.
• Look to minimize both raw material stock and finished goods inventory. Aside from being a good financial idea, it reduces the amount of disposal that is required when it becomes obsolete.
• Reduction in the use of compressed air – the most expensive source of power.
• The use of BMS systems or protocols.
• Look to install intelligent lighting control systems in every new building initiative to ensure that they are not left on when vacant.

Investment in Green initiatives are often put on the back burner. This can be due to the fact that the payback is longer (typically 2 to 7 years) or whatever investment euros that are available are prioritized for business expansion. Most manufacturing entities fall into the general classification of 50% of their cost being materials, 25% being labour and 25% being overhead. Most costs associated with Green initiatives fall into the overhead classification and as a result, unless there is a significant overhead, for example power, the overhead element of the cost structure has been largely overlooked. However, for some companies significant savings have been made on the back of Green investments.

• Use of alternative heating (wood chip, geothermal, biomass)
• Where there is a constant energy requirement, use of wind turbines or CHP
• Heat recovery from waste streams, particularly compressor rooms
• Waste water treatment using Reverse Osmosis, reed beds & willow plantations
• Securing ISO14001, ISO5001 or even ISO2600(CSR)

We need to make investing in Green initiatives a real option for SMEs. This can be achieved through availability of cheap funding or tax incentives or other financial benefits that will allow the longer payback time to be shortened. The Enterprise Ireland’s GreenStart & GreenPlus Initiatives do give support but not enough companies are taking up the opportunity. We need to make Green “Sexy” and the best way to do that is for it to save money.