In this podcast, I gave this presentation at the AME Annual Conference in Dallas in October 2016 called “Integrating Sustainability Into Your Lean Six Sigma Program Initiative”
I discuss adding green into improvement initiatives, how to communicate sustainability to existing improvement personnel, how existing tools can be modified to consider environmental impacts, how organizations and resources available to help with the integration, and I was hoping to motivate the attendees to continue with process improvements and try to incorporate “green” and the environment in those efforts.
Joe Rizzo (J): Please help me welcome Brion.
Brion (B): I’ve got some handouts to give. It looks like we’ve got enough – about fifty or so. If you want to take a look at some of the key slides that I’ll be going over, plus a couple of handouts that I mention. If you don’t get a copy, just let me know and I can email it to you as well.
Thanks for coming. I wanted to start off just getting familiar with you guys’s background and where your company’s at, so I can get a raise of hands on the questions that pertain to you. The first one is do you have a sustainability department or do you know somebody in your organization that has the responsibility to work on sustainability? does anyone have a program? A couple of you, okay. How about do you have your ES&H group or a facilities group in your improvement events and do you invite them to those? Okay, good. Does your ES&H facility group have their own process improvement events? Half of you, okay. All right. Have you had any dedicated projects or events around energy reduction, trash, water, or toxins, typically, focused on that? Okay, good. Do you know how much you’re spending on electricity, solid waste, water? do you know about what the cost is at your facility? Okay, that’s good. Some other groups I’ve talked to, very few hands go up on a lot of these questions, so that tells me just a little bit.
What we’re going to talk through today is how does your Lean Six Sigma, how can it help with environmental sustainability. We’ll do a little bit of education, a little bit of experiences that I’ve had at my company, and then at the end here, we’ll wrap up with some resources and open up for questions.
Most of you are probably familiar or have seen this diagram before about sustainability, but sometimes there’s confusion about what sustainability is. It is how we maintain things in the long run, but from a business standpoint, we want to look at how can the company survive in the long run. Whether it’s seven generations into the future or whether it’s 1500 years into the future, it’s really trying to get companies to look at those long term views of their company and how can they do business that’s going to keep them around for a long time and so to look at the three areas and not only just make decisions about profit but look at how does it impact people and how does it impact the plant and how do we make decisions that try and incorporate all the ideas and impacts of those into our decision-making.
I’m going to spend a lot of the time talking about the environmental part or the planet side of this, but there’s a whole other aspect around people and social. I think a lot of your initiatives do a pretty good job of bringing employee engagement into the picture, getting your companies out into the communities and donating time and volunteering, and so that’s a whole other aspect that I’m not going to deep dive into today.
For example, when we talk about triple bottom line, which is another phrase that’s used, transportation – getting to the conference. We all had different options of getting here and maybe it’s transportation to actually get to Dallas, or if you were in the Dallas area, how did you get to this conference today. Did you stay in this hotel and so there’s basically zero transportation involved; you just walked down from your room. Or do you stay outside of Dallas somewhere and you drove your car in and parked it in the parking garage or did you got an Uber here or did you take mass transit and take the train in? all those have different cost models, they also have impact on the people, the workers in the companies supported – you’re supporting Uber, you’re supporting mass transit and the group that runs that. Maybe you biked in, so what kind of bike service did you use? did you bring your own bike? did you rent one? who are the people that are providing the services to you and how does that factor into your decision-making? are those the type of companies you want to support? and then what kind of impact on carbon and impact on the environment does your decision have? those are all of the things that you want to consider.
Despite the many different things to think about, in a perfect world, all of that would be wrapped up into the price. If they were using unfair labor practices, then, hopefully, their prices would be higher. If they were polluting with their products and services, hopefully, their product would be more expensive. But if you look around a little bit, that’s not how things are set up right now. Our economic models don’t reflect that directly, so sometimes the cheaper option is more damaging on the people and planet side. Until they get to a point where that starts to balance out, we can still justify some financial reasons to be more sustainable.
This is a calculator tool that Bob Willard put together and I highly recommend that you use this. What we did is went through and plugged in some numbers at our company, put in how much sales did we have, what’s the average employee salary, how much did we spend on materials costs, I think it was looking at profit margins, stuff like that. You plug in some really high deep level numbers that mostly you can get out of your financial statements and what it does is breaks up and looks at here are the opportunities. Based on what other companies have done, here’s the type of financial benefits you can get by becoming more sustainable in these seven different categories.
The first one would be increased revenue, which would be I provide a product or service that wasn’t available. I’m bringing in a new customer base or I’m offering them a different option that they like. Maybe it’s even a little bit more expensive and so there might be additional revenue that can be generated from that. The next three here have to do with focus efforts around reducing the impact of those areas – energy, water, material costs, moving from raw materials into more recycled materials, or minimizing raw materials needed, and solid waste and hazardous waste expenses. Focused efforts around those, which a lot of people have already done, continue to bring those costs down. That could be a positive thing to the bottom line. There’s also increased employee productivity that is a result of the improvements and getting people engaged. As people look at their company that they work for and see that they’re doing the right things, there’s productivity gains right there that says I’m working at a company that cares about the environment; they don’t care about just making money and there’s some natural productivity that comes with that.
There’s also reduction in employee attrition expenses. When you lose somebody who leaves and says I’m going to go work somewhere else that I feel more passionate about what their mission is or what they’re trying to do for the community, then you have to backfill in the short term. Everybody else takes up the slack for the missing time, then they’ve got to post the job, they’ve got to interview some people, they have to go through a lot of extra expenses, and then onboard that person, and then the people that were filling in have to probably train them up, and so there’s huge productivity loss and expenses of getting more people. If you can increase productivity and make employees happy to work there, they’re less likely to leave and you have less attrition costs.
And then, finally, looking at risks. If you’re doing the right things, you’re less likely going to run into problems from a legal issue or a regulatory perspective. The more you’re getting ahead of it and looking at these things, then even if something does go wrong, you can say, “Look, we were trying to work on these things.” You’re going to come off in a much better light than if it’s something we just ignored that or we were covering up something or we weren’t even paying attention to that. You’re setting yourselves up in a much better situation if something did go wrong.
On the website, there’s a little tool that would go in there. When we did this, it was in the millions of dollars of opportunity when you roll all of those numbers. That’s some of the information I’ve been pouring onto our investment relations group and our finance group and saying, “Hey, I think this is something. Even if it’s a fraction of the millions of dollars. This is something we need to look at pretty seriously.” That in itself can justify some of your programs.
We’re going to start looking at how do we start with Lean and see how it touches the green side of things. Here is a picture in our factory. As you can see, there are a lot of pushcarts around there and it’s messy and it’s cluttered. It allowed us to have excess inventory and it looked like it was important stuff but it was just a place to store things. It basically hid problems, and of course, we know that that’s not a good thing, and it took up floor space. That was an area we first looked at in this area and said how do we deal with these carts and what do we do?
we went through and did some 5S, added some floor markings. It turns out we actually had to replace those carts, we’re going to go through more ESD friendly carts. There was an order that they had done for 54 replacement carts and that’s how many were in the cell, which is a lot. After the event and when we started actually looking at how many needed to actually be here, it was actually down to 30, which is still a lot of carts but we’re working our way down to a smaller number. But that in itself – the reduction of 24 carts – was about $10,000. That wasn’t really the goal going into it, but when we started to capture the environmental impact of that, which would be if you’re preventing the purchase or the manufacturing of a product, for each 1 pound that you save, it’s actually 19 pounds upstream when you look at the starting raw material level. By the time you cut and process everything down and all the waste in that process, you end up getting 1 pound out of the 19. When you look at that perspective, preventing the purchase of something is actually a very big environmental impact and having to get cost savings done. So one thing is just capture some of the environmental benefits that you’re already getting or start to look for those opportunities when you’re doing your improvement.
The EPA came out with a table in one of the guidebooks that I’ll reference in the back here, it’s called The Environmental Professional’s Guide to Lean and Six Sigma and they show that when you look at the different types of waste, these all come with an environmental impact as well. For example, if we overproduce, then we’ve got extra products that will spoil or maybe become obsolete and we’ve got to dispose of them or dealing with them in some way. If we have inventory, we have to heat, cool, and light that area and that’s space that we’re paying rent on so that’s an impact. If we can reduce those problems and reduce the inventory, maybe we don’t need that much space, maybe we can rent out that space to someone else, maybe we can downsize the area we have or maybe we can put in more products or more services or bring in more people into that space without getting a new space.
Transportation, obviously, there’s fuel that goes along with transportation. Usually, when I move something, I have to package it up. I put it in a box or I wrap it up in bubble wrap or I tape it up and that’s labor and then someone on the other side has to unpack it and there’s more labor there. Defects, of course, then I’ve got to deal with the defects, I’ve got to try to just wrap up parts or I have to throw away something, that’s going into my solid waste costs and there’s processing and paperwork that goes along with those as well. And then waiting, if I’ve got things that are sitting on a shelf or I’m waiting for something to process while all the equipment is still running, the lights are still on, and the things that are sitting there are more likely to get damaged, knocked over, or they might become outdated or spoiled depending on what your products are.
Every time you see the Lean waste, think about the environmental waste that goes along with that. It helps not only to help you identify the full picture of the waste, but it can also help justify some of the business case around the improvement and say not only will it address our flow issues and our quality issues, but it actually reduces some of our trucking costs and some of our solid waste costs and that can help push the project forward and get funded or help with the return on investment on certain improvements.
The other thing I want to look a question that comes up is we need electricity and we need the lights, these are important parts of our business. That’s true and so how do we separate out value-added uses of energy and materials from non-value added? let’s start with a focus on the non-value added first because that’s going to be easier to address. Yes, I needed electricity to put parts on a board or to run that piece of equipment, but do I needed to stay and work overtime because of a problem where I’ve got to keep the lights on and work late or come in on the weekend to deal with a problem that happened? Do I need that energy to keep a projector running in a conference room because I walked out and no one turned it off, or cool area that nobody’s using that’s just sitting idle and nobody’s working in that area? those are the areas you would start with and say how do I get rid of the non-value added applications. Then I can start looking at maybe I can green up the sources of energy where I do have value and I want to just come up with more renewable energy options or a greener source of electricity. Obviously, stuff like lighting up a parking lot at night to make it more safe, that’s a value-added reason to use electricity. Your customer doesn’t want to pay for non-value added waste, so this is a good place to start to attack some of these non-value add opportunities. You can find those through gemba walks, and I’ll talk about that.
Another thing I want to introduce is the Waste Pyramid. How many of you have a pretty good recycling program at work? Most of you, okay. And so a lot of companies say we’re doing recycling and so we’re doing pretty good, but if you look at this pyramid of it’s really kind of a decision-making pyramid of where does recycling fall, it’s actually towards the bottom of the list. And so the first question is really refusal and saying do I actually need this in the first place? let’s take a look at water bottles, for example. The first question is do I need a water bottle and you say, well, yeah. I’m on the go and I don’t have any other thing to put it in, so yeah, I need it for this opportunity. Maybe in the future, I’m going to bring my own water bottle container or maybe there’s a drinking fountain I can use to basically quench my thirst, and that’s the real goal. So the first question is can I refuse the water bottle in the first place, the reduce part would be can I cut down the size of the water bottle that I need. Maybe there’s a big liter size but I only need the 12-ounce size, so if I can choose a smaller size, that’s less material that went into that processing. So I’m still going to use a water bottle but just not as much material. Or maybe I select an option to have recycled plastic instead of virgin plastic, so that would be an example of reduce.
Reuse would be I’m going to use the water bottle, but I’m going to use it many times throughout the day and maybe the next day or two, so I’m going to get a lot of extra use out of it than what it was intended for. And so I still use the water bottle, but I’m now getting more life out of it, so that would be an example of reuse. And then recycle would be, okay, I’m done with it. Now I’m going to take it somewhere where it’s get recycled into some other product to get reused somehow that way.
There’s also another one called recover, which has to do with burning or incinerating the water bottle and taking the energy that’s stored in the bottle and using that for heat, which would then power a turbine and generate electricity from it. There’s actually facilities that are set up for that for incineration. And then if none of these other options are available, then you can look at dispose where, actually, it’s going into the landfill. I just wanted to highlight that there’s some other decisions up front ahead of recycling. You’re also going to start to hear more about zero waste.
Does anyone have a zero waste facility or is working towards zero waste? You guys are? Okay, good. I think you’re going to hear more and more of that coming through and facilities are going to start looking at that and saying we want to achieve that level. Usually, it’s about 90% or more of your waste gets recycled or you can capture some of the reuse and reduction activities you’ve done. You can do self-incineration, but it can’t be more than like 10% of the total waste.
There’s also another acronym around WASTE and this is used for trying to determine where is our biggest impact in our company that we should be focused on. W would stand for water, A would be air emissions, S would be solid waste, T would be toxins or hazardous waste, and E would be energy. If you’re thinking about my company, what kind of impact does it have on the environment? if you think about those five categories, maybe if you can get some numbers around that like how much do we spend, how much do we consume in each of those categories, that can help steer your improvement efforts into those areas. This came out of a training I took, the Green Manufacturing Specialist training through Purdue University, their Technical Assistance Program. I thought it was a pretty good tie in with Lean with using the WASTE acronym.
How many of you would say that water is your biggest problem area or the one you guys are focused on right now, in terms of reducing water? Anyone? okay. How about air emissions? It depends on the industry a little bit, whether that’s a big part or not. How about solid waste? Quite a few of you. Is that a cost thing on you guys? Okay. How about toxins or hazardous waste? That can be pretty costly. How about energy? Most groups, energy is usually pretty high up there in terms of impact or cost impact. I recommend just think about these five categories and then think about which one is most impactful and say what is the one that your company is most impacting on the environment and then maybe do some focused Lean improvements around that area.
The other approach is I’m taking the green approach and seeing some Lean benefits that come from that. This was a picture I took at our transfer station. We have a service that picks up our waste and then they take it to a transfer station and it gets processed and put in the right categories, and then the trucks go off and take it to the different areas. I met up over at the transfer station and did a very simple go and see activity and took pictures of what was dumped out of our dumpster. You can see there’s a lot of pink foam and black foam and white packing material and all of that is coming from suppliers. So we definitely identified, in our solids area, that would be an opportunity to look at where all of this is coming from and try to look for opportunities because there’s processing and labor that goes along with these. So, yeah, this might not cost us a lot of money to dispose of, but if we start thinking about the labor that goes along with dealing with it, now you start thinking about the real financial impact of this stuff.
One of the suppliers, we’ve set up a reusable packaging system. This is our visor product and so it’s actually just a piece of glass, kind of like a motorcycle shield. It’s easy for us to tell how many we have because they’re the only ones in a yellow box in our factory. It breaks down easily, it’s fairly inexpensive, and the real nice benefit, from a Lean perspective, is it kind of created a kanban system by accident. Now when we ship back a box full of these packaging containers, they know how much we consume and they can fill those back up because they know how many we consumed of those, so it’s kind of creating an automatic system like that by default. There’s also a lot of benefits from a packing standpoint – it takes less time for them to package into that box, and it takes less time for us to unpackage it, and so there’s some savings there. Even if it costs a little bit more to ship back and to process it, I think we’re getting more savings on the labor side. So that’s another way to look at some of these opportunities. Again, this one is kind of a win-win because we were able to reduce down some of our solid waste, but we’re also seeing gains in our labor and purchasing.
How many of you have been through or done a gemba walk or a go and see event? This one was around energy and that is our biggest one is our energy consumption and most of it is electric. In our corporate office, we actually set up about six or seven different go and sees. The idea was that we would go during different times of the day and of the week to look at how energy is being used. Most of it was outside of the working hours because it’s usually that’s where everybody’s looking, but we wanted to start with an off-shift time, like a weekend or an evening where nobody’s there. You will learn a lot from that first one; that’s probably the most powerful point. So even if that’s the only place you look and you only spend an hour doing it, you’re going to get some easy takeaways from that.
We actually did that the day after Christmas this year. We have a shutdown over the last two weeks of the year and we came in when nobody was there and there’s a lot of things that we learned. We learned some of our occupancy sensors aren’t working properly so lights were on that were not supposed to be. That’s stuff you wouldn’t really tell during the day. You start hearing things running – that’s something you wouldn’t notice when there’s people there and it’s really noisy out. You don’t hear some of the stuff that’s running.
And then the other start period would be starting up of the shifts, that would be at 5 AM or 6 AM, and you’re trying to see what happens when people walk in – do they put on all the equipment and all the lights or do they just turn on the stuff as they need it? and what happens when you have breaks or during the shift? when they’re done with that machine, do they shut it off or did they leave it on the whole shift? And what happens during a shift change or at the end of the day? How do things get handled? You’re making observations around these specific areas and then you’ll come up with a list of questions and then you go back and interview the employees and say, “I noticed you did this. Can you explain why this is that way?” or, “Have you thought about ways you can shut off the equipment or turn that down?” Just really start engaging the employees in some of the discussion.
You want to have a mixture of people on the team. You can have a manager, you can have, hopefully, a couple of workers in the area, people who are familiar and people who are not familiar with the area so they can ask some questions that might seem obvious or not so obvious to people who aren’t always working in that area, but they want to have some knowledge to be able to answer, “We use this for this purpose, we use this for that. We use that all the time, we don’t use that very often.” So a mixture of even levels of management is good. And then, if you have a large area, you can break up into small groups and send out smaller teams to different areas. One of the things that came out of that was air leaks, being able to identify and hear those air leaks that it’s just too noisy during the day or people get so used to it that they block it out. And so that led to a huge effort to go through and clean out a lot of the air leak activity.
We also did a Six Sigma project on electricity in the corporate office as well. This is a Pareto of energy usage by facility. It was very clear, when we made that chart, where to focus our attention. That is or corporate location. We went through and tried to piece together a pie chart of where the energy was going. That was a massive amount of work and this piece is unknown. So we only got half of it figured out, but what we figured out is these pie pieces are very large and there’s enough opportunity in there – hundreds of thousands of dollars – that we don’t have to get the rest of the 50%; we can go off and start working on some of these, so that’s what we did.
We went down the path of I think it was the heating and cooling system, our HVAC system. We also did some regression modeling to try to figure out what drives our energy. Is it the outside temperature? Yes, that’s important and that drives it. Is it our production rates? No, it actually wasn’t anything to do with how much production volume we had. We said maybe it’s how many days of the month we work. Each dot represents a month of data and so the red is our model and the black line is actual usage. We were trying to get fairly close to matching that pattern, but one thing that was interesting was that how many days we worked in the month had nothing to do with the electricity. That was really interesting. You would think if you work 15 days in a month or 25, that would affect your bill. Well, not really. It was minor if it did.
Then we started skating down the path of why doesn’t that match? Let’s look at the baseload and when we started getting some more detailed data, we saw that we actually carry a huge amount of energy all during the day and even at night. And so then we started digging into some of that. It turned out there was a decision made a couple of years ago that they were just going to leave the temp settings 24/7 where they’re at just in case people came in at different times; we didn’t want to discourage employees from coming in at odd times to do work. I think they came up with a really good solution here. We did some surveys of each area – when do you work normally, what type of work do you have, are you in a lab setting where maybe temperatures are really important or you in just an open work area or an office area where temperatures aren’t that critical.
Then we set up some time ranges – from 6 AM to 7 PM, it’s going to be this temperature and then after those time periods, we’re going to adjust it high or low depending on the people. But to deal with the change management around that, they put in these temperature adjustment buttons. Basically, if anyone was in an area and they didn’t like the temperature or they were uncomfortable, they could press the button and it would go back to that set point for a two-hour period. The first week or two, we did a pilot and it got pressed a couple of times and then, after that, there wasn’t anybody pressing the button and we didn’t get any complaints. I think just knowing that that option was available, that they could always override the system, really helped the engagement and the deployment of that. That ended up being about $300,000 in savings by doing this offset and then it really stuck because I think we had that adjustment button available.
This is the site I’m at now (Wilsonville). I’ve been there about three years so we have a green team. We switched over to 30% recycled paper from 0%. We’d like to go 100% in the future. We set up a composting program, we changed out our cleaners to third-party certified green cleaners, we just got an electric vehicle charge station put in, we’re pretty excited about that. And then we set up something called the Green Bag Sessions, which is employees come in and we each have a 30-minute block around lunchtime, kind of like a brown bag lunch and learn type of thing, but they get to share something that they’re really passionate about around the environment. Maybe it’s about the electric vehicle that they just got, one of them was how they take the bus two hours a day each way from another state, which was a really fascinating discussion. Another one was around food choices and the impact it has on the environment, one was about organic gardening at home. And so we’re trying to find out which employees have action around certain topics and then have them share that with other employees. We can have extras come in and talk about these topics, but it’s much more powerful, I think, if you have people that you know and you work with and you can say, “Hey, I saw your presentation. I’ve got some detailed questions or I want some help with this. How did you overcome this? how does your apartment complex deal with composting?” Those are some things they’ll talk to somebody they know or get to know at work. There’s some side benefits that go along with networking at work that this can create, so I think that’s been pretty good.
Then we’ve got a go and see event we did last year, and then we’ve got the Six Sigma project that we’re still in the middle of. We got proposed ideas, one did get funded, so now we’re going back and looking at other improvement ideas. We also went through a County certification program that really helped to get us going in the right direction. It was a list of 80-some questions and we had to hit like 55 of the 80 questions to get certified. If anyone wants to get a copy of that, I can send that to you. It’s a good place to start from in terms of a checklist to say where are we at today and what are some simple thing we can do to get moving in the right direction. The efforts at this site have actually kind of turtled back to our corporate group. We have a goal this year to get green teams set up at all of our facilities and we’ve got our senior facility director at our corporate office on board and we’re looking at putting together more of a broader sustainability program. We’ve had one in the past that fell apart and now we’re trying to refresh that. I think our momentum at this site has started that discussion, so even if you work in a small facility in a large corporation, there’s ways that you can influence by the work that you’ve done. We also are ISO 9000 and ISO 14000 certified.
Others have success with this; this isn’t just something that we’ve come across. This is also on the EPA toolkit. 3M has seen reductions in volatile air emissions by 60% and a lot of that through their Lean and Six Sigma improvements. Columbia Paint reduced their paint solid waste and wastewater by significant amounts, and Woodfold Manufacturing reduced VOC and solid PVC waste through Lean improvements, and this is specifically at a value stream mapping event. IBM has put a quote out that said they have offset the expenses of green improvement by 2:1, so every dollar they’re spending on these, they’re getting two dollars back. That’s a pretty big company that would make a statement like that.
To tie it back to this conference, businesses have a responsibility. They can’t just say we only do this for the profit or our shareholders demand we hit our quarterly numbers or our stockholders. I would argue that a lot of the stockholders don’t just look at the quarters; they don’t want this quarter to look good and the next couple of quarters to look bad. They really do, most of them, would want you to say we would expect you to make the right long-term decisions. But sometimes that pressure of quarterly results for a publicly traded company can be a lot of pressure but businesses need to take those into consideration, people and the planet, and that’s to stay in business in the long run, that’s the real purpose. Those that are leading the sustainability efforts are seeing positive impacts on their business. It’s not something that’s going to cost extra like maybe there’s a perception around it.
As Lean Six Sigma professionals and experts, we have the right skillset to do this. We can take those same skills and apply it to wastewater and air emissions and solids and energy. It’s the same approach, the same tools can be used; just a little bit of tweaking and I’ll talk about that in a second. What impact can you have in your company or, if you feel like I don’t have the opportunities there, what can you do in your community to share your skills and your knowledge? Maybe there’s a nonprofit that could use your help. Whether you like the people side of it better or the planet side of it, there’s opportunities and there’s lots of groups that could use your skillset. That’s something I’m really passionate about is trying to spread the knowledge that you guys have because we’ve talked to other groups and they don’t know much about Lean or Six Sigma and so they’re open to do ideas like that.
There’s a couple of gaps with Lean and Six Sigma. Usually, when we’re looking at the manufacturing flow or your office processes, you really focus on the gemba, but a lot of the opportunities from the environment are outside of there – it’s the lighting and the electricity and the heating and cooling and the pipes and those are often hidden and so we’ve got to look outside of that area. That’s what gemba walks at different times of the day is set up to do. There’s also problems from maybe it’s just the cost of doing business – we’ve got to use it and it’s just the cost of using electricity and they’re not looking at that as an opportunity or they’re looking at it as a very specific – this equipment only costs us 20 bucks a day for electricity versus if we’re spending $5000 a day on electricity. When you raise it up to a higher level, it builds more of a bigger number and makes it more like an opportunity there, nut sometimes we’re looking at too narrow a piece.
Sometimes the costs get blanketed across by how much square footage that department uses or how many employees they have and it’s not always tied to who’s using the most amount of that, who’s generating the most hazardous wastes. Are they paying for their full share within your company, within your building? Oftentimes, that’s not the case. So what’s the incentive to their budget to go fix that? sometimes that’s part of the problem.
Lean doesn’t necessarily always look at the quality of the content material coming in – they’re not looking at is this recycled material versus virgin material, is it a clean energy source versus energy from coal or other fossil fuels, or is it a hazardous material that you’re using in your machine or is it a cleaner material. Those aren’t necessarily a focus around a lot of improvements. And externality costs, the full impacts, those aren’t always hitting the company bottom line. If they’re polluting something in the air, are they really paying the full share and the healthcare costs that are incurred in the community? Probably not, so businesses don’t always get the full bill for what they’re contributing to the problem.
Or sometimes side benefits are not known or anticipated. One example is we have a takeback program where you go and say, after your customers are done using your product, you say we’ll take it back from you and we’ll handle it properly and put it in the right spot and break it down and recycle it and do something. You might see that as a cost, but what you might not realize is the opportunity to interact with your customer – find out how they’re using your product, find out ideas that they would like for enhancements to your product, sell them a new version of the product, and that is huge benefits; not just it’s going to cost us money to deal with this product. Some of those aren’t known and so they’re harder to justify.
ES&H, they do a pretty good job from the bottom-up approach that we have in the ES&H group. They handle a lot of the stuff with turning off equipment, recycling, composting, hazardous waste processing, looking for air leaks. Facilities that do a better job are the top-down approach, looking at the utility bills and the costs and looking for energy upgrades or efficiency upgrades, renewable energy, Lean building certification, putting in showers for bikers to encourage different ways of commuting to work. The combination of the two groups can really do a good job of helping drive the program.
Here’s a value stream map and one thing that you could do is start to add in some of the water usage or electricity usage into the data boxes of your value stream map or you can add another timeline at the bottom that is the amount of material that’s going through those processed. We take 30 gallons of water in only 25 comes out, so we’re losing 5 gallons in that process there and maybe that will help you identify some opportunities that way.
In a SIPOC diagram, make sure that the environment is one of the customers that’s getting put on there so that they get considered as a stakeholder in that process. Or have you seen this SQDC or QDIP charts where you put a green or a red color on each day of the week, whether you’ve met your goal for safety or quality or delivery? Maybe there’s one you’ve added for environment that has to do with did we shut off our equipment at the end of the day, did we properly recycle everything we’re supposed to, did we follow the hazardous waste guidelines.
Some other tools. Jacksonville did some work where they added green into their DMAIC model. Before they put in their improvements, they evaluated the environmental impact of those groupings, so it’s DMAGIC instead of DMAIC. I thought that was pretty interesting. And then there’s an OEE, I think it’s Infor, and it recommends you can add an energy consumption of your equipment as a fourth element of OEE. Usually, equipment starts use up more energy as it starts to wear or something is going wrong with it and you see that in the area usage, so that would bring down your OEE score if you’re familiar with OEE.
There’s a couple of checklists in a handout that are pretty useful. If your ES&H person can’t make it to the event, you can have them fill out this checklist. It’s got 10 tips for greening your 5S events and making them less harmful than what the impact can already be. Don’t just throw everything into the dumpster, please. And then how to green your Lean events in terms of ordering food and picking the right conference room and picking the right location and things like that. Those are just things to consider.
Some tactical stuff. I mentioned the SIPOC, adding things to the value stream. Take the table I showed earlier on that had the different wastes and the impact to the environment, if you can add that into your training material, that would be really great. Those checklists I mentioned, if you can incorporate those or if you can send those out, you’re free to share with anyone in your company. And get the ES&H and facility people involved in your Lean event and Six Sigma projects if you don’t already.
The more strategic things you can do is do you have improvement efforts that are focused on those higher-level metrics of energy usage and solid waste and water? make sure that you try to align those into the business. It’s not just the right thing to do, but how does that help us achieve our goals as a company? there should be some alignment there. We actually have an ES&H performance metric that we use and it’s on our Rockwell Collins scorecard at the corporate level, so that helps tie a lot of stuff into that effort.
All process improvements will have a positive impact on the environment, so we just want you to capture those and start to document that, hey, this also had that. And please share this presentation or if there’s been other good presentations from the conference on the same topic, share that with your personnel when you get back.
There’s a lot of different books available. AME actually came out with a green manufacturing book about 10 years ago. There’s some really good case studies in there that I’d suggest. There’s Lean and Green, Creating a Lean and Green Business System, Six Sigma for Sustainability, Green Your Work, Green Process Management, Green to Gold, Lean Sustainability, Lean Waste Stream, Green Intentions that’s to deal with value stream mapping. So there’s lots of different resources that are out there now. Probably over the last couple of years, I’ve seen quite a few of these books come out.
And these are the links to the EPA toolkit. There’s one on Lean in the environment, Lean energy and climate, Lean in chemicals, Lean in water, and environment professionals guide to Lean. One of those might be interesting to you or someone at your company, so I recommend sharing that with them if they’re not familiar with these toolkits
To summarize, focusing Lean can lead to green improvements. Focusing on the green improvements can lead to Lean benefits. I went through two examples.
Sustainability is good for business; not an extra cost.
You can leverage Lean Six Sigma to address social and environmental issues at work and in your community. I’ve got a group I’m working at in Portland, called Lean Portland, and we are Lean Six Sigma consultants that go work with nonprofits. If you want to learn more about that, we have a website, LeanPDX.org (now LeanPortland.com). That’s the same kind of concept is what can we do to give back.
Lean Six Sigma doesn’t automatically address all sustainability issues; so you need some kind of focused effort around that.
Use ES&H to help the bottom-up actively and facilities with the top-down approach, and then there’s a lot of good books and references and resources out there available.
With that, thank you for your time and we’ll take some time for questions.
J: Thank you, Brion. Do you have questions?
Female Speaker (FS): You talked about that you have your Green Bag presentations about their own personal Lean to green. Does that help to generate some general ideas for the company also, or at least give that guide to managers or whatever it might be in that area of work?
B: It was really geared towards getting people to think about personal use of it. Part of our green team mission was to just educate people and if they take it home, I think that’s a great start because then we know that, eventually, it’ll start to trickle back to work. We really had to focus on personal use at home, hoping that, eventually, it’ll come back and impact it at work as well. Good question. Any other questions or comments? Yes?
Yeah, I had some handouts, but if you can email me. Okay, he’s got some extras. Does anyone else need a handout? I’ve got two more left. Yes, question? Any other questions? All right, thank you.
J: Brion, on behalf of AME, we have a token of our appreciation. Thank you very much for giving a presentation.
B: Thank you very much.