Lean and Green

Organic cucumbers, vegetarians, global warming... and lean manufacturing.  An unlikely combination?  Not in the latest issue of Grist Magazine, which provides "environmental news and commentary."

In a very well-written article, Supply and Da Man, Joel Makower discusses the potential for savings by "greening" the supply chain.  The classic example is by using more energy efficient lighting, where in the case of Baxter it saved almost $50 million.  But as that company soon realized, significant additional savings are possible by pushing "green" up and down the supply chain.  Baxter is extending the concept from raw materials all the way into the hospitals of its final customers, such as new raw materials to help reduce the amount of hospital waste.

Other companies have taken note, and the EPA has started a public-private partnership called the Green Suppliers Network to help suppliers and manufacturers eliminate waste, save money, and reduce their environmental impact.  Members, such as Abbott Labs, GM, Herman Miller, Pratt & Whitney, and Johnson & Johnson come from a wide variety of industries.

What is pretty impressive is that this environmental activist author gets lean right.  He discusses how lean focuses on the elimination of waste, creating the benefits of faster cycle times, improved productivity, higher quality, and increased flexibility.  And he even talks about continuous one piece flow and how just in time requires supply chain reliability.  He could run circles around some of the baffoons that write for the Wall Street Journal or various other top tier newspapers that continue to miss the point of lean.

And he's right.  Lean manufacturing and green thinking (or "supply chain environmental management") are in many ways naturally symbiotic.  And he's realistic... "In the end, it's the economics, stupid.  If ou can convince the powers that be that there's a way to save money beyond the purchase price you can break through the purchasing department's traditional reluctance to change vendors."

In your search for waste, take a step beyond the traditional steps of turning out the bathroom lights and see where you can leverage green to save money (increase value...) at your suppliers and customers. 

Comments

[Olaf Hunter]

Toyota is doing this by expanding its line of hybrid vehicles.

[Melissa]

I work with Whirlpool and after reading your post, I thought you might be interested in the Home Energy Blueprint, a nationwide search for ten energy inefficient homes to outfit with energy and water-saving appliances. With energy costs continuing to soar, the Environmental Protection Agency, the Edison Electrical Institute and GreenHomes America are joining Whirlpool to help change the way people consume energy and promote more efficient energy practices in the American home.

The premise of the contest is simple: The program is going to determine which products will make a more efficient home - from new appliances, to insulation to lighting. Those homes that are deemed to be in most need of help will receive ENERGY STAR appliances and other energy-saving products to start saving money. For more information on the contest, please visit www.whirlpool.com/energy

[Eric H]

Why are you surprised by this, Kevin? Kathleen Fasanella and I are both Green and Lean enthusiasts, the book _Natural Capitalism_ contains an entire chapter dedicated to talking about Lean Thinking, and Hal Macomber once called that chapter "the best 19 pages on lean thinking you will find".

Warning: NatCap is an interesting introduction to the subject, but I wouldn't read it without also picking up Julian Simon's _Ultimate Resource II_, or Andersen and Leal's _Free Market Environmentalism_.

[Barry "aka the Hillbilly"]

Lean, Green, and Clean manufacturing seem to go hand in hand. I was rooting around on the EPA website and found many lengthy articles written several years ago concerning the Environmental merits of Lean Manufacturing. I was shocked as several of them were 50 to 100 pages in length. Apparently the Environmental folks have been paying attention to Lean Manufacturing for several years now.

I suppose it wouldn't take a lean thinking person long to realize that those roll off boxes that Rumpke is hauling to the land fill is nothing but Absolute Waste. Toyota and Honda already have many plants that don't send anything to a landfill. Honda's new plant in SE Indiana is to have the least Environmental Impact Footprint of any plant they have built.

To be fair, I don't know if the same is true for Big Three plants or not. I do know that GM and Daimler are a part of the Green Supplier Network, which is a partnership with Government and Industry with the aim of helping to improve Environmental performance.

Following lean thinking can naturally lead one in a more Environmentally friendly direction. For many Industries the use of Energy is a very important part of a products cost. As a result, a company's performance can be highly leveraged by Energy prices.

It seems to me the future will belong to those who apply Lean thinking and CI to their Environmental and Energy footprints as well. Creating highly reliable (high quality) products while at the same time trying to use fewer resources and decreasing the Environmental footprint appears to be a good strategy.

[Melissa]

Last chance to enter the Home Energy Blueprint, a nationwide search for ten energy inefficient homes to outfit with energy and water-saving appliances. The premise of the contest is simple: The program is going to determine which products will make a more efficient home - from new appliances, to insulation to lighting. Those homes that are deemed to be in most need of help will receive ENERGY STAR appliances and other energy-saving products to start saving money. For more information on the contest, please visit www.whirlpool.com/energy