The road to sustainability

When the residents of Munchkinland told Dorothy to follow the Yellow Brick Road to the Emerald City, they weren’t concerned about how much energy the Wizard of Oz was using to power his lights and pyrotechnics show from behind the curtain. And they certainly weren’t concerned about using natural resources when Dorothy dumped the bucket of water over the Wicked Witch of the West.

By Kevin Campbell, Senior Editor February 15, 2008

When the residents of Munchkinland told Dorothy to follow the Yellow Brick Road to the Emerald City, they weren’t concerned about how much energy the Wizard of Oz was using to power his lights and pyrotechnics show from behind the curtain. And they certainly weren’t concerned about using natural resources when Dorothy dumped the bucket of water over the Wicked Witch of the West.

Nope. They were simply trying to help Dorothy get home.

For today’s plant employees, the Yellow Brick Road isn’t a fantastical path to a magical place where apple trees come to life and snow falls in poppy-flowered meadows. What it can be is a path to better business practices, more efficient operations, a better bottom line and a better environment.

Sustainability is a big deal. It’s more than just being energy efficient. It’s more than just recycling or making sure the lights are turned off at the end of the production day. Sustainability is all of these characteristics and more, wrapped up into a single strategy that will help manufacturing facilities remain profitable and ensure their viability in the years and decades ahead.

While this road to sustainability may not be smooth and shiny, it can definitely lead to some serious green — from both environmental and economic standpoints. Manufacturers are always looking for ways to reduce costs in an effort to improve their bottom line. By embracing sustainability as a strategy — as a better way of doing business — they can do just that.

So, what is sustainability?

Part of the problem people tend to have with sustainability is that, no matter who you ask, everyone’s definition is a little bit different. Some think of sustainability only in an economic sense. Others think of it strictly from an environmental point of view. What’s clear is, from a business sense, sustainability must share aspects of both views.

And despite what traditional thinking says — that you can have only one, not both, because the two ways of thinking are mutually exclusive — manufacturers find that by borrowing from both ways of thinking, they can indeed have a profitable business while being socially conscious as well.

“You can be a profitable company and environmentally responsible,” said Walt Tunnessen, national program manager with the U.S. EPA’s Energy Star program. “And that is really the key of this concept of meeting your needs today; doing it in a way that is isn’t compromising your children’s children or the communities around you.

“What I find to be the most practical definition is meeting our needs today without sacrificing or degrading the ability of future generations to meet their needs,” Tunnessen said. “You find the concept of intergenerational equity, meeting the needs of the present without compromising the ability of future generations to meet their own needs at the core of most definitions of sustainability. It’s the basis of the working definition that we use at EPA.”

Other organizations take that basic definition and fold in specific aspects as they relate to the business. Johnson Controls offers this definition, which according to David Love, director of private sector solutions for Johnson Controls, is referred to as the Triple Bottom Line.

“Through our actions and offerings, we embrace environmental, social and economic practices that benefit our customers, our employees, shareholders and society as a whole,” Love said.

No matter how it’s defined, the basic concept behind sustainability is simple: meet the needs of today without destroying tomorrow’s ability to prosper. As manufacturers delve into how to make their operations sustainable, they’ll discover many common threads that apply no matter what product is being manufactured or what processes are being used.

Old components, new strategies

“It’s setting up processes, like a management structure, focused on continuous improvement,” Tunnessen said. “And this isn’t anything new. People have been doing Six Sigma; companies have been doing various ISO initiatives focused on continuous improvement for years. They haven’t necessarily always applied it to things like water and energy. It’s setting up a program based on baselines for performance, setting goals, tracking performance, benchmarking over time or if possible benchmarking against peers or some other rating system.”

The components of sustainability include many techniques that successful manufacturers are probably already doing, or at the very least are moving toward: energy efficiency, recycling, conservation, Lean manufacturing — particularly the elimination of waste. All cornerstone components of sustainability, the key is taking how an organization handles them and finding ways to do them better. It leads to a better bottom line while making the business that much more socially conscious and environmentally friendly.

Much like Lean manufacturing and continuous improvement, sustainability is not something that is just done and then left to operate. It too is a journey, a practice. It requires attention to detail; it requires assessment of production processes, goal setting, monitoring and measuring; and then adjustments of manufacturing’s components to reach the set goals. And also like Lean, it does require some changes in how things are done around the plant.

“We think that sustainable design is not a one-time deal. It’s a long-term process and commitment to maintaining your facilities and operations in an energy-efficient manner,” said Gordon Holness, society treasurer for ASHRAE and chairman emeritus of Albert Kahn Associates Inc., Detroit.

As with Lean manufacturing, sustainability often requires changes in behavior. It requires manufacturers to build a culture in their facilities, which obviously takes time and necessitates astute planning and goal setting.

“You can’t just march into a plant and say we’re going to become sustainable. You’ve got to get buy-in and build a culture,” Tunnessen said. “And it’s very doable, but you’ve got recognize it’s not just going to happen overnight. You’ve got to get people thinking differently. Thinking a little longer term; seeing the value of making an improvement; of changing behavior.”

The best way to get started is like any other changes made to the plant: begin with audits and assessments. Holness suggests going over every detail, beginning with the product itself and moving through all the processes used in its manufacture. This allows manufacturers to not only identify ways of doing things better, with both the product and the process, but it also lends itself to identifying waste.

“You have to look at that entire component, indeed even in terms of should you be manufacturing that component in the first place?” Holness said.

Collecting data is a key component, because the strategy for sustainability will be developed directly from what the plant engineers find about their processes from the audits, Love said. It’s difficult to effectively implement sustainable behavior and take the plant in a different direction without first knowing some of the benchmarks going in.

“I think one of the most useful things to do is simply think about the value chain of what you do in your own job or your own plant,” Love said. “Begin to think about what are the environmental opportunities and risks both downstream and upstream.”

Starting down the Yellow Brick Road

Once the audits and assessments are in, plant managers and engineers can begin to strategize how the sustainability plan will work. What areas will be addressed first? What changes or improvements can be made first to facilitate the plan going forward? Often times, the initial analyses of the facility’s products and processes indicate some “low-hanging fruit.” These are jobs that are obvious and easy to modify, and typically they will provide some quick and encouraging returns as the project moves ahead.

“Usually where I see the most successful companies going is they start off with a lot of the no- or low-cost projects and better operations and maintenance practices,” Tunnessen said. “Then they go up to better optimization, and then from there they begin to look at getting energy or other environmental issues incorporated into scheduled upgrades, scheduled replacements and other procurement decisions. But you can’t just focus on projects, you need to establish a program.

“From there, you’re then moving into another level where you can start thinking about how are we making this? How much energy do we really need? Is there a way we can take some of the energy out? Could we do this differently?” Tunnessen added.

Most plants offer a vast array of areas where simple improvements can make a big difference in making the facility sustainable and lowering its carbon footprint. Small tune-ups of the utilities, whether they are natural gas, chilled water, steam, electricity, compressed air or something else, can add up quickly.

“The more efficient your equipment is running, the less energy you’re consuming and the less waste you’re consuming,” said Love. “Anytime you reduce energy and BTUs into your processes or your plant or your offices, you reduce your carbon footprint.

“Other things we’re seeing a significant impact in the manufacturing process is de-bottlenecking of processes within the manufacturing process,” Love added. By eliminating those bottlenecks, manufacturers are able to make more efficient use of their steam or their chilled water, which leads to a recovery of the waste stream in the manufacturing process, he said.

“We’re seeing a significant improvement right now with heat recovery in process arenas where they use steam for cooking, baking and drying,” Love said. “That’s a huge opportunity we’re seeing because of the cost of natural gas and the emissions that you can reduce by capturing that heat, repurposing it back into the same process or other processes. You’re taking the load off your boiler and reducing the emissions, and many times you’re improving the productivity and the yield of that line.”

Other areas where improvements can be made include lighting, maintenance practices and content of the materials that go into the finished product. And don’t forget about the building itself. As manufacturers tend to be highly concerned about the manufacturing line and its processes, sometimes the building housing the line gets forgotten.

“What I see today in a lot of plants is neglected utility infrastructures and neglected maintenance, where they’re kind of keeping things running on a shoestring because they don’t provide the right maintenance practices. They don’t reinvest into their capital; they don’t provide an asset renewal strategy. So they’re running old, obsolete equipment that’s inefficient and breaks down frequently,” Love said.

“They can continue to improve and increase the efficiencies of their productivity and their manufacturing services and reduce waste,” Holness said. “The biggest thing they can do from their standpoint on the environment is that related to the building itself. To look at all of the operating systems for the building itself, whether that be for gas or steam or electricity, compressed air, water; all of those elements, and look at ways to improve the efficient use of those and minimize the wasteful discharge that impacts our atmosphere.

“If you cut back the amount of water use in a building, almost automatically you cut back the amount of waste discharge from the building,” Holness added.

Making the case for sustainability

Beyond the obvious implications sustainability offers with reduced costs and carbon emissions, it’s clear now that it offers manufacturers the opportunity to grow. By its very nature, sustainability invites innovation because it requires manufacturers to improve upon their current practices. And particularly for U.S. manufacturers, it just might afford them the opportunity to reclaim a leadership position.

“What I have found, what’s really happened the last five, 10 years, is that more and more companies are beginning to see sustainability not as a constraint but as a growth,” said Dr. Alan Hecht, director of sustainability in the Office of Research and Development at the U.S. EPA. “And they’re finding that as soon as you get into really looking at processes within the operation, there’s a huge opportunity for efficiencies. There are huge opportunities for innovation.”

Public perception is and always will be a key factor in consumer purchasing decisions. Add in Wal-Mart’s position concerning sustainability and its coming demand that its suppliers report the carbon content of their products, and manufacturers really will have to embrace sustainability as a major component of their business. Then there’s government regulation, which is sure to increase in this regard as evidence of climate change and the effect of greenhouse gases becomes more and more apparent.

“I think you’re seeing a significant increase in public awareness and perception, and so I think you’re also seeing a significant increase in manufacturers touting their sustainability efforts,” Holness said. “I think you’re going to see more efforts from the federal government.

“I think that, obviously with energy costs skyrocketing, I think the run-up in crude oil prices has been staggering over the last three years, and that’s certainly going to impact their manufacturing costs as well, and drive for improvement in energy efficiency, or for efficient operations of their systems,” he added.

Finally, as the largest producer and consumer of waste in the world, the U.S. will have the opportunity to reclaim some ground as a manufacturing leader.

“Sustainability is an issue where we can be the leaders and may become a source of competitive advantage that a lot of companies in the traditional manufacturing parts of this country haven’t been able to have,” Tunnessen said. “The times have changed. This is really an opportunity for American companies to distinguish themselves.”

A March 2007 survey conducted by Johnson Controls Inc. indicated 48% of those surveyed said environmental responsibility is at least as strong a motivator as cost savings, and 35% said environmental responsibility and cost savings are equal motivators. SOURCE : JCI online survey of 1,249 North American executive/managers responsible for energy management decisions Johnson Controls Inc.’s 5 Cs of Lean Buildings: Commit : to improvement targets Collect : data and assess facilities Contract : for guaranteed results Confirm : performance over time Communicate : plans and progress SOURCE : Johnson Controls Inc. Based on projections, green building will reach a tipping point in 2009, with 82% of companies greening at least 16% of their portfolios. SOURCE : McGraw Hill Construction and Siemens study: Greening of Corporate America In another Johnson Controls online survey conducted in March ’07, of 228 manufacturing executives and managers responsible for energy management decisions:

77% believe energy prices will rise significantly in 2008

66% expect to make energy efficiency investments over the next year

75% expect to fund energy efficiency improvements through operating budgets

69% are paying more attention to energy efficiency than they were one year ago

SOURCE: David Love, director of industrial solutions, Johnson Controls Inc. More than 48% of a representative sample of corporate leaders do not see risk as a primary driver to their green activities. Only 21% claim risk and liability as the most important reason for going green. SOURCE : McGraw Hill Construction and Siemens study: Greening of Corporate America Each year, U.S. industry consumes approximately 17.9 quadrillion BTU (quads) of fuel, including 4.03 quads of natural gas, for powerhouses that generate steam and electricity. SOURCE : Energy Efficiency Impact on Industrial Steam Operations, Alliance to Save Energy, 67% of CEOs see green building as a market differentiator, well above the total respondent average of 58%. SOURCE : McGraw Hill Construction and Siemens study: Greening of Corporate America Annual greenhouse gas emissions in the U.S. are projected to rise from 7.2 gigatons CO2 equivalents in 2005 to 9.7 gigatons in 2030 — an increase of 35% — according to an analysis of U.S. government reference forecasts. “Carbon dioxide equivalent” is a standardized measure of GHG emissions designed to account for the differing global warming potentials of GHGs. SOURCE : Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?, McKinsey & Company, 2007 Manufacturers can reduce costs and risks related to water and wastewater by:

Minimizing the overall use of water in their manufacturing processes

Using recycled water rather than potable sources

Minimizing contaminants in wastewater

Investigating the feasibility of capturing, recycling and reusing water onsite.

SOURCE : Sustainability for Manufacturers: Driving Profitability and Growth, a white paper by Gina Blus, EcoAdvantage Network, 2007 Autodesk Inc. Over the next 20 to 30 years, a wide range of new products and materials will be produced by the U.S. economy that will have important effects on the profile of manufacturing residuals (e.g., wastes, by-products) generated by industry. For instance, there are already many examples of products and industries in which potentially harmful chemicals have been phased out in favor of more benign materials. SOURCE : Beyond RCRA: Waste and Materials Management in the Year 2020, EPA, April 2003 .Industrial energy is 49% of world energy use; U.S. industry makes up 16% of that usage. SOURCE : World Energy Outlook, International Energy Agency, 2006 Manufacturers can plan for future cost increases and improve competitiveness by:

Minimizing the energy used in operations, both in business operations and manufacturing processes

Minimizing the energy consumed by products during their useful life

Limiting product packaging and shipping distances when possible

Considering using clean, renewable energy to meet some or all operational needs.

SOURCE : Sustainability for Manufacturers: Driving Profitability and Growth, a white paper by Gina Blus, EcoAdvantage Network, 2007 Autodesk Inc. In a study of German companies published in February of 2006, more than 50% of those surveyed said sustainable development was highly relevant. More than 30% said it was very highly relevant. SOURCE : Approaches to Corporate Sustainability among German Companies, Wiley InterScience, February 2006

Tips for making the sustainability case

Speak dollars, not BTUs . Communications to senior management should have specific savings goals measured in monetary terms, demonstrating the objective of lowering operating costs and improving profitability.

Make the case with metrics . Use common financial metrics such as net present value, simple payback, internal rate of return and hurdle rate.

Focus on life-cycle costs . Focus on internal rates of return rather than a project’s initial costs to demonstrate that energy projects may be better investment alternatives than capital allocated for process improvements.

Provide real-world proof . Offer evidence to support targeted savings, such as results from a pilot energy-management program implemented at a company facility. This can help demonstrate the relatively short payback of energy projects along with their significant savings.

Compare to the competition . To appeal to management’s desire to achieve a competitive edge, use benchmarking data to compare the company’s energy performance to that of similar companies or operations.

Relate energy to security and risk . Explain how investing in technologies and practices that reduce energy use can enhance the company’s energy security and help insulate it from risks associated with supply and price uncertainties.

— Excerpted from Energy Management and Shareholder Value white paper,

Sustainable Top Plants: a blend of people and process

Before the profits or even the process, Plant Engineering’s 2007 Top Plant winners — The Global Engine Manufacturing Alliance, Spirax Sarco and SEW Eurodrive — demonstrate a commitment to their own people that sets them apart as truly sustainable manufacturers. It is one of the reasons for their success, and one of the criteria for their selection as 2007 Top Plant recipients.

The goal for sustainable manufacturing is the same as the goals in manufacturing in general — high quality, high productivity, lower costs and greater employee involvement. The biggest difference seems to be in how those goals are achieved.

For example, Spriax Sarco introduced a Lean manufacturing system in 2000 that shortened lead times and increased quality, tying production to customer demand. Scrap was reduced from $50,000 per month to $3,000 per month while increasing production levels.

Spirax Sarco has committees within the plant focused on social and environmental sustainability. They’ve taken those efforts beyond the talking stages, however:

A water-based paint system with a water curtain booth captures paint overspray. Emissions have been cut from 180 pounds per year to 1.8 pounds per year.

Non-hazardous waste such as oils are processed and disposed of in an environmentally friendly way. An on-site filtration system reduces coolant cost by 40%.

A computer-controlled energy management system for HVAC and lighting has reduced electricity consumption by 7%.

A shop floor lighting project saved 47% on cost.

GEMA’s site in Dundee, MI was a green field just three years ago. Now it is being reclaimed as a prairie. Landscaping is based on a sustainable concept developed by Michigan State University that includes more than 100 acres of land planted with native flora to recreate natural Michigan prairie. The prairie reduces the environmental impacts of mowing and maintenance, fertilization, weed control and irrigation. The precipitation runoff at the 1 million square foot facility is routed for use to irrigate the remainder of the 276 acre site. The prairie landscape augments nearly two miles of walkways that are open to both employees and the citizens.

The management at SEW Eurodrive also regards its responsibility to its environment as a business imperative. They also extend that imperative beyond the plant walls and the work week.

“Our efforts to adopt sustainable manufacturing practices started with a commitment to provide a safe and healthy environment for our most valuable resource, our employees,” said plant manager Carl Hinze. “This commitment also extends beyond the factory to include minimizing our environmental impact on the surrounding communities where our employees live.”

SEW has a series of “Rules To Live By” which helps the management and employees measure progress on existing ideas and create new goals. These rules include:

Reduce worker injuries

Prevent toxic materials from entering the workplace

Control manufacturing waste

Reduce unscheduled work stoppages.

What materials they do need to use are fully recycled. “Nothing from the manufacturing process goes down the drain to the public sewage treatment system or to landfills,” said Hinze. “Waste metal, dunnage, wood, cardboard, plastic and paper are all recycled. Oil is recycled to make fuel, for example, and cleaning water is evaporated.”

Those strategies save money in the short-term and the environment in the long term. At GEMA, for example, a consistent process of filtration and cleaning and regular monitoring, the lifetime of coolants has been extended to six years. That eliminates more than 1,000 gallons of hazardous wastes per year.

Aluminum scrap from machining processes is recycled, reducing the cost of new aluminum and enabling GEMA to keep the money once spent with off-site recyclers. Recycling aluminum also provides a buffer against fluctuations in commodity prices.