How to Cost-Effectively Reduce Your Environmental Footprint

01 Oct, 2012

In This Article

Sustainability efforts reap financial benefits through the efficient use of resources.

By Rachel Duran

Anna Mangum illustrates the benefits of sustainability initiatives by asking manufacturers to think about the fact that they pay to purchase raw materials and to process them: “Why are you going to pay to throw the materials away?” Mangum asks.

Mangum is the E3 lead in North Carolina, which is housed at the Industrial Extension Service at North Carolina State University in Raleigh. E3 is a NIST Manufacturing Extension Partnership program, which works with manufacturers to consider the economy, energy and the environment in their operations. The program is underway in communities across the country, an initiative where companies implement sustainable manufacturing practices, which leads to lower bottom lines.

“We ask manufacturers to look at optimizing all three elements based on optimizing the raw materials they purchase, and optimizing process efficiencies and minimizing defects and waste,” Mangum says. “Then look at ways to eliminate solid waste disposal costs.”

Many manufacturing firms tend to view sustainability as something that will adds costs and more regulations to their operations, says Randy Bertram, senior manufacturing specialist, Wisconsin Manufacturing Extension Partnership, who works with the organization’s Profitable Sustainability Initiative. “We approach the effort from a perspective of: How can we do these things and benefit you financially?” Bertram says. “It is about more efficient use of resources, and that is what sustainability is all about.”

Bertram shares the savings an aluminum extrusion company realized, while at the same time significantly reducing its environmental footprint. At the end of the production day, 30 percent of what the company was extruding wasn’t usable and workers would remelt the product to make it over. “We worked with the company to reduce that number to 24 percent, which is a tremendous energy savings, and they don’t have to recycle that,” Bertram says. “But more importantly, from the client’s perspective, each percentage point of scrap that they are able to reduce is roughly $100,000 per percentage point.”

For another Wisconsin company, reworking how it distributed goods led to a reduction of thousands of miles of travel each year, as well as cutting down on the use of diesel fuel and the emissions associated with it.

Also in Wisconsin, a transportation and logistics firm was able to scale back on the number of carriers coming into its facility on a daily basis, resulting in a reduction of miles of truck traffic and the greenhouse gasses associated with it.

Bertram says among the more common themes companies implement in regard to sustainability measures includes changing lighting systems, and upgrading air compressors and variable frequency drive motors. In-depth initiatives review energy-intensive processes such as looking at ways to reuse the waste heat generated in one area that could be used somewhere else in the process.

What Saying Yes Gets You

Companies participating in the E3 programming are small to medium-sized enterprises, and have less than 500 employees at a singular facility, Mangum says. A variety of manufacturers have joined the initiative, representing industries such as food, furniture, auto, rail, aerospace and textiles. In North Carolina, the E3 team has worked in 17 communities and with 33 manufacturers.

Participating manufacturers go through an assessment phase, which includes:

* business excellence assessment

* lean and green review of process efficiency and environmental stewardship

* energy assessment

* carbon footprint assessment

* worker safety review

A report is generated with recommendations as to how companies can strengthen their sustainability efforts. “It may require some investment or new focuses or shifts in workforce commitment,” Mangum says.

Next, the companies enter the transformation phase where they implement projects or access additional training or grant programs to purchase equipment and begin to realize savings. The transformation is continuous and companies are monitored for a year.

The next step is to sustain the efforts. “We have developed a local manufacturing council to share best practices around sustainability,” Mangum says. At a recent manufacturing council meeting in Buncombe County, Thermo Fisher Scientific Inc. hosted 21 manufacturers at its facility to discuss lean best practices. The company shared how it is implementing a zero waste to landfill goal. The company discussed the segregation of waste streams, the type of employee training that is needed and what resources it has leveraged at the state level to help in identifying recyclers.

An example of the transformation process in North Carolina is Besam, part of Assa Abloy, located in Monroe, south of Charlotte. The company manufactures aluminum and glass automatic entrance solutions. A constant theme in the company’s E3 assessment phase found it would realize the biggest gains from implementing lean manufacturing processes. The company implemented changes in shifts and the way it performed the manufacturing process. A layout change and the implementation of lean tools allowed the company to hit several record production numbers several months after the assessment process, Mangum notes. “They also made investments with respect to equipment for energy efficiency and implemented safety program improvements.”

Eight months after Besam’s E3 assessment, the company reported the impact on its business was nearly a quarter of a million dollars. What’s more, company officials felt they still had a significant amount of projects to implement for further savings.

Opening Up Green Market Opportunities

The Manufacturing Extension Partnerships involved in E3 efforts have also worked with clients on new product and green product development. In Wisconsin, a manufacturer with an innovation for a nearly 100 percent post-consumer materials point of purchase clam shell product didn’t have the financial resources to bring the idea to production. Bertram’s team assisted the firm in developing a business plan, conducting market research and putting the financial numbers in place to get the financing they needed to get up and running. “Their business has grown 60 percent as a result of these opportunities,” Bertram adds.

The Wisconsin E3 effort is similar to other E3 programs in the country, with a slight twist. “In Wisconsin, we recognize that sustainability is a broad area, with a lot of different aspects, such as transportation, water and energy,” Bertram says. “There are so many paths a company can take when they look at sustainability with regard to having an environmental impact, well at the same time improving their financial performance.”

Much like the other MEPs involved in the E3 initiative, Bertram says his team has partnered with a number of organizations in Wisconsin that have expertise in energy, environment, logistics, new products, financing and new business development. These partnerships have allowed the Wisconsin MEP to work on more than 100 E3 projects in a little more than two years.

In Alabama, the E3 program is managed by the Alabama Technology Network. “We have formed collaborations within our state to pull in the right sources if there is something we don’t have the expertise to do,” says Anthony Holden, E3 program director, Alabama Technology Network. One partnership involved working with the Alabama Auto Manufacturers Association to identify companies involved in the auto supply chain to approach about the benefits of E3 programming. Other partners include utilities. “For example, if a company’s need has to do with power factor training, we reach out to the utilities or power generators to help a company with its power factor issues,” Holden says.

Holden says one of the largest successes of Alabama E3 programming has been with ZF Industries in Tuscaloosa. The company was bidding on new business from Mercedes, and was asked by the OEM to perform services it had not done before, such as painting parts. ZF had only conducted assembly activities at its existing facility. The company outlined its plan to the E3 team, and by implementing recommendations provided by the E3 team, the company tweaked its idea and saved on its HVAC expenses, which made it more competitive and attractive to Mercedes. “ZP actually landed $200 million of new business and we had some impact on that,” Holden notes.

Entering its third year in Alabama, the E3 program has been accessed by 50 companies in industries such as auto, food and textiles.

Holden says manufacturers should understand that the E3 programming efforts are flexible, where classes can be broken up and conducted in units as opposed to a large block of training. “We want to find out what their needs are and meet them with the right training,” Holden says. “We do not want to force a canned amount of training.”

Adds Wisconsin’s Bertram: “We need to get manufacturers to understand that in a lot of respects, they are already looking at the efficient use of resources. Looking at things through the lens of sustainability opens up opportunities they were blind to prior.”

For complete details about the organizations featured in this article, visit:

Alabama Technology Network

www.atn.org

Industrial Extension Service-North Carolina State University

www.ies.ncsu.edu

Wisconsin Manufacturing Extension Partnership

www.wmep.org

What Is E3?

The NIST MEP E3 program assists manufacturers in leveraging the resources of local, state and federal agencies in regard to implementing sustainable practices in their processes. The process improvements have resulted in improved financial performance as well.

The program launched in 2009 with pilot projects in two cities; today communities in 15 states participate in the program.

Manufacturers who enter the Economy, Energy and Environment (E3) program have the opportunity to leverage several resources to achieve sustainability goals. Federal agencies include:

* NIST MEP represents the U.S. Department of Commerce

* The U.S. Department of Energy

* The Environmental Protection Agency

* The U.S. Department of Labor

* The Small Business Administration

*The U.S. Department of Agriculture

Each of these agencies has a program or grant or loan fund that is geared toward supporting manufacturers in achieving their sustainability goals, says Anna Mangum, E3 lead in North Carolina, based at the Industrial Extension Service at North Carolina State University.

“The goal of the program is twofold: adopt best practices that are aligned with sustainability; and for manufacturers, probably more important, is to increase their profitability,” Mangum says.

To learn more, visit www.nist.gov/mep/e3.cfm.

Rachel Duran

Rachel Duran is the editor in chief for Business Xpansion Journal. Contact her at rduran@latitude3.com.

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