Click the link for a free 40 minute recording of a live webinar we presented on Green Six Sigma. This webinar discusses how to apply Lean and Six Sigma tools to develop a sustainabilty program for your organization and is based on my book An Introduction to Green Process Management
If you would like more information contact me at sam@greenprocessmanagement.com or visit our training page at http://www.6sigma.us/six-sigma-green-process-management.php#
-sam
What is Green Process Management?
Green Process Management is the application of Six Sigma and
Lean tools to measure monitor and drive continuous improvement on environmental
issues such as waste and carbon emissions. The Lean Six Sigma tool set
traditionally used for process improvement is ideal for driving improvement
where emissions and waste are concerned. It becomes a matter of mapping the
process to determine where waste and emissions are created, determining
measures for those wastes and emissions and build project to reduce those emissions
and wastes.
So why do we even care about this? Well if we don’t as businesses
we should. Green and environmentally friendly products are everywhere. I have
seen green mentioned in advertising products and services from window cleaners
to food to colleges. The Green movement offers business a unique opportunity to
Save money, market products and services as green and be seen as proactive on
environmental issues.
One of the first reactions I get when I mention Green is
that it is too expensive. I think this is partly due to the fact that everyone
has their own definition of what Green really is. I discuss this in my book An Introduction to Green Process Management
available from Amazon. The definition of green is
much like the definition of quality. Have you ever heard a company say that
they produce anything other than a quality product? So what do they mean when
they say Quality? So when you say you are Green what do you mean? At one time
many companies thought it was too expensive to produce a quality product, those
companies are not around today. I think
the companies that ignore green will discover the same fate.
Green
doesn’t have to be expensive, I believe a green company is one who measures, understands
and works to reduce its environmental impact. After all everything we do has
some sort of impact so the definition of Green cannot be “Zero Impact”. By
measuring ones impact and working to reduce it an organization can save money,
if you think about it energy costs money reducing energy use saves money and
reduces carbon emissions. And if you understand and work to reduce yor
emissions you will be taking the first steps to becoming a Green company and
the Lean Six Sigma tools can help you do just that.
Check back as I will be uploading a free 40 miniute recorded Webinar on the subject.
Visit me at Green Process Management.com
Sam
So you think you are green by selecting paper bags over plastic? Better think again. A life cycle assessment published by the Michigan Department of the Environmental Quality http://tinyurl.com/3tae7fb shows that Plastic grocery bags consume 40% less energy to produce and generate 80 % less solid waste than paper bags. Plastic bags consume less energy and emit less pollutants and every stage of the life cycle from extraction of raw materials, manufacture and disposal. Plastics shopping bags do take 10-15 years to decompose in a landfill where paper bags only take a matter of months. So the real answer to which is
better paper or plastic is really neither. Both have fairly significant impacts.
Paper bags have a larger impact to produce and ship to market, while plastic
bags stay in a landfill much longer.
This exercise is an example of how important it to Investigate and measure the life cycle impact of a product and just not listen to what someone or some company’s advertising states.
True environmental improvement cannot be accomplished without accurate and objective measurements. These measurements can only be achieved when feelings, politics and misleading advertising is removed. This will only come with understanding of subjects such as life cycle assessments, carbon emissions and environmental impacts. So before you make Green decision
or tell your neighbor how green you are, do your homework so you really
understand what you are talking about. – Remember it is all about measurement, the numbers won’t lie.
Short Video on Carbon intensity metrics for Green IT discussed by Rami Branitzky (SAP), Christina Page (Yahoo!), Dr Nicole Peill-Moelter (Akamai Technologies) and John Pflueger (Dell) http://tinyurl.com/3to483q
“Every dollar that Bloomberg has spent on sustainability has saved two dollars in operating costs, according to the company’s first public sustainability report.”
Be sure to read this article posted the The Environmental Leader. http://www.environmentalleader.com/2011/05/06/bloomberg-makes-back-double-its-sustainability-dollar/
According to the Environmental Leader http://www.environmentalleader.com. Procter and Gamble (P&G) recently revised their supplier Environmental Sustainability Score card asking suppliers to report performance on such things as energy use, water use, waste disposal, and greenhouse gas emissions. They also stated that “beginning this year scorecard results will affect supplier ratings”.
P&G is not the only large organization requiring such a report. The P&G requirement is similar to what is required of Wal-Mart suppliers. This according to the Environmental Leader includes 75,000 businesses.
Maybe you are not a supplier to Wal-Mart or P&G, but your customer just may start asking these questions. Will you be ready? P&G stated that the top performing suppliers will be recognized, what do you think will happen to the ones that don’t comply? Only time will tell.
The P&G scorecard along with instructions to complete it can be found at http://www.pgsupplier.com/pg-launches-enhanced-supplier-environmental-sustainability-scorecard-and-training-materials
The scorecard is considered “open code” allowing any organization to use it.
Both the Wal-Mart and P&G scorecards are based on what is required by Carbon Disclosure Project, but the P&G scorecard goes even further, requiring plans for improvement and year on year progress reports.
When my book “An Introduction to Green Process Management” was in the review stages, one reviewer took exception to my notion that a company’s environmental performance would have a significant relationship to its business performance. I strongly disagreed with this, and believe that a company with environmental impact measures and process to improve their environmental performance will have major advantages over those suppliers that do not have such programs.
Unfortunately, like many other things, politics enters into the equation. One major argument against “Going Green” or managing environmental performance is that it is too expensive. My experience is just the opposite, environmental impacts can be reduced by reducing waste and energy usage, both of which will save organizations real dollars.
Organizations put a tremendous amount of resources into reducing cost and improving efficiencies; why not focus on waste and energy reduction projects? Will you wait until you are forced to comply by your customer? Will you lose your customer because you competition took advantage of understanding and managing their environmental impact and you didn’t?
I can only image that environmental performance measures will become important supplier selection criteria just as Quality requirements have long been a part of supplier audits and surveys.
I really believe that the “Green” train has left the station and it is pointless to argue about it, now is the time to do something and save money while being recognized by your customers as a leader in environmental sustainability.
-Sam
In 2010 the Carbon Disclosure Project (CDP) sent questionnaires to 1,400 companies that make up the supply chain of 45 of the world’s leading corporations. The questions included “Is Climate change integrated into your business strategy?, if please explain why not and Do you have an emission reduction target?
Could your business answer yes to both of these questions and provide evidence to support it? What if your customer told you that if you couldn’t you could no longer be their supplier?
That day may not be far off; the corporations participating in the CDP include Boeing, Bank of America, Dell, Eaton, Heinz, IBM, Johnson & Johnson, Kellogg, Pepsi, Sony and Wal-Mart. As the larger companies begin to measure, report and implement programs to reduce emissions and waste, you can only expect the trickledown effect throughout the supply chain. The reason for this is that an organization that is managing emissions and waste is not only an “Environmentally Friendly” company but is an efficient company focused on its operating costs. After all emissions are the result of consuming energy and energy costs money.
The current focus on the environment and becoming Green presents business with an opportunity to save money, reduce its environmental impact, market its self as a “Green” organization and feel good about doing it. What could be wrong with this? And why isn’t everyone on board? Is Green seen as too expensive? Just a fad? Just political? Whatever the reason many companies are missing a great opportunity to take advantage of something that has no downside. Furthermore ignoring the opportunity may have a huge downside, just what if your customer will only buy from a company that is measuring and managing its environmental impact, what do you do then?
Companies are about money, and I can think of no other organization more focused on money than Wal-Mart, love them or hate them they are a very efficient organization and there are lessons that can be learned from what they do. If Wal-Mart is involved in Green and Sustainability there are savings in Green and Sustainability. In a statement Wal-Mart’s chief executive, H. Lee Scott said:
“There is no conflict between our business model of everyday low costs and everyday low prices and being a more sustainable business,”
In one example Wal-Mart saved $25 million by installing auxiliary power units in trucks to provided power when the truck would otherwise be idling. The savings came from the 10 million gallons of diesel fuel that did not have to be burned.
So why doesn’t every organization just find and implement projects that save money by reducing energy? Interesting question and I believe the answer is that there is just no focus within the organization to do it. There is no focus because it is not something that is measured and reported, and if it is not measured and reported it just doesn’t happen. This is the beauty of measuring and reporting carbon emissions. Carbon Emissions provide a universal measurement unit that is easily calculated just buy knowing the amount of energy that is used. Your organization may use electricity, natural gas and or diesel fuel. If you know the amount of each used in a given time period you simply multiply usage by a factor to calculate emissions in pounds or tons of Carbon Dioxide. This measurement at a top level provides a method to track reduction efforts. Once the emissions are base lined, projects can be implemented to reduce energy usage which reduces emissions and saves money. As in any improvement project the measurement is the key. Without an effective way to measure what you are doing, you have no way to understand and quantify the results of the effort. Without a measurement any project will just die. It is not enough to proclaim you are a Green and an environmental company you need a good way to measure how green you are.
Here is where it all comes together; by starting even a basic program to measure your carbon emissions and understanding what activities consume the most energy you will be well on your way to set goals for improvement that will lead to reduced operating costs and as a benefit you will be prepared to address your customers questions when they ask you “Is Climate change integrated into your business strategy?, and Do you have an emission reduction target?
Will you competitor be able to do this?
-Sam Windsor
www.greenprocessmanagement.com
After reading the news post that The Obama Energy Czar, Carol Bower is stepping down and seeing the discussions between the “Business” Republicans and the “Environmental” Democrats I can’t help but wonder how this will impact the view of Green and Sustainability in the small to medium size business world. Will more businesses put their environmental management and green initiatives on the back burner and miss out on ways to reduce costs and demonstrate to their suppliers that they are on top of their game, or will this serve to take some of the politics out of the discussion and allow the focus to be on the business and the benefits of a good environmental management program. I guess time will tell.
Will these small and medium size businesses wait until they receive the request from their major customer for a sustainability report before doing anything? You have to believe the day is coming. In the Greenbiz.com State of Green Business 2010 report, they state that 84% of the US companies listed on FTSE Global 500 companies reported their carbon emissions to the Carbon Disclosure Projects. As the major companies report and start to manage their emissions, smaller companies who are their suppliers can only expect to receive such requests. Wal-Mart is collecting environmental data from their customers and while that I am sure Wal-Mart is committed to the environment, it is hard for me to believe that Wal-Mart does anything that does not save them money. A tour of their Sustainability page located at http://walmartstores.com/sustainability/ will certainly demonstrate the effort they are putting into addressing environmental issues and they are not shy about saving money from these efforts.
Even if you are not a supplier to one of the large companies that are reporting to the Carbon Disclosure project, you are missing an opportunity to do something than can save money and possibly give you a marketing advantage with very little investment. I think that most miss the point, when they see something like reporting carbon emissions, they go straight to Global warming and does carbon really cause global warming. The real point is that carbon emissions are a convenient way to measure energy usage from multiple sources in a single measure. Energy costs money, saving energy lowers cost a pretty simple equation.
Most organizations go to great efforts to reduce costs with all sorts of improvement and cost reducing efforts. At the same time they walk past opportunities to save money by understanding their energy usage. If you can save money at home by managing energy and waste, doesn’t it make sense to do it at work? Measuring carbon emissions has become this big political football with the playing field clearly divided between the Democrats and Republicans. Saving money is not about the politics or global warming it is about business, and money can be saved with a basic assessment of energy usage and waste streams. Understanding and measuring emissions and waste is the key to reductions, Measuring Carbon is a convenient measurement tool.
Forget the politics and go save some money
-Sam
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