Many of you have heard the word "sustainability" used to refer to a business initiative or process, and you probably wonder how it fits with continuous improvement activities in your own business. At the recent AME Annual Conference in Chicago, Hunter Lovins, who founded and runs Natural Capitalism Solutions and was one of the keynote speakers, presented the hypothesis that sustainability is good business and, done well, can be very profitable for an organization.
When you think about the goals of lean manufacturing and sustainability, the two are very synergistic. Continuous improvement efforts in lean are focused on the elimination of non-value-added waste to produce exactly what the customer wants, when they want it, in the quantity they specify -- and to use the minimum amount of time, material, space and labor to accomplish this at the lowest possible cost. Sustainability is all about minimizing the use of natural resources like materials, energy and even replenishable biomass resources like trees, while reducing solid waste and hazardous materials from our production processes and minimizing our carbon footprint.
All of these resource inputs to our manufacturing operations have a cost, so reducing their use is a cost-reduction effort that improves profitability. In addition to reducing cost, the commitment to sustainability can be motivational for your employees, many of whom are concerned about our planet's future and the lifestyle we will leave behind for future generations.
Many of the attendees at the AME Conference were interested in lean product design and design for manufacturability. These, combined with the 3P (profit, people, planet) process that includes right-sized equipment (not the biggest or fastest), are all about minimizing the material, labor, energy and capital content of your products to reduce the final cost. They also happen to be very friendly to sustainability by minimizing the use of natural resources and reducing the volume of your waste stream.
Stop and think for a moment about all the costs you incur in your operations for things that don't end up in your final product that customers pay for -- things like excess space (that you pay to heat, cool, insure and maintain), materials that end up in your waste stream that you pay to dispose of (have you ever looked at what goes into your Dumpster and gets hauled to the landfill?), excess inventory that you either write off against profit and scrap or try to sell at a deep discount, and things like packaging materials that you pay for (both inbound and outbound) that end up in landfills. These all represent a cost to your business and, in many cases, an unsustainable waste of natural resources.
If you have not already done so, you should pick up a copy of The Squeeze by Gary Langenwalter (SME, 2006) and read the story of how a commitment to sustainability saved a distressed family business by focusing on the triple bottom line of profit, people and planet (community). When you really look into it, you'll find that a commitment to sustainability is not only good for the planet and your people, it's just good business.
Ralph Keller is president of the Association for Manufacturing Excellence, an organization dedicated to cultivating understanding, analysis and exchange of productivity methods and their successful application in the pursuit of excellence. He has been an operations practitioner for the past 35 years.
