Tim Woolman - Research Engineer, Dr Ali Veshagh - Senior Lecturer

1. Integrating Environmental Sustainability within Manufacturing SME’s Operations- Development of Business Support Tim Woolman -Research Engineer, Dr Ali Veshagh - Senior Lecturer Warwick Manufacturing Group, University of Warwick, UK 13th International Conference of The Greening of Industry Network 2 – 5 July 2006

2. Integrating Environmental Sustainability within Manufacturing SME’s Operations • INTRODUCTION & RESEARCH CONTEXT • LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS • EXISTING SUPPORT FOR SMES • DIAGNOSING PERFORMANCE IMPROVEMENT • CONCLUSIONS FOR DEVELOPING BUSINESS SUPPORT FOR SMES Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

3. INTRODUCTION • UK SMEs contribute approx; • 60% commercial waste, • 80% pollution incidents [NetRegs]. • Literature shows barriers to action through environmental management are; • lack of training, awareness & relevant information, • lack of sector specific support and solutions, • expense. • To inform the design of effective support for SMEs : (1) What drivers and barriers are currently faced by UK manufacturing SMEs? (2) What support for SMEs do current schemes offer? (3) How can support be developed to be effective in integrating sustainability? Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

4. RESEARCH CONTEXT Part of WMG research project (2003-7)… Eco-Product Innovation & Clean Manufacturing Technologies … to investigate how small & medium sized manufacturers in the UK West Midlandscould be most effectively supported in adoptingeco-product innovation & clean manufacturing. ~5,000 manufacturing SMEs in UK West Midlands Uptake of more environmentally sustainable practices depends on SMEs recognising, and realising, their contribution to current objectives. Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

5. RESEARCH CONTEXT Existing schemes; Envirowise, EnviroINNOVATEvary in approach to ecodesign,cleaner production. • Ecodesign : Most successful ecodesign principles in 77 Dutch SMEs • recycling material • increasing durability • using recycled materials • reducing energy use • Cleaner Production : “…conserving raw materials, water and energy; eliminating toxic and dangerous raw materials; and reducing the quantity and toxicity of all emissions and wastes at source during the production process.” [UNEP] Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

6. LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS 1. Small Business Survey [UK Department of Trade & Industry, 2004/5] 7505 small businesses, UK wide • Potential to incorporate environmentally conscious practices, through: growth, • ~25% predicted company growth from promoting the company as environmentally friendly innovation, • 35% introduced a new product or service in preceding year • 25% introduced new processes or way of working “ and the majority being prepared to act • >75% “no obstacle” to reducing energy, water or waste. Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

7. 64% 22% 16% 9% 80% 74% 62% 51% 51% General Legislation Reduce Customer Pressure Concern Costs Workforce Motivates Creates Good Relations with Customers Prosecution Operating Costs Competitiveness Reduced Risk of Reduced Improved LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS 2. SME-nvironment Survey [NetRegs – Environment Agency, 2005] 5554 SMEs, UK wide, 15 sectors incl. manuf’g • Growing SME awareness of their environmental impacts, since 2003 • Action >70% manufacturers implemented at least 1 practical measure • Reasons for addressing environmental issues • Agreement on links between environmentalgood practice and business benefits Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

8. 36% 30% 22% 46% 16% 12% Meeting Regulatory Environmental customer compliance benefit Lack of Cost Lack of demands customer prohibitive concern demand 83% 56% 54% 53% 21% 18% 44% 15% 7% Industry Trade Governement/ Fairs/ Customers Business Industry or EC/EU National End Associations regulatory suppliers/ clients trade bodies government customer authorities parent co. LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS 3. Design Council European Survey [UK Design Council, 2001] 600 manufacturing companies, 5 European countries (200 from UK) • Activities approaching Design for Sustainability (DfS) increase with co. size • DriversBarriers • Influenced by Informed by • 61% looked forward to DfS increasing profits, a third expecting +5% Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

9. LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS Observations • ~ 25% SMEs recognise environment as driver, but majority are prepared to act. • New products & processes are important to growing SMEs, - opportunity to incorporate environmental criteria, with justification as; • cost reduction, • improving compliance, • improving customer relations (business clients are a strong influence). • Gaps in existing surveys: • expectations for future customer demand • status of action addressing cleaner production • typical ambitions, particularly for product/production technologies • testing which support enablers are favoured e.g. training, measurement, guides.  need a more focussed survey Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

10. 65% 57% 22% 14% 12% 4% 4% 4% 4% Automotive General Aerospace Medical Construction Mining Office & Retail Domestic & Petrochemical Engineering Recreational 56% 21% 13% 4% 4% 2% <10 10 to 50 to 100 to 150 to 200 to 49 99 149 199 249 WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES WMG postal survey to 540 manufacturing SMEs in West Midlands,‘05/06 • 49 returns (11%), mainly in automotive/general engineering supply chains • Most companies – small, 10 to 49 employees – respondents: senior management Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

11. WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES Results • Important reasons to invest in cleaner manufacturing Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

12. WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES Results • Constraints to adopting cleaner production processes and/or environmentally conscious product design Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

13. WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES Results • Cleaner manufacturing actions implemented or planned Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

14. "Cost effective renewable energy sources" "Waste / cost reduction schemes" "Money" "Time" WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES Results • Enablers for making progress • Training • Internet guidance preferred (37%) to printed guidance (10%) • 41% interested in spreadsheet for self-analysis of environmental performance • Suggested Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

15. Large Companies Medium Companies Small Companies In house Environmental Consultants Management Consultants BREW - Envirowise - Carbon Trust - NISP Eco- Design & Manufacturing Consultants Regional SME Support Schemes GAP Low Depth of service in Environmental Innovation High EXISTING CLEANER MANUFACTURING SUPPORT (UK) • EnviroINNOVATE (WM):accelerate product/process dev’t, tech. transfer • Subsidised expert input – 5 days to 6 months • Envirowise : Waste Minimisation, Resource Efficiency • Free half-day visit from advisors, Helpline, Workshops,Best Practice Guides – printed and internet Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

16. DEVELOPING EFFECTIVE SUPPORT FOR ENVIRONMENTAL SUSTAINABILITY Addressing the gap… Criteria for Content • Address any shortfall/uncertainty in compliance as a priority (NetRegs) • Reduce & justify costs, offering investment appraisal • Address customer and market signals to identify (future) value-add • Respond to internal concerns • Link to process for new product or process development • Provide information and training to address barriers of; • lack of in-house expertise, • perceived poor availability of compatible cleaner technology • Raise general awareness and explain likely environmental benefits Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

17. DEVELOPING EFFECTIVE SUPPORT FOR ENVIRONMENTAL SUSTAINABILITY Addressing the gap… Criteria for Method • Collaborate with an internal champion • Offer self-study manuals and Internet guides • Channel support through influencers; • Industry / Trade Associations • customers higher in the supply chain • Enable SMEs to address their lower tier suppliers • Enable use of a spreadsheet, tailored for self-diagnosis Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

18. 1. Plan & Select Indicators 2. Collect Data & Convert to Information 3. Assess & Communicate Results 4. Review & Improve EPE DIAGNOSING PERFORMANCE IMPROVEMENT Environmental Performance Evaluation [ISO 14031] offers framework Selecting Indicators – are they… • related to meaningful environmental conditions eg. air/water quality? • sensitive to causal aspects and their changing? • flexible or robust to changes in organisation to reveal trends, independent of levels of business activity? • relevant and understandable by interested parties? • obtainable in a cost-effective, consistent, reliable and timely manner? Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

19. DIAGNOSING PERFORMANCE IMPROVEMENT Simplified proxy measures • cost-effective - to limit the burden of data collection • understandable - suitable to integrate with business measures Example Quantitative Measures - normalised using production output • Non-renewable vs recyclate vs renewable material use • Energy use • Water use • Emissions; solid, liquid, gaseous especially eco/human toxic substances Qualitative Measures- broaden the evaluation to assess integration, such as: • Environmental awareness & participation - highlight gaps • Degree of product design-for-cleaner production • Degree of conformance of suppliers to environmental criteria Further work - relate projected measures to value, to prioritize action using ‘eco-efficiency’ Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

20. Info. DEVELOPING SME SUPPORT FOR INTEGRATING ENVIRONMENTAL SUSTAINABILITY Support Process • with measurementto demonstrateimprovement andtest effectivenessof approaches • to be developedwith feedbackfrom trial SMEimplementation Plan Do Check Identify (& measure where appropriate) initial environmental performance Measure Identify priorities for improvement and needs for information, guidance and training to overcome any barriers Guide Deliver information, guidance and training to enable action Action within manufacturing and/or design Measure Identify (& measure where appropriate) improving environmental performance Feed back Case Studies Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

21. CONCLUSIONS Support for environmental sustainability in Midlands manufacturing SMEs should: • Address legislative compliance to introduce a change process which can go further. • Seek net cost benefits with an SME-friendly method of investment appraisal. • Appraise both current and future customer / market signals to find sources of value in addressing environmental aspects in products or production. • Build-in consideration of internal concerns and enable people to contribute to solutions through responding to demand for environmental awareness and skills. • Keep abreast of new solutions emerging in the field of cleaner technology and new channels for supply. • Enable cooperation between SME champions and external advisors, also suppliers with key expertise. • Offer guiding information through both the Internet and self-study manuals, backed up by local contact, involving customers, Trade Associations & suppliers. • Demonstrate benefits through measurement (EPE) seeking continuous improvement Further work needed to help prioritize actions from projected measures of ‘eco-efficiency’ Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006

22. Eco-Product Innovation and Cleaner Manufacturing Technologies Acknowledgements Engineering & Physical Sciences Research Council, UK Pro Enviro Ltd – particularly Mr. Steve Stones Questions? Tim Woolman Research Engineer – Warwick Manufacturing Group EngD Programme, UK Direct Tel: +44 (0) 24 765 75960 t.c.woolman@warwick.ac.uk http://www2.warwick.ac.uk/fac/sci/eng/engdoc/research/twoolman/ Dr Ali Veshagh Senior Lecturer– Warwick Manufacturing Group Direct Tel: +44 (0) 24 765 23875 a.veshagh@warwick.ac.uk Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006