Lean, Green, Profitable: the extended supply chain

1. Lean, Green, Profitable: the extended supply chain

2. Lean Thinking and Manufacturing Process Improvement Understanding the Problems, Fixing the Processes, and Using Your People to Make it stick

3. Lean Thinking • Focus change • From machine and people utilisation to- • Performing Value Adding operations

4. Value Adding? • Any operation that changes the component. • As that is what the customer pays for

5. How to add value more of the time • 1) Value • 2) Value stream • 3) Flow of Value • 4) Pull • 5) Perfection Lean Thinking: Womack and Jones

6. ● Specify what customers Value – Value is what the customer wants and only what the customer wants. This requires a precise understanding of the specific needs of the customer. It is said (but I have never traced the source) that up to 95% of process activities are non - value adding. This is probably true, depending on your definition of value adding vs supporting and waste in a system

7. ● Understand the Value Stream – The value stream are those activities that, when done correctly and in the right order, produce the product or service that the customer values. A lean organisation traces and manages all the activities in the organisation that deliver value wherever they are and whichever department they are in. Activities can be: in whole or part unnecessary and wasteful (and therefore, should be eliminated); supporting the value-adding activities (which should be reduced as far as possible); and customer value-adding (which should be continuously improved)

8. ● Improve the Flow – In a lean organisation work should flow steadily and without interruption from one value adding or supporting activity to the next. This is contrasted with the “batching” of work where, for instance a week's expenses claims are collected for a manager to authorise in one go. Where it is suitable, flow significantly speeds the processing and every effort should be

9. ● Pull – The system should react to customer demand, in other words, customers pull the work through the system. In non-lean organisations work is pushed though the system at the convenience of the operators and so you produce outputs that are not required. Most services react to customer demand and so pull the work through the system

10. ● Perfection – As the first four principles are implemented you should get to understand the system ever better and from this understanding you should generate ideas for more improvement. A lean system becomes yet more leaner and faster and waste is ever easier to identify and eliminate. A perfect process delivers just the right amount of value to the customer. In a perfect process, every step is valuable-adding, capable (produces a good result every time), available (produces the desired output, not just the desired quality, every time), adequate (does not cause delay), flexible, and linked by continuous flow. If one of these factors fails some waste is produced

11. Lean Consumption • 1. Solve the customer’s problem completely by ensuring that all the goods and services work, and work together • 2. Don’t waste the customer’s time • 3. Provide exactly what the customer wants • 4. Provide what’s wanted exactly where it’s wanted • 5. Provide what’s wanted where it’s wanted exactly when it’s wanted • 6. Continually aggregate solutions to reduce the customer’s time and hassle. (Womack and Jones; Harvard Business Review 2005)

12. The 7 Wastes • If green manufacturing is about lean manufacturing, then reducing the 7 wastes should also help: • Overproduction; • Waiting time; • Transportation; • Inappropriate or unnecessary manufacture; • Unnecessary inventory; • Unnecessary movement of goods; • Defective products.

13. Waste Minimisation

14. What is Waste? Waste Resource=in Disguise=Waste = Indicator of Inefficiency=Waste Goal: To eliminate the very concept of Waste

15. What are Examples of Waste? Manufacturing Wastes (Toyota) General Wastes: Solid Waste - Garbage Hazardous Waste Emissions Waste of Resources - Energy, Water, Materials Waste of Human Resources Misprinted Invoices • 1. Waste from Overproduction • 2. Waste of Waiting Time • 3. Waste of Transportation • 4. Waste in Processing • 5. Waste of Inventory • 6. Waste of Motion • 7. Waste from Product Defects

16. What is Meant by Zero Waste? • 100% Resource Efficiency! • Zero Solid & Hazardous Waste • Zero Emissions - to air, water or soil • Zero Waste in Production & Admin Activities • Zero Waste in Product Life • Zero Toxics - to reduce risks to nature - the presence of toxics creates hazardous waste

17. Clear Endpoint Goal Reminds us of the need for a sustainable future Easily understood by all Promotes more rapid Innovation Optimizes the entire system

18. Incremental strategies are very valuable • Pollution Prevention • Cleaner Production • Environmental management Systems • Eco-Efficiency - better than yesterday is good, but will not necessarily achieve a sustainable future

19. Zero Waste – Goals 1. Zero Waste of Resources (100% efficiency) - Energy, Materials, Human 2. Zero Emissions - Air, Soil, Water, Solid Waste, Hazardous Waste 3. Zero Waste in Activities - Administration, Production 4. Zero Waste in Product Life - Transportation, Use, End-of-Life 5. Zero Use of Toxics - Processes and Products

20. Zero Waste is a Sound Strategy • Easily understood - Engages people • Saves Money - economically sound • Promotes:-Waste Prevention: P2, redesign, reuse, repair • Promotes :- Waste Recovery: recycling, composting • Leads to :-Conservation of resources and energy • Eliminates:-Pollution • Creates New Jobs - 10 to 1 over landfilling • - Waste Managers become Resource Managers • - Opportunities in return logistics • - New products from recovered materials

21. Widely Applicable • Businesses • Communities • Governments • Schools • Industries • Homes • You name it!

22. Zero Waste Supports Sustainability Economic Sustainability •Waste reduction improves efficiency and lowers costs • Costs of compliance with regulations is reduced Environmental Sustainability • Reduces demand for resources and energy from nature • Reduces wastes to nature Social Sustainability • More resources and energy become available for others • Closing the loop (cradle-to-cradle) generates new jobs

23. Sound Business Tool • Can engage all employees • Identifies all types of inefficiencies • Reduces costs • Promotes more rapid, massive improvements, savings • Guides design activities throughout product life-cycle • Leads to conservation of all resources and energy • Leads to reduced compliance requirements • Integrated into business cycles, not a project

24. Wide Range of Support Tools • Life-Cycle Assessment (LCA) • Full Cost Accounting (FCA) • Green Chemistry - materials that are “Benign by Design” • Design for the Environment (DfE) - using benign materials, recycled materials, durable, repairable - reusable components, recyclable and compostable

25. • Product Stewardship/Extended Product Responsibility (EPR) • Environmental Management Systems (EMS) • Pollution Prevention (P2) • Process Mapping & Mass Balancing • Resource Recovery Facilities • Waste Exchanges • Eco-Industrial Parks

26. Does it Really Work? • Hewlett Packard in Roseville, CA reduced its waste by 95% and saved $870,564 in 1998. • Epson in Portland, OR has reduced its waste to landfills zero and has saved $300,000. • Interface, Inc. in Atlanta, GA has saved over $90M through waste elimination. • Xerox Corp., Rochester, NY has had a Waste-Free Factory environmental performance goal since the early 1990s. The criteria include reductions in waste, emissions, energy consumption, and increased recycling. Savings were $45 million in 1998.

27. Supply Chain Footprint

28. Supply Chain Footprint

29. Carbon Labels? • Actual CO2? • Traffic Lights? • “24 kg CO2 equivalents were used in the production of this steak” • One, two, three planets? • All meat? • All veg?

30. Will Carbon Labels help? • It won’t help the consumer decide which brands to buy, it will simply alienate categories. • Added customer confusion; • Relying on consumer guilt; • Anyway, consumers don’t change much…

31. Will Carbon Labels help?

32. Will Carbon Labels help? • To expect a carbon reduction would be to expect wholesale dietary change (not to mention loss of the meat industry). • Re-think: what are we trying to achieve? • The onus needs to be on the entire supply chain as the entity that gets selected (or not) according to CO2 contribution; • Sits comfortably with OFT ( Office of Fair Trading).

33. Solutions • Technological • Fuel • Redrigeration • Capacity • Lifespan • Distributional • Hubs • Load sharing • Storage sharing • Infrastructure • Institutional • Carbon markets • Political intervention (taxes & subsidies )

34. Remember the 7 Wastes • If green manufacturing is about lean manufacturing, then reducing the 7 wastes should also help: • Overproduction; • Waiting time; • Transportation; • Inappropriate or unnecessary manufacture; • Unnecessary inventory; • Unnecessary movement of goods; • Defective products.