Lean, Mean - and Green?
Lean, Mean - and Green?
BakingBusiness.com, September 01, 2008
by FoodBusinessNews.net Staff

Lean manufacturing has been around for several decades. Sustainability, on the other hand, is relatively new and becoming more and more important in our resource-restrained world. Until recently, lean and sustainability were considered mutually exclusive initiatives with different goals and outcomes. Now, however, increasing numbers of people are saying the lean paradigm and the sustainability movement are linked.

However, some suspect that the lean initiative is losing its prominence and trying to piggyback on the rapidly growing sustainability initiative. Others fear that the sustainability people are simply trying to hitch a ride on the already established and popular lean initiative. Still others might think consultants are simply trying to show a link between two robust initiatives for the purpose of opening a new market for themselves. So it is legitimate to ask: Should lean and sustainability be linked?

DEFINED PRACTICES. To answer this, let’s first look at the definitions of the two terms.

Sustainability was defined in 1987 at the World Commission on Environment and Development as, "Development that meets the needs of the present without compromising the ability of future organizations to meet their own needs." It stresses reducing the carbon footprint, minimizing the use of natural resources and reducing solid waste and hazardous materials. In a world in which resource usage is outpacing improvements in manufacturing and the environment is becoming increasingly fragile, the sustainability initiative originated from concern about unsustainable damage to the environment and the conservation of rapidly depleting natural resources. Sustainability was largely born from a combination of moral responsibility, economic motivation and legal considerations. It stresses conservation of resources and environmental stewardship.

Lean manufacturing, as put forth by Michigan Institute of Technology’s International Motor Vehicles Program, begins, "Lean Production uses less of everything vs. mass production:

• Half the manufacturing space • Half the investment in tools • Half the engineering hours to develop a new product in half the time • Less than half the needed inventory • Fewer defects producing less scrap and rework."

Lean derives from the Toyota Production System, and it has been accepted since the 1970s as a more efficient way to manufacture almost anything. The adoption of lean manufacturing gained momentum as a result of the recognition that "lean" manufacturers are by far the most competitive. The basic concept of lean manufacturing is the minimization of waste, or non-value adding activities, throughout the entire enterprise and across the whole supply chain. These wastes are commonly identified as defects, excess travel distance, inventory, waiting, overproduction, motion and overprocessing activities that do not contribute to the creation of value that a customer is willing to pay for.

Lean does not specifically strive to eliminate wasted materials and energy resources. Lean stresses producing what the customer wants, when they want it and in the quantities they want. It strives to do this using the least amount of time, labor, materials and space. The motivation for lean manufacturing is driven mostly by economic factors and competitive necessity.

It can be said that lean and sustainability have different drivers, but they are both, for the most part, responses to internal values and/or competitiveness issues rather than compliance to regulatory requirements. Lean metrics are typically factors related to economic performance and customer satisfaction. Sustainability has traditionally been measured in terms of environmental and social impacts. Consequently, lean and sustainability were not closely linked until relatively recently. For many years in fact, it was intuitively believed that efforts to produce environmental and social benefits resulted in increased cost, while manufacturing efficiencies produced economic benefit to manufacturers. The link between lean and sustainability was not immediately obvious to their respective supporters and practitioners.

Now, however, there is a growing recognition that lean contributes in many ways to sustainability. Complementary environmental, social and economic metrics can be used to measure the effectiveness of both lean and sustainability initiatives. Most large corporations now have lean initiatives and many include sustainability among their core values. Large manufacturers and retailers such as Wal-Mart and Target are driving lean and sustainability across their entire supplier chains. Lean is well established. The movement toward sustainability has gained momentum and appears to be irreversible.

RELENTLESS EFFORTS. The efficiencies introduced in lean manufacturing have a positive impact on sustainability. They result in less energy and fewer materials being used per unit manufactured, reduced emissions to air and water and less hazardous waste being produced. Lean’s relentless drive to eliminate wastes also results in reduced material and water usage and a reduced carbon and physical footprint.

There are many ways that lean minimizes the amount of materials going to landfills and the amount of energy used for recycling. These include reduced scrap in the manufacturing process and improved packaging and product design for manufacturability.

Reduced scrap and rework results in less energy used to repair faulty products and less material wasted as a result of scrapping and disposing of unrepairable defects.

Optimized process layouts minimize the distances traveled by materials in the manufacturing process (which is commonly measured in miles, even in relatively simple processes), thus saving energy and reducing the amount of manufacturing space required.

A smaller physical footprint means less need for heating and cooling of enclosed space, thus contributing to a smaller carbon footprint.

Supply chain optimization results in reduced usage of petroleum products and reduced transportation costs. All work-in-process (WIP) inventories have undergone some value-adding activity. If the amount of WIP exceeds the demand by customers, or it becomes obsolete because of changing customer demand or design changes, it becomes unusable and the sunk cost is wasted. It must be recycled or disposed of, thus wasting energy and/or contributing to the amount of discarded materials in landfills.

Benefits to society and to the environment are outcomes of lean that were not part of its initial goals, but that does not mean the link between lean and sustainability needs to be forced. No special environmental considerations or tools need to be incorporated into lean to make it more environmentally friendly during the life cycle of products and facilities in lean operations. Achieving manufacturing efficiencies and creating a culture of continuous improvement create the foundation for achieving sustainability objectives.

MEASURED SUCCESS. The key to linking lean and sustainability is to identify their synergies and use common metrics to measure the success of both. In our capitalist society, social and environmental metrics have traditionally been driven mostly by regulation and, increasingly, public opinion. In the end, however, businesses are driven by economics. The good news is that sustainability and lean can both be measured in terms of environmental, social and economic costs, benefits and savings.

Common metrics should measure costs across the entire supply chain and the total cost of goods delivered, including accounting for hidden, overhead, capital and lifecycle costs. Such emphasis will result in looking not only at manufacturing costs, but cost of materials, transportation, packaging, disposal and recycling, and cost of regulatory compliance (or noncompliance). Reducing these costs produces profitability and contributes to the sustainability of the culture and our planet.

So should lean and sustainability be linked? They are linked. One complements the other. They are synergistic. While their drivers have been different, there is an increasingly obvious convergence of their goals and outcomes. Lean and sustainability practitioners need only acknowledge that fact and work together to produce even greater benefits by integrating their efforts.

It becomes more apparent with each passing day that waste is not sustainable. Lean reduces waste and contributes to sustainability. In turn, it also provides public relations and marketing opportunities as public and government scrutiny of environmental stewardship increases. While the general public does not typically discuss environmental and conservation issues in terms of sustainability, there is now a general awareness of the associated issues. People are basing their preferences for companies, products and services at least in part on how well companies are perceived as stewards of the environment. Businesses that embrace lean and sustainability are and will continue to be more competitive, successful and sustainable for the long term. It is just good business.

Mr. Stamm, vice-president, director, Lean Enterprise Consulting, provides manufacturing improvement consulting at CH2M HILL, Atlanta, GA. He has been a key contributor to the development of Lean Outcomes Architecting, a highly successful systems engineering-based lean transformation methodology. Mr. Stamm is a member of the Institute of Industrial Engineers (IIE) Lean Certification Program committee. He can be reached at Dennis.Stamm@ch2m.com.