Success Paths to Sustainable Manufacturing Greg Glassley April 10, 2015 1.

Success Paths to Sustainable ManufacturingGreg GlassleyApril 10, 2015

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Authors and Contributors• Dr. Sanya Carley, Associate Professor, School of Public and

Environmental Affairs, Indiana University• Jerry Jasinowski, Former President of the National Association

of Manufacturers• Greg Glassley, MPA and MSES Student, School of Public and

Environmental Affairs, Indiana University• Patrick Strahan, MPA Student, School of Public and

Environmental Affairs, Indiana University• Dr. Shahzeen Attari, Assistant Professor, School of Public and

Environmental Affairs, Indiana University• Dr. Scott Shackelford, Assistant Professor of Business Law and

Ethics, Kelley School of Business,Indiana University 2

OutlineI. Purpose for ResearchII. Main Categories of Sustainable ManufacturingIII. Benefits of Sustainable ManufacturingIV. Barriers to Successful ImplementationV. Common Themes and Advice

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Purpose for Research

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Guiding Questions− What is Sustainable Manufacturing (SM)?− Rising Importance − Multitude of technical and engineering

reports− What are the Benefits?− How much money are companies saving?− What barriers do companies encounter?− How do they deal with those barriers?

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1970 1974 1979 1984 1989 1994 1999 2004 2009 20110

500

1000

1500

2000

2500

Rise in Importance of Sustainability

Number of Companies

Year

Num

ber o

f Com

pani

es

Note: Year sustainability first appeared on management agendaSource: Graph is an approximation adapted from Kiron, et al (2011)

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Sustainable Manufacturing− “Sustainable manufacturing efforts generally aim

to decrease resource consumption through improved efficiency in manufacturing processes, eliminate unnecessary resource use, and decrease the amount of waste and emissions produced through manufacturing activities.”

Categories− Energy Reduction− Water Reduction− Emissions Reductions− Waste Reduction

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ENERGY:− Energy efficient lighting or appliances− Repairing / Replacing HVAC systems− Making the manufacturing process more efficient

WATER:− Use less− Collect and Reuse

EMISSIONS:− CO2, Volatile Organic Compounds (VOCs), Phosphorus− Efficiency improvements; Input and technology

improvements

WASTE:− Using fewer materials− Recycling, Creative Reusing

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Benefits of Sustainable Manufacturing

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Economic Gains− “Our environmental or social initiatives need to be grounded

in economic goodness.”− “As companies got started, they realized it was not all costs

and that you could earn money.”− “Our company has saved $7 billion over 15 years.”− “We’ve saved close to $200 million through energy efficiency

projects.”− “Eliminating hazardous waste streams saves the company

$750,000 each year.”− “Fixing air leaks allowed us to save $60,000 in the first two

months.”− “We have saved $1 billion in the last five years by simply

reducing the amount of waste that goes to landfill.”11

Social Commitment

− “Communities are the most important because they

provide the infrastructure and use our products in

projects. If we are going to have a sustainable

organization, we have to make sure that we improve

and maintain the quality of our communities.”

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Environmental Protection

− Using fewer resources and hazardous chemicals

− “Compliance and regulation was getting so

expensive that companies were starting to think

more creatively as to how you can avoid needing to

be in compliance by reducing your impact.”

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Other Benefits− Meeting Consumer Expectations

− “The transparency around, what is your impact on the environment while you’re making the product that I want to buy from you, is something that is not driven by regulation; it’s driven by the marketplace.”

− Awards and Media Attention Garnered by Initiatives− Sense of Pride among employees− Brand loyalty

− Hiring Gains due to their SM efforts− “They expect the companies that they work for to pay

attention to the environment, to put a high value on sustainability. It’s just an expectation of theirs now.” 14

Barriers to Implementing Sustainable Manufacturing

Initiatives

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Internal Company Culture− “To get everybody to think about it in the same way, it’s a

huge challenge.”

− “What is most important is getting people to think differently about sustainability.”

Communication

− Conveying the message to all parts and members of the organization.

− Why are we changing what we do? How are we changing?

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Time and Resources

− “We’ll have a 40% increase in sales in a year. Everybody is

overloaded. The tendency is to slip away from what we

know is preventative and progressive and we tend to

kind of move away from it. We have to come back to it.

And we always do.”

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Operational Concerns− Is change necessary?− Sacrificing quality?

Legal Issues

− Companies ahead of regulators− Beyond Compliance?

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Common Themes and

Advice

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Importance of Flexible Goals− Top down objectives with bottom-up and decentralized

solutions.− “Each level in the manufacturing organization plays a

role in what they can contribute, or what kind of objectives they can support, where they think they can make improvements.”

− “I think the culture has created an environment where the best ideas come forward and they don’t all come top down.”

− Adapt and Change− “If it makes sense, we do it.”

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Importance of Flexible Goals− Benchmarking

− “When you start benchmarking other companies and looking at your own data and footprint, it can become overwhelming for some people, so keeping everyone centered is important, not overwhelming them.”

− Appropriate Metrics− Be fair to yourself and the company− Intensity metrics

− “We focus mostly on intensity metrics because it’s a proxy for efficiency, and we’re all about operating as efficiently as possible.”

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Communication is a Prerequisite for Success

− The power and value of voice throughout the organization.

− Speak the language in a way each employee understands.− “There is no one size fits all approach in this regard.”

− “Make sure people understand the importance and value associated with it and bring it to their employees and engage them.”

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Robust Culture of Corporate Sustainability is Vital

− “A lot of them [best ideas] come from the shop floor, or they come from mid-level managers who, like Employee X, come up with an idea that really makes a lot of sense. That only happens when people trust (a) that you really want that and (b) that you’re going to look at it seriously and do something with it.”

− “This practice builds trust and employee engagement, in turn producing innovation and worker satisfaction.”

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Successful Initiatives Require Innovation

− Tracking flights; investing in hi-definition video conferencing equipment.

− Reusing your company’s waste or the waste of a different company

Reporting is Essential to Accountability and Effectiveness

− Global Reporting Initiative (GRI)− “Our numbers are for us to make decisions. Our

sustainability report is for employees.”

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Final Thoughts

− Sustainability is a journey− Scale and Scope− Go at your own pace and build off of “wins”− Timing

− “Learn how to recognize opportunities and then capitalize on it to move your program forward.”

− “Either/Or to Both/And”

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Thank You!

Greg GlassleyIndiana [email protected]

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