Six Solutions for Sustainable Business

Companies that prosper in the future will be more sustainable, with new products and processes. This seminar was designed to provide an answer to three questions. “What does being sustainable mean?” “Why does it matter?” “What must we do to become sustainable?” At the end of the day, people participating will:

• have a high level view of our natural environment, and its challenges that involve business;
• recognize many of the different tools and techniques that can be used, with examples;
• have a start in developing a company specific strategy, business case, plan, and responsibilities.

The seminar is organized around six topical solutions. They are: Design for environment, Energy transition, Quality improvement, Supply chain initiatives, Product transition, and Triple bottom line. Each solution involves several functional groups. While designed around manufacturing operations, this seminar will benefit people in all industries and functions, and sending a cross functional team will provide additional synergy.

The Six Topical Solutions:

Design for environment In a typical product eighty percent of the environmental impact is determined in the design phase. Design criteria include environmentally benign materials, part marking, rapid disassembly, enabling renewal and recycling, as well as others. Life cycle assessment identifies environmental impacts of a product and thus suggests improvements. In the past, such criteria have not been emphasized. Thus, as Michael Braungart says, “It’s time to redesign everything.” New product development will be an essential element of the transition to sustainability. The prime responsibility must be in the R&D and engineering groups.
Energy transition Most of the energy of the typical firm is used in facilities (including production processes) and transportation (both supply chain and employees). Footprinting techniques measure the impacts. In the year 2050, two thirds of the buildings will have been built after today, so the time to begin is now. Facilities can take advantage of LEED standards to have a small carbon footprint, and carbon neutral buildings are possible. The impacts of process energy are very company specific and examples of improvements will be included. Sources of transportation energy impacts include supply chain, distribution network, and employee commuting and travel. Techniques to minimize carbon emissions include managing the transportation network, sourcing, technology upgrades and employee carpooling. The facilities staff has the lead, with most transportation impacts considered as part of the supply chain plan.
Quality improvement Since Deming’s work, improvement activities have evolved into several areas, including managing based on information, just-in-time, lean, theory of constraints, and six sigma. This body of knowledge is central to the APICS mission, and the techniques included are vital to an effective sustainability transition. Tools include waste reduction, process improvement, and value stream mapping. These activities have frequently been centered in a firm’s operations staff. Their use to support sustainability is an extension of their traditional application, and requires the same careful implementation. Operations has the lead role and can facilitate the use of these tools in other parts of the firm.
Supply chain initiatives In many firms, the supplier network has been based on fragmented decision making using only financial measures. The initiatives in this area will include applying the triple bottom line to renew this network. An example of the result is more purchased goods and services sourced closer to home to reduce the carbon footprint, as part of the energy transition. Quality improvement, already applied in the supply chain, becomes more extensive. The procurement group has the lead.
Product transition Like the sweeping change in the economy a century ago as automobiles revolutionized transportation, many new products incorporating new designs will replace the existing generation of products. In energy, wind power and solar power are viable replacements for fossil fuels, to provide one example. The customer drives demand for new products, and innovation supports this demand. Within the firm the group responsible is sales and marketing. In some companies, the design groups will lead or co-lead.
Triple bottom line The almost religious belief that everything can be measured in dollars has lead to many damaging outcomes. Today many advocate measures that incorporate not just financial values but also social and environmental impacts. Profit, people, and planet. Economy, equity, and ecology. This approach considers all stakeholders, not just investors. Current economic thinking is challenged, and new measures are needed. The scorekeepers for the firm are in finance and accounting, and these groups must have the prime responsibility for implementing triple bottom line thinking in the organization.
The seventh solution: strategy The sustainable firm will be transformed as these six topical solutions are applied. All the groups in the organization have a role and are impacted in the course of these solutions. Clearly this happens best with a strategy. A new vision is required. This will result in a new long range direction and the rethinking of goals. The business case must consider the triple bottom line. As in all such change, top management must play a leadership role. Project management and coordination are essential. An employee driven approach is possible. The companies that make the transition will survive.

copyright 2009 Ron Sullivan (G)

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