green suppliers network an innovative industry-government collaboration
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GREEN SUPPLIERS NETWORK
An Innovative Industry-Government
Collaboration
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•Challenges:
•Outsourcing causes environmental impacts to move
down supply chain
•Manufacturers can be held publicly responsible for suppliers’
environmental performance
•Small and medium-sized manufacturers are pressured to
reduce costs and improve environmental performance with
little resources
Tier N Suppliers
OEM
Tier 1 Suppliers
Tier 2 Suppliers
Responding to Industry’s Needs
Response:
The Green Suppliers Network provides lean and environmental technical assistance to lower tier suppliers
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Green Suppliers Network in a Nutshell
• Green Suppliers provides Lean & Clean technical assistance to small and mid-sized manufacturers that improves competitiveness through environmental and economic benefits
• A Lean & Clean approach expands the traditional Lean definition of waste from eliminating non-value added time, labor, and money to include environmental wastes (e.g. energy, emissions)
• A collaborative venture among industry, the National Institute of Standards and Technology Manufacturing Extension Partnership (NIST MEP) Program, the States and the U.S. EPA
• This voluntary initiative aligns original equipment manufacturer (OEM), supplier and government interests
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What is Lean and Clean?
Clean strives for:
• Nature-friendly Substitutes
• Optimized Material
Efficiency
• Waste Elimination
• Air/Water Emission
Reductions
• Solid/ Haz Waste Reduction
• Toxic Material Reduction
• Efficient Packaging
Lean reduces:
• Defects
• Overproduction
• Waiting
• Non-utilized People
• Transportation
• Inventory
• Motion
• Extra processing
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What Makes Green Suppliers’ Unique?
• OEMs drive supplier participation
• Only engaging interested sectors and OEMs– Suppliers’ environmental performance is the OEM’s problem
• Brings suppliers cost savings • Encourages OEMs to re-visit specifications that hinder
improvement• Collects aggregate data through NIST MEP database• Marries NIST MEP system with state environmental
resources• Bolsters and expands State and Regional programs
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Green Suppliers Network Results
Cost Savings from Environmental Impact Opportunities $4,4985,730/yr
Energy Conservation (MM BTUs) 221,789
Water Conservation (Gallons) 8,930,459
CO2 Emission Reduction (lbs) 128,250
Solid Waste Reduction (lbs) 573,669
Cost Savings from Lean Opportunities $12,846,250yr
Cost Savings from Other Opportunities $189,193/yr
Total Potential Cost Savings $17,534,173/yr
Cost Savings from One-time Lean Opportunities $9,065,466
Potential savings for 30 Green Suppliers Network Reviews:
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Innovation through Collaboration
The Green Suppliers Network brings together:
• Government & Industry– US EPA, OPPTS– US Department of Commerce’s National Institute of
Standards and Technology’s Manufacturing Extension Partnership (MEP)
• State Economic and Environmental Resources– State environmental program – NIST Manufacturing Extension Partnership
• Lean Manufacturing & P2
• Supply chains– Original Equipment Manufacturers– Suppliers
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Green Suppliers’ Industry Champions
• Aerospace – Boeing, Lockheed-Martin, Northrop Grumman, Pratt & Whitney,
Raytheon, Rockwell Collins, United Technologies Corporation
• Automotive (Suppliers’ Partnership for the Environment)– DaimlerChrysler, General Motors and 30 suppliers
• Healthcare/Pharmaceutical– Abbott Labs, Baxter Healthcare, Bristol-Myers Squibb, Eli Lilly,
GlaxoSmithKline, Johnson & Johnson, Pfizer, Roche and Wyeth
• Office Furniture– Haworth, Herman Miller, HNI/AllSteel, Kimball, Light Corp, Steelcase
• Any facility can benefit from the Green Suppliers Network
State Perspective
Marcia Horan
Michigan Department of Environmental Quality
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It’s All About Community
• Focus on inter-relationships at the community level
• State programs complement EPA objectives
• Creates the potential to leverage a successful model to enhance
economic development, manufacturing support and environmental
performance
• Provides the supplier with follow-up support activity in waste
reduction/energy efficiency implementation and realized cost
savings.
“All politics are local.”
Eugene “Tip” O’Neal, Former Speaker of the U.S. House of Representatives
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Synergistic Connections
RETAP Internship Program
Mentoring
Product Stewardship
Clean Corporate
Citizen
GSN
Green Suppliers Network connects to other EPA programs and to state programs
Design for the
Environment
Performance
Track
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• Retired Engineer Technical Assistance Program (RETAP)
• RETAP Internship Program
• Small Business P2 Loan Program
• RETAP P2 Technical Demonstration Grant
• Michigan Business Pollution Prevention Partnership (MBP3)
• Clean Corporate Citizen (C3)
• Environmental Management Systems (EMS)
State Program Support Michigan Examples
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Real World Connections
• Five Green Suppliers assessments performed
• Three included RETAP engineers
• Three RETAP Interns placed Summer 2003 – 2005
• Two OEM and one Supplier awarded Clean Corporate Citizen (C3) status in 2004
• October, 2005- 12 additional suppliers engaged in the Green Suppliers learning process.
• December, 2005- 2 Green Suppliers assessments scheduled for 2006
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PartneringMBP3, EMS, C3
Business BenefitsReduced Costs
Increased Profits
Business DriversEconomic, Social,
Environmental
Transparency
New Direction with Business - Sustainability Along the Supply Chain as Standard Operating Procedure
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Green Suppliers Network Catalyzes Action
• Metal Works, Inc.- Supplier working on EMS, joins the Michigan Business Pollution Prevention Program (MBP3) and is setting a goal of gaining C3 status by the end of 2005
• Environmental Coatings Inc. - Supplier agrees to an Investment Grade Audit with RETAP participation and the Delta Institute.
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Energy Conservation (MM BTU's)
69,745
Water Conservation (gallons) 5,561,000
Air Emission Reduction CO2 (lbs.) 2,200
Solid Waste Reduction (lbs.) 207,669
Water Pollution Reduction (gallons) 90,000
Green Suppliers Aggregate Potential Environmental Data for Office Furniture Suppliers in Michigan-5 Technical Reviews (NIST-10-12-05)
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Green Suppliers Aggregate Potential Dollars Savings Data for Office Furniture Suppliers in Michigan- 5 Technical Reviews (NIST-10-12-05)
Lean Savings $1,031,617/ yr
Clean Savings $ 892,227/ yr
Total Potential Recurring Savings $1,923,844 / yr
One Time Conversions To Cash (Inventory Reduction)
$2,401,782
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The Rewards
• Creates a comfort zone• Connections are supported• Opportunities develop• Business growth and innovation occurs• New directions of state support are created
The Review
Bill Stough
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MANUFACTURING WASTE
LINKS TO
LEAN AND ENVIRONMENTAL
IMPACTS
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What is the Manufacturing Extension Partnership?
• The NIST Manufacturing Extension Partnership (MEP) program help’s America’s small manufacturers improve their productivity, economic competitiveness and technological capability.
• Created or retained 50,315 jobs
• Increased $1.483 billion in sales
• Retained sales of $2.638 billion
• Realized $686 million in cost savings
• Invested $912 million in modernization, including plant and equipment, information systems, and workforce training
• Served 18,422 clients in FY 2003
*Survey results of clients served from October 2002 through September 2003
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Green Suppliers Network Review Process
Step 1 – Green Suppliers Network review team (NIST MEP and State environmental experts) engage supplier to complete Transformation Planner
Step 2 –The team works with supplier to determine which process and areas to focus on
Step 3 –The team works with supplier to create value stream map and process map while training them at the same time
Step 4 – The team uses these maps to find improvement opportunities
Step 5 – NIST MEP completes final report including a cost benefit analysis of all identified opportunities
Step 6 – The team conducts follow-up with supplier to assist in implementation
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Understanding the Current StateBenchmarking Exercise
Activities
Questionnaire
Data Comparison
Results Discussion
Identify Opportunities
Estimate financial Benefit
& Generate Final Report
Implementation
Responsibility
Supplier
NIST MEP Center
NIST MEP Center, State TAP
NIST MEP Center, State TAP
NIST MEP Center, State TAP
NIST MEP Center, State TAP
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Operation A Operation B
Value Stream
Raw Material Final Product
Understanding the Current StateValue Stream Mapping
A Value Stream is the set of activities (both value added and non value added) required to bring a specific product or service from raw material through to the customer.
Operation C
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Understanding the Current StateValue Stream Mapping
Market Forecast
Total Lead Time = 68 days Value Added Time = 15 min
CustomerA
2 people
C/T = 4 minC/O = 3 hrUptime = 61%
Assembly &Inspection
2 people
Milling
C/T = 2 minC/O = 2 hrUptime = 74%
3 people
C/T = 7 minC/O = 4 hrUptime = 48%
Painting
I I I3 people
Shipping
7 min4 min2 min
15 days 8 days10 days 30 days
Production ControlAnnual Production Plan
Weekly delivery schedule
Wee
kly
sch
edul
e
Daily sch
edu
le
Daily schedule
Daily schedule
WK
I
5 days
D ID
30 daysWK
Receiving
C/T = 2 minC/O = 30 minUptime = 93%
Welding
5 days
2 min
CustomerBSupplier
1Supplier
2
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VSM with Environmental Metrics & EHS Icons
Market Forecast
Total Lead Time = 68 days Value Added Time = 15 min
CustomerA
2 people
C/T = 4 minC/O = 3 hrUptime = 61%Haz. Waste = 20 lbs
Assembly &Inspection
2 people
Milling
C/T = 2 minC/O = 2 hrUptime = 74%Haz. Waste = 5 lbs
3 people
C/T = 7 minC/O = 4 hrUptime = 48%Haz. Waste = 60 lbs
Painting
I I I3 people
Shipping
7 min4 min2 min
15 days 8 days10 days 30 days
Production ControlAnnual Production Plan
Weekly delivery schedule
Wee
kly
sch
edul
e
Daily sch
edu
le
Daily schedule
Daily schedule
WK
I
5 days
D ID
30 daysWK
Receiving
C/T = 2 minC/O = 30 minUptime = 93%
Welding
5 days
2 min
CustomerBSupplier
1Supplier
2
EHS EHS EHS
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VSM with Materials Line and EHS Icons
Market Forecast
Total Lead Time = 68 days Value Added Time = 15 min
CustomerA
2 people
C/T = 4 minC/O = 3 hrUptime = 61%
Assembly &Inspection
2 people
Milling
C/T = 2 minC/O = 2 hrUptime = 74%
3 people
C/T = 7 minC/O = 4 hrUptime = 48%
Painting
I I I3 people
Shipping
7 min4 min2 min
15 days 8 days10 days 30 days
Production ControlAnnual Production Plan
Weekly delivery schedule
Wee
kly
sch
edul
e
Daily sch
edu
le
Daily schedule
Daily schedule
WK
I
5 days
D ID
30 daysWK
Receiving
C/T = 2 minC/O = 30 minUptime = 93%
Welding
5 days
2 min
CustomerBSupplier
1Supplier
2
EHS EHS EHS
Total Materials Used = 195 lbs Materials Needed = 110 lbs
20 lbs5 lbs80 lbs
40 lbs 20 lbs15 lbs120 lbs
5 lbs
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Future State VSM with Materials Line and EHS Icons
Market Forecast
Lead Time = 68 days Value Added Time = 15 min
Customer A
Customer B
2 people
C/T = 4 minC/O = 3 hrUptime = 61%
Assembly &Inspection
2 people
Milling
C/T = 2 minC/O = 2 hrUptime = 74%
3 people
C/T = 7 minC/O = 4 hrUptime = 48%
Painting
3 people
Shipping
Production Control
Supplier 1
Supplier 2
Annual Production Plan
Daily schedule
Daily schedule
C/T = 2 minC/O = 30 minUptime = 93%
Total Materials Used < 150 lbsMaterials Needed = 110 lbs
Welding
<90 lbs
5 lb
EHSEHS EHS
DI
7 min4 min2 min
15 days 8 days10 days5 days2 min
20 lbs5 lbs<25 lbs 20 lbs15 lbs
80 lbs
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Understanding the Current StateProcess Mapping
• A schematic depiction of a process
• Used to enhance resource utilization
• Used to identify, eliminate/reduce wastes
ProcessRaw Material Final Product
EnergyWater
Lubricants
Contaminated Water
Atmospheric Emissions
Used Oil
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Next Steps: Implement Changes
Green Suppliers’ Implementation support
• $1,000 credit toward implementation assistance if suppliers work with MEP center on an environmental project within 3 months of review
MEP
• Create implementation recommendation report
• Share results and cost-benefit analysis with supplier
• Conduct follow-up survey within 6 months to assess impacts
State
• Direct supplier to state resources and programs
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Review Specifics
• Cost$7,000 Cost of review$2,500 U.S. EPA program discount*$4,500 Total cost to supplier for Green Suppliers review
• Supplier benefits often exceed 3:1 ROI• Reviews offered first come, first served• Reviews focus on single process• On-site reviews take 2-3 days• Reports generated in 4-6 weeks• Technical assistance providers disclosed before review
*Suppliers Must Qualify Under SBA Definitions
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Real World Examples
Metalworks, Inc., (a metal fabricator for furniture industry)
Green Suppliers Assessment recommended:
1. Used 21,828,138 gallons of water per year; recommended a 25 percent reduction; reduced water consumption to 8,500,000 gallons per year, a 60 percent reduction, saved $30,000.
2. Used $700,000/year on electricity and natural gas; recommended a 10 percent conservation goal; achieved over 12 percent, saved $85,000.
3. Develop an Environmental Management System team that integrates the Lean Team
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Review Results: H&L Advantage
Plastic Injection molding and assembly for furniture and automotive industries:
• Reduce Energy Use by 10 percent by joining the EnergyStar program, focus on improving air compressor efficiency.
• Reduce chemical use for cooling water system; reduce Water Use by 15 percent by
• “…The Lean and Green principles have become our way of doing business for everything we do at H&L, and it’s now in our DNA. I would encourage anyone who has an opportunity to become involved in the Green Supplier’s Network to take that opportunity. It is extremely valuable.” –Steve Beurkens, Sales Marketing Manager, H&L Advantage
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Waste Types
Lean Environmental
Defects Scrap, rework, replacement,
production, inspection
•Raw materials consumed in defective products•Defective components recycle or disposal•More space, more energy required
Waiting Stock-outs, lot processing delays equipment downtime
•Material spoilage or component damage/waste•Wasted energy during downtime
Overproduction Manufacturing items for which there are no orders
•Additional raw materials consumed to make extra•Products could spoil, become obsolete
Movement Human motions that are unnecessary or straining, carrying WIP long distances
•More energy and emissions for transport
Inventory Excess raw material, WIP, finished goods
•More space for WIP, extra lights, heat & cool•More materials to replace damaged WIP•More packaging, waste from storage damage, or more raw materials to replace damaged WIP & energy
Complexity More parts, process steps, time than customer needs
•More raw material consumed/unit of production•Extra processing adds waste, energy/emissions
Unused Creativity
Lost time, ideas, skills, innovations
•Fewer suggestions for P2/E2 opportunities
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The End Result is,
Any Type of Waste has Multiple Negative Impacts to Your Profit
Margin
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The Challenges
• Motivating engagement • Speaking the same language• Building trusting relationships• Maintaining a consistent message• Maximizing resources• Large scale adoption and diffusion system• Getting participants to implement recommendations
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Contact Information
For more information about the Green Suppliers Network visit www.greensuppliers.gov or contact:
Tom Murray – Pollution Prevention Division, US EPA(murray.tom-hq@epa.gov or 202-564-8829)
Marcia Horan – Environmental Science and Services Division, Michigan Department of Environmental Quality(horanm@michigan.gov or 517-373-9122)
Bill Stough – The Right Place, Inc. (srg@iserv.net or 616-301-1059)
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