Dematerialization
Interface Carpets
Ray Anderson is another example of the new breed of ecologically sensitive executive. Anderson founded Interface Carpets, one of the world's largest carpet tile manufacturers. But he became concerned with the enormous waste of resources associated with selling carpets. Every six or seven years, his customers were tearing out their old carpet, throwing it away, and replacing it. He came up with an idea: since 20% of the carpet gets 80% of the wear, why not make a special carpet where only one-fifth needs to be replace? He conceived of a new way to make money from carpet: by leasing carpet service. Now he offers perennial carpet leasing plans, where his firm can restore carpet continuously, replacing only the worn sections. That extends product life by a factor of five. But Anderson's vision goes much beyond this. His objective is a fully sustainable business by around the year 2000, a plant with no pipes and smokestacks out.
Gillette
Gillette achieved its 50% energy savings and 90% water savings in razor manufacturing through building consensus. Top management never set quantified goals for water and energy savings. They simply established resource efficiency as a priority. Thereafter, teams of people at every Gillette site worked to capitalize on ideas drawn from throughout the organization, ideas that work together to produce results that no single individual could have achieved. An employee at one plant suggested recycling process water. But that would have required building a cooling system. So another employee suggested that the swimming pool be used as the "cooling system." Those ideas were then shared with Gillette's European sites, whose employees added additional refinements. Eventually, Gillette's Boston plant came to rely entirely on the heat it had formerly been venting to serve all of its needs. What was crucial in bringing this about was a corporate climate that encouraged people to come forward with their ideas.
Baxter Healthcare
Through a Quality Leadership Process that promotes teamwork to solve problems through different "quality working teams" of six to twelve employees for specific materials, Baxter Healthcare has continuously exceeded their ambitious waste reduction goals for materials used and generated throughout their facilities. Starting with plastic scrap generated in packaging in the early 1980's, Baxter has been setting and meeting goals for plastic reduction. By 1992 the scrap rate was 90% lower than the 1982 rate. Plastic recycling saved Baxter $9 million between 1982 and 1992. The recycling program has extended to all areas and materials, involving "hundreds of projects and practically everybody in the plant." These programs are part of the strong employee suggestion team process. Baxter receives 4,000 suggestions a year from their 2,500 employees, and uses almost 80 percent of the recommendations. Suggestions must be considered and answered within ten days, providing a strong and rapid feedback system, a key to a successful suggestion program. The ongoing benefits of the program have been impressive, and as plant engineer John Carter noted: "this just keeps going on as long as you keep your program going. It just keeps adding up." In 1992, packaging reductions added up to a reduction of 11.6 million pounds of packaging and cost savings of $5.9 million. Sources: Joe Romm, Lean and Clean Management and The CONEG Challenge Voluntary Packaging Reduction by Industry, 1993.
Digital Equipment Corporation (DEC)
Digital's Packaging Waste Management program was initiated through the company's overall TQM approach, which has grown to a company wide initiative since it began in 1977. Many of the principles used in Digital's TQM approach seek to achieve the elimination of waste. The packaging waste program seeks to reduce packaging waste from all aspects of Digital's business, including manufacturing and sales/service operations. DEC has a worldwide corporate committee to coordinate packaging decisions and policy. This committee has incorporated the CONEG (Coalition of Northeastern Governor's) Challenge and Packaging Waste Management Strategy into their regular agenda items. The strategy follows the principles of the Preferred Packaging Guidelines (reduce, reuse, recycle), and is incorporated into DEC's packaging design standards. The program is now beginning to shift emphasis to new product development to assure that packaging waste is eliminated from the beginning of a product's life. The company has made broad efforts to reduce packaging waste. In less than 3 years, DEC reduced total packaging waste by more than 20%, a total of over 5,400 tons. Accomplishments include:
- Computer cabinet packaging reduction of 31%, with the use of foam almost eliminated.
- Compact Disc ROM packaging reduction of 88%.
- Reduction of packaging by 54% by increasing the durability of an internal storage unit in the computer system.
- Establishment of a reusable packaging system between a cable manufacturer and DEC's mail order business, eliminating disposal of more than 50 tons a year of corrugated boxes and wooden pallets.
- Reuse of wooden pallets at the Salem, New Hampshire plant, reducing disposal by 55 tons per year.
Source: Digital Equipment Corporation, Maynard Massachusetts in The CONEG Challenge Voluntary Packaging Reductions by Industry, Coalition of Northeastern Governors Source Reduction Task Force, November 1993.
Xerox: Leadership Through Quality
Xerox initiated their Leadership Through Quality program as part of a broader corporate focus on quality. Over 100,000 employees were trained over a three year period in a six- step process Xerox has developed for virtually all decision-making tasks: 1) Identify and state the problem, 2) analyze the problem, 3) generate potential solutions, 4) select and plan the solution, 5) implement the solution, 6) evaluate the solution. Empowered employees have started a number of initiatives, many involving environmental and quality improvements, yielding millions of dollars in added profits each year. Xerox management credits the success of new environmental initiatives primarily to employees using quality management practices. Cross function teams are formed to focus on a variety of issues:
A European Manufacturing operation's Packaging team, addressed the problem of developing environmentally acceptable packaging. The team identified the problems involved: impending global legislation, packaging materials that are not environmentally acceptable, and the goal of minimizing landfill disposal. Using quality tools, the team identified materials, issues, and causes of packaging problems, then brainstormed to identify almost 40 alternatives. These were scored on issues such as reuse/recycling, quality, cost, delivery, and marketing. The top ranking alternatives to replace Styrofoam packaging were "corrupad" and molded pulp made from post- consumer recycled materials. This project resulted in improved customer satisfaction, easier regulatory compliance, and a cost savings of about $2 million a year.
A multinational team identified Xerox's chaotic and independent approach to packaging across their facilities worldwide as problem, and developed a set of eight modular cartons and a reusable pallet standard across Xerox facilities and suppliers. These changes result in $20 million in annual savings from a variety of redesign gains.
USS Chemicals Employee Suggestion Program
USS Chemicals has a Suggestions for Cost Reduction (SCORE) corporate program to encourage non-management employees to identify cost reduction opportunities. Employees are rewarded a percentage of the cost savings (up to a maximum of $15,000 apiece). The program applies to waste reduction, energy conservation, reduced labor costs, process improvements, and other measures. About 400 suggestions are evaluated each year, saving over $500,000 annually. One example of a SCORE suggestion is the addition of a condenser to a resin adsorption system to soak up organic vapors in the phenol units for subsequent reuse. The cost of the condenser was only $5,000, but has resulted in savings of $100,000, a ROI of 2000%, and a payback of 7 months.
Republic Engineered Steels
After Republic was bought by employees in 1989, it needed to cut costs by $80 million a year to remain solvent. The company initiated an employee suggestion program for its 5,000 employees. Harold Kelly, a vice-president, noted that the management realized they couldn't succeed with an adversarial relationship with workers, the majority of whom were in the union. In 1991, Republic initiated Project 80, a program to reduce costs $80 million a year by encouraging employees to identify process changes that would eliminate waste. Suggestions are reviewed by a management-union committee, workers develop an action plan, and it is implemented. Employees suggested about 1,000 improvements, and implemented about 500 in the first 20 months of Project 80. These suggestions have resulted in about $45 million in savings, with almost $20 million more identified. While the company did have to lay off about 100 employees during the recession, they estimate that without the suggestion system's results about 600 employees would have been laid off. Examples of employee suggestions include:
- The greatest single project resulted in $3.5 million a year in savings for recycling, rather than disposing of the steel drums that supplies were shipped to the plant in.
- At the Gary, Indiana plant, a quality team cut in-plant salvage 40%.
- Other employee teams identified ways to reduce water used during the heat-treating process and implemented a water efficiency program. Water consumption dropped 80%, from more than 9 million gallons a month in 1991 to under 2 million in 1993, saving close to $50,000 a year at the main plant in Canton, Ohio.
- Stream-lining the order department processes cut the number of product returns caused by entry error from 116 to 38 a year.
Source: Joe Romm, Lean and Clean Management
Hudson's Department Stores
By responding to customer concerns about packaging, a Michigan department store chain discovered an alternative method for effective product packaging that lowers packaging costs by over 40%, saves the chain $17,500 a year, and eliminates the disposal of 21 tons per year of paper waste. The company replaced polystyrene packaging materials with discarded and shredded office paper from its own stores. There are plans to sell additional amounts of shredded paper, which could generate over $10,000 a year in new revenues -- from paper waste.
John Roberts Company: Commercial Printing
When the laundry facility that was washing John Roberts Company's washrags was facing increased regulation for excess emissions, the printer evaluated their use of solvents for cleaning presses and identified two changes that would reduce emissions and solvent content in the wipe rags. First, by replacing solvents types, the company reduced solvent purchase by 72%, as well as reducing volatization at their facility. Second, John Roberts purchased a centrifuge which extracts and recovers solvent from used wipers before they are sent to the laundry, recovering over 5,000 gallons of solvent in the first year. The changes cost $15,000, and have saved $50,000, for a ROI of 333% and a payback of under 4 months.
Source: Pollution Prevention Review, Autumn 1991.Sears, Roebuck Company
In 1991, Sears initiated a comprehensive program with their suppliers to reduce the volume of packaging materials for products sold at Sears. Sears asked their 5,500 suppliers to identify practical and innovative ways to reduce the amount of solid waste generated by eliminating packaging and increasing use of recycled content. The overall response from suppliers has been positive, with most striving to make the changes and meet the goals that Sears suggested. These changes are expected to reduce packaging by about 1.5 million tons by the end of 1994, and save the company about $5 million a year, beginning in 1992. Examples of changes suppliers have made include: shipping fashion merchandise from the manufacturer to Sears distributor centers in bulk instead of corrugated containers to reduce packaging by 2.8 million pounds, and eliminating packaging from tool displays and small hardware items to eliminate almost 200,000 tons of plastic blister wrap.
