A Lean Green Six Sigma Machine

By Thomas R. Cutler

All over the world, new national and regional laws relating to carbon emissions and other environmental issues are seriously going to affect how companies operate in the future. The market for green initiatives is growing exponentially as businesses and consumers become environmentally aware. The carbon footprint associated with this demand has a value and offers growing economic incentives for companies to manage their carbon output more efficiently.

Green Six Sigma is addressing the real challenges for leadership and senior executives to drive business process excellence while reducing environmental impact—the role of Six Sigma both now and in the future for sustainability, energy reduction and to boost profits.

Six Sigma is not a new methodology to solve new problems. Many view it as something on top of everything else they already have to do. It is not. Six Sigma is a tried-and-proven methodology to solve today’s problems efficiently and permanently. These excuses are not allowing companies to address today’s big picture and meet the challenge of climate change and sustainability. Six Sigma can be a key weapon in that battle.

"In a global economy with environmental pressures high on the agenda, organizations are under increasing pressure to control costs, maintain high levels of safety and quality, and save energy," says Evan Miller, president of Hertzler Systems in Goshen, Indiana. "Energy conservation offers the parallel advantages of helping to reduce costs, improving efficiency, as well as reducing the carbon footprint. In this climate, increasing numbers of companies are implementing Six Sigma techniques as an efficient and effective means to building a sustainable business and make their operations, products and services more socially responsible, particularly regarding the environment."

The Inaugural Green Six Sigma Conference was held in Chicago May 13-14. Organized by WCBF, the market leader in Six Sigma conferences, the program ensured Six Sigma is made understandable, acceptable and accessible to those working in the fields of corporate social responsibility (CSR), sustainability, energy and climate change.

Blending real world examples and practical advice, the case study presentations encouraged delegates to think more robustly about their approach to process improvement and how to apply proven approaches that they can implement immediately on their return, including:

• Working on the right problem or opportunity
• Quickly reaching shared understanding of green initiatives across the organization
• Identifying practical success measures and baselines and targets
• Identifying factors that may influence success
• Gathering facts and data about cause dynamics that matter in problem-solving or design
• Considering a full range of solution alternatives and using the facts to select the best
• Demonstrating practical results and delivering sustainable and scalable gains

With Green Six Sigma, companies have an opportunity to create sustainable businesses and learn how to:

• Define Green Six Sigma and understand organization benefits
• Assess the impact of green initiatives on the bottom line
• Harness the power of Green Six Sigma as a vehicle for business transformation
• Calculate the value of a carbon footprint
• Determine the cost savings carbon reduction can provide a business
• Reduce carbon in the end-to-end operations and across the supply chain
• Build a greener brand by using Green Six Sigma to drive CSR policies
• Combat rising energy costs in a business
• Use Green Six Sigma to increase recycling rates across the organization
• Develop innovative environmental systems for compliance and governance frameworks

Carbon and energy reductions, sustainability and green initiatives will create business opportunities and risks. According to a new report by the Carbon Trust, forward thinking businesses could increase company value by up to 80 percent. Poorly positioned and laggard companies run the greatest risk of destroying value. Tackling climate change can have a significant impact on company value in six sectors worth a total of $7 trillion. No organization can afford to ignore the emerging green agenda, and in this climate, increasing numbers of companies are implementing Six Sigma techniques as an efficient and effective means to building a sustainable business.

"Using solutions to synchronize production and material replenishment across the factory via a lean assessment produces impressive results," according to Narayan Laksham, founder and president of Ultriva, a lean solutions leader based in Cupertino, Calif. "Order-to-ship lead times are reduced by over 50 percent, on-time delivery performance is improved by more than 20 percent, and work-in-progress inventories are reduced up to 40 percent."

Indeed, a lean assessment impacts distribution, factories and the supply chain. Lean distribution allows companies to manage finished goods inventory in a dynamic, efficient and real-time environment. It provides the right product mix, visibility, stock-out alerts and analytics to be fully streamlined. A lean factory process allows firms to orient production around customer demands instead of capacity optimization. Increased flexible scheduling allows adjustments to be made on the fly.

"A lean supply chain allows for the replenishment system of choice, including kanban, MRP orders, VMI or 3PL, on a collaborative platform that seamlessly connects plants and suppliers," Laksham said.

The lean supply chain is still largely controlled by MRP and ERP systems which use forecasted or planned demand to set up supplier replenishments. Every run generates changes to the existing demand while also creating new demands. The result is a series of inconsistencies across the supply chain, late shipments, costly expediting and stock outs.

As manufacturing spreads horizontally, the global supply chain is becoming the most critical factor in determining customer demands.

Laksham emphasizes that managing the chain is no longer a matter of reducing costs, but requires optimizing a key process that is fueled by integration, trust, common metrics and aligned goals.

The move to lean green manufacturing must happen in practical, incremental steps. Whether a company utilizes Six Sigma and begins with distribution, factory or supply chain, each step improves flexibility and optimizes resources to bring the enterprise closer to a profitable, customer-centered manufacturing and distribution model.

Ed. Note: Learn how Industramark and Standard Register are ensuring printing initiatives are eco-friendly in their plants as well as their end products and corporate environment.

 

The author of this piece, Thomas R. Cutler, is the President and CEO of Fort Lauderdale, Fla.-based, TR Cutler, Inc, (http://www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium of 3,500 journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, Committee of Concerned Journalists, as well as author of more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com.