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The Lean and Environment Toolkit

www.epa.gov/lean

◆ Improve Environmental Results

◆ Identify and Eliminate Waste

◆ Reduce Business Costs and Risk

Toolkit Format and Icons The toolkit uses icons in the page margins to help you find and follow important information in each chapter.

Key Point Identifies an important point to remember

Key Term Defi nes an important term or concept

New Tool Presents a technique or resource that helps capture, communicate, or apply new knowledge

How-to Steps Describes sequenced actions to implement a tool

Chapters also include one or more “To Consider” text boxes that contain questions to help you explore how the information relates to your organization.

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Lean and Environment Toolkit

Preface

This Lean and Environment Toolkit assembles practical experience collected by the U.S. Environ- mental Protection Agency (EPA) from a group of partner companies and organizations that have experience with coordinating Lean implementation and environmental management. The toolkit builds on work conducted and research sponsored by EPA’s Lean Manufacturing and Environment Initiative (see http://www.epa.gov/lean).

The EPA’s intent in developing this toolkit is to enable Lean practitioners to improve both their busi- ness performance and their environmental performance by identifying and eliminating environ- mental wastes at their organizations. The toolkit offers practical strategies and tools for integrating environmental considerations into Lean initiatives in ways that support Lean’s focus on the elimina- tion of waste and non-value added activity.

This is the second iteration of the Toolkit. EPA welcomes your comments and reflections on this document, as well as other ideas you have for Lean and environment strategies, tools, and resources which can be incorporated in future versions of the toolkit. Please contact EPA to share your experi- ences with Lean and the environment and/or to discuss partnership opportunities by using the form found at http://www.epa.gov/lean/auxfiles/contact.htm.

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Lean and Environment Toolkit

Acknowledgments

The U.S. Environmental Protection Agency is very grateful for the invaluable assistance of its part- ners in developing this toolkit. EPA’s partners shared their experiences, tools, and techniques for integrating Lean and environmental management, and worked collaboratively with EPA to develop, test, and refi ne the content of this toolkit.

EPA’s Lean and Environment partners include: Baxter International, Chicago Manufacturing Center, CONNSTEP, HNI Corporation, Robins Air Force Base, Rockwell Collins, and the U.S. Army Materiel Command. Participating Offices at EPA include: the National Center for Environmental Innovation; the Offi ce of Pollution Prevention and Toxics; and the Offi ce of Solid Waste.

In addition to these organizational partners, this toolkit has benefi ted from the collective expertise and ideas of many individuals. In particular, EPA would like to thank the following individuals for their thoughtful contributions:

Pat Bartholomew of Baxter International Kate V. Bates of Earth Tech, Inc., working with Robins Air Force Base Dave Bury of Robins Air Force Base Jenni Cawein of Baxter International Angie Coyle of Delphi Corporation Rob Currie of Baxter International James Ellor of Elzly Technology Corporation, working with the U.S. Army Materiel Command Mike Fisher of Baxter International Vicki Fisher of Rockwell Collins Antonia Giardina of the U.S. Army Materiel Command Scott Lesnet of HNI Corporation Alistair Stewart of the Chicago Manufacturing Center Karen Wan of the Chicago Manufacturing Center Megan Wertz of The George Washington University Judy Wlodarczyk of CONNSTEP, Inc.

This toolkit was prepared for the U.S. Environmental Protection Agency by Ross & Associates Environmental Consulting, Ltd. in association with Industrial Economics, Inc. (EPA Contract # EP-W-04-23).

Chapter 1: Introduction—Getting Started With Lean & Environment

Purpose of This Toolkit

The Lean and Environment Toolkit offers practical strategies and techniques to Lean imple- menters about how to improve Lean results—waste elimination, quality enhancement, and delivery of value to customers—while achieving environmental performance goals. The toolkit also provides tools to help your organization get better environmental performance from Lean ef- forts on the shop floor.

Benefits of Coordinating Lean & Environment

✓ Reduce costs ✓ Improve process fl ow and reduce lead times ✓ Lower regulatory non-compliance risk ✓ Meet customer expectations ✓ Improve environmental quality ✓ Improve employee morale and commitment

The “Lean” methods discussed in this Toolkit are organizational improvement methods pioneered in the Toyota Production System. Lean production and Lean manufacturing refer to a customer-fo- cused business model and collection of methods that focuses on the elimination of waste (non-value added activity) while delivering quality products on time and at a low cost. The toolkit assumes that you are familiar with Lean methods and their implementation. For those who want to learn more about Lean methods discussed in the toolkit, see Appendix A.

Key Questions Addressed by the Toolkit

Lean works well when it focuses on identifying and eliminating non-value added activity. Environ- mental improvement efforts that have potential to distract Lean efforts from this prime focus will likely not get much traction. By contrast, this toolkit contains strategies and techniques that can seamlessly enable Lean practitioners to easily identify environmental wastes and improvement op- portunities alongside the myriad other wastes and improvement opportunities uncovered by Lean. To accomplish this, the toolkit aims to answer the following questions:

What is environmental waste? Environmental waste is an unnecessary or excess use of resources or a substance released to the air, water, or land that could harm human health or the environment. Environmental wastes can occur when companies use resources to provide products or services to customers, and/or when customers use and dispose of products. Chapter 2 defines and provides examples of environmen- tal waste.

Chapter 1: Introduction—Getting Started With Lean & Environment

Why should I identify environmental waste in my processes? Environmental wastes do not add value to the customer. Environmental wastes can also directly af- fect production flow, time, quality, and cost—making them ripe targets for Lean initiatives. In many cases, the costs associated with pollution and wasted energy, water, and raw materials can be signifi - cant. This chapter (Chapter 1) discusses the business case for eliminating environmental waste.

How will I know when I see environmental waste? Some environmental wastes are easy to see. Containers of solid and hazardous waste are visual indications of environmental waste. Health and environmental risks posed by certain chemicals or materials can be more diffi cult to see, although they can represent costly non-value added aspects of a process or product. Chapter 2 provides examples of environmental wastes and describes organi- zational strategies that will make it easier to know when you see them.

Where should I look for environmental wastes? Environmental wastes can be found in almost any process. Processes requiring environmental per- mits—such as painting, metal fi nishing, and hazardous waste management processes—are often a good place to look for environmental improvement opportunities. If your organization has an environmental management system (EMS), your Environmental, Health and Safety (EHS) personnel may have already identified key environmental impacts associated with each of the organization’s processes. Chapter 3 discusses how value stream mapping (VSM) tools and techniques can be used to help Lean practitioners see environmental wastes in processes. Chapter 4 discusses how to identify and address environmental wastes during kaizen rapid improvement events.

How do I measure the environmental impacts of a process? Measurement of key environmental wastes associated with a process can pinpoint those wastes that are most important to track over time. For example, chemical use and hazardous waste generation may be important to measure for one process, while water use may be most important to measure for another process. Chapter 3 discusses techniques for integrating environmental metrics into value stream maps. Appendix B includes information on environmental metrics that are often used by companies and facilities.

Where can I find environmentally preferable alternatives to my current process? EHS professionals in your organization may have ideas and information regarding environmentally preferable processes, equipment and materials. In addition, numerous organizations, including EPA, have developed technical assistance resources and programs to assist organizations in improving the environmental and operational performance of processes. Chapter 4 discusses several useful resources and technical assistance networks. There are also Pollution Prevention Resources in Appendix D.

Chapter 1: Introduction—Getting Started With Lean & Environment

2. Enhance the Effectiveness of Lean Implementation

Explicit coordination of Lean and environmental initiatives can lead to compelling organizational and environmental improvement results. For example, Lean thinking can be applied to various environmental management processes, such as chemical and waste management. Companies have found that as much as 40 percent of their chemical supplies were going unused and directly be- coming hazardous waste as they expired on the shelf or became obsolete. Using Lean principles to improve chemical and waste management processes can have big pay-offs for environmental perfor- mance and bottom-line results.

Case Study: Lockheed Martin Corporation

Lockheed Martin Corporation, the world’s largest defense contractor, has been implementing Lean techniques corporate-wide since the late 1990s. Lockheed Martin’s Manassas plant conducted improvement events to ap- ply Lean thinking to its chemical and waste management activities because a signifi cant amount of warehoused chemicals were going directly to the hazardous waste stream without ever being used, expired on-shelf, or were no longer used for research or production. Lockheed Martin sought to move toward a just-in-time chemical management system, with chemicals delivered three times a week in “right-sized” containers to meet real-time demand. The Lean events reduced chemical inventories, freed capital tied up in inven- tory, increased chemical inventory turns and chemical utilization rates, and eliminated the chemical warehouse and chemicals expiring on the shelf.

Proactive Lean and environment coordination can also anticipate and ease environmental constraints to leaning “monument” processes, thereby enabling large performance gains. Mon- uments are production processes or process steps that have large equipment and/or other physical or environmental regulatory constraints that make them very diffi cult or costly to move, which can complicate Lean efforts. Typical monuments include painting and metal fi nishing processes.

Making changes to monument processes can require approval or permits from environmental regu- latory agencies, as well as special work practices or control measures, all of which can be diffi cult to accomplish within rapid timeframes. EHS personnel can help to identify environmentally friendly process alternatives, and ensure that process changes can be made as quickly as possible.

Chapter 1: Introduction—Getting Started With Lean & Environment

Case Study: Apollo Hardwoods

Apollo Hardwoods used Lean methods to manufacture custom “cut-to-size” cherry plywood for cabinetry. The company’s founders and investors discov- ered that a “right-sized” veneering process would require less expensive equipment, use a wider variety of logs, and produce less wood scrap, with- out compromising product quality. The company sought to fi nd a veneering process that would also address product quality, fl ow time, and cost. Since such a process did not exist, Apollo Hardwoods recruited a team to develop a Lean veneer slicing and drying process and associated equipment using the pre-production planning (3P) method. The Lean veneer manufacturing process incorporated one-piece fl ow cells that eliminated the piling of inven- tory in between steps. The “right-sized” equipment requires less capital than conventional machinery (or “monuments”), uses less energy, fi ts into small production cells, and allows Apollo Hardwoods to fabricate the same amount of fi nished product using fewer logs and generating less wood scrap.

3. Deliver What Customers and Employees Want

Most customers who purchase products do not want to buy environmental wastes, impacts, or risk. Companies that can deliver products and services with fewer environmental impacts have the potential to capture significant competitive advantage, provided that there are not sacrifices in time, quality, or cost. In many markets products with superior environmental performance can attract new customers.

Explicit consideration of environmental waste in Lean initiatives can also improve the work envi- ronment for employees. Similar to ergonomic concerns, eliminating environmental hazards can reduce potential worker exposure to toxic substances and create a cleaner and safer workplace.

In addition, employees want to do the right thing. When employees take pride in their work because they believe it has broader benefits to their community and the world, there can be a substantial posi- tive effect on organizational morale. This can empower employees and further enhance productivity.

To Consider

• How could your company benefi t from improved Lean and environmental per- formance? (Think about time and cost savings, reduced risks and liabilities, added value to customers, etc.)
• How well coordinated are Lean and environmental management activities in your organization?
• Do EHS personnel participate in Lean events and initiatives at your company?

Chapter 1: Introduction—Getting Started With Lean & Environment

Conclusion

Summary

This toolkit provides practical strategies, tools, and techniques for incorpo- rating environmental considerations into already existing Lean initiatives in an effort to improve Lean results and add value to your organization. There are three key reasons why business leaders, Lean practitioners, and EHS managers pursue efforts to coordinate Lean and environmental man- agement activities.

1. Learning to see and eliminate hidden environmental wastes during Lean implementation can lead to more efficient production by improving the time, quality, and cost results of Lean initiatives. Chemical substitution, process changes and other strategies can reduce the need for non-value added activities—such as regulatory compliance management and invest- ment in pollution control equipment—that might otherwise be overlooked by Lean alone.
2. Coordination of Lean and environmental management can facilitate more process improvement and make it easier to apply Lean to processes with environmental regulatory constraints. EHS personnel can assist Lean implementation by anticipating and addressing environmental constraints such as the need to obtain permits, and by identifying environmentally friendly process alternatives.
3. A signifi cant competitive advantage can be attained by providing customers with products and services with less environmental impacts, and by improv- ing the work environment for employees.

Chapter 1: Introduction—Getting Started With Lean & Environment

Your Thoughts

Now that you have finished this chapter, refl ect on what you read by answering these questions:

• What did you learn in this chapter that was particularly useful?
• Do you need any more information to fully understand the business case for identifying and eliminating environmental waste? How strong is the business case for doing this in your organization?
• What ideas do you have for helping your organization learn to see environmental wastes?

Notes:

Chapter Contents

Introduction to Value Stream Mapping Defi nition of Environmental Waste The Link Between Environmental Waste and Lean’s Seven Deadly Wastes

How to “Learn to See” Environmental Waste in Your Organization Overview of Organizational Strategies

1. Add Environmental Metrics to Lean Metrics
2. Show Management Commitment and Support
3. Include Environmental Waste in Lean Training Efforts
4. Make Environmental Wastes Visible and Simple to Eliminate
5. Recognize and Reward Success

Conclusion Summary Your Thoughts

CHAPTER 2

Identifying Environmental Wastes

Chapter 2: Identifying Environmental Wastes

Introduction to Identifying Environmental Wastes

This chapter defi nes environmental waste and describes strategies to encourage employees to iden- tify and eliminate environmental waste as part of Lean efforts.

Defi nition of Environmental Waste

Environmental waste is any unnecessary use of resources or a substance released into the air, water, or land that could harm human health or the environment. Environmental wastes can occur when companies use resources to provide products or services to customers, and/or when customers use and dispose of products. Practically speaking, environmental wastes include:

• Energy, water, or raw materials consumed in excess of what is needed to meet customer needs.
• Pollutants and material wastes released into the environment, such as air emissions, wastewater discharges, hazardous wastes and solid wastes (trash or discarded scrap).
• Hazardous substances that adversely affect human health or the environment during their use in production or their presence in products.

Like other Lean wastes, environmental wastes do not add customer value. They also represent costs to the enterprise and society in general.

The Link Between Environmental Waste and Lean’s Seven Deadly

Wastes

The focus of Lean is on eliminating any non-value added activity, or waste, from production. Lean typically targets seven so-called deadly wastes:

1. Overproduction 5. Defects
2. Inventory 6. Over Processing
3. Transportation 7. Waiting
4. Motion