11.27.2006

The Greening of Lean

I was impressed by a Baxter Healthcare presentation at the recent AME conference for two reasons. First, the speakers described how to apply lean principles in an unusual way – and it’s always good to find new ways to achieve the benefits of lean. Second, they dispelled a common myth about lean improvement efforts.


            The myth is that making your operations leaner and more efficient will automatically help you when it comes to energy and environmental issues.


            But as Jenni Cawein and Rob Currie of Baxter pointed out, while the company has seen a dramatic decrease in non-hazardous trash since beginning a lean journey four years ago, there have been no corresponding decreases in use of energy or water.


            The reason is that these areas are typically ignored during kaizen events. The result can be – and for Baxter, sometimes has been – that a kaizen event may produce some operational improvements but actually make things worse when it comes to EHS (environmental health and safety).


            For example, a kaizen team at one Baxter plant decided that segregating plastics was a waste of time. As a result, the piles of clean, segregated plastics – which had been producing recycling revenue – turned into a non-revenue-producing pile of trash.


            The good news is that by applying lean to EHS areas, or by incorporating EHS metrics into lean methods, significant benefits can be achieved.


            Typically, measurements on the shop floor might focus on cycle time, takt time, WIP, etc. By also measuring energy usage and water usage, for example – and taking those measurements every day – problems can be spotted more rapidly, causes identified and problems solved.


            This approach produced annual savings for Baxter of more than 200,000 euros in energy costs at one European plant. And Baxter calculates that as a company, its EHS-related improvement efforts produced $23.6 million in income, savings and cost avoidance in 2005, plus another $62.2 million in cost avoidance as a result of efforts during previous years.


            Baxter is now inserting EHS data into value stream maps. In addition to listing cycle time and scrap rates, some maps now also show the amount of hazardous waste generated (per X number of units) and the gallons of water used per day at each of the steps of a production process.


            Baxter – a $9 billion manufacturer of healthcare products such as IV delivery systems as well as dialysis and anesthesia products – is applying a variety of lean tools and methods to include EHS issues in its improvement efforts.


            This approach also is getting a boost from the EPA, which has launched a “Green Suppliers Network,” at least in its region covering the six New England states. It is a joint effort with other agencies to help small companies focus on EHS waste.


            The program, as described at the conference by Linda Darveau of EPA, involves a review of environmental impact opportunities, the cost of which is discounted by EPA for qualified suppliers.


            Would this approach help your company?

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