5.15.2013

Can Lean Be Green?

On May 19, at the upcoming Institute of Industrial Engineers (IIE) annual conference in Puerto Rico, Keivan Zokaei will introduce his latest book, Creating a Lean and Green Business System: Techniques for Improving Profits and Sustainability, which he co-authored with L. Hunter Lovins, Andy Wood, and Peter Hines.

I recently spoke with Keivan about his book, and I asked him: "Why should companies bother incorporating sustainability and 'green' aspects into their Lean initiatives? Here is his complete answer:

Lean and green is not about protecting the planet; it is about protecting your company’s purse. I am encouraged by the proactive approach of a few leading-edge companies for whom going "lean and green" has become a key economic driver. Take elite firms such as Toyota, WalMart, DuPont, Tesco, Unilever, Procter & Gamble, Marks & Spencer, General Electric, and General Motors – all of whom have invested heavily in greening their products and processes during the past few years.

Unilever plans to double revenue over the next 10 years while halving their environmental impact. General Electric aims to reduce energy intensity by 50% by 2015. Toyota has already reduced emissions per vehicle by 37% between 2001 and 2012. Similarly, DuPont committed itself to a 65% reduction in greenhouse gas emissions over a 10-year period up to 2010. In 2007, DuPont saved $2.2 billion through energy efficiency. In the same year, its total declared profits was not much more than $2 billion.

The secret is in a simple yet powerful realization that environmental and economic footprints are aligned. When we prevent physical waste, increase energy efficiency, or improve resource productivity, we save money, improve profitability and enhance competitiveness. In fact, there are often, huge “quick wins," thanks to years of neglect. Today, the “greening industry” movement stands where the “quality movement” stood around 40 years ago. During the past 30 to 40 years, industries realized better quality can be (and often is) cheaper to make. By the same token, going “lean and green” is free – and in fact much cheaper. Lowering our impact on the environment, rather counter-intuitively, means lowering costs. I see the same phenomenon as we have observed in the evolution of our thinking about quality. Those companies who move fastest are the billionaires of tomorrow.

What do you think of Keivan's points? Have any of you incorporated green issues into your Lean initiatives? What have been the hurdles?

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