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GREEN SUPPLIERS NETWORK. An Innovative Industry-Government Collaboration. Responding to Industry’s Needs. OEM. Tier 1 Suppliers. Challenges: Outsourcing causes environmental impacts to move down supply chain

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green suppliers network

GREEN SUPPLIERS NETWORK

An Innovative Industry-Government

Collaboration

slide2

Responding to Industry’s Needs

OEM

Tier 1 Suppliers

Challenges:

Outsourcing causes environmental impacts to move down supply chain

Manufacturers can be held publicly responsible for suppliers’ environmental performance

Small and medium-sized manufacturers are pressured to reduce costs and improve environmental performance with little resources

Tier 2 Suppliers

Tier N Suppliers

Response:

The Green Suppliers Network provides lean and environmental technical assistance to lower tier suppliers

green suppliers network in a nutshell
Green Suppliers Network in a Nutshell
  • Green Suppliers provides Lean & Clean technical assistance to small and mid-sized manufacturers that improves competitiveness through environmental and economic benefits
  • A Lean & Clean approach expands the traditional Lean definition of waste from eliminating non-value added time, labor, and money to include environmental wastes (e.g. energy, emissions)
  • A collaborative venture among industry, the National Institute of Standards and Technology Manufacturing Extension Partnership (NIST MEP) Program, the States and the U.S. EPA
  • This voluntary initiative aligns original equipment manufacturer (OEM), supplier and government interests
what is lean and clean
What is Lean and Clean?

Lean reduces:

  • Defects
  • Overproduction
  • Waiting
  • Non-utilized People
  • Transportation
  • Inventory
  • Motion
  • Extra processing

Clean strives for:

  • Nature-friendly Substitutes
  • Optimized Material Efficiency
  • Waste Elimination
  • Air/Water Emission Reductions
  • Solid/ Haz Waste Reduction
  • Toxic Material Reduction
  • Efficient Packaging
what makes green suppliers unique
What Makes Green Suppliers’ Unique?
  • OEMs drive supplier participation
  • Only engaging interested sectors and OEMs
    • Suppliers’ environmental performance is the OEM’s problem
  • Brings suppliers cost savings
  • Encourages OEMs to re-visit specifications that hinder improvement
  • Collects aggregate data through NIST MEP database
  • Marries NIST MEP system with state environmental resources
  • Bolsters and expands State and Regional programs
green suppliers network results
Green Suppliers Network Results

Potential savings for 30 Green Suppliers Network Reviews:

innovation through collaboration
Innovation through Collaboration

The Green Suppliers Network brings together:

  • Government & Industry
    • US EPA, OPPTS
    • US Department of Commerce’s National Institute of Standards and Technology’s Manufacturing Extension Partnership (MEP)
  • State Economic and Environmental Resources
    • State environmental program
    • NIST Manufacturing Extension Partnership
  • Lean Manufacturing & P2
  • Supply chains
    • Original Equipment Manufacturers
    • Suppliers
green suppliers industry champions
Green Suppliers’ Industry Champions
  • Aerospace
    • Boeing, Lockheed-Martin, Northrop Grumman, Pratt & Whitney, Raytheon, Rockwell Collins, United Technologies Corporation
  • Automotive (Suppliers’ Partnership for the Environment)
    • DaimlerChrysler, General Motors and 30 suppliers
  • Healthcare/Pharmaceutical
    • Abbott Labs, Baxter Healthcare, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, Pfizer, Roche and Wyeth
  • Office Furniture
    • Haworth, Herman Miller, HNI/AllSteel, Kimball, Light Corp, Steelcase
  • Any facility can benefit from the Green Suppliers Network
state perspective

State Perspective

Marcia Horan

Michigan Department of Environmental Quality

it s all about community
It’s All About Community

“All politics are local.”

Eugene “Tip” O’Neal, Former Speaker of the U.S. House of Representatives

  • Focus on inter-relationships at the community level
  • State programs complement EPA objectives
  • Creates the potential to leverage a successful model to enhance economic development, manufacturing support and environmental performance
  • Provides the supplier with follow-up support activity in waste reduction/energy efficiency implementation and realized cost savings.
synergistic connections

Clean Corporate Citizen

Mentoring

RETAP Internship Program

GSN

Product Stewardship

Synergistic Connections

Green Suppliers Network connects to other EPA programs and to state programs

Design for the

Environment

Performance

Track

state program support michigan examples
Retired Engineer Technical Assistance Program (RETAP)

RETAP Internship Program

Small Business P2 Loan Program

RETAP P2 Technical Demonstration Grant

Michigan Business Pollution Prevention Partnership (MBP3)

Clean Corporate Citizen (C3)

Environmental Management Systems (EMS)

State Program Support Michigan Examples
real world connections
Real World Connections
  • Five Green Suppliers assessments performed
  • Three included RETAP engineers
  • Three RETAP Interns placed Summer 2003 – 2005
  • Two OEM and one Supplier awarded Clean Corporate Citizen (C3) status in 2004
  • October, 2005- 12 additional suppliers engaged in the Green Suppliers learning process.
  • December, 2005- 2 Green Suppliers assessments scheduled for 2006
new direction with business sustainability along the supply chain as standard operating procedure
New Direction with Business - Sustainability Along the Supply Chain as Standard Operating Procedure

Transparency

green suppliers network catalyzes action
Green Suppliers Network Catalyzes Action
  • Metal Works, Inc.- Supplier working on EMS, joins the Michigan Business Pollution Prevention Program (MBP3) and is setting a goal of gaining C3 status by the end of 2005
  • Environmental Coatings Inc. - Supplier agrees to an Investment Grade Audit with RETAP participation and the Delta Institute.
slide16
Green Suppliers Aggregate Potential Environmental Data for Office Furniture Suppliers in Michigan-5 Technical Reviews (NIST-10-12-05)
slide17
Green Suppliers Aggregate Potential Dollars Savings Data for Office Furniture Suppliers in Michigan- 5 Technical Reviews (NIST-10-12-05)
the rewards
The Rewards
  • Creates a comfort zone
  • Connections are supported
  • Opportunities develop
  • Business growth and innovation occurs
  • New directions of state support are created
the review

The Review

Bill Stough

slide20
MANUFACTURING WASTE

LINKS TO

LEAN AND ENVIRONMENTAL

IMPACTS

what is the manufacturing extension partnership
What is the Manufacturing Extension Partnership?
  • The NIST Manufacturing Extension Partnership (MEP) program help’s America’s small manufacturers improve their productivity, economic competitiveness and technological capability.
  • Created or retained 50,315 jobs
  • Increased $1.483 billion in sales
  • Retained sales of $2.638 billion
  • Realized $686 million in cost savings
  • Invested $912 million in modernization, including plant and equipment, information systems, and workforce training
  • Served 18,422 clients in FY 2003

*Survey results of clients served from October 2002 through September 2003

green suppliers network review process
Green Suppliers Network Review Process

Step 1 – Green Suppliers Network review team (NIST MEP and State environmental experts) engage supplier to complete Transformation Planner

Step 2 –The team works with supplier to determine which process and areas to focus on

Step 3 –The team works with supplier to create value stream map and process map while training them at the same time

Step 4 – The team uses these maps to find improvement opportunities

Step 5 – NIST MEP completes final report including a cost benefit analysis of all identified opportunities

Step 6 – The team conducts follow-up with supplier to assist in implementation

understanding the current state benchmarking exercise
Understanding the Current StateBenchmarking Exercise

Activities

Questionnaire

Data Comparison

Results Discussion

Identify Opportunities

Estimate financial Benefit

& Generate Final Report

Implementation

Responsibility

Supplier

NIST MEP Center

NIST MEP Center, State TAP

NIST MEP Center, State TAP

NIST MEP Center, State TAP

NIST MEP Center, State TAP

understanding the current state value stream mapping
Understanding the Current StateValue Stream Mapping

A Value Stream is the set of activities (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

Value Stream

Operation A

Operation B

Operation C

Raw Material

Final Product

understanding the current state value stream mapping1

Weekly delivery schedule

Production Control

Market Forecast

Annual Production Plan

D

Customer

A

Customer

B

Supplier

1

Supplier

2

D

WK

WK

Daily schedule

Weekly schedule

I

Daily schedule

Daily schedule

30 days

Shipping

Receiving

I

Assembly &

Inspection

Welding

Painting

Milling

I

I

I

5 days

2 people

3 people

3 people

2 people

C/T = 2 min

C/O = 2 hr

Uptime = 74%

C/T = 4 min

C/O = 3 hr

Uptime = 61%

C/T = 2 min

C/O = 30 min

Uptime = 93%

C/T = 7 min

C/O = 4 hr

Uptime = 48%

5 days

10 days

15 days

8 days

30 days

2 min

4 min

7 min

2 min

Total Lead Time = 68 days

Value Added Time = 15 min

Understanding the Current StateValue Stream Mapping
vsm with environmental metrics ehs icons

Production Control

Market Forecast

Annual Production Plan

Customer

A

Customer

B

Weekly delivery schedule

Supplier

1

Supplier

2

D

Daily schedule

Weekly schedule

I

Daily schedule

D

Daily schedule

WK

WK

30 days

Shipping

EHS

EHS

EHS

Receiving

I

Assembly &

Inspection

Welding

Painting

Milling

I

I

I

5 days

2 people

3 people

3 people

2 people

C/T = 2 min

C/O = 2 hr

Uptime = 74%

Haz. Waste = 5 lbs

C/T = 4 min

C/O = 3 hr

Uptime = 61%

Haz. Waste = 20 lbs

C/T = 2 min

C/O = 30 min

Uptime = 93%

C/T = 7 min

C/O = 4 hr

Uptime = 48%

Haz. Waste = 60 lbs

5 days

10 days

15 days

8 days

30 days

2 min

4 min

7 min

2 min

Total Lead Time = 68 days

Value Added Time = 15 min

VSM with Environmental Metrics & EHS Icons
vsm with materials line and ehs icons

Production Control

Market Forecast

Annual Production Plan

Customer

A

Customer

B

Weekly delivery schedule

Supplier

1

Supplier

2

D

Daily schedule

Weekly schedule

I

Daily schedule

Daily schedule

D

WK

WK

30 days

Shipping

EHS

EHS

EHS

Receiving

I

Assembly &

Inspection

Welding

Painting

Milling

I

I

I

5 days

2 people

3 people

3 people

2 people

C/T = 2 min

C/O = 2 hr

Uptime = 74%

C/T = 4 min

C/O = 3 hr

Uptime = 61%

C/T = 2 min

C/O = 30 min

Uptime = 93%

C/T = 7 min

C/O = 4 hr

Uptime = 48%

5 days

10 days

15 days

8 days

30 days

2 min

4 min

7 min

2 min

20 lbs

120 lbs

15 lbs

40 lbs

80 lbs

5 lbs

20 lbs

5 lbs

Total Lead Time = 68 days

Value Added Time = 15 min

Total Materials Used = 195 lbs

Materials Needed = 110 lbs

VSM with Materials Line and EHS Icons
future state vsm with materials line and ehs icons

Production Control

Market Forecast

Annual Production Plan

Daily schedule

Customer

A

Customer

B

Supplier

1

Supplier

2

Daily schedule

D

I

Shipping

EHS

EHS

EHS

Assembly &

Inspection

Milling

Welding

Painting

2 people

2 people

3 people

3 people

C/T = 2 min

C/O = 2 hr

Uptime = 74%

C/T = 4 min

C/O = 3 hr

Uptime = 61%

C/T = 7 min

C/O = 4 hr

Uptime = 48%

C/T = 2 min

C/O = 30 min

Uptime = 93%

8 days

10 days

5 days

15 days

2 min

7 min

2 min

4 min

<90 lbs

15 lbs

20 lbs

<25 lbs

5 lb

20 lbs

80 lbs

5 lbs

Lead Time = 68 days

Value Added Time = 15 min

Total Materials Used < 150 lbs

Materials Needed = 110 lbs

Future State VSM with Materials Line and EHS Icons
understanding the current state process mapping

Lubricants

Water

Energy

Process

Final Product

Raw Material

Atmospheric Emissions

Contaminated Water

Used Oil

Understanding the Current StateProcess Mapping
  • A schematic depiction of a process
  • Used to enhance resource utilization
  • Used to identify, eliminate/reduce wastes
next steps implement changes
Next Steps: Implement Changes

Green Suppliers’ Implementation support

  • $1,000 credit toward implementation assistance if suppliers work with MEP center on an environmental project within 3 months of review

MEP

  • Create implementation recommendation report
  • Share results and cost-benefit analysis with supplier
  • Conduct follow-up survey within 6 months to assess impacts

State

  • Direct supplier to state resources and programs
review specifics
Review Specifics
  • Cost

$7,000 Cost of review

$2,500 U.S. EPA program discount*

$4,500 Total cost to supplier for Green Suppliers review

  • Supplier benefits often exceed 3:1 ROI
  • Reviews offered first come, first served
  • Reviews focus on single process
  • On-site reviews take 2-3 days
  • Reports generated in 4-6 weeks
  • Technical assistance providers disclosed before review

*Suppliers Must Qualify Under SBA Definitions

real world examples
Real World Examples

Metalworks, Inc.,(a metal fabricator for furniture industry)

Green Suppliers Assessment recommended:

1. Used 21,828,138 gallons of water per year; recommended a 25 percent reduction; reduced water consumption to 8,500,000 gallons per year, a 60 percent reduction, saved $30,000.

2. Used $700,000/year on electricity and natural gas; recommended a 10 percent conservation goal; achieved over 12 percent, saved $85,000.

3. Develop an Environmental Management System team that integrates the Lean Team

review results h l advantage
Review Results: H&L Advantage

Plastic Injection molding and assembly for furniture and automotive industries:

  • Reduce Energy Use by 10 percent by joining the EnergyStar program, focus on improving air compressor efficiency.
  • Reduce chemical use for cooling water system; reduce Water Use by 15 percent by
  • “…The Lean and Green principles have become our way of doing business for everything we do at H&L, and it’s now in our DNA. I would encourage anyone who has an opportunity to become involved in the Green Supplier’s Network to take that opportunity. It is extremely valuable.” –Steve Beurkens, Sales Marketing Manager, H&L Advantage
slide35
The End Result is,

Any Type of Waste has Multiple Negative Impacts to Your Profit Margin

the challenges
The Challenges
  • Motivating engagement
  • Speaking the same language
  • Building trusting relationships
  • Maintaining a consistent message
  • Maximizing resources
  • Large scale adoption and diffusion system
  • Getting participants to implement recommendations
contact information
Contact Information

For more information about the Green Suppliers Network visit www.greensuppliers.gov or contact:

Tom Murray – Pollution Prevention Division, US EPA

(murray.tom-hq@epa.gov or 202-564-8829)

Marcia Horan – Environmental Science and Services Division,

Michigan Department of Environmental Quality

(horanm@michigan.gov or 517-373-9122)

Bill Stough – The Right Place, Inc.

(srg@iserv.net or 616-301-1059)