8/11/2019 332-3500

1/6

SUSTAINABILITY: A NEW LEAN PRINCIPLE

Gene FliednerDecision and Information Sciences Department

School of Business AdministrationOakland University

Rochester, MI 48309fliedner@oakland.edu

248-370-4281

ABSTRACT

Lean principles are well known with documented savings and productivity enhancements through theelimination of waste. Many organizations have found that a by-product of lean principles is enhancedgreen or environmental performance, even when lean activities were not initiated for environmentalreasons. Typically, environmental savings are not often part of the financial justification for leanimprovement activities. This paper proposes a new lean principle, sustainability and argues thatorganizations should explicitly consider the environmental impact, savings and even potential revenues ofsustainable lean initiatives.

INTRODUCTION

In the early 1900s Henry Ford became the first person to integrate an entire production process. Fordmarried consistently interchangeable parts with standard work and moving conveyance to create what hecalled flow production. Kiichiro Toyoda and Taichi Ohno (4) refined Fords approach. Difficult financialcircumstances at Toyota led these two to build upon the concepts developed by Ford in order to pioneer thefrequently cited seven lean principles shown in Table 1.

Table 1: Lean Principles

1. Eliminate waste of overproduction2.

Eliminate waste of time on hand (waiting)3. Eliminate waste in transportation4.

Eliminate waste of processing itself5.

Eliminate waste of stock on hand (inventory)6.

Eliminate waste of movement7. Eliminate waste of making defective products

Whether implemented in a manufacturing or service environment, Lean is frequently defined as theelimination of waste or muda. The seven Lean principles noted in Table 1 promote waste reduction orelimination. Numerous waste reduction examples can be found in the research literature including theproduction of fewer defects, lower inventories, and less scrap (6).

Many organizations have found that following these seven lean principles results in waste reduction. Manyorganizations have also found that a by-product of these seven lean principles is enhanced green or

environmental performance, even when lean activities were not initiated for environmental reasons. Forexample, if a work environment is kept clean using the 5S concepts (sift, sort, sweep, sanitize and sustain),hazardous spills and leaks may be noticed more quickly and can subsequently be addressed more rapidly.Leaner operations typically require less floor space for operations and storage which can translate intodecreased energy needs. The production of fewer defects reduces energy and resource needs.

Lean initiatives have the ability to promote substantial green benefits. Environmental savings are oftennot part of the business case for lean improvement activities. Likewise, organizations implementing leanfrequently do not quantify the environmental performance gains associated with their lean initiatives. Thepurpose of this paper is to suggest that organizations should explicitly consider the environmental impact,

3321

mailto:fliedner@oakland.edumailto:fliedner@oakland.edu

8/11/2019 332-3500

2/6

savings and even potential revenues of lean initiatives. Namely, given the ability to reduce waste and toimprove productivity and quality, sustainable green initiatives should become an intentional objectiveand the eighth Lean principle.

A LEAN BYPRODUCT IS GREEN

Firms commonly pursue the seven Lean principles of Table 1 through the application of various Leanmethods and tools. Some commonly used methods and tools are identified in Table 2. While Leanimproves processes and saves money through waste reduction and elimination, the methods and tools notedin Table 2 have also demonstrated environmental benefits.

Table 2: Lean Methods and Tools with Associated Environmental Benefits

Lean Method/Tool Examples of Observed Environmental Benefits

Kaizen Events Uncovering and eliminating hidden wastes and waste generating activities

Value Stream Mapping

Magnification of environmental benefits of lean production (e.g., reducedwaste through fewer defects, less scrap, less energy usage, etc.) across thenetwork

Environmental benefits may be more broadly realized by introducing lean toexisting suppliers rather than finding new, already lean suppliers

5S Clean windows reduce lighting requirements

Spills and leaks noticed more quickly

Reduced consumption of materials and chemicals when equipment, parts, andmaterials are organized and easy to find

Cellular Manufacturing Smaller set-up times reduces energy and resource needs

Fewer product changeovers reduces energy and resource needs

Defects may be noticed earlier, reducing waste

Pull Approach

Lower in-process and post-process inventory; avoids potential waste fromdamaged, spoiled, or deteriorated products

Less floor space needed; potential decrease in energy use

Total Preventive Maintenance Increased longevity of equipment decreases need for replacement equipment

and associated environmental impacts Decreased number and severity of spills, leaks, and upset conditions: less

solid and hazardous waste

Six Sigma Fewer defects which reduces energy and resource needs; avoids waste

Focuses attention on reducing the conditions that result in accidents, spills,and malfunctions, thereby reducing solid and hazardous wastes

Improving product durability and reliability can increase product lifespan,reducing environmental impacts

Pre-production Planning Reduces waste at the product and process design stage, similar to Design forEnvironment methods

Use of right-sized equipment lowers material and energy requirements

Reducing the complexity of the production process (design formanufacturability) can eliminate or streamline process steps;environmentally sensitive processes can be targeted for elimination, sincethey are often time-, resource-, and capital-intensive

Less complex product designs can use fewer parts and fewer types ofmaterials, increasing the ease of disassembly and recycling

Lean Supplier Networks Magnification of environmental benefits of lean production (e.g., reducedwaste through fewer defects, less scrap, less energy usage, etc.) across thenetwork

Environmental benefits may be more broadly realized by introducing lean toexisting suppliers rather than finding new, already lean suppliers

As noted in Table 2, some commonly observed environmental benefits derived from specific Lean methodand tool applications include the following. Uncovering and eliminating hidden wastes during kaizen

3322

8/11/2019 332-3500

3/6

events reduces resource requirements. If an improvement undertaking is extended beyond a localizedportion of a process to the entire value stream, there can be significant magnification of environmentalbenefits across the supply chain. The application of a 5S approach within the workplace can identify spillsand leaks more quickly and can lead to a reduced consumption of materials and chemicals when equipment,parts, and materials are organized and easy to find. Cellular manufacturing may lead to shorter set-up times,fewer product changeovers, and earlier defect detection, all resulting in reduced energy and resource needs.A pull approach to production may lower inventories resulting in less floor space being needed and apotential decrease in energy use. A total preventive maintenance (TPM) program may increase thelongevity of equipment which decreases the need for replacement equipment and associated environmentalimpacts. A TPM program may also decrease the number and severity of spills and leaks thereby providingless solid and hazardous waste. These are just a few of the environmental benefits that have been observedas a result of Lean implementations.

Lately, even the United States Environmental Protection Agency (EPA) has become interested in findingways to maximize the environmental benefits of Lean. The EPA has a Case Studies page on its web site(www.epa.gov/lean/studies/index.htm), which identifies examples of environmental benefits from Leanimplementations. Table 3 notes some of the EPA case studies and best practice examples of the types ofenvironmental benefits that result from Lean implementations.

Table 3: EPA Case Studies

Company Environmental Benefits

Designed equipment that can use smaller pieces of wood, which reduceswood scrap and alleviates the need to harvest large-diameter, maturetreesApollo Hardwoods Company

Baxter Healthcare Corporation

Over a three-day event, an interdepartmental team developed valuestream maps (VSM) that detailed the plants use of water and identified

processes for improvement potential with a byproduct of saving 170,000gallons of water per day with little or no capital investment

Boeing Company (Everett)

Eliminated the use of 350 cubic feet of cardboard and bubble wrappacking material per 747 wing panel set

Reduced chemical usage per airplane by 11.6 percent

Columbia Paint & Coatings

Reduction of 15,000 lbs of paint solids from wash water

Saved 18,000 lbs of shrink wrap

Removed 2,820 lbs of hazardous materials from the waste stream

DuBois-Johnson Diversey andSteelcase

Energy savings of a 60 percent reduction in the BTUs required

Reduction in water usage by 80 percent

Waste stream was cut by 85 to 95 percent

General Electric (Peebles, Ohio jetengine facility)

Reduced fuel consumption for GE90 engine testing from 17,000 gallonsto 9,000 gallons

Produced 5,000 metric tons less of GHG emissions from the GE90 in2007 compared to 2006

Reduced GHG emissions from the CFM testing cycle by 1,600 metrictons annually

General Motors (Saturn) Saved 17 tons per year in air emissions

Eliminated 258 tons per year of solid waste

Reduced hazardous waste generation from 9.0 pounds per car in 1992 to

3323

http://www.epa.gov/lean/studies/baxter.htmhttp://www.epa.gov/lean/studies/baxter.htm

8/11/2019 332-3500

4/6

3.2 pounds per car in 1996

General Motors

Eliminated 7 tons per year of volatile organic compound (VOC)emissions, hazardous wastes, and transportation-related impacts in itssupply chain by working with suppliers to eliminate a painting processstep

It should be clear from the examples noted in Table 3, that Lean initiatives have the ability to promotesubstantial green benefits. As stated earlier, environmental savings are often not part of the businesscase for lean improvement activities. Likewise, organizations implementing lean frequently do notquantify the environmental performance gains associated with their lean initiatives. Organizations shouldexplicitly consider the environmental impact, savings and even potential revenues of lean initiatives.Namely, given the ability to reduce waste and to improve productivity and quality, green initiativesshould become an intentional objective and the eighth Lean principle.

SUSTAINABILITY: THE EIGHT LEAN PRINCIPLE

Many agree that if an activity does not add value, it should be reduced or eliminated if possible. For

example, a frequently cited non-value added activity is transportation or movement. The movement of awork piece from one work station to a downstream workstation does not add value, although it may benecessary. The movement may be necessary in order to: (1) increase throughput due to a lower possiblecycle time resulting from the division of the workload, or (2) enhance the workload balance, or (3) toreduce the skill set requirements of any one worker, or a variety of additional reasons.

Non-value adding activities consume resources and therefore, over the long run are not economicallysustainable. Defined, sustainability is a characteristic of a process or state that can be maintained at acertain level indefinitely. Sustainability addresses how processes and operations can last longer and haveless impact on ecological systems, and particularly relates to concern over major global problems relatingto climate change and resource depletion. Sustainable processes reduce ecological impacts and mayeliminate wasteful depletion of scarce resources. Without waste reduction and elimination, processes andoperations are less likely to be sustainable as resources are typically increasingly scarce. In a Lean

environment, the word sustainability refers to systems that can be expected to be productive for longperiods of time, even with growth in scale and complexity, through the promotion of green initiativeswhich lessen or even eliminate ecological impacts and possibly eliminate the impact of resourceconsumption.

Increasingly, Lean objectives must recognize more than just the elimination of non-value adding activities.Lean objectives must be broadened to recognize the ability to reduce resource or capacity requirementsthrough conservation and reclamation activities and the ability to capture resources for a cost that is lessthan the value recovered.

One significant change in corporate environment over the past few years has been the increasing demandfor social responsibility as the result of global warming, resource depletion and other environmental issues.Environmental concerns are increasingly attracting worldwide attention and, as a result, corporate

stewardship of the environment is becoming a more important issue.

Environmental savings are typically not included in an assessment for undertaking Lean improvementactivities. Environmental performance gains associated with Lean initiatives are simply not quantified inthe financial justification. Fortunately, organizations are starting to realize the potential for a significantsavings and consequently are starting to explicitly consider the environmental impact(s), savings, imagebenefits, and even potential revenues of Lean initiatives. Given the ability to reduce waste and to improveproductivity and quality, sustainable Lean initiatives should be an intentional objective. The eight Lean

3324

8/11/2019 332-3500

5/6

principle gaining importance is the conservation of resources, natural or otherwise, through sustainableactivities and processes.

Recent literature provides an abundance of sustainable Lean initiatives and their associated benefits. Thesesustainable Lean initiatives focus on the six broad categories identified in Table 4. Each of these initiativesis discussed below with a few examples as well as some costs and benefits being noted.

Table 4: Sustainable Lean Initiatives with Examples

1. Product research, design, & development

Hybrid automotive engine technology providingCO2 emissions reduction

Improved energy efficiencies of lithium ionbatteries over standard batteries

2. Building design and construction Incorporation of solar and wind power in buildingdesign

Reduced building heights

Incorporation of fly ash in concrete mix

Larger, energy efficient windows to reducelighting power consumption

3. Indoor environmental control

Automatic monitoring of lighting, heating, andcooling systems

4. Facility and systems maintenance Real time data collection and monitoring fordefect detection and systems failures

5. Reclamation of resources Rainwater collection for non-potable indoor use(e.g., toilets and air conditioning) and outdoorirrigation

Remanufacturing of components

6. Ethical and social considerations

Recycling

Reforestation

Reclamation of resources

The first sustainable Lean initiative questions how products are being researched, designed, and developed.

Increasingly products are being researched, designed, and developed with an eye towards waste elimination andconservation. For example, Toyota believes that hybrid technologies will play a central role in achieving sustainablemobility. Toyota has made considerable efforts to promote the use of hybrid vehiclessince the launch of the Prius in1997. As of November 2007, Toyota has achieved global cumulative sales of 1.25 million hybrid vehicles. Theestimated resulting reduction in CO2 emissions is 5 million tons. Toyota is also working towards the development and

production of lithium-ion batteries. These batteries offer the advantages of greater energy and output densities thannickel-metal hydride batteries in current hybrid vehicles.

The second sustainable Lean initiative identified is building design. As one example, Toyota is emphasizing the role ofnature in creating production sites that are in harmony with their natural surroundings. The main feature of this conceptis facility development following three directives: (1) achieving groundbreaking environmental performance byintroducing innovative technology and kaizen (improvement) activities; (2) using renewable energy, including biomassand natural energy sources (solar and wind power); and, (3) contributing to the local community and conserving theenvironment by planting trees in and around plants. As a second example, Wal-Mart is reducing the height of stores aswell as tenant space which reduces facility energy consumption. Wal-Mart is also incorporating environmentally

friendly materials such as fly ash in concrete in building construction. A third example, Bank-of America utilizes floor-to-ceiling energy efficient windows reducing lighting energy needs by 25 percent (2).

The third sustainable Lean initiative utilizes indoor environmental control systems. Currently available environmentalcontrol systems have the ability to sense and subsequently automatically regulate a variety of indoor heating, cooling,lighting, and other systems saving labor and energy costs. Wal-Mart is utilizing a variety of technologies in somestores, including natural daylight dimming controls, electricity generating photovoltaic cells in clerestories andskylights, radiant floor heating, and wetland rainwater collection and filtration systems to name a few. At one Wal-Martstore, the skylights alone allowed lights to be turned off in the lawn and garden center for up to 10 hours per daycontributing to a $30,000 savings. The 99 Store estimates savings of $1,500 for each skylight unit that actively tracks

3325

http://www.theautochannel.com/news/2007/12/31/074153.html##http://www.theautochannel.com/news/2007/12/31/074153.html##

8/11/2019 332-3500

6/6

the sun and stores sunlight (3). Siemens offers an energy and water management program that it has estimated willprovide energy and operational savings of $430,000 annually for the Mississippi Department of Corrections (5).

The fourth sustainable Lean initiative is facility and systems maintenance. Recent technological advances enablemodern equipment to offer substantial operational and maintenance savings relative to older equipment. ExxonMobilinstalled Emersons facility management system which enables maintenance personnel to identify system failuresquickly and accurately with real-time data reducing maintenance costs.

The fifth sustainable Lean initiative is reclamation of resources, both natural and man made. For example, the newlyconstructed Bank of America building in New York collects rainwater to flush toilets, irrigate its green roof, and to runair conditioning (2). State Legislators in North Carolina have approved a plan to build a $120,000 cistern and filtrationsystem for a landscaping irrigation system. The water would otherwise pick up unsafe lawn fertilizers, pesticides,

petroleum and other contaminants which are harmful to the environment before entering the states waterways. Thesystem is expected to eliminate a $2,500 annual irrigation expense and a $3,000 storm water fee. In addition otreducing costs through resource reclamation efforts, it may be possible for a firm to reduce capacity requirementsthrough the reclamation of resources too. For example, Caterpillars tractor components remanufacturing division has

become its fastest-growing unit this decade. Annual revenue tops $1 billion and is estimated to grow 20 percent a yearwhile reclaiming components that might otherwise be discarded (1).

Lastly, sustainable Lean initiatives must recognize ethical and social considerations. For example, as landfills close andfewer are constructed, increasingly corporations will need to expand recycling efforts to reduce landfill waste or other

environmental problems. Toyota has introduced a social contribution activity through hands-on environmentaleducation. Over the past ten years, approximately 25,000 children having participated. Toyota is also conductingvigorous forestation activities in countries such as China and the Philippines. Some firms are burning used motor oil forfuel as well as utilizing more environmentally friendly freezer and cooler refrigeration units. These efforts reducelandfill waste and freshwater contamination issues.

CONCLUSION

Future Lean initiatives will continue to focus on the traditional objective of the reduction of non-value adding activities.These efforts emphasize profit improvement through cost reduction efforts. However, future Lean initiatives must also

begin to recognize the importance of sustainability. Numerous examples of sustainable Lean initiatives have beenidentified. As the documented savings of these Lean conservation efforts become increasing clear, future conservationefforts will thrive. Lean initiatives must recognize the environmental savings in an assessment for undertaking Leanimprovement activities. Environmental performance gains must be quantified in the financial justification of futureLean initiatives. Fortunately, organizations are starting to realize the potential for a significant savings and

consequently are starting to explicitly consider the environmental impact(s), savings, image benefits, and even potentialrevenues of Lean initiatives.

REFERENCES

[1] Arndt, Michael. Cat Sinks Its Claws Into Services,Business Week, Issue 3962, p. 56, December 5, 2005.[2] Aston, Adam. Bank of America Tower: The Worlds Greenest Skyscraper, Set to Open Early Next Year, is Rising

Near Times Square. The $1.3 Billion Building Will be New Yorks Second-Tallest,Business Week, Issue 4025,pg. 22, March 12, 2007.

[3] Hisey, Pete. Frugal Retailers Switch off Lighting Costs, Discount Store News, Vol. 35, Issue 4, pp. 3-4, 1996.[4] Ohno, T. Toyota Production System: Beyond Large-Scale Production, New York, New York: Productivity Press,

1988.[5] Skaer, Mark. Big Boys Help Owners Save on Energy, Air Conditioning, Heating and Refrigeration News, Vol.

226, Issue 4, pp. 20 and 22, 2005.[6] Womack, James P. and Daniel T. Jones. Lean Thinking: Banish Waste and Create Wealthi in Your Corporation,

New York, New York, Free Press, 2003.

3326