8th Deadly Waste

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Lean Manufacturing

and the EnvironmentIgnoring the 8th Deadly Waste1 leaves money on the table.

Mitch Kidwell

Taking a break from akaizen event, Ihad the rare opportunity to pick thebrain of thesensei, a Japanese con-

sultant who had been involved with leanmanufacturing since before its arrival to theUnited States. Since I work for theEnvironmental Protection Agency (EPA), Iasked him about the status of lean manu-facturing in Japan, and in particularwhether the focus of lean and efficient pro-

duction had begun addressing environmen-tal concerns. Through a few more questionsand responses, his answer became clear.Environmental concerns are a part of thelean concept. Emissions to air and water, aswell as the generation of solid/hazardouswaste, represent a waste of production (thatis, no value to the customer), just as surely asthe need for protective equipment (such asgloves and ear plugs) is, and that eventuallylean would address them.

Lean usually helps the environment

without really intending to. A Shingo Prize-winning study that EPA commissionedfound that through Lean, many companieswere saving money by taking steps thatalso benefited the environment, even whenthey were not consciously trying to do so.Environmental wastes, such as excessenergy or water use, hazardous waste, orsolid waste, present largely untappedopportunities to the lean practitioner. Thisis obvious if one steps back to consider the

overall goals of lean manufacturing contin-ually improving production efficiency.More efficient production means less ener-gy used per unit produced. It means lessmaterial resources are used per unit pro-duced, and materials (and energy, for thatmatter) are used or reused more efficiently.Aside from the obvious savings on produc-tion costs, this more efficient use meansnot only less energy and raw materials con-

sumed, but also less material emitted to airand water, and less solid/hazardous wastegenerated. See the box for examples.

Therefore, EPA has begun to look veryclosely at lean as an area in which environ-mental and business practitioners can worktogether. On the one hand, lean practition-ers save money finding undiscoveredopportunities to eliminate the same wastesthat concern environmental agencies. Onthe other hand, much expertise in environ-mental waste-minimizing opportunities

already exists. It is readily available by tap-

In Brief

Lean strategies coincidentally benefit the environment, without

the need for special environmental toolkits or a separate focus

on environmental considerations, as explained by author Mitch

kidwell of the EPA.

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ping into the many years of knowledge thatenvironmental experts and in-houseEnvironment, Health and Safety (EHS) per-sonnel have in finding and eliminatingwastes in ways that can significantly boostthe economic bottom line.

Environmental Waste: An

Overlooked Savings Opportunity

Lean manufacturing first came to EPAsattention through case studies that demon-strated that very significant reductions in so-

Examples of Environmental Gain from Production Process Kaizen

General Motors: An assembly plant evaluated paint booth cleaning operations; cleaning took place every other day.They discovered that the automated section of the painting operations only needed to be cleaned once a week, as longas the cleaning was thorough and bigger holes were cut in the floor grating to accommodate thicker paint accumula-tions. More efficient cleaning techniques and solvent recycling were also implemented.

Production gain:

Reduction in cleaning frequency reduced downtime and improved production flow.

Environmental gain:

Use of purge solvents was reduced by 3/8 gallons per vehicle.

VOC emissions from purge solvents were reduced 369 tons in the first year these modifications were implemented.

Goodrich Aerostructures: A facility shifted to lean point-of-use chemical management systems. Goodrich personnelworked with suppliers to get just-in-time delivery of chemicals in smaller, right-sized containers.

Production gain:

Delivery of right-sized containers to the point-of-use (either in work kits or by designated water spiders who courier

materials to the point-of-use) reduced wasted worker movement and downtime.

Shifting to right-sized containers of chemicals reduced inventory and minimized the chance of chemicals expiring on the

shelf.

Eliminated the need for four 5000 gallon tanks containing methyl ethyl ketone, sulfuric acid, nitric acid, andtrichloroethane, thus eliminating the need to address risk management planning and other chemical managementrequirements for the tanks.

Environmental gain:

Right-sized chemical containers reduced chemical use and hazardous waste generation. Minimized the waste gener-ated through chemicals expiring in inventory.

Eliminating the four 5000 gallon tanks eliminated the potential for large-scale spills.

The Gehl Company, West Bend, WI: The modification of a paint stripping process demonstrated the connection

between lean manufacturing and pollution prevention and demonstrated that pollution prevention saves money. (Orin environmental lingo, P2 Pays.) The company replaced chemical paint strippers with a blasting cabinet that usessmall plastic particles to strip paint off parts.

Production Gain:

This directly resulted in savings of $32,000 a year in waste disposal costs.

Environmental Gain:

Employees had a safer and healthier work environment. The long-term expense or liability that this eliminated cannotbe quantified, but it is significant.

Please note that this type of process improvement and money-saving exercise was an EHS-oriented kaizen event, with

the methodology being wholly consistent with lean manufacturing.

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called environmental wastes (that is, the8th Deadly Waste) resulted from Lean activi-ties solely focused on increasing productionefficiency.2 In 2003, EPA published thisreport, a collection of case studies of leanmanufacturing activities and the environ-mental benefits that resulted. We are proudthat this report won a Shingo Prize forresearch.

Companies usually do not consciouslytarget environmental issues such as ener-gy or water use, solid or hazardous waste, orchemical hazards, in their lean initiatives.Typically, environmental costs and impactsare considered overhead. Thus they tend tobe hidden from the cost evaluation of a spe-cific production process. But with the recent

rise in energy (and transportation) costs, anincreasing number of companies havebegun specifically targeting energy con-sumption for kaizen. Energy consumptionhas a very definite, measurable impact on acompanys bottom line as well as a facilitysenvironmental footprint.

To understand lean better, EPA beganparticipating in actual kaizen events. Thatshow I met the sensei. When I suggested tohim that the lack of environmental consider-ations during lean events was leaving

opportunities for reducing costs on the table,he responded by saying that such a situationsimply indicated a flaw in how lean wasbeing implemented. He believed environ-mental considerations and the costsinvolved are an inherent component of lean.If cost-reduction opportunities concerningenvironmental wastes are being overlooked,then the true costs of production are notreally being accounted for. He also wentfurther by saying that if the true costs of pro-duction are not being overlooked, then it islikely a simple question of priorities.

He pointed out that many ideas forimproving production efficiency reduce oreliminate all manner of wastes. Even ifenvironmental wastes do not get first priori-ty, it is likely that eventually lean will getaround to addressing them. In some cases,this will happen through lean activities notintentionally focusing on environmentalwastes, as was shown in EPAs 2003 report.However, companies may consciously

choose to focus kaizen on particular envi-ronmental wastes.

Lean manufacturing confers very realbenefits by reducing the costs of productionand more efficiently using capital. If leanmanufacturing also incorporates environ-mental considerations, it can help a compa-ny achieve many other long-term goals, suchas environmental sustainability and main-taining a good relationship with the public.

Environmental Expertise CanHelp Achieve Lean Goals

Lean manufacturing provides theopportunity for businesses to collaboratewith EPA and other environmental agencies

either by working together directly toaddress a specific concern or by using envi-ronmental experts as a source of informationand tools that lean practitioners can findhelpful. For many years, EPA has promotedthe concept of pollution prevention, eliminating pollution from the productionprocess rather than installing costly end ofpipe controls. Pollution prevention assis-tance providers have acquired years ofexpertise in finding ways to eliminate waste.They do audits with manufacturers, suggest-

ing ways to save energy and reconfigure pro-duction processes to minimize the wastesgenerated, while at the same time, makingthe kinds of efficiency improvements thatlean manufacturing also seeks out.

Most pollution prevention strategiesactually save money. Few pollution preven-tion ideas would be voluntarily implementedif they only increased the cost of production.While the goal of pollution prevention is notto increase production efficiency per se, andthe goal of lean manufacturing is not to min-imize environmental wastes per se, bothdisciplines tend to arrive at the same, or atleast consistent, end results.

From EPAs perspective, leveraging leanto achieve environmental goals is a no-brainer. Lean manufacturing represents theRosetta stone for translating pollution pre-vention ideas into a language that makessense to the operations side of a business.Likewise, focusing on environmental wastescan help companies achieve their lean goals.

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EPAs Lean and EnvironmentInitiative

To help bridge the gap, EPA has begunto observe how lean works in action, and to

work with lean experts on strategies for tar-geting environmental wastes. EPA has part-nered with several companies, Manufactur-ing Extension Partnerships (MEPs), andFederal facilities that have already begunmaking the connections between lean andthe environment. We have been delighted tofind that lean companies tend to be very freeabout sharing information, experience,expertise, and the actual tools theyve devel-oped in furthering the goal of efficient pro-duction. We set about acquiring lean experi-

ence through attendance at lean confer-ences, workshops, visiting facilities to seefirsthand the changes resulting from leanimplementation, and by actively participatinginkaizen events and other lean activities atvarious partner facilities. EPA participated ina special session at AMEs 2005 conferencein Boston and 2006 conference in Dallas,where EPA also had a booth.

Based on our experience and that ofour partners, in January 2006, EPA devel-oped and published The Lean and

Environment Toolkit (see box copy). TheToolkit incorporates tools already developedand used by our partners, as well as newideas that arose during our collaboration.Lean practitioners will find these tools to be

very familiar; for the most part, theyre tradi-tional lean tools with slight adaptations toaccount for a slightly different perspective.

For example, the Toolkit includes aValue Stream Mapping (VSM) tool, which isbasically the same as the traditional VSMbut adding a starburst to identify environ-mentally sensitive processes. These wouldbe processes that involve the need for a per-mit, the use of hazardous materials, orwhere an opportunity for achieving environ-mental gains consistent with productionefficiency is identified during the VSM exer-cise. Should such a process be addressed bya future lean event, the team working on theevent would know to involve environmen-tal, health, and safety (EHS) staff. More sig-

nificantly, the Toolkit demonstrates how theVSM can also be adapted to track the use ofraw materials, energy, or other utilities, suchas water. Without adaptation, many leantechniques can also specifically addressenvironmental concerns. They can be usedin a kaizen event focused on a specific envi-ronmental problem, or in kaizen dealingwith process waste in general.

Another fairly common example is a6S Checklist where Safety is the sixth S.This checklist includes items for tagging

potentially hazardous materials, and organ-izing them to minimize the risk of spills orunsafe exposure.

EPA has designated this Toolkit asVersion 1.0. In keeping with the continu-ous improvement philosophy, EPA expectsto publish additional versions. We seekinput on suggested changes, both in sub-stance and presentation, to enhance theToolkits usefulness to lean practitionersEPA welcomes suggestions for other leanconcepts that EPA should pursue to enhance

the environmental benefits of lean manufac-turing. We seek information or data fromyou that EPA can provide to other compa-nies to assist them in drawing their ownlinks between Lean and the environment.

EPAs lean website provides a link tomake such suggestions. We really want tohear from you. Please contact us atwww.epa.gov/lean.

The Lean and Environment Toolkit

How can EPA help save you money? The Lean and EnvironmentToolkit, published in January 2006, presents slightly modified

standard lean tools, such as VSM and 5S, to include environmen-tal considerations. The Toolkit also provides checklists and otherstandardized forms used during kaizen events that provide aframework for environmental considerations.

The Toolkit is available for download at www.epa.gov/lean. Thereis also a link on this site to provide comments, suggestions, andespecially if you would like to share success stories involving lean

manufacturing and its impact on the environment, or seek furtherinformation.

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Bringing EHS into theLean World

A key recommendation in the Toolkit isto involve EHS staff more fully in Lean activ-

ities, and to draw on their environmentalexpertise. Currently, when EHS personnelare involved, their role is geared heavilytoward health and safety, as well as ensuringcompliance with OSHA requirements.

Environmental concerns are oftendownplayed, or even absent from kaizenactivities. This seems to be a natural out-growth of regarding environmental issues asa monument during kaizen, being cautiousmaking changes to a production cell thatmay make perfect sense, but that would

require a permit modification to maintaincompliance, for example. But such environ-mental monuments are little different fromother monuments that kaizen teams feelcompelled to lean around. Sooner or laterthey need to be addressed.

While compliance issues are rightfullya major concern, and people acknowledgethat its better to get such issues out in theopen early in a kaizen event, theres still anatural inclination to downplay or evenexclude environmental monuments from

improvement considerations. As a result,EHS personnel participating in a kaizenevent may leave their environmental hatbehind, or be reluctant to offer their envi-ronmental ideas, believing that they willnot receive full consideration because theycome from the nay-sayer.

However, more and more experiencedlean companies are finding that it pays toencourage EHS personnel to wear theirenvironmental hat. With that hat comeinsights into costs that are otherwise hid-

den from the operations side, and from theaccounting system, but thats anotherissue. These insights can help evaluate thetrue costs associated with a particular pro-duction process, and find opportunitiesotherwise unseen.

For example, EHS staff are more likelyto realize that a more expensive, but lesstoxic solvent may actually be more cost-effective if it results in less hazardous waste(or even none) being generated. The costs to

treat and dispose of wastes often exceed theadded expense of less toxic solvent.

Another all too common example isthat it seems more efficient from a produc-tion perspective to combine wastewaterstreams and treat all the wastewater togeth-er. However, if one stream results in a haz-ardous waste, combining it with other waste-water streams can generate a much largervolume of hazardous waste. How could thathappen? Suppose electroplating rinse wateris one of the wastewater streams. Under thehazardous waste regulations, the sludgefrom the treatment of electroplating rinsewa-ter is a hazardous waste. Combining theelectroplating rinsewater with other waste-water streams does not change the regulato-

ry status of the rinsewater (that is, it remainselectroplating rinsewater). So the sludgeresulting from the treatment of the combinedwaste stream continues to be considered thesludge from the treatment of electroplatingrinsewater, and so continues to be a haz-ardous waste, only now with a much largervolume because of the precipitants con-tributed by all the other wastewater streams.In such a situation, the added cost of treat-ment and disposal of the larger volume ofhazardous waste could easily exceed the

operational savings of combining all thefacility's wastewaters, something an EHSperson would know.

Combining waste streams can alsoadversely impact the recyclability of allresulting waste, impacting the cost of a facil-itys overall waste management program.For example, scrap metal and used oil areboth recyclable, but combining the twocould render both unrecyclable unless theyare again separated. Even then, they areless attractive to a recycler. Too often, such

environmental costs are hidden in overhead,and the insights that would have broughtthem to light during a kaizen event neverarise if environment expertise is omitted ordiscouraged during the event.3

We strongly encourage companies toinvolve EHS staff in kaizen events on pro-duction processes, and encourage them towear their environmental hat. Certainly,many kaizen events do not require environ-mental insights. But with a little time and

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experience, managers soon learn when toinvolve EHS staff, just as they sense when toinvolve people from marketing, purchasing,or IT when a process kaizen is apt to crossboundaries. Unless they do, theyll neverknow what insights they missed.

Working Together TowardSustainability

EPA has recognized that lean strate-gies coincidentally benefit the environment.As noted earlier, EPA also recognizes thatlean is first and foremost a business model.Trying to hijack it to redirect to other goalswill not be successful either for EPA or ourbusiness partners. Thus, we encourage tar-

geting environmental wastes not for altruis-tic reasons, but because it serves the samegoals as targeting wasted time, wastedmotion, and other traditional deadlywastes.

Nevertheless, the environmental bene-fits that result from kaizen activities can bequite significant. They can lead a companytowards sustainability and a reputation as agood corporate citizen. Increasingly, com-panies concerned with their public imagehave adopted, directly or indirectly, the goal

of reducing their environmental footprint intheir mission statements. For a variety ofreasons, they are taking steps well beyondwhat is required by law and looking at thetriple bottom line of economic, environ-mental, and social concerns. (Interestedreaders may want to review GaryLangenwalters article, Life is Our UltimateCustomer: From Lean to Sustainability inTargets first 2006 issue.4)

While not every company is ready forthis step, EPA encourages companies to

consider it, and views the lean journey as anexcellent way to start the environmentaljourney. EPAs goal is to maximize the envi-ronmental benefits of lean by raising theawareness of the linkage between lean andthe environment. We are developing pollu-tion prevention and other relevant expertise.We will develop informational materials,such as the Toolkit, when appropriate. To dothis, EPA needs the input of lean companies.

We need you to tell us what we can do tohelp your company continue the lean pathWe trust that environmental considerationscan become incorporated as an inherent partof lean, without the need for special envi-ronmental Toolkits or a separate focus onenvironmental considerations. We need notwait for lean to eventually address environ-mental considerations they are worth con-sidering now as part of efficient production.

Mitch Kidwell is a senior staff person in EPAsNational Center for Environmental Innovation(NCEI). Prior to that, he spent 14 years in EPAs

hazardous waste regulatory program.

Footnotes:

1. The 8th Deadly Waste is a term coined by lean manu-facturing companies and assistance providers that have

partnered with EPA in pursuing the goal of enhancing the

environmental benefits inherent in lean manufacturing

Environmental waste is a term used to distinguishbetween those emissions and solid/hazardous wastes

that EPA typically considers waste from the 7 Deadly

Wastes associated with lean manufacturing.

2. Lean Manufacturing and the Environment: Research

on Advanced Manufacturing Systems and the

Environment and Recommendations for LeveragingBetter Environmental Performance, EPA100-R-03-005

October 2003. This EPA publication is available for downloading at http://www.epa.gov/lean/leanreport.pdf.

3. For smaller companies that do not have such com-

partmentalization of key functions, insights into environ-mental costs and alternative processes and materials can

often be gained through pollution prevention assistance

providers, Manufacturing Extension Partnerships (MEPs)state regulatory agencies, or private consultants that spe-

cialize in such issues.

4. Life is Our Ultimate Customer: From Lean to

Sustainability, by Gary Langenwalter, Target, Volume 22

Number 1, p. 5.

2006 AME For information on reprints, contact: AMEAssociation for Manu facturing Excellencewww.ame.org

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8th Deadly Waste