Profitable Sustainability Savings

Profitable Sustainability Yields Big Savings

A growing number of Wisconsin manufacturers are using sustainability to reduce costs – and grow profits.

In the area of logistics,
11 manufacturers identified
$1.8 million in recurring annual savings. 

“Every manufacturer has the potential to achieve immediate and recurring savings by using resources more efficiently and effectively,” said Randy Bertram of WMEP, speaking to a group of more than 20 Madison-area manufacturers at a recent Profitable Sustainability forum.  “If this isn’t on your radar right now, it should be.”

Companies that embrace profitable sustainability in their products, processes and plant operations are well-positioned to gain competitive advantage and capture new markets and customers.  Fueling the move to sustainability is a perfect storm of consumer demand, environmental concerns and regulatory requirements.

Initial results from the Wisconsin Profitable Sustainability Initiative (PSI) underscore the potential for significant savings.  Forty-five manufacturers are participating in PSI, developed by WMEP and its partners to help manufacturers integrate sustainable practices into their operations. 
   
A few highlights from the PSI’s initial results:

• In the area of logistics, 11 manufacturers identified $1.8 million in recurring annual savings.  In addition these manufacturers will reduce:
  • Fuel by 68,800 gallons
  • CO2 emissions by 758 tons
  • Oxides of nitrogen by 18,944 lbs.
  • Particulate matter by 680 lbs.

• Logistics savings of $191,000 allowed a Madison-area manufacturer to offset the need for a price increase that could have resulted in the loss of business and jobs.
• A  Southeast Wisconsin manufacturing firm will save $360,000 annually by reclassifying byproducts, eliminating the need to take them to the landfill.

Energy Efficiency = Quick savings

Ray Tierney, principal at BT Squared, an environmental and civil engineering firm partnering with WMEP, points out that the greatest number of energy and environment opportunities for savings in companies participating in PSI have been found in:

• HVAC
• Waste Heat Recovery
• Exhaust/Filtration
• Compressors
• Process Heat
• Lighting

Tierney says that it's not surprising that HVAC is at the top of the list.  "Most older heating and air conditioning systems are designed for the warmest and coldest days of the year plus a safety factor.  Once they're installed, they work at full capacity and draw energy accordingly.  A 'modular' system, with energy efficient add-ons, allows greater flexibility in climate control - using only the capacity that is necessary for the existing environmental conditions," he said.

Starting an energy efficiency program delivers a solid ROI.   According to the U.S. Department of Energy, companies with comprehensive energy programs can achieve, on average, practical energy reductions of 20%.

• Of these savings, 20-30% can be achieved with little or no capital investment by using only procedural and behavioral changes (culture).

Cultivating an employee culture to support sustainability is the first step in developing an energy efficiency program.  Tierney encourages companies to draw a team of employees from all areas of the company.  Support from top management is essential for success.

Tierney suggests that the easiest initial targets for energy use reduction are:

• Repairing leaks – steam, compressed air, ventilation air, water, etc.
• Maintenance – tuning burners, belts, lubrication, replacing filters
• Lights – replacing incandescent and metal halide fixtures with fluorescent can quickly pay for itself and dramatically cut the cost of lighting over time.
• Use of scheduling or controls –  such as turning down or off a HVAC system and lights overnight.

A thorough review of a company’s energy invoices and energy profile can highlight major areas of savings, Tierney said.  For example, starting all of the facilities machines at the same time in the morning draws a large amount of energy, producing a high peak demand rate.  This results in extra charges that can easily be avoided by staging equipment start-up over an hour or two or moving usage of equipment to a different shift.

The PSI Approach

The Profitable Sustainability approach developed by WMEP and its partners uses a structured, comprehensive, systemic process to optimize all aspects of product production.  Areas that typically yield immediate results for manufacturers are:

• Operating processes and materials processing
• Energy use and environmental impact
• Supply chain logistics and transportation
• Packaging

WMEP and its partners bring a breadth of experience in logistics, environmental services, energy management and lean methods to analyze how each manufacturer can achieve the greatest savings in a three-phase, collaborative process.

1. A Diagnostic establishes baseline performance and prioritizes opportunities for cost savings.  This includes a discussion with top management and a tour of the facility to gather data that will point to the areas offering the biggest ROI.
2. The Assessment phase uses the diagnostic results to gather additional data in targeted areas, develop metrics, define business goals and objectives and develop an initial action plan.
3. Implementation uses findings from the assessment to drive actual business execution of the action plan with specialized assistance as needed.

Profitable Sustainability is Good Business

Manufacturers are accustomed to cutting costs out of the manufacturing process.  But looking at the entire operation – the use of raw material, waste, the facility itself, how much energy the machines use and how they use it – will result in significant savings, both immediate and over time.

WMEP can help with a structured, multi-disciplinary, collaborative approach to Profitable Sustainability.  Give us a call at 877.856.8588 to find out more, or

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WMEP will be offering free Profitable Sustainability Lunch & Learn Sessions in the upcoming months.  Please check the Events page for availability in your area, or fill out the Contact Form and let us know you want to be notified of any sessions in your area.