Sustainability Internal Drivers and Self-Assessment Dennis J. Stamm VP, Director Lean Enterprise Consulting February 22, 2010

What is Sustainability?  Sustainability was defined in 1987 at the World Commission on Environment and Development as, “Development that meets the needs of the present without compromising the ability of future organizations to meet their own needs.”  Extraction and consequential disposal of resources at rates or in forms that nature can absorb

Sustainability Drivers  Rising Costs of Energy and Raw Materials  Developing Legislation (EU RoHS, WEEE, REACH)  Increased Global Competition Market differentiation & Consumer demands for “Green”  Image and corporate citizenship Delivering solutions that create a desirable future for people, business and environment  Just Good Business

“Triple Bottom Line” Drivers: Social – Environmental - Financial  Social Sensitize Stakeholders  Environmental Produce benign emissions Use renewable energy Close the loop Use resource efficient transportation  Financial (business model) Eliminate NVA Redesign commerce [Document Control Number]

Primary Drivers How increased shareholder value, and operational excellence result from Sustainability Excellence: Direct cost savings Increased customer loyalty Improved safety, employee engagement and ability to attract / retain talent Improved cash flow and profitability fund innovation and development of new products and technologies Improved environmental performance with lower emissions and energy use (beyond compliance) Regulatory risk minimization Brand equity Most Sustainability initiatives lack commitment unless they drive economic results External: Regulatory Compliance Internal: Economic Bottom Line

Economic Bottom Line Companies which successfully identify and manage risks and opportunities associated with sustainability are clearly able to deliver a higher return-on-equity (ROE) than similar companies that do not. Zurich-based SAM (Sustainable Asset Management) Group

[Document Control Number][Document Footer] Sustainability  Sustainability – achieving short-term and long-term operating cost reductions Stress water conservation and waste water reduction Reduce carbon footprint Reduce solid waste and hazardous materials Extensive use of re-cycled water and materials Environmentally sound strategies for energy and water use, transportation, product packaging, and other opportunities Eliminate waste Minimize carbon footprint Minimize use of natural resources Do more with less

[Document Control Number] Assessment (L1, L2, L3) Self-Assessment of Operations Conceptual scoping Conceptual scoping Data analysis and field observations Gap Analysis Business Case & Plan Project Definition Implementation The assessment focuses on: - Operational-efficiency opportunities - Energy-efficiency opportunities Assessment must be fact-based and aim to build a business case for action

[Document Control Number] Use a thorough checklist to ensure a Sustainable project implementation

[Document Control Number] The assessment can offer recommendations to improve efficiencies and to achieve immediate and long term capacity gains… Current Capacity Quick Wins “OpEx” Transformation CapEx driven Expansion Future Capacity

[Document Control Number] … as well as recommendations to minimize reduce energy consumption and GHG emissions Current Level Energy Consumption Energy Quick Wins Energy “OpEx” Transformation CapEx driven Energy Mitigation Future Level Energy Consumption

[Document Control Number] … use a variety of industry-proven audit tools to identify efficiencies with current technology and potential use of renewable sources

[Document Control Number] Work and find partners to strive for:  End-to-end Lean Sustainability approach across the life cycle of a facility to achieve: Excellence in operational performance (cost, delivery, quality) Excellence in sustainability performance (emissions, energy consumption, environmental waste)  Combined Lean and Sustainability practices drive behavior change and the development of a continuous improvement mindset  Requires a broad set of global and integrated capabilities ranging from consulting to engineering to construction to operational implementation to greatly reduce time and risk Vision Design Construct. Operations Decomm. Sustainability Principles

[Document Control Number][Document Footer] Sustainability principles are also applicable to the last stages of the facility life cycle Cost-effective and sustainable decommissioning  Planning for decontamination and decommissioning  Equipment refurbishing, relocation & reuse  Sustainable building reuse or building demolition  Recycling of materials collected during decommissioning  Assistance site sale or lease Vision Design Construct. Operations Decomm. Sustainability Principles

[Document Control Number] Factory of the Future: Lean and Sustainable A Symbiotic Life Cycle approach that stresses the elimination of waste everywhere while adding value for customers.

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