Lean and Environment University of Washington January 22, 2010 Michelle Gaither, Pollution Prevention Resource Center B.S. Industrial Engineering, 1988 M.S. Environmental Science, 1995 Acknowledgments: Partially adapted from: Ross & Associates Environmental Consulting, EPA’s Lean & Environment Toolkits Additional thanks to: Canyon Creek Cabinet Company, Lasco Bathware, Columia Paint & Coatings, Woodfold Manufacturing, ON Semiconductor, Oregon Manufacturing Extension Partnership (www.omep.org), Impact Washington, Idaho Department of Environmental Quality, Idaho Department of Energy Resources

Presentation Objectives Describe how lean manufacturing principles relate to environmental performance. What is happening in Lean and Green? Learn by examples from different case studies.

What is Lean? A continuous-flow production approach, pioneered by Henry Ford, further developed by Toyota, and adapted by many others Lean thinking aims to produce: high quality products and services at the lowest cost with maximum customer responsiveness Seeks to eliminate “waste” which is defined as any non-value added activity, input, or output Key metrics are quality, cost, and time

Lean = Eliminating Waste Non-Value-Added Value-Added Overproduction Waiting Transportation Non-value-added processing Excess inventory Defects Excess motion Underutilized people Environmental waste Typically 95% of all lead time can be non-value-added.

& Time What Lean Does $$$ Lean reduces the capital and time intensity of manufacturing products $$$ & Time

Lean Philosophy Shorten time line between customer order and product shipment by eliminating waste Business as Usual Product Shipment Customer Order Waste Time Lean Manufacturing Customer Order Product Shipment Waste Lead Time (Shorter)

Long Vendor Deliveries Communication Problems Seven Wastes ‘Muda’ Raw Materials Poor Scheduling Quality Problems Line Imbalance Long Vendor Deliveries Long Start-up Time Poor Housekeeping Communication Problems Machine Breakdowns Long Transportation Absenteeism Sea of Inventory Finished Goods Overproduction Transportation Waiting Inventory Motion Over Processing Defects Underutilized employees Some of these definitions may seem rather 'idealist' but this tough definition is seen as important. The clear identification of 'non-value adding work', as distinct from waste or work, is critical to identifying the assumptions behind the current work process and to challenging them in due course. In the words of Taiichi Ohno "eliminate muda, mura, muri completely". Breakthroughs in SMED and other process changing techniques rely upon clear identification of where untapped opportunities may lie if the processing assumptions are challenged. Overproduction production ahead of demand Transportation moving products that is not actually required to perform the processing Waiting (waiting for the next production step) Inventory (all components, work-in-progress and finished product not being processed) Motion (people or equipment moving or walking more than is required to perform the processing) Over Processing (due to poor tool or product design creating activity) Defects (the effort involved in inspecting for and fixing defects) ©Washington Manufacturing Services www.wamfg.org

House of Lean (& Environment) Building Blocks Continuous Improvement Quick Changeover Standardized Work Batch Reduction Teams Quality at Source 5S System Visual Controls Plant Layout POUS Cellular/Flow Pull/Kanban TPM P2 Value Stream Mapping Adapted from www.mep.nist.gov

Why Are You Hearing About Lean? Lean production is becoming more & more widespread At least 30-40% of U.S. manufacturing firms are engaged in lean; 5% are pursuing it aggressively Many organizations in King County and the Pacific NW are implementing Lean The Economy! Lean is connected to competitive business drivers with substantial financial benefits Growing interest & experience with lean in service sector (hospitals, banking, insurance) government (15+ State and local environmental agencies)

What is Pollution Prevention (P2)? Pollution prevention consists of any activity or strategy that eliminates or reduces the use of toxic substances; conserves water or energy; and/or, reduces (or better yet, eliminates) the generation of nonproductive output, hazardous waste, air emissions, wastewater, or other pollutants. Buzzwords Relating to P2 Zero-Waste Source Reduction Sustainability

The Environmental Hierarchy

Where are the environmental wastes? Lean Eliminates Production “Wastes” But Not Always Environmental Wastes Lean’s “Deadly Wastes” Defects Overproduction Waiting Non-value added (over-) processing Transportation Inventory Motion Where are the environmental wastes? Excess material use Toxic / hazardous material use Scrap & non-product output Hazardous wastes Pollution (emissions/effluents) Energy and water consumption In the context of Lean, Environmental Waste is either: an unnecessary use of resources, OR a substance released to the air, water, or land that could harm human health or the environment Examples of environmental wastes include: Excess (non-value-added) use of energy, water, or materials to meet customer needs Air and water pollution Hazardous wastes, trash, discarded scrap

any inputs or outputs that do not add value to the product Environmental Waste = any inputs or outputs that do not add value to the product Energy Waste Heating, cooling, lighting Resource Waste Raw material, space, equipment, water Process Waste Scrap, rework, emissions, heat Solid & Hazardous Waste Expired or unusable hazardous material, excess packaging (inbound or out), trash, manufacturing wastes XX = Definite crossover with lean waste

Lean Manufacturing and Environment Integration Efforts EPA’s Lean and Environment Toolkit (2006) and Lean and Energy Toolkit (2007) and Lean and Chemicals Toolkit (2009) Designed to show lean practitioners how to integrate environmental & energy considerations into lean Practical strategies and tools that work with and support lean’s overall waste-elimination focus

House of Energy Efficiency Align Performance to Strategic Plans Energy Audits Measure Energy Intensity/Output Strat. Tools Utility EE Programs Hardware & Technology Operations Strategic Management Kaizen Continuous Improvement Equipment & Tech Vendors Sustain Value Stream Mapping Instructor Notes – Lower Inventory The idea in this graphic is that we must lower the “waste line” as much as possible to allow value-creating work to become a priority in each workday. Imagine a day in which you come into work with great ideas, enthusiasm, etc. After the first, second, and third low-priority meeting or other interruption, you have lost much of your enthusiasm. After a full morning of waste and distraction, you are likely to just “give up on my great idea and hope for some clear time tomorrow.” Real work must be moved to the forefront of a daily work schedule and given the same urgency as all of the firefights, customer calls, factory emergencies, and supposedly important meetings that seem to dominate the work environment in many firms. Source: California MEP (www.cmtc.org) 15

Similarities Between Lean and P2 A systematic approach to continual improvement. A systematic and on-going approach to identify and eliminate waste. Root cause analysis Baseline assessments and data collection (lots) Active employee participation in improvement activities. Emphasis on metrics to inform decisions. Engagement with the supply chain to improve enterprise-wide performance.

Differences Lean is fundamentally about competitiveness, not environmental improvement. Drivers/Motivation Lean Competitiveness, capital productivity, and customer satisfaction P2 Reduced toxicity, consumption, waste, & pollution Methods (many of these tools can be used in tandem) Lean Value stream maps, 5S, standard work, flow, setup reduction, P2 Process mapping, P2 and engineering assessments, utilities assessment, environmental cost accounting Different “Wastes” Lean non-value added production waste P2 Toxics, pollution, solid & hazardous waste, energy, water, material use Leadership Lean Operations and business managers P2 Environmental or safety managers Environmental and human health risks are often not explicitly considered in lean initiatives

Strategies for Adding Environment to Lean #1 = Include the company EHS person Lean Training Include (“integrate” or “layer in”) environmental wastes not typically covered in lean Add a waste stream to lean simulations Lean Events Add “ESH” icons or flags Record environmental data on current state VSM Use P2 Checklists Process Mapping with environmental inputs/outputs

Example P2 Checklist Excerpt Metal Finishing Industry P2 Checklist Parts Cleaning:  Mechanically pre-clean parts as much as possible first.  Determine level of cleaning needed.  Work with the supplier to use a corrosion inhibitor more easily removed or compatible with the cleaning system used on site.  Arrange for JIT delivery to reduce or eliminate need for corrosion protection.  Use a lower vapor pressure cleaner.  Use an aqueous cleaner. Reduce Drag Out Losses:  Extend drip time; install drip racks.  Install drainage boards between tanks to route drag out into the correct process tank.  Reduce workpiece withdrawal rate from the chemical bath.  Install air knives or water misters to remove drag out.  Lower the concentration of plating bath constituents, increase the plating solution temperature. Both actions will reduce solution viscosity to enhance runoff.  Rack workpieces being plated so that cavities open downward to promote draining.  Use non-ionic wetting agents …. Source: http://www.epa.ohio.gov/portals/41/p2/Kansas%20SBEAP%20Checklist.pdf

Current State Value Stream Map (Unmodified) Market Forecast Total Lead Time = 7 days Value Added Time = 8.5 hours Customer A 2 people C/T = 4 min C/O = 3 hr Uptime = 61% Assembly & Inspection Milling C/T = 2 min C/O = 2 hr Uptime = 74% 3 people C/T = 7 min C/O = 4 hr Uptime = 48% Painting I Shipping 4 hours 3 hours 2 hours 1 day 2 days Production Control Annual Production Plan Weekly delivery schedule Weekly schedule Daily schedule WK 1days D 30 days Receiving C/O = 30 min Uptime = 93% Welding 32 minutes B Supplier 1 2 Delivery Delays Color Change Actual Value-Added

Current State Value Stream Map Example Previous Page Next Page

Example of Adding a Materials Line EHS EHS Milling Welding I I 2 people 2 people 12 lbs 10 lbs Materials Used = 22 lbs Materials Needed = 13 lbs Materials Wasted = 8 lbs 8 lbs 5 lbs Top line: Materials Used by Process Bottom line: Materials Added to Product During the Process This example looks at total materials use. You could also look at hazardous materials/chemicals used, or focus on a particular type of raw material (e.g., steel or plastic) that is responsible for a large portion of the product’s cost. Materials lines can be developed for any major material source used in processes and products

Expand the current state value stream mapping to include natural resource flows (energy, water, materials) EHS EHS EHS Surface Prep Paint Purge Spray Line I I I 1 person 1 person 1 person Materials Used 5 lbs 10 lbs 0 lbs Materials Needed 2 lbs 7 lbs N/A Water Used 4 gal 5 gal 5 gal Water Needed This example looks at total materials use. You could also look at hazardous materials/chemicals used, or focus on a particular type of raw material (e.g., steel or plastic) that is responsible for a large portion of the product’s cost. 2 gal 5 gal 3 gal Materials Used = 15 lbs Materials Needed = 9 lbs Materials Wasted = 6 lbs Water Used = 14 gal Water Needed = 10 gal Water Wasted = 4 gal

Lean/Green Value Stream Map – Inputs & Outputs

Louver Paint Line – Current State

Lean and Environment Kaizen Events Previous Page Next Page

What Are Kaizen Events? Cross-functional, team-based activities that: Eliminate waste Make rapid changes in the workplace Events last 2-7 days – and may involve pre-planning Steps in kaizen events include: Gathering baseline data Brainstorming improvement ideas Testing ideas Presenting the results Also known as rapid process improvement events and kaizen “blitz” events Kaizen events are great opportunities for environmental improvement. They are powerful windows of opportunity to: Eliminate non-value added activity Reduce environmental wastes such as scrap, pollution, and hazardous wastes Save money by wasting less energy, water, and raw materials Improve working conditions for employees

Example Lean Event Meeting Room Photo Source: Goodrich, Engineered Polymer Products Monthly Newsletter, “EPP Conducts Lean Event Week,” www.goodrich.com/ EPP/MonthlyNewsletter, photo downloaded 4/26/06.

Bringing Environment into the Kaizen Event Environment, Health or Safety Officer participation Process mapping P2 checklists*, audits, and “Open Eyes” Environmental hazards/wastes - in 5S * Also useful in VSM Also known as rapid process improvement events and kaizen “blitz” events Kaizen events are great opportunities for environmental improvement. They are powerful windows of opportunity to: Eliminate non-value added activity Reduce environmental wastes such as scrap, pollution, and hazardous wastes Save money by wasting less energy, water, and raw materials Improve working conditions for employees

Reasons to Include Environmental Health and Safety (EHS) Expertise in Kaizen Events If not properly managed for EHS impacts, kaizen events can: Result in regulatory compliance violations Create health and safety hazards for workers Overlook opportunities to reduce wastes and help organizations meet their environmental goals Proactively Involve EHS Staff in Kaizen Events Use an EHS Checklist for Lean Events Determine which events may have EHS impacts Train Lean Team Leaders on EHS Issues Identify an EHS Contact for Kaizen Event Teams

The P2 Thinking Cap and “Open Eyes” Processes or overproduction that unnecessarily consume raw material, chemicals, or resources Can water use be reduced or spent water be reused, recycled? Is a chemical inventory management system utilized? (e.g., from 2,130 vs. 700) Can packaging be reduced? (e.g., reusable, buy in bulk) Processes that use highly toxic chemicals Why are these chemicals used? Are these the only option? If no other option, can we reduce the amount used? Can we reduce evaporation? Processes that generate major quantities of material wastes, including scrap, spoilage, overspray, defects, and inventory due to overproduction Can transfer efficiency or material utilization be improved? How can we reduce defects? If there is no opportunity to reduce, can one process’ scrap for another process? Processes that generate significant regulated emissions and effluents? Are there alternative, lower-VOC products that could reduce emissions? Are there alternative methods to clean equipment, purge spray lines, etc? Can transport, movement, and oversized equipment be changed/reduced to minimize emissions? All the tools in this training module—EHS icons, environmental metrics, the materials line, and materials-flow tracking—can help you to see environmental wastes in the current state of the value stream as well as identify targets for future Lean activities. Future State VSMs are often developed by asking a set of key questions. Here are some questions that can help address environmental opportunities when drawing the future state VSM. Including EHS personnel on your VSM team can also help your company to identify creative solutions for the future state and to anticipate when proposed changes could lead to EHS compliance issues. (These may have regulatory compliance implications)

CASE STUDIES

WOODFOLD: Shutter Paint Line Improvements Lean Improvements WIP reduced from 58 to 40 units Mixed model line – paint and stain flow together Better flow and line balance Throughput – 20% potential capacity increase

Material Use Reduced overproduction of custom color paints by 48 gallons/year with a simple container redesign. Increased paint transfer efficiency by around 15% with training and standard work for shutter painters. Minimum Fill Before After

Shutter Paint Line Improvements Water Reductions Revised methods and criteria for flush water for line purging. Reduced water consumption by about 50% for this function – from 12 gallons/day to 6 gallons/day. (Saved a whopping $4, but stay tuned….

Shutter Paint Line Improvements Energy Reduced energy associated with evaporating paint line flush wastewater stream.

Shutter Paint Line Improvements Woodfold – Particulate Emissions Actions: Changed to a zipper-mounted filter system for paint booths. Improved spray transfer efficiency Results: Eliminated particulate emissions and increase longevity of the filters. Reduced labor for filter changeout and added 156 hours of available paint booth time.

& Environmental Savings Woodfold Mfg., (Forest Grove, OR) Saving $43K/year with opportunities identified by including P2 during their VSM. Reductions Source of Savings Annual Cost Savings Annual Time, Material, & Environmental Savings Labor/Increased Capacity New filter system $ 3,800 Over 160 hours Material Avoided paint purchase (raw material) due to new paint container design $ 1,440 48 gallons/year Improved transfer efficiency $34,530 102 gallons primer 980 gallons of lacquer Emissions Not quantified 968 pounds VOCs 82 pounds hazardous air pollutants (HAPS) Disposal Filters (longer life) PVC scrap to recycler $ 670 6 tons scrap PVC Water New flush /purge water methods 2,600 gallons/year Energy Reduced use of evaporators due to improved water use $ 3,300 120,000 kwh electricity Total Cost Savings (Quantified as of 12/07) $43,740  

Three Washington Pilot Projects: ’06 – ‘07 Collective Annual Cost Savings in Productivity and Environmental Improvements: $1.6 Million “I believe the collective experience has set the groundwork for future lean and environmental improvement efforts at our company.”

Canyon Creek Cabinet Company Excerpts from Pilot Project - 2006

Lean and Environment Pilot Project Conducted through a grant partnership with the Washington State Manufacturing Extension Center and Washington Department of Ecology Lean 101 Training Value Stream Mapping Event 3 One-Week Kaizen Events for Each of Two Teams Woodworking and milling (Woodchuckers) Cabinet surface coatings (Toxics Team)

Kaizen Event – New Saws and In-Flow Layout 3 new crosscut saws Cutting time per day (before) 368 sheets/day @ 120 sec/sheets = 12 hours 15 min Cutting time per day (after) 219 cuts @ 21 sec/cut = 1 hour 17 minutes ---------------------------------------------------------------------------- Reduction in time: 90% = $31,000 Reduction in sheets required: $194,000/year Reduction in waste removal: 580,000 lbs/year and $58,000/year ----------------------------------------------------------------------------------------------- Layout improvements saved: Over 650 foot-miles of foot travel per year!

5S in the Work Area –Set in Order with Visual Controls

Orphan Bin, Doors & Drawer Fronts Before After

Quality / Inspection Line Before After Better ergonomics In-Line (reduced travel) Improved lighting Changes reduced cost of rework by $208,000/yr

Capital Equipment is Not Typical Lean - Solvent-Based Staining. Before Capital Equipment is Not Typical Lean - Solvent-Based Staining Before After

Aqueous Purge System (1 of 2) Example of Mistake Proofing (Poka Yoke)

Aqueous Purge (2 of 2) Waste Old Waste New Recoverable Product 1.3 quarts Old Waste 0.5 quarts New Recoverable Product 1 quart

Material substitution – Topcoat to “Unicoat” Reduced Volatile organic compound (VOC) emissions by 114,535 pounds/year. Now will not need to file for Title V air permit even with a 70% increase in production)

Lasco Bathware Spray Variability Reduced variability from +13 lbs/unit to +4 lbs/unit (69%) Reduced overspray and calibration waste Stronger products (more resin on the product)

Columbia Paint Reducing Bad Batches and Inventory Waste By Reorganizing Ingredients BEFORE AFTER

ON Semiconductor (Idaho) Used a Facility Map (Pseudo-VSM) to Identified Environmental Improvements Avoid disposal of 800 booties /month Eliminate redundant lab refrigerators Turn off lab incubators when not in use Consolidate office space and duplicate services Evaluate beneficial end use for calcium fluoride cake waste Shut down records building (heated, sprinkler) Right-size the nitrogen gas production system

Food Processor (in Oregon) Used VSM to Identify Wasted Water, Energy, and Material A Case of “That’s the Way We’ve Always Done It”. Dumpster Dive – tons of food processing residuals Plant clean-up day Incredible amount of water used at plant Heated water to clean food residuals Wash water collection and treatment Energy Dewatering of solids Permitting/BOD issues Found local composter Changed cleaning process to remove most of solids

For More Links/Info www.pprc.org/solutions/leangreen.cfm

NOT USING NEXT SLIDES AFTER

Lean Production’s Environmental “Coattails” Less scrap, fewer defects, less spoilage = reduced waste Fewer defects, less overproduction, simpler products, right-sized equipment = reduced use of raw materials Less storage, inventory space needed = reduced materials, land, and energy consumed Less overproduction, lighting/heating/cooling unneeded space, oversized equipment = less energy use Less overprocessing, efficient transport and movement = lower emissions Clean, orderly workplace w/ well-maintained equipment = fewer accidents; leaks & spills are noticed quickly

P2 Checklists Processes or overproduction that unnecessarily consume raw material, chemicals, or resources Can water use be reduced or spent water be reused, recycled? Is a chemical inventory management system utilized? (e.g., from 2,130 vs. 700) Can packaging be reduced? (e.g., reusable, buy in bulk) Processes that use highly toxic chemicals Why are these chemicals used? Are these the only option? If no other option, can we reduce the amount used? Can we reduce evaporation? Processes that generate major quantities of material wastes, including scrap, spoilage, overspray, defects, and inventory due to overproduction Can transfer efficiency or material utilization be improved? How can we reduce defects? If there is no opportunity to reduce, can one process’ scrap for another process? Processes that generate significant regulated emissions and effluents? Are there alternative, lower-VOC products that could reduce emissions? Are there alternative methods to clean equipment, purge spray lines, etc? Can transport, movement, and oversized equipment be changed/reduced to minimize emissions? All the tools in this training module—EHS icons, environmental metrics, the materials line, and materials-flow tracking—can help you to see environmental wastes in the current state of the value stream as well as identify targets for future Lean activities. Future State VSMs are often developed by asking a set of key questions. Here are some questions that can help address environmental opportunities when drawing the future state VSM. Including EHS personnel on your VSM team can also help your company to identify creative solutions for the future state and to anticipate when proposed changes could lead to EHS compliance issues. (These may have regulatory compliance implications)

Characteristics of a Lean Culture Traditional Progressive (Lean/Green) Philosophy Short term results People disposable Product disposable Materials disposable Bottom line focused Long term health People as assets Product returned / re-used Materials conserved / recycled Customer focused Quality Meets the spec Role of a specialist Continually improve Everyone’s job Structure Autocratic mgmt style Hierarchical, deep Leadership style Flexible and flat Process flow Large lot sizes Long set-up times High inventory Process focused layout Long lead-times Small lot sizes Short set-up times Low inventory Product focused Short lead-times People Narrow skills Specialists Fixed training Broad skill set Generalists (w. a specialty) Cross training Technology Large machines Capacity driven Small flexible mach Throughput driven