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Business Sustainability: A cleaner production approach to small business management

Student Manual

Environment Australia
October 2000
ISBN 0642547149


Business Sustainability: Session 3 - Introduction to Cleaner Production Assessment

OVERVIEW
Objective of this session

To give an understanding of cleaner production as a tool for reducing waste in a business, thereby increasing profits and long term sustainability

The following topics will be covered in this session
Cleaner Production
Cleaner Production Assessment Method
Preliminary Assessment
Detailed Study
Cleaner Production Hierarchy
Business Management Issues
Cleaner Production as Business Strategy
3 Case Studies

Cleaner Production

Cleaner Production

Cleaner production is a systematic process for eliminating waste from the production of goods or services. Cleaner production involves reducing and eventually eliminating wastes at the source, rather than treating waste at the end of the production process.

Assessment and Implementation

Assessment and implementation are two halves of the cleaner production method.

Cleaner production assessment is the process of collecting and evaluating data and information to identify process improvements that will reduce waste in a business, and to draw up plans to realise that improvement. Cleaner production assessment is the topic of this course.

Cleaner production implementation is the actioning of those improvement plans within the business.

Student Involvement

Projects will involve applying the cleaner production assessment method to a small business. You will complete the assessment work (with assistance from the business team member), but will not proceed into the implementation.

If you want to maintain contact with the small business during the implementation, or even assist with that work, then you are free to do so. However, the educational institution will have no formal involvement or responsibility for your participation in the implementation.

Cleaner Production Assessment Method

Two Stages

A systematic approach to cleaner production assessment comprises two stages:

Preliminary Assessment

In the preliminary assessment, data and information are collected about the business, its premises and operations, and its processes. Its main inputs and product and waste outputs are identified. This stage culminates in the choice of those inputs and waste outputs that are most likely to provide opportunities for improvement. The selected inputs and waste outputs will be the focus of detailed study in the next stage.

Detailed Study

The detailed study is a systematic compilation, validation and assessment of process data to identify specific opportunities for reducing or eliminating wastes. This leads into development and evaluation of options for improvement, and finally a business improvement plan.

Preliminary Assessment

Elements of Preliminary Assessment

A preliminary assessment comprises six elements:

  1. Management commitment and employee awareness;
  2. Business description;
  3. Annual usage and wastage;
  4. Process characterisation;
  5. Prioritisation;
  6. Preliminary assessment report.

An overview of each of these elements is given below.

Management Commitment

Management commitment is essential to the success of any business project. This is especially true of cleaner production. Cleaner production requires a long-term commitment to tracking down and eliminating waste. If that commitment isn't there, then the improvement plans developed during the cleaner production assessment will never be implemented - it will have been a waste of time and effort.

Employee Awareness

Many of the business' employees will be involved in the assessment and implementation stages of the cleaner production project. If they are informed by management of what is going on and why it is being done, they are more likely to contribute information and ideas, and work enthusiastically during implementation.

Business Description

The business description is simply a summary of general business details - a general overview of the business. It is important to understand the nature of the business, its main outputs (products/services), its size and its main market(s). It is also important to know what aspects of the quality of its products or services are most critical to business success, and the stages of production that are most critical to maintaining that quality.

Information is also gathered about the business premises, the layout of its operations, and its main processes.

Annual Usage and Wastage

Data is collected on the annual quantity and cost of major inputs to the business. Data is also collected on annual waste quantities and costs, including the content and value of otherwise useable raw materials or product in this waste. This information will be used in the next two elements - Process Characterisation and Prioritisation.

Process Characterisation

Process characterisation involves identification of the business' major processes, and the development of flow diagrams, input/output diagrams and usage maps to gain a more detailed understanding of process inputs and outputs.

Prioritisation

Prioritisation involves identifying those business costs (inputs and waste) that offer the greatest opportunities for improving business efficiency and profitability.

Preliminary Assessment Report

A preliminary assessment report is prepared for the business client. It details the outcome of the previous five elements and presents a prioritised list of improvement opportunities.

Detailed Study

Elements of Detailed Study

A detailed study comprises five elements:

  1. Data collection and validation;
  2. Data assessment;
  3. Improvement options;
  4. Targets for process improvement;
  5. Business improvement plan.

An overview of each of these elements is given below.

Data Collection and Validation

Data is collected to complete the quantitative usage maps and to get a fuller understanding of mass and energy flows for those inputs and wastes selected in the preliminary assessment. This additional data will often give new insights into business process inefficiencies and identify new sources of waste.

Data validation is the process of gathering evidence that the data collected is accurate, and correcting any inaccurate data.

Data Assessment

Data is assessed to obtain useful information on sources and levels of waste, and so identify specific improvement opportunities.

Improvement Options

Improvement options are developed and evaluated. Improvement options are potential courses of action that will realise the improvement opportunities identified in the previous element.

Improvement options are prioritised in terms of criteria such as cost, benefits, practicality and probability of success.

Targets for Process Improvement

Having decided which improvement options to implement, improvement targets are set, and one or more performance indicators are chosen to measure success in meeting each target.

Business Improvement Plan

The final outcome of the detailed study is a business improvement plan. This plan details the outcome of each stage of the detailed study and presents a plan of action for achieving the identified business improvement.

Cleaner Production Hierarchy

Hierarchy

The cleaner production hierarchy shown below is a model for deciding the most effective way to address a waste issue. This hierarchy is used during the detailed study in the development of improvement options.

The simple rule is this: the higher up the hierarchy one acts, the more effective is the action.

Example of questions that might be asked:

  1. Avoid: Can inputs or waste be eliminated altogether by changing the process, changing purchasing practice or by innovative initiatives?
  2. Reduce: Can inputs or waste be reduced by, for example, process or equipment changes, reducing rework, or reducing inputs to the process?
  3. Reuse: Can the waste be reused in this process or in another process on-site? Can the process be changed to make the waste useable? Have all opportunities for reuse been explored?
  4. Recycle: Can the waste be reused after some form of treatment? Can it be collected for treatment and reused by someone else?
  5. Reformulate: Can process inputs be changed to reduce the cost of waste or make the waste more environmentally-friendly?
  6. Rethink: If no solution is found, try working through the above hierarchy again. This time, widen your perspective and think laterally - question assumptions. For example, ask:

Business Management Issues

Business Sustainability

Cleaner production is a comprehensive method for waste reduction that leads to increased business efficiency, profitability and long-term business sustainability.

Senior Management Leadership

The business manager is responsible for developing the policy and business goals for cleaner production. While this is a most important step in the overall cleaner production process, setting business policy and business goals are outside the scope of the student projects.

Senior management is also responsible for ensuring that adequate resources of personnel and funding are available for the cleaner production program.

The commitment of the business manager to the cleaner production assessment is affirmed at the start of the preliminary assessment.

Business Requirements

From the beginning of the cleaner production program, business management should work with employees to achieve:

Cleaner Production as Business Strategy

Change in Business Strategy

Cleaner production is a comprehensive way of doing business. While we speak of cleaner production programs as a way of introducing cleaner production into a business, the adoption of cleaner production by a business is a major change of business strategy. As such, it needs a wide scope of application, complete management commitment and general employee awareness to be successful.

Class Activity

Objective: to analyse three case studies to help "visualise" how cleaner production is applied in a small business, and to gain an appreciation of some of the practical difficulties of using the cleaner production method.

Discuss the attached small business case studies and analyse the information given.

All three case studies are taken from Environment Australia's Eco-efficiency and Cleaner Production Homepage:

http://www.ea.gov.au/industry/eecp/case-studies/index.html

This homepage contains over 120 cleaner production case studies that provide interesting reading for the purposes of this course. However, the companies listed here will probably not appreciate being contacted by students.

Case Study 1 - Reducing Waste in Panel Beating Industry

Background

GP Crash Repairs of Albion, Qld is a typical spray painting and panel beating workshop of twelve employees.

Issue

As in all such businesses, solvents and their disposal represent a significant cost.

Action Taken

Initially, one solvent recycling unit was purchased for $1200, and because the unit significantly reduced the need for offsite recycling and disposal, a second unit was purchased for $1500. The combined output of both units is 40 litres of recycled solvents per week. The recycled solvent is suitable for cleaning spray equipment, base coating and "blackening" wheel arches and engine bays.

The second improvement step was to purchase two gun wash stations for $700 each. The common practice of cleaning by spraying solvent through the gun was using up to 60 litres of solvent per week per gun, costing approximately $120. The combined solvent usage of the two gun washing stations was 60 litres per week. The solvent used in the gun washing stations comes directly from the recycling units.

Benefits

The savings in solvent purchases and used solvent disposal costs made a payback period of less than 12 months.

Case study 2 - Cleaning of Dampeners in Printing Industry

Background

The Printing Office is a medium sized print shop employing 15 people. It specialises in high quality short run jobs. In order to reduce the usage of solvents, the business trialed a new dampener washer system that uses no solvents.

Issue

The offset printing process requires a dampening system which comprises three cloth-covered rollers that supply a thin film of moisture to the printing plates. The roller covers become soiled with ink and require regular cleaning to keep printing spoils to a minimum.

Cleaning was a slow process, where rollers were manually sprayed with solvent and hosed down in a tub. This resulted in excessive machine down-time and as much as 200 litres of water per wash. The rollers were then wrung out to remove excess water, which resulted in excess wear to the rollers.

Action Taken

High-pressure water with no solvent is now being used to wash the rollers. The water is filtered prior to re-use. The new process uses only seven litres of water per week. The pressure causes the rollers to spin while being washed, and the spinning helps remove excess water when the spray is stopped. The entire process takes about two minutes compared with ten minutes for the earlier process.

Benefits

Some of the benefits included:

Cost Savings

285,000 litres of water per year saved, and $31,820 per year saved from:

The cost of the process improvements was $6,900, giving a payback period of 2.6 months.

Case study 3: Electroplating

Background

Queensland Electroplating Pty Ltd is a small electroplating factory specialising in tin plating of conductors for electrical transformers. Small quantities of gold and silver plating are also carried out.

Issue

Wastage of chemicals by "drag-out" from the plating tanks as plated components are lifted from the tanks.

Action Taken

Benefits

The payback period was not given in the case study. Benefits of the improvement program were: