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Lean and Green Can Be Profitable

Green businessAs manufacturers around the world adopt lean manufacturing and cut down on raw material consumption, energy usage, environmental waste and pollution, they are learning that eco-friendly practices can be profitable, according to Ensia.

John Quarmley has learned this. Quarmley started Highwood USA in Pennsylvania as a company with sustainable manufacturing practices and a green product: plastic wood. Highwood heats its offices and production floor during the winter with waste heat from its manufacturing machines, and a closed-loop water system cools its plastics during the production process.

Although started as a green company, Highwood has since embraced lean manufacturing principles, whereby a company manufactures based on a responsive and precise system keyed to demand as opposed to forecasts.

Lean manufacturing can position companies to be globally competitive, and with its low-waste philosophy it fits well with green practices, according to Brian Lagas of the US Department of Commerce’s Manufacturing Extension Partnership. The MEP provides training and programs to help manufacturers find ways to be more efficient and more competitive.

For Highwood, implementing lean practices led him to other environmentally friendly actions. In 2009, Highwood cut its energy consumption for lighting by more than 50 percent just by retrofitting its facility with high-efficiency fluorescent light bulbs. With help from MEP, the company installed solar panels, which now provide about 20 percent of its energy needs.

Other manufacturers are finding similar paired economic and environmental benefits with lean.  Through lean approaches, the tractor components manufacturer Hy-Capacity achieved zero landfill status in 90 days while adding more than $100,000 in sales, and Oklahoma shopping cart manufacturer Unarco found $15,000 in annual utility savings and a near complete elimination of hazardous materials use.

Last year, a survey by Boston Consulting Group and MIT revealed that sustainability programs were producing cost savings, revenue growth, competitive advantage and environmental benefits across corporate America.

In addition, sustainability issues are increasingly relevant to investors as they seek to integrate environmental and corporate responsibility factors in both current and future investment practices, according to research released by PricewaterhouseCoopers earlier this year.

Photo Credit: Green business via Shutterstock

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