Achieve Bottom-Line Benefits Through Environmental Savings

ONLINE EXCLUSIVE: Achieve Bottom-Line Benefits Through Environmental Savings

By Sarah Wendel and Christopher Reed
 

U.S. industry can achieve up to a 20-percent energy reduction and save more than $19 billion (based on 2004 energy prices) by integrating energy-efficient actions and lean techniques into their operations, according to a 2005 report by the National Association of Manufacturers and The Alliance to Save Energy. Many companies beat the recession and boosted their bottom lines by focusing on non-traditional cost-cutting strategies such as energy reductions and environmentally focused projects. Lisa P. Jackson, administrator of the U.S. Environmental Protection Agency (EPA), stated, in a 2010 address, “Well-conceived, effectively implemented environmental protection is good for economic growth.”

Gray’s Harbor Paper Company

Gray’s Harbor Paper Company (GHPC), a paper manufacturing mill in Hoquiam, WA, provides an excellent example. Its motto is “People, Paper, Planet.” GHPC supplies its own energy from waste within its production process — sufficient to meet its annual production capacity. This “waste” is biomass derived from a mixture of tree limbs and roots called “slash,” which is left behind after logging operations for the paper supply. The remains are gathered, ground, and burned at an in-house power plant, producing enough steam to power the mill’s three electricity turbines.

In 2008, more than 75 percent of the total energy used across all areas of GHPC manufacturing processes was carbon-neutral, from renewable energy sources; no fuel oil was used. “All of Gray’s Harbor energy management manufacturing techniques are developed by an experienced energy team which set realistic goals for each project,” said Jamie Quigg, sustainability manager. Team members coordinate energy projects and share the results with employees and interested stakeholders.  The team members focus on goal-setting agendas:
 

• Consider efficiency in all aspects of the business planning and manufacturing
• Integrate a comprehensive energy management program with overall environmental business goals
• Set and use key performance indicators (KPIs) for all energy-efficiency objectives and targets to drive performance improvements.

GHPC’s 2008 energy conservation projects yielded an annual savings of more than 2.5 million kilowatt hours, equivalent to the total energy used in 242 average U.S. households. They sell unused energy onto the public grid.

The company produces, sells, and markets only environmentally friendly products. The city of Hoquiam named GHPC Green Business of the Year in 2008, recognizing “a business or organization that has made a substantial commitment to sustainability and the environment through product manufacturing processes,” a strategy that helped GHPC weather recent economic challenges.

Sierra Nevada Brewing Company

Privately owned Sierra Nevada Brewing Company (SNBC) also incorporates sustainability into manufacturing. It uses “green” suppliers in almost every aspect of its manufacturing process, purchasing only biodegradable and recyclable materials. According to Cheri Chastain, SNBC’s sustainability coordinator, “All the malt, yeast, hops, water, glass, pallets, cardboard, stretch wrap, and office paper are sustainably manufactured and appropriately recycled within the factory.” In the last five years, SNBC invested more than $7 million to increase its overall system efficiency.

SNBC installed a wastewater treatment plant for $3 million and processes the entire brewery’s discarded water. This wastewater treatment facility removes more than 95 percent of the waste load before it is released into the community sewer system. The company plans to achieve 100 percent manufacturing sustainability in the near future.

In 2008, SNBC completed construction of one of the largest private solar arrays in the United States. The 500-kilowatt elevated tracking solar system produces more than 1.4 megawatts of AC power. Solar panels provide the majority of its electrical energy needs by producing emissions-free power on-site. “We plan to make our surplus electrical energy available to help supply the overloaded California power grid during peak power usage periods,” said Chastain. Covering a majority of the brewing facility’s roofs, the system uses more than 6,700 Mitsubishi 185-watt, lead-free panels. It cuts SNBC annual electricity costs by more than $400,000. Employees closely monitor manufacturing processes and related energy expenditures.

SNBC installed a compressor and filtration system to purify methane gas generated during the brewery's water treatment process, feeding it to the power plant for fuel. Two of the plant's four fuel cell stacks can operate in dual fuel mode – using any combination of natural gas and anaerobic digester gas (ADG). As SNBC increases its production and the amount of methane it generates, it can operate the other two fuel cells on ADG (reducing power plant fuel usage). The system can produce 250 to 400 kilowatts of electricity from biogas, reducing the company's fuel costs by 25 to 40 percent.

Solutions for Savings

Both Gray’s Harbor Paper Company and SNBC realized there were opportunities for savings through sustainability initiatives. One way to find these opportunities is through lean strategies. During kaizen (improvement) events, for example, employees use tools such as value stream mapping (VSM) to uncover improvement opportunities. Environmental metrics that can be incorporated into traditional lean metrics when analyzing performance and data (noted in the U.S. EPA’s Lean and Environment Toolkit) include scrap/non-product output, air emissions, materials use, solid waste, hazardous materials use, hazardous waste, energy use, water pollution/wastewater, and water use.

A Decision-Making Framework

For companies sorting out related improvement project priorities, EPA’s Green Suppliers Network  developed a decision-making framework based on an aggregate of best practices among companies participating in the program. The network website provides more detailed information on identifying costs, determining opportunities, calculating benefits, etc. The key is to make an informed decision that will help both the bottom line and the environment. Suggestions for evaluating and improving process changes, shown in “6 Ideas for Success,” can be applied to environmental wastes including energy and natural resources.