Executive Briefings

Focus On Supply Chain Management: Going Green--Leveraging Lean Six Sigma

"Going green" means organizations must challenge conventional wisdom and find new and creative ways to become eco-friendly in business. Every day, customers, employees, governments, and communities increase the demand for companies to become more environmentally responsible and reduce their carbon footprints. This potentially affects everything that businesses do--both internally (in how they use energy and consumables) and externally (in how they offer products and services to the market).

Many organizations want to do something about being "greener" in everything they do, but the prevailing question is "Where do we start?" This two-part article explores a simple six-phase process that provides the road map to leveraging lean six sigma.

 

Part I addresses the first two phases of this process.The six phases in the process to leverage lean six sigma are as follows:1. Green (and Lean) Marketing2. Green Product and Services Design3. Green Supply Chain Development4. Green Operations5. Green People6. Continuous Green Improvement ProgramsEach of these naturally supports the other in a cycle of continuous improvement that promotes never-ending, ever-improving "green-ness." Best of all, each as a stand-alone process offers huge benefits if starting small makes the most sense. Each phase can--and should--leverage best practices in lean six sigma, operational excellence, change management, supply chain, and high-performing work teams. Here are some thoughts on how to get started with the process.Phase 1: Green Marketing--Before starting charter activities to get greener, companies must ask a simple question: "Should we start with the voice of the customer (VOC)?" This question will generally prompt a quick answer of "Yes, of course." Unfortunately, the old practices of dreaming up new products to offer and then conducting some market testing before taking new products or services to market just won't get the job done when trying to "go green."The customer for our supply chain outputs has expanded dramatically to now include local, state, and federal governments around the world. Add to this special interest groups such as animal rights groups, environmentalists, global warming scientists, and a long list of other groups with special interests that affect politics and culture.The next important question is: "How does the company 'get green' and get paid for it?" Getting green usually means making more costly choices. So how does a company "get green" while bringing goods and services to market in a way that ensures a payback for that effort? This is where an enlightened approach that leverages some of the tools of lean six sigma proves invaluable.First, implement a kaizen structure that engages a truly cross-functional team of stakeholders who together can give the organization a complete view of the VOC that takes in both internal stakeholder needs and the traditional and nontraditional external stakeholders I described earlier that make up the total VOC input for the process. It is this cross-functional team's job to use various tools from lean six sigma--such as house of quality, Kano, and statistical analysis techniques--to tackle the problem.This team must tirelessly and continually scan the marketplace and business environment for dynamically changing inputs, while making some inevitable trade-off decisions between "going green" and remaining profitable. This ongoing process--the delicate balance between greening and maintaining profitability--requires that companies identify exactly what products and services to offer to meet and exceed customers' green expectations and desires profitably.Phase 2: Green Products and Services Design--Designing green products and services up-front is an obvious--and longer-term strategy--that must be embraced to achieve high levels of effectiveness. In the short term, this strategy puts even more pressure on design teams and supply chain partners to find ways to respond to the intelligence that marketing teams provide. However, to ensure lasting success, companies must make a conscious decision to begin integrating design efforts with their on-board suppliers up front. This best practice becomes increasingly important and critical in the face of increased market and governmental demands. Some of the forces already in place and growing in importance include:1. Designed-in use of recycled materials: Some governments are setting minimum thresholds for recycled content as both current guidelines and subsequent future mandates for the not-to-distant future.2. Designed-in reuse and reusability of products in a direct recycle plan: An entire industry has emerged to take in and recycle or reuse cell phones. Some of the phones simply get refurbished and sent on to third-world countries or another use cycle. The rest are torn down and then recycled to recover valuable components and materials. In the not-to-distant future, it is likely that cell phone manufacturers and many other commodity goods manufacturers will develop their own programs for this. Why leave money on the table--and worse--shirk ecological responsibility?3. Product life cycle management. Cradle-to-grave, eco-friendly, product life cycle management is quickly becoming a mandate. Most producers of copier and printer toners already have--or are putting in place--programs to close the reverse logistics cycle so that toners can be either reused or sensibly recycled. This takes place entirely inside the sales-to-recycle relationship with the customer without third-party intervention other than for logistics.4. Green packaging. Green packaging takes many forms. Bio-degradable shipping peanuts are an example. Recently, Wal-Mart mandated that most of its suppliers begin using shipping pallets made from recycled and recyclable paper.5. Designed-in reduced carbon footprint. There are many elements to this, including sourcing locally to reduce transportation, seeking out raw materials that don't require oil or coal as source materials, telecommuting for workers and for many otherwise face-to-face interactions, and going "paperless" in our offices to kill fewer trees. Some countries are mandating an additional charge for plastic bags used for packing groceries, and the search is on for a suitable alternative to the ubiquitous plastic bottles that are filling landfills around the world.About the Author: Ronald Crabtree, CPIM, CIRM, CSCP, is president of MetaOps, Inc. He can be reached at (734) 425-1455 or via e-mail at rcrabtree@MetaOps.com.http://www.apics.org

"Going green" means organizations must challenge conventional wisdom and find new and creative ways to become eco-friendly in business. Every day, customers, employees, governments, and communities increase the demand for companies to become more environmentally responsible and reduce their carbon footprints. This potentially affects everything that businesses do--both internally (in how they use energy and consumables) and externally (in how they offer products and services to the market).

Many organizations want to do something about being "greener" in everything they do, but the prevailing question is "Where do we start?" This two-part article explores a simple six-phase process that provides the road map to leveraging lean six sigma.

 

Part I addresses the first two phases of this process.The six phases in the process to leverage lean six sigma are as follows:1. Green (and Lean) Marketing2. Green Product and Services Design3. Green Supply Chain Development4. Green Operations5. Green People6. Continuous Green Improvement ProgramsEach of these naturally supports the other in a cycle of continuous improvement that promotes never-ending, ever-improving "green-ness." Best of all, each as a stand-alone process offers huge benefits if starting small makes the most sense. Each phase can--and should--leverage best practices in lean six sigma, operational excellence, change management, supply chain, and high-performing work teams. Here are some thoughts on how to get started with the process.Phase 1: Green Marketing--Before starting charter activities to get greener, companies must ask a simple question: "Should we start with the voice of the customer (VOC)?" This question will generally prompt a quick answer of "Yes, of course." Unfortunately, the old practices of dreaming up new products to offer and then conducting some market testing before taking new products or services to market just won't get the job done when trying to "go green."The customer for our supply chain outputs has expanded dramatically to now include local, state, and federal governments around the world. Add to this special interest groups such as animal rights groups, environmentalists, global warming scientists, and a long list of other groups with special interests that affect politics and culture.The next important question is: "How does the company 'get green' and get paid for it?" Getting green usually means making more costly choices. So how does a company "get green" while bringing goods and services to market in a way that ensures a payback for that effort? This is where an enlightened approach that leverages some of the tools of lean six sigma proves invaluable.First, implement a kaizen structure that engages a truly cross-functional team of stakeholders who together can give the organization a complete view of the VOC that takes in both internal stakeholder needs and the traditional and nontraditional external stakeholders I described earlier that make up the total VOC input for the process. It is this cross-functional team's job to use various tools from lean six sigma--such as house of quality, Kano, and statistical analysis techniques--to tackle the problem.This team must tirelessly and continually scan the marketplace and business environment for dynamically changing inputs, while making some inevitable trade-off decisions between "going green" and remaining profitable. This ongoing process--the delicate balance between greening and maintaining profitability--requires that companies identify exactly what products and services to offer to meet and exceed customers' green expectations and desires profitably.Phase 2: Green Products and Services Design--Designing green products and services up-front is an obvious--and longer-term strategy--that must be embraced to achieve high levels of effectiveness. In the short term, this strategy puts even more pressure on design teams and supply chain partners to find ways to respond to the intelligence that marketing teams provide. However, to ensure lasting success, companies must make a conscious decision to begin integrating design efforts with their on-board suppliers up front. This best practice becomes increasingly important and critical in the face of increased market and governmental demands. Some of the forces already in place and growing in importance include:1. Designed-in use of recycled materials: Some governments are setting minimum thresholds for recycled content as both current guidelines and subsequent future mandates for the not-to-distant future.2. Designed-in reuse and reusability of products in a direct recycle plan: An entire industry has emerged to take in and recycle or reuse cell phones. Some of the phones simply get refurbished and sent on to third-world countries or another use cycle. The rest are torn down and then recycled to recover valuable components and materials. In the not-to-distant future, it is likely that cell phone manufacturers and many other commodity goods manufacturers will develop their own programs for this. Why leave money on the table--and worse--shirk ecological responsibility?3. Product life cycle management. Cradle-to-grave, eco-friendly, product life cycle management is quickly becoming a mandate. Most producers of copier and printer toners already have--or are putting in place--programs to close the reverse logistics cycle so that toners can be either reused or sensibly recycled. This takes place entirely inside the sales-to-recycle relationship with the customer without third-party intervention other than for logistics.4. Green packaging. Green packaging takes many forms. Bio-degradable shipping peanuts are an example. Recently, Wal-Mart mandated that most of its suppliers begin using shipping pallets made from recycled and recyclable paper.5. Designed-in reduced carbon footprint. There are many elements to this, including sourcing locally to reduce transportation, seeking out raw materials that don't require oil or coal as source materials, telecommuting for workers and for many otherwise face-to-face interactions, and going "paperless" in our offices to kill fewer trees. Some countries are mandating an additional charge for plastic bags used for packing groceries, and the search is on for a suitable alternative to the ubiquitous plastic bottles that are filling landfills around the world.About the Author: Ronald Crabtree, CPIM, CIRM, CSCP, is president of MetaOps, Inc. He can be reached at (734) 425-1455 or via e-mail at rcrabtree@MetaOps.com.http://www.apics.org