Executive Briefings

Lean Concepts and Corporate Sustainability

Lean management is focused on reducing waste and sustainability is focused on lowering the use of resources, so the two concepts have a natural alignment, says Margo Ugarte of The Sustainability Consortium.

Both of these movements draw from former initiatives, he says. "The quality movement in the 1980s established concepts from process quality to environmental impacts. Then with the lean movement, first in manufacturing and later in logistics, companies addressed the economic dimension of sustainability," he says.

While both these initiatives deliver benefits, the benefits are not always straightforward, Ugarte says. For example, he notes that lean systems are, by design, meant to require less in the way of materials and resources. When applied to logistics, however, a lean program like just-in-time may require more intensive use of transportation. "To have a better customer service experience at the retail level, companies may need to devote more resources to distribution and infrastructure," he says. "It is a trade-off."

Ugarte disputes the idea that doing what is good for the environment is necessarily more expensive. He notes that manufacturers of laundry detergent have introduced products that are more environmentally friendly without increasing the cost to consumers. "It is possible to take costs out of the equation while producing products with better environmental characteristics," he says.

To view video in its entirety, click here

 

Lean management is focused on reducing waste and sustainability is focused on lowering the use of resources, so the two concepts have a natural alignment, says Margo Ugarte of The Sustainability Consortium.

Both of these movements draw from former initiatives, he says. "The quality movement in the 1980s established concepts from process quality to environmental impacts. Then with the lean movement, first in manufacturing and later in logistics, companies addressed the economic dimension of sustainability," he says.

While both these initiatives deliver benefits, the benefits are not always straightforward, Ugarte says. For example, he notes that lean systems are, by design, meant to require less in the way of materials and resources. When applied to logistics, however, a lean program like just-in-time may require more intensive use of transportation. "To have a better customer service experience at the retail level, companies may need to devote more resources to distribution and infrastructure," he says. "It is a trade-off."

Ugarte disputes the idea that doing what is good for the environment is necessarily more expensive. He notes that manufacturers of laundry detergent have introduced products that are more environmentally friendly without increasing the cost to consumers. "It is possible to take costs out of the equation while producing products with better environmental characteristics," he says.

To view video in its entirety, click here