Profiting from sustainable manufacturing
From the December 2020 print edition
In 2016, Southbrook Winery, located in Ontario’s Niagara region, received the results of a conservation assessment advising that its electricity and natural gas consumption could be reduced by 40 per cent.
This was notable given that Southbrook was already a recognized leader in sustainable production, was operating in a LEED gold certified facility, and was planning a solar panel installation to offset its electricity consumption. Furthermore, an earlier energy study commissioned by Niagara-on-the-Lake Hydro had identified potential savings of only five per cent.
The news was no surprise to Bruce Taylor, president of Elmira, Ontario-based Enviro-Stewards, which conducted the second study. Taylor’s approach, which has won his company numerous awards, is to comprehensively assess all potential sources of waste, including losses of energy, heat, materials, toxic substances and in many cases the final product.
The challenge is that environmental losses are not usually caused by large and easy-to-identify deficiencies, but by dozens or even hundreds of incremental problems which may be inter-related. Rooting them out takes time and effort, but it’s worth it. Enviro-Stewards’ customers achieve on average a one-year payback, including Maple Leaf Foods, which is saving $12 million per year across its 33 plants, and is now the first major food producer to be carbon neutral.
By implementing Enviro-Stewards’ recommendations, Southbrook was able to reduce the footprint of its solar panel installation, saving land to grow more grapes which now produce an additional 200 cases of wine per year. Payback was four months. The project also won a national Clean50 award.
Some of the best opportunities are found by looking across engineering disciplines. Enviro-Stewards was recently called into a solvent recycling plant where management was concerned about the costs of running a huge exhaust fan to remove toxic fumes from a distilling process.
“They had a fan blowing air out through the wall,” says Taylor. “If we only looked at electricity, we would get them a better fan motor.
If we also looked at thermal, we’d get them a heat exchanger to get 60 per cent of that heat back. But if we look at toxics, we ask why they even have the fan.”
It turns out that the toxic fumes were emitting from a single tank. Having sealed the tank, the company now vents the fumes through a condenser, producing additional solvent that is now being sold. “Now it’s not in the air, and we didn’t even need the fan,” says Taylor. “So you save more energy by doing a toxic study than you could save by doing an energy study.”
Most companies miss such opportunities because they only scratch the surface of their environmental deficiencies, often under pressure to comply with government regulations. Accordingly, companies typically commission environmental audits based on the lowest bid price, which rules out a comprehensive approach. “The procurement person assumes that the best audit is the least expensive one,” says Taylor.
The issue Taylor finds most disturbing is food waste, which he claims is getting little attention. “All the emphasis is on destroying that food more efficiently and keeping it out of landfill where it would turn into methane,” he says. Even when the food is disposed of correctly, he notes, 90 per cent of the environmental footprint for producing it – cultivating, fertilizing, harvesting, transporting – goes to waste.
“Reducing food loss in the first place recovers its economic, environmental, and social value,” he says.
Enviro-Stewards’ assessment of 50 food and beverage processors across Canada found an average of $230,000 savings per year at each facility. “Food loss is the third largest greenhouse emitter in the world,” says Taylor. “If food loss was a country, it would be the third largest greenhouse emitter in the world.”
Lean and green
Profiting from waste reduction is a central tenet of Lean manufacturing, the approach pioneered by Toyota, which engages the entire workforce in finding and eradicating wasteful expenditures and efforts.
“Lean is inherently green, because you’re constantly looking for ways to maintain output while consuming less resources,” says Larry Coté, president of Ottawa-based Lean Advisors. Improving workflows by revising the plant layout is often an early target. “If we shorten the distance a forklift has to travel from 500 to 100 yards, we’re saving time and energy,” says Coté, “and that might add up to not having to buy another forklift.”
Other examples include eliminating unnecessary run time of machinery or reducing excess inventory of materials, works in process, and finished product. The improvements add up – companies that take the Lean approach seriously routinely reduce space requirements by 50 per cent, improving their environmental footprint as a by-product.
“When you fly into Pearson Airport, those flat-topped buildings you see are all inventory,” says Coté, “and a lot of them don’t have to be there. If you reduce their required footprint, your energy and overall operational costs go down, and you’re not creating as much pollution.”
A product is only as sustainable as the components that comprise it, so many manufacturers depend on their suppliers, who might be located anywhere in the world, to align with their sustainability practices. Validating supplier claims, however, can be difficult.
New information technology may alleviate this concern. A number of companies, including Toronto-based start-up Convergence Technologies, are providing blockchain-based verification solutions for supply chain consortiums. A blockchain, in a nutshell, can provide an unbreakable record of a product’s lifecycle, including certificates of origin and proof of compliance with standards.
For example, working with the United Nations Development Programme (UNDP), Convergence developed a solution that allows Mongolian farmers to certify their wool as genuine cashmere, assuring farmers the necessary margins to maintain sustainable practices, and giving clothing brands and their customers the assurance that they are getting what they are paying a premium for.
“What the technology can give you is a high level of assurance that the claims suppliers are making weren’t just fabricated, but were actually issued by a certification body,” says Erik Zvaigzne, vice-president of product innovation at Convergence, “so there’s a lot of integrity to the claim piece.”
In many industries, Zvaigzne says, companies have been reluctant to share the data that reveals their sustainability practices. Blockchain technology addresses this by allowing a finer degree of control over what is shared and what is kept private.
“People don’t want to give up their trade secrets,” says Zvaigzne. “What the newer technology provides is a degree of transparency that doesn’t have to be 100 per cent.”
The technology also shows promise in multi-tier supply chains with many players. “In the more complex supply chains, you’re often passing on or forwarding claims,” says Zvaigzne, “so that’s where traceability comes in. If there’s a quality issue, you can trace the product all the way back.”
The bottom line is that a reactive approach to sustainability — meeting only minimum regulatory requirements — tends to incur costs with little or no benefit. Boldly going the distance, as many companies have found, can be a winning proposition.
“Sustainable companies tend to be more profitable than the rest,” says Taylor. “Otherwise, you’re spending all your time and money on compliance.”
Embracing sustainability also gives manufacturers the edge in meeting what is arguably their toughest challenge – hiring the best talent from the next generation of workers.
“Employers that understand the positive impacts of sustainable practices don’t always appreciate the excitement that comes from employees knowing that they actually are doing something to help the next generation,” says Coté. “I think that’s a huge motivator for a lot of people. We all want to leave this world better than the way we took it on.”