In ear­lier posts I wrote about “Define”, “Mea­sure” ‚  “Analyze” and “Improve” as part of Lean Six Sigma’s DMAIC cycle. The example I used in these previous posts showed that our office is not energy efficient, but an analyze phase showed us why, and the improve phase let us implement solutions to waste less energy.

The control phase of Lean Six Sigma ensures that results are monitored over a longer phase, and that the responsibility to maintain or improve results is given to a process owner as part of his or her usual daily duties.

It is preferable that automatic reporting systems are used, usually as part of an existing controlling system. This lets process owners see if the improvements are sustained and allows for corrective action if changes to the desired results are seen. However if automated systems cannot be used, a task of manually collecting data periodically can accomplish a similar continuity. Actually, in my experience it can be very powerful if  a person collects data, puts it into a monitoring sheet visible for everyone, and captures measures to ensure that the improvements stay on target. I used “Flag Map” systems very successfully, as they also emphasize ownership to maintain improvements.

One other thing: The control phase is the last step of a Lean Six Sigma program. If successful do not forget to celebrate and thank the participants for their achievements. After all you want to en a program like that on a positive note, as usually one successful program spawns a serious of other improvement activities that can really make a difference for organizations.

Do you want to know more about how to start and organize an improvement program? — Please contact me!

Claus Schafhalter, Management Consultant @ Sunogos

Activist organization Greenpeace publishes periodically a “Guide to greener electronics”. The guide attempts to rank top electronics manufacturers according to their “policies on toxic chemicals, recycling, and climate change”. I have written about this ranking earlier, it showed Nokia as the greenest company and Nintendo on the bottom of the list.

In October 2010 Greenpeace released their updated ranking, here are some excerpts for some companies including their “green score” (10 is best, 0 is worst).

1. Nokia   (Score: 7.5)
2. Sony-Ericsson (6.9)
3. Philips (5.5)
4. Hewlett Packard (5.5)
5. Samsung (5.3)
…
16. Toshiba (4.3)
17. Microsoft (1.9)
18.Nintendo (1.8)

Looking at this list unscientifically I cannot see an obvious connection between sales success of a company and “greenness”. The top contenders do well in the markets, but the low ranked companies seem to do very well too. Microsoft is certainly making lots of money, Nintendo is my son’s favorite. So, is it fair to say that being green is an insignificant factor for overall sales success?

I think so. Availability of a favorite game or ability to play games with friends is important to many kids, sustainability is not. Does this change with the age of the consumer? Apparently not, features and coolness (think Apple’s product line) seem to be more important than qualities like energy efficiency or sustainable  practices  in production.

There might be exceptions to this observation. Some products sell because they are deemed to be green (think about a Prius Hybrid for a moment). Still, consumers might choose these products more to make a statement than for its green features.

But I do have one hope: What if there is a company that delivers cool and feature rich products made in a very green way? Will this combo sell?

Claus Schafhalter, Sunogos

An Oekom Study looking at 27 leading oil and gas corporations rates organizations regarding their sustainability. The study’s authors granted that corporations try to do the right things, however overall their activities are not focused enough and lack tangible results.

On a scale from A+ to D-, the small Austrian company OMV ranked first with a “B”, followed by Snam Rete (Italy) and Total (France).  Norway’s Statoil is rated only “C”.

What about the company behind the oil spill in the Gulf of Mexico? BP is also rated “C”, and the authors of the study stated problems with save operation of assets and higher than normal risk for workers to get injured.

While the Deepwater Horizon — the oil rig that exploded and sunk killing 11 people — was owned and operated by Transocean, BP is said to had a major role in making decisions that lead to the tragedy and the catastrophic oil spill that followed. Maybe a “D” would have been in order for BP?

Claus Schafhalter, Management Consultant @ Sunogos

In ear­lier posts I wrote about “Define”, “Mea­sure” and “Analyze” as part of Lean Six Sigma’s DMAIC cycle. The example I used in these previous posts showed that our office is not energy efficient, and we also analyzed where and why. Remember, the most important results of the Analysis phase are well determined problem causes.

Within the Improve phase, creativity techniques are used to find and evaluate ideas to address the problems.  Let’s assume one of the issues we want to tackle is the waste of energy due to offices that are heated or cooled, even when they are not occupied. Ideas to improve might be installation of occupancy sensors (motion sensors) that turn off heating or A/C when no one is there.  Or maybe a connection to the light switch — no light, then no heating or cooling. A different approach could be to control temperature based on daytime, weekend and holidays. And there maybe many more ways to reduce energy (more efficient heating / cooling system, better insulation, etc.).

Once we have collected ideas, we need to evaluate these ideas against benefits, cost, risk, time to implement, and other criteria suitable for our situation. We select the best improvement ideas, and — using plain old project management tools — implement the improvements.

Some advice: Especially if your organization is new to structured improvement processes, it is better to concentrate on solutions that can be implemented fast using small (or no) investment money. These solutions should show positive results very soon, and therefore motivate employees to go along, prepare for future changes, and convince management that the solutions are worth while.

Lean Six Sigma improvements should be seen as part of a targeted continuous improvement process, and the really successful organizations are in for the long haul. They set an overall goal, and break this goal down into smaller targets to be accomplished along the way.

But how do we know if our improvement efforts are successful? Lean Six Sigma has the answer in Step 5 — Control, which I will describe in a following post.

Claus Schafhalter, Management Consultant @ Sunogos

Walmart, the largest US-retailer, makes another move to get more sustainable. This time the targets are specific popular product categories and their suppliers. Suppliers are asked to examine and reduce their carbon footprint by using less energy, less packaging, more efficient processes, etc.

It sounds good and it is good, at least in my opinion. However, if you are one of the suppliers targeted you might feel differently. Walmart makes it clear that they expect greener products from their suppliers. But beware, any costs related to make the products differently will be the responsibility of each supplier.

You can see this initiative from two different perspectives:

1) It is a great idea that an organization as important as Walmart starts an initiative to reduce the carbon footprint of the products it sells. Who could argue with that?

2) A Walmart supplier most certainly already faces high pressure from Walmart to supply goods at rock bottom prices. The supplier likely already analyzed processes to find efficiencies and savings. Following this thought, further efficiency improvements to reduce the carbon footprint might not be cost efficient any more. The reason is that at a certain level of efficiency the costs to improve efficiency go up while the additional savings go down. This has a lot to do with how we account – or better do not account – for environmental costs. The cost a polluter has to pay for pollution is still not anywhere near to the real cost of polluting.

If you are a supplier you need to get more green, at least you need to appear more green in Walmart’s eyes. To get there you have the choice to really get more sustainable, which will cost you money. Or you try to compensate for these costs and cut some corners elsewhere.  For instance reducing quality of your product.

You don’t think so? Well, it happened before, in a different context. When car manufactures were forced by increased competition to bring down their costs substantially, they pressed their suppliers to reduce costs. Costs came down, quality of their products too. Which lead to some interesting unintended consequences.

Hopefully Walmart recognizes that they are in this together with their suppliers. And hopefully Walmart offers more than only pressing their suppliers into a greener future. Partnering with suppliers to achieve a common goal would be an important step, I think.

Claus Schafhalter, Sunogos

Increasing efficiency is the name of the game. The objective is to reduce waste and get more value into the product. Thus improving profits and decreasing environmental impacts.

Lean Management, Six Sigma and other management philosophies offer tools to get sustainability efforts right. For instance, Six Sigma offers DMAIC – Define, Measure, Analyze, Improve, Control.

Step 1 — Define: To get a sustainability initiative started management needs to define the objective and the framework, preferably as part of the business strategy. Let’s assume an executive team decides to concentrate sustainability efforts first on one area: Reduction of energy used. The sustainability officer is asked to come up with an initial plan to reduce energy usage substantially.

He now has to define the object of improvements, for the sake of our example we assume there are two areas to look at: Energy used in the manufacturing and delivery operations, and energy used in the administrative functions.

I personally recommend to set an early initial target in this phase of an initiative. The initial target could be to reduce energy consumption by 10% within 12 months. And framework wise it is defined that investments into energy reduction need a pay off of less than 18 months.

Yeah, I know, there are a lot of assumptions and not a lot of hard facts. Is a reduction of 10% feasible? Can it be achieved under the time constraints and investment constraints given? Well, failure is possible, but I do believe that starting targeted activities early is better than analyzing without aim.

So here we go, the first step is done. On the strategic level our example company set the goal to get more sustainable by reducing energy consumption. On the operational level initial objectives for the first 12 months are defined.

Are we up to a good start?

Claus Schafhalter, Sunogos

I got this from the “Irish Times”:

“There is nothing new about the concepts of green or sustainable economic growth. The Cambridge economist Arthur Pigou wrote about these ideas as far back as 1912. His famous example was a factory which belched forth smoke and thereby entailed “social costs” which, he believed, the manufacturer should be forced to bear by paying a special tax. The Pigovian tax, as it became known, was probably the first carbon tax.”

Pigou’s approach to levy a special tax for “social costs” is one attempt to control pollution. Another approach is “Cap and Trade” and discussed here.