Melding Lean with Green

05/01/2012 02:25 pm ET | Updated Jul 01, 2012

Are "lean" and "green" principles complementary business practices, or are they better implemented separately? "Lean" refers to an approach of continuous improvement and the elimination of non-value-adding activities, and it is mainly used in the manufacturing sector. "Green" refers to practices and actions that reduce negative impacts on the environment. While "green" and "sustainability" are often used interchangeably, the term "green" is more appropriate in this discussion, because unless materials are replenished at the same rate they are depleted, the practice cannot truly be considered "sustainable."

Green benefits can be a byproduct of lean practices. By definition, using fewer resources and streamlining is better for the environment. However, when undertaking process improvements with just the lean philosophy in mind, environmental benefits may not be fully achieved. This is because lean principles are not focused on reducing energy, water, waste, and transportation costs, although these may be byproducts. A smaller warehouse results in less energy used; reuse or repurpose of materials that would otherwise go to landfill reduces waste. It begs the question: Is it better to start with lean or green principles, or both?

If lean and green principles were to be married from the outset, the result would be a more comprehensive look at the life cycle of a product or service. This would include the upstream and downstream inputs and impacts. The life-cycle approach is a more rigorous path to pursue, and some companies have found that it is easier to start with one (either lean or green) and follow with the other rather than implement both at the same time. Steve Brenneman, president of the Aluminum Trailer Company (ATC),* learned this firsthand.

I had the pleasure of speaking with Steve Brenneman and learning more about how he implemented lean and green practices at his company. Brenneman founded ATC in 1999; the company manufactures precision-built trailers out of Nappanee, Ind. He began implementing lean principles in 2009, following the economic contraction and a resulting drop in sales.

He and his team improved the flow of materials, information, and parts; identified wasted processes; established simple standards; communicated them across the organization; and implemented a materials replenishment system. Because of this, ATC was able to decrease its warehouse space from 105,000 square feet to 50,000 square feet. Brenneman and his team then turned to the office and applied the same principles there. The result? A reduction in sales cycle time from seven weeks to three weeks.

In 2010, while in the middle of focusing on lean processes, Brenneman also began applying green principles. Initial goals included lighting upgrades, making recycling easier for line workers, and providing adequate bins for recycling cardboard, plastic, wood, wire, and wood on the floor. These goals were met, as was a 50-percent decrease in paper use in the office.

Many of these reductions came out of processes that ATC learned through the lean improvement cycle, which they refer to as the Deming Cycle (Plan, Do, Check, Adjust[Act]). This begins with a root cause analysis and asks whether a specific action or process is necessary, and what might be a better, faster alternative. The purpose is to rethink processes and come up with an answer other than, "This is how we have always done it." Conversely, they also found that green practices such as recycling, reducing, and reusing have helped them be more mindful of the details; this in turn moved them closer to the Japanese philosophy on which lean principles were founded. Therefore, the two principles reinforced each other.

Although some green practices were implemented at the same time as lean practices, others had to be put on the back burner to better focus on the lean initiative. Now that the floor and the office are structured following lean principles, Brenneman plans to redirect his attention to green actions. His goals range from eliminating cups for coffee and water and implementing machinery and equipment shutdowns on the shop floor to decreasing water usage by 50 percent and developing an education plan for plant employees.

When asked why he chose to implement eco-friendly initiatives, Brenneman pointed to his Mennonite upbringing, which taught him to care and respect other living creatures and the environment. He also pointed out that green principles make business sense: "If you think about 'green' in the right way, it doesn't have to cost extra; it may take a little more care and a little more thought, but you will find that it saves costs and saves money."

Although being "green" was important to him, operational improvements to address the tougher economic environment had to be the first focus, hence the redirected focus on lean practices. Brenneman plans to move the culture of the organization to one more in line with the Japanese philosophy of caring. This is very much aligned with eco-friendly principles and focuses on taking pride and care in how everything is done, which also leads to a neater and cleaner work environment and less waste. He has an advantage in that many of the ATC employees are Amish, and their culture includes a focus on care and concern for others and nature.

In the end, there are many synergies between lean and green principles, and businesses -- even non-manufacturing ones -- can benefit from lean and green practices. In today's economic reality, both can save money and help streamline processes. And both can be implemented, albeit maybe not simultaneously, and provide companies with a competitive advantage and even improved branding, in the case of green or eco-friendly practices.

*The Aluminum Trailer Company has no affiliation with me or Eco-Coach in any way.