Industry Market Trends

Sustainable Manufacturing Toolkit Offers Green Roadmap for Small and Medium Businesses

May 21, 2012

If you're a firm looking to green your manufacturing operations, you can find a good starting point with the Sustainable Manufacturing Toolkit offered by the Organization for Economic Cooperation and Development (OECD), made up of 34 of the world's most developed countries.

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In the Start-up Guide to the Toolkit, Andrew Wyckoff, director of the Directorate for Science, Technology and Industry for the OECD, asserts that "managing operations in an environmentally and socially responsible manner" is "no longer just nice to have, but a business imperative." Pioneering efforts in sustainable manufacturing, he says, "largely show that environmental improvements go hand in hand with profit-making and improved competitiveness."

The Toolkit, Wyckoff says, is designed to help smaller and medium-sized businesses (SMEs) apply the green-growth strategies worked out by larger companies. For SMEs trying to find their way, the Toolkit provides "a set of internationally applicable, common and comparable indicators to measure the environmental performance of manufacturing facilities in any business size, sector or country."

The Toolkit lays out seven key steps for manufacturers. These steps should be seen as a continuous cyclical management process:

  1. Map your impact and set priorities using an internal sustainability team.
  2. Select useful performance indicators to identify what data should be collected for continuous improvement.
  3. Measure the inputs used in production, tying materials and components used in production processes to their environmental effects.
  4. Assess operations of your facility in terms of their impact and efficiency by such measures as energy intensity, greenhouse gas (GHG) emissions and emissions to air and water.
  5. Evaluate your products for sustainability in such areas as energy consumption in use, recyclability and hazardous materials.
  6. Understand measured results by monitoring indicators and analyzing performance trends.
  7. Take action to improve performance by identifying the best opportunities to make manufacturing operations more sustainable.


Graphic showing OECD's 7 steps

Key to this process is step two's indicators, shown in the table below. The OECD offers a set of 18 indicators but stresses that these are not meant to be exhaustive. Firms will likely develop their own indicators specific to their businesses.


OECD's 18 Indicators for Sustainable Manufacturing

Inputs Operations Products
I1. Non-renewable materials intensity
I2. Restricted substances intensity
I3. Recycled and reused content
O1. Water intensity
O2. Energy intensity
O3. Renewable properties of energy
O4. Greenhouse gas intensity
O5. Residuals intensity
O6. Air releases intensity
O7. Water releases intensity
O8. Proportion of natural land
P1. Recycled and reused content
P2. Recyclability
P3. Renewable materials content
P4. Non-renewable materials intensity
P5. Restricted substances content
P6. Energy consumption intensity
P7. Greenhouse gas emissions intensity


These indicators are to be applied at the level of the individual facility, but a company would also want to aggregate and analyze data from across all of its facilities. To produce the indicators, the team will need to tie in to data sources and possibly deploy new systems to generate needed data in such areas as energy and water consumption and GHG emissions.

The Toolkit's Start-up Guide emphasizes the importance of "normalizing" these indicators. This means developing an indicator that is "presented in relative terms as a ratio of performance per specific unit of output," or "intensity." So instead of just stating a raw number for water consumption, you would want to define it as water consumption per unit of output by the facility, or maybe sales volume or person-hours. This way, the company will be able to track its progress over time or benchmark its performance against competitors.


Sample Excel worksheet for comparing scenarios to reduce energy consumption


During the process of mapping a facility's environmental impact, the sustainability team might find that certain areas emerge as clear priorities:

  1. Quick wins, or low-hanging fruit such as energy efficiency -- steps that can result in early quantifiable successes.
  2. Hot issues that are already concerns, maybe with local communities or advocacy groups.
  3. Strategic imperatives that affect the company's core business -- for example, regulatory demands or pressure from a customer that is cleaning up its supply chain.

OECD provides some case studies of companies that have used sustainable manufacturing practices to benefit their businesses and reduce environmental impact:

  • Isothane, a UK manufacturer of insulation materials, decided to eliminate flammable materials from its processes to reduce solvent emissions and comply with regulatory requirements. An internal R&D team worked out a material substitution strategy that reduced the use of three different flammable solvents from 150 tonnes per year to only 22 tonnes of one non-flammable solvent. This reduced hazards to employees and saved the company $400,000 that would have been required for plant safety modifications.
  • Calstone, a Canadian furniture manufacturer, reduced its environmental impact by introducing a new vapor spray system for degreasing metal components that reduced the use of chemicals by 60 percent from 2005 to 2010. The company installed a system to collect rainwater and use it for cooling its equipment. This has reduced water used for cooling by 56 percent. The system also supplies water for the company's toilets.
  • Rapid-Line, a metal fabrication company in Grand Rapids, Mich., introduced various practices to reduce its consumption of natural gas, including capturing and redirecting waste heat from its paint-line ovens; improving energy efficiency for heating and cooling through a system of ceiling fans and baffles; and installation of insulation and automatic controls to boost efficiency of energy usage. Such measures have reduced natural gas consumption at the company's plant by 125,000 cubic meters per year.

All of these examples highlight the value of developing company-specific indicators, collecting data and measuring results to drive real changes in a facility's manufacturing operations.

The OECD website mentions 54 different data points that could be used to feed in to the 18 indicators but says this list is "to be added soon." It's worth noting that these data points are listed in the PDF Start-up Guide, on pages 50 and 51. The guide also shows some samples of worksheets for collecting and recording data.

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