Metrics Matter: Eco-efficiency in Manufacturing

Transcription

1 Metrics Matter: Eco-efficiency in Manufacturing Jan Snoeij Chair MESA EMEA / Principal Consultant European Conference Unlocking Your Operations Potential November 9-10, Düsseldorf, Germany

2 Trends and observations Lowering consumer brand loyalty Increased price pressure Regulatory requirements General Food Law Sarbanes-Oxley Sustainability Shorter product life cycles Product innovation required Globalization Branding Make or buy? Where to produce?

3 Improve Need of transparency and visibility Business processes Streamline production and workflows Consistent strategy and policy is required with clear objectives Tools Organization Alignment of Business processes Organization & people Tools, including IT

4 Multi Perspective View

5 Sustainability in the press

6 Agenda 1. Introduction 2. Sustainable manufacturing 3. Research Eco-efficiency Metrics 4. Results 5. Closing remarks

7 Sustainable manufacturing Sustainable manufacturing is Developing and applying technologies to transform materials without emission of greenhouse gases, use of non-renewable or toxic materials or generation of waste. Assembly Components Retail Extraction Material antropo-sphere Use Disposal eco-sphere

8 Five options for sustainable manufacturing 1. Use less material and energy 2. Substitute input materials: toxic by non-toxic non-renewable by renewable scarse by well available 3. Reduce unwanted output: cleaner processes 4. Convert output into input: recycling in all its variants!

9 Fifth option for sustainable manufacturing 5. Change the structures of ownership and production: product service systems, supply chain structure Disposal Use Retail Assembly Components Material Extraction Example: pay-per-wash system means the producent keeps the ownership of all mateials in the product!

10 Sustainable manufacturing in practice Sustainable manufacturing is Developing and applying technologies to transform materials without emission of greenhouse gases, use of non-renewable or toxic materials or generation of waste. More sustainable manufacturing is Developing and applying technologies to transform materials with reduced emission of greenhouse gases, reduced use of nonrenewable or toxic materials and reduced generation of waste.

11 Make behavior change easy!

12 Agenda 1. Introduction 2. Sustainable manufacturing 3. Research Eco-efficiency Metrics 4. Results 5. Closing remarks

13 Eco-efficiency study MESA Metrics Research "Eco-efficiency in Manufacturing" MESA / AVS Systems survey on the web Analysis Comparison with X participants and 'peers' Main topics Asset management Product Lifecycle Management Supporting technologies Strategy, activities and metrics Results / improvements

14 Examples of improvement potential in manufacturing - Savings through the use of alternative materials in products and packaging - Operational efficiency through the purchase of more energy efficient machinery - Reduction in energy usage due to smart metering and monitoring - Reduction in supply chain waste/cost (e.g. freight) - Cost reductions through recovery / recycling - Savings through the use of alternative energy - Savings due to reduced emissions and effluents - Savings due to reduced use of hazardous or toxic chemicals - Improved maintenance practices leading to less waste generation - Reduction in MRO material and labor

15 Metrics Matter! MESA Metrics Research "Correlating Plant and Business performance" Cambashi/Logica survey on the web Analysis Comparison with 140+ participants and 'peers' Main topics Business metrics (14) Operational metrics (21), including 7 sustainability metrics Data capturing Feedback to 'originators' Information technology

16 Sustainability metrics Metrics that Matter Questionnaire Comprises 26 operational metrics Sustainability related operational metrics o Carbon footprint / sustainability o Energy consumption per unit of production o Toxic waste reductions o Reportable environmental incidents / year o Reportable health & safety incidents / year o Batch / lot / unit right first time o Scrap / rework as percentage of sales

17 Supply Chain Raw material producer Supplier Transport Objective: Maximalization customer satisfaction and profit for all partners. This includes sustainability! Factory Factory Distributor INFORMATION FLOW Retail MATERIAL FLOW Distributor Retail Consumer

18 Agenda 1. Introduction 2. Sustainable manufacturing 3. Research Eco-efficiency Metrics 4. Results 5. Closing remarks

19 Business Movers versus "Business Movers": EBITDA improved over 10%* or Others Net Operating Profit improved over 10%* or Have improved more than 1% on at least 10 of 14 business metrics* 50 participants (35%) of the 143 participants are business movers in all industries in all regions small and big * average annual improvement over last 3 years

20 Business movers: better and faster control Very Effective Links between Operational and Business Metrics 25% 20% 15% 10% 5% 5% 0% 0% For For all/most KPIs KPIs Business Movers Others Business Movers have more effective links between business and operational metrics: better control. Business Movers are collecting their metrics data fully or partially automated more often. 80% 60% 40% 20% 0% 0% How rapidly are operational metrics showed to to those managing the operations measured Within a shift Longer than a shift Business Movers Others Business Movers improved more on the vast majority of operations metrics Business Movers provide feedback on operational metrics to those who manage the concerning operations more rapidly

21 Improvement sustainability metrics Busines Movers improve (>1%) their sustainability metrics more often than Others. 80% Improvement (>1%) Sustainability Operational KPI's 70% 60% 50% 40% 30% 20% 10% 0% Carbon footprint / Energy sustainability consumption per unit of of production Toxic waste reductions Reportable Reportable health environmental & safety incidents incidents / year / year Batch/lot/unit right first time Scrap/rework as as percentage of of sales Business Movers Others

22 Significant improvement of sustainability metrics Busines Movers are more likely to improve sustainailibity metrics with more than 10% (significantly) than Others. 30% Improvement (>10%) Sustainability Operational KPI's 25% 20% 15% 10% 5% 0% Carbon footprint / Energy sustainability consumption per unit of of production Toxic waste reductions Reportable Reportable health environmental & safety incidents incidents / year / year Batch/lot/unit right first time Scrap/rework as as percentage of of sales Business Movers Others

23 Use of sustainability metrics Business Movers says LESS often NOT to use sustainability metrics. 60% Sustainability Operational KPI's : Not Used 50% 40% 30% 20% 10% 0% Carbon footprint Energy / sustainability consumption per unit of of production Toxic waste reductions Reportable environmental incidents / year Reportable health & safety incidents / year Batch/lot/unit right first time Scrap/rework as as percentage of of sales Business Movers Others

24 Sustainability metrics per production typology Continuous Processing participants report more often a significant improvement (>10%) of their sustainability metrics. 20% Significant improvement (>10%) on Sustainable Operational Metrics 15% 10% 5% 0% Batch Continuous Discrete Other mixed mode Packaged Goods

25 Sustainability metrics per production typology Significant improvements (>10%) of sustainability metrics varies strongly per production typology. 35% Improvement (>10%) Sustainability Operational KPI's 30% 25% 20% 15% 10% 5% 0% Batch Continuous Discrete Other mixed mode Packaged goods Carbon footprint / sustainability Toxic waste reduction Reportable health & safety incidents / year Scrap/rework reduction Energy consumption Reportable environmental incidents / year Batch/lot/unit right first time

26 Use of sustainability metrics per region Despite the more severe legislation, European participants are using operational metrics not as often as their North American colleagues. 45% Sustainable Metrics - not used/not measured - 40% 35% 30% 25% 20% 15% 10% 5% 0% All Asia Pacific Europe Middle East Africa North America South/Central America

27 Carbon footprint / sustainability Quite a few participants indicate not to measure their carbon footprint or to have appropriate metrics in place (yet). 100% Carbon footprint / sustainability - not used/not measured - 80% 60% 40% 20% 0% All Asia Pacific Europe Middle East Africa North America South/Central America

28 Agenda 1. Introduction 2. Sustainable manufacturing 3. Research Eco-efficiency Metrics 4. Results 5. Closing remarks

29 Closing remarks Sustainability is a must! Develop new products and processes Better alignment in the logistical chains In production/manufacturing Efficiency: material, energy Effectiveness: 'right first time', no wast or losses Agility

30 Closing remarks Changing successfully requires: clear objectives (SMART) adequate measurements right information, right time, right person Metrics matter! Technology is not restrictive Duurzaamheid is niet duurder! (Sustainability is not more expensive) It is all about people!

31 Want to know more Ask now or later: Foto: Christiaan Krop / Energiegids.nl jan.snoeij@logica.com