Mhlnews 617 Substainability

SustainabilityTechnical Feasibility: How Doing the Right Thing Makes Cents

May 1, 2008
If your company is not positioning itself to be aggressive in reducing operating costs, you will be less competitive and left behind.

There are two major facets of the sustainability topic: Where we’ve been and where we’re going. There’s nothing to be done about what created today’s state of environmental conditions—other than to recognize the problems and note what not to do.

As for the present, it’s always a discussion about the past or the future. There is a plethora of information available to help managers make the right decision. And, while a move toward a more sustainable way of doing business might be the right thing to do—like installing solar panels on the building roof to generate renewable energy—the question looms: Is it feasible? Or, should it make sense only if it makes cents?

And, the future? The future looks bright ahead. Some companies have been ahead of this sustainability curve for more than 30 years. Others have seen the (fluorescent) light only recently. Others are still in the dark.

Back to the Future
Pat Lancaster, chairman, Lantech Co., Louisville, Ky., says people look at stretch wrapping and think the “green” thing is about using less film. They miss the point. The point, even back in 1972 when Lancaster introduced his line of wrapping machines, was waste prevention through damage reduction.

“The green thing,” says Lancaster, “is how much waste we prevent.”

He illustrates his point with data and wisdom of more than 35 years in the business of inventing, designing and building stretch wrapping equipment. Based on seven or eight ounces of film per pallet load, a typical trailer has about 10 pounds of film protecting 40,000 pounds of goods.

“Based on my experience of watching loads come and go from warehouses,” says Lancaster, “I’d estimate there are at least five cases of stuff that gets damaged and tossed into the trash from every trailer. What is the weight and volume of that damaged product going to the landfill, compared with the film that has a volume of about two gallons of milk jugs?”

Lancaster says managers have to keep their eyes on the ball, and that ball is damaged goods, not how much stretch film is being consumed. He speaks candidly when he says people don’t talk about what they’re really buying when they purchase stretch wrapping equipment. It’s containment force—the cumulative force that holds a load together.

“All the tests show that the higher the containment force, the better the load ships,” he says. “Our goal has to been to move that containment force up on loads—and, by the way, use less film doing it.”

Lancaster says since 1975, when about two pounds of film was used to contain a load, the requirement has dropped to about a quarter pound per pallet. Lantech’s new, no-film-break technology is the latest example of getting more by using less.

“The opportunity to reduce film is enormous,” he says, “however, the opportunity to help customers contain their loads better—and put a process in place to maintain that [better load containment]—has a much higher value than film savings. The value proposition now is about holding the load and creating less product damage waste.”

Solving the Problem
Lancaster is banking on education for solving sustainability’s challenges. He contends many distribution managers underestimate the amount of damaged goods because the feedback loops for the root causes of the problem don’t exist. If, while wrapping a load, the film breaks, typically, the operator will reduce the level of force. Maybe the real problem was bad film, sharp corners on a pallet or machine controls. By reducing the force, however, the operator is almost guaranteed to create more damage and waste down the line. Managers and operators need to understand this. They need to see the entire picture.

Toward resolving these kinds of education problems, Lantech has started a series of podcasts to educate its customers on basic issues of stretch wrapping and machine operation. It’s also creating workshops that educate operators on proper use of stretch wrapping machines.

“People don’t understand the metrics of stretch wrapping,” says Lancaster. “They don’t understand that, if they choose to use a lighter- gauge film, almost inevitably, they’ll have to turn down the wrap force—thus reducing the containment force—unless they increase the layers.” Lancaster offers some thoughts on how to become more sustainable— or how to address the notion of sustainability.

  • Go for full, lifecycle values. Don’t look at just your piece of the puzzle. Find the links between all the parts. Don’t detriment one part of a process for a seeming benefit of another.
  • Don’t get caught up in the scorecard and publicity game. Scorecards might not be bad ideas; however, if you drive for the scorecard component, you miss the whole point of sustainability.
  • Don’t trade off packaging material for damage to product that will result in more solid waste. In the case of stretch wrapping, improving what the package does is probably more important than improving the material.
  • Look at what you do that makes good business sense and try to extract from that values that go toward things like sustainability. If you’re looking for better values for your customer, there’s a good chance you’re doing improvement work that will have sustainability benefits.
  • Check to see if you really got the planned benefit of an improvement on the third shift after everyone has left the building. Too often, a month after a machine is in place, what managers thought was going to happen isn’t happening.
  • The big error [in the supply chain] is that, often, the whole process starts with the notion that some amount of scrap is okay.

A Bright Idea
Rather than consume energy, why not manufacture some? Then, sell it back to the companies that sell it to consumers.

Renewable energy. Solar and wind-generated electricity. Something for tree huggers only? Not so. ProLogis, a global owner, manager and developer of distribution facilities, has recently entered into an agreement to lease roof space to Southern California Edison (SCE), the largest electric utility in California, as a part of the utility’s new solar power program.

In the initial phase of this program, the utility will lease 607,000 square feet of roof space at ProLogis’ Kaiser Distribution Park in Fontana, Calif. The area will be used to install and maintain solar panels with the potential to generate enough electricity to power 1,426 households for one year. At ProLogis Park Chanteloup in France, the company has installed roof-mounted solar panels, generating electricity that is incorporated back into the local French utility power grid. In Spain, at ProLogis Park Penedes, the company installed state-of-the-art, amorphous silicon solar panels that produce electricity using a wider spectrum of light than traditional crystalline technology, thus enabling maximum output.

Jack Rizzo, managing director of global construction at ProLogis, says things are different between the U.S and elsewhere. “Our agreement with SCE is the first of its kind in the U.S. and lays the groundwork for similar programs throughout the country. Countries in Europe create incentives for renewable energy through feed-in tariff laws.”

A feed-in tariff is good business. Essentially, utility companies buy energy produced by other entities at rates dramatically higher than what they sell it for.

Rizzo is a global traveler for his company. He says the U.S. is trailing most European and some Asian countries, based in part because our country did not sign the Kyoto Protocol. Based on the progress it’s made in Europe, ProLogis is expanding its efforts in this country. “Currently, the payback on many renewable energy projects is too long for small and mid-size companies,” says Rizzo, “however, there are many things any company can do to reduce energy consumption.”

Another Way to Wrap in Green

Containment force on a load, and securing the load to the pallet, are keys to preventing damage. Preventing damage reduces waste. Reducing waste creates a more sustainable environment. Products, such as virtually anything packaged in a bag and newspaper bundles, however, don’t lend themselves to easy wrapping.

Companies are finding a new way to reduce damage and stretch film use with stretch hooders instead of stretch wrappers. According to Greg Bunker, application development leader, Dow Chemical, Midland, Mich., a manufacturer of film resins, there are green—and other—reasons for using stretch hooders. “Because the wrap is weather tight, using hooders allows a company to store pallet loads outside the building,” says Bunker. “And, because a single sheet of film is used, companies can print logos or other information on the load.”

During application, a stretch hooder machine pulls the single-piece film in two directions, which is said to improve the stress/strain curve of the film material and allow the film to form more snuggly around the load, locking it onto the pallet. This tension, in both the vertical and horizontal directions, keeps loads from shifting during transit.

Bunker points out some of the green aspects of this technology include the use of a film that is thicker and thus able to achieve greater force than multiple wraps that might be required by other technologies. His company works with film makers and machine manufacturers to create these products and better understand market requirements.

“Sustainability is not just about the material,” says Bunker. “You have to look at the full lifecycle of the process and material. You have to factor in the impact of unsaleable product and all of its packaging that ends in the landfill.”

Finding Opportunity
Striving for a more environmentally sustainable business helps the planet in a multitude of ways, while adding money to the bottom line.

“Our job is to go into a facility and look for opportunities that will make the building perform better and be more sustainable,” says Lisa Raffin, vice president of professional services, VFA Inc., a provider of end-to-end solutions for facilities capital planning and asset management in Boston. “The issue [for the client] might be operational, heating or how they actually operate.”

After a review of a company’s operations, VFA provides a Webbased planning tool so the company can create its own solutions for sustainability.

“It [the company] can categorize and prioritize its program with this tool,” she says. “It can do what makes most sense for it. It can compare how focusing on one specific aspect can benefit it, and what the impact on the environment or energy payback will be.”

She adds that many decisions have soft, or side, benefits. Improving the environment or sustainability of the building can bring benefits to the workforce and, in turn, higher productivity.

In the end, says Raffin, regardless of the entity, the driver is operating costs. A company might buy some visibility adopting and announcing green initiatives; however, it is still about reducing expenses.

Think Sustainable
Where does sustainability start? It can come from the shop floor or the corner office. Managers responding to the suggestions of employees is a great way to show a company is serious about the subject. Sustainability can come through legislative mandates as well as pressure from customers.

The big push, however, will come when managers look at the true cost of doing business. The cost of operating a more sustainable business is tough to pin down today because technology feeds on itself and rarely moves in straight lines. And, even though the line on the corporate profit chart indicates the cost of sustainability is high, the direction of the need for more sustainability in business is a steep, vertical curve. Why? Because the red line currently graphing global temperatures is also on a steadily increasing diagonal.