Supporting Manufacturing Leadership Through Sustainability
E3: Economy, Energy, and Environment
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E3: Economy, Energy & Environment is an initiative designed to help local manufacturers thrive in a new business era focused on sustainability and, working together, to promote sustainable manufacturing and economic growth throughout the United States. The E3 Framework facilitates collaboration among groups with common interests and a common agenda. This framework focuses on strengthening small to medium sized American manufacturers (with 500 employees or less), which represent the largest proportion of the manufacturing sector.
E3 Initiatives Strengthen Manufacturers
Strengthening “triple bottom line” • Supporting economic growth through a
local team approach • Promoting environmental stewardship and
energy efficiency • Transforming facilities and their workforce
toward sustainable work practices
E3: Economy, Energy, and the Environment
E3 drives comprehensive evaluation and optimized
solutions … Federal, State and Local efforts working together
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The E3 framework provides small to medium size American manufacturers with customized assessments to “tune-up” their factories to increase productivity, reduce the use of energy and materials, lessen environmental impacts and be better positioned to compete in the global marketplace. Assess: In the assessment stage, the local E3 team identifies community needs, defines roles and responsibilities, and recruits manufacturing partners. Technical assistance (such as the CMTC) leads provide manufacturers with coordinated, customized assessments of selected production processes and comprehensive report of opportunities. Transform: In the transformation stage, you won’t have to spend valuable time navigating through a myriad of complex federal programs. The E3 Support Network provides tailored information on the most appropriate tools, training, and financing options to support implementation of recommended actions, including purchasing new systems and equipment. Workforce training provides targeted and certified skills in sustainable technologies. These skills will enhance job retention and growth. The E3 Team will review the results from the technical review and conduct interviews to customize each company’s E3 Workforce Training and Support Program. � Sustain: Finally, at the Sustain stage, the local E3 team provides a forum for manufacturers to network, share best practices and success stories, learn about new technologies, and work together to achieve long-term sustainability goals.
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Sustainability efforts abound throughout the United States, and several are weaving together energy considerations with lean and clean manufacturing best practices. E3 is no exception in this regard. However, what makes E3 different from other programs is the collaborative support structure behind the initiative. E3 is supported by a Memorandum of Understanding (signed in 2010) among six federal agencies who share a common focus on sustainability. This collaborative approach has proven to be an excellent motivator for local technical resources to come together and provide optimal technical assistance to local small to medium-sized businesses. This avoids redundancies and provides a framework that local communities can use to access the expertise of each federal agency and its local affiliates involved in the initiative. NIST= National Institute of Standards and Technology supports CMTC (CA Manufacturing Technology Consulting) IAC = Industrial Assessment Centers (More than $30 million is expected to be available to IACs from 2012-2016.)
E3 Partners in Southern CA • California Manufacturing Technology Consulting (CMTC) • The Southern California Gas Company • California Department of Toxic Substances Control (DTSC) • City of Los Angeles • County of San Bernardino Workforce Development Department • Long Beach Water Department • Los Angeles Department of Water and Power (LADWP) • Los Angeles/ Orange County Environmental Training Center • North Orange Co Community College District/Center for Applied Competitive Technologies (CACT) • Pacific Gateway Workforce Investment Board (Pacific Gateway) • San Diego State University’s Industrial Assessment Center • Small Business Development Center (SBDC) – Santa Monica College • South Bay Workforce Investment Board
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E3: Southern California officially began collaboration in mid-2011 with a kickoff meeting hosted by The Gas Company in Downey, California. Over 35 participants attended the first official meeting in person, and an additional 14 attendees teleconferenced. Participants included local government representatives, local workforce investment boards, regional small business development centers, utility companies, and local technical assistance providers for manufacturers. It was at this meeting that California Manufacturing Technology Consulting (CMTC), the local Manufacturing Extension Partnership (MEP), agreed to take a lead role in organizing E3: Southern California. E3 is joined by myriad partners at the local level. With the exception of DTSC and the City of L.A., each of these entities has a federal counterpart that provides support and resources. For example, CMTC is part of the Department of Commerce Manufacturing Extension Partnership. The SDSU Industry Assessment Center is part of the Department of Energy’s Energy Efficiency and Renewable Energy initiative. And the Workforce Development Department is supported by the Department of Labor. The organizations listed here are signatories to the E3: Southern CA charter, which was formally signed in March 2012 at the Southern CA Gas Company’s Business Expo in Pomona, CA.
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Technical Assessment
A Lean Review which leads to increased productivity and reduced costs
A Clean Review resulting in water and energy conservation, reduced emissions, and additional cost savings
A Greenhouse Gas (GHG) Evaluation that teaches manufacturers how to calculate GHG emissions and evaluate reduction strategies
Post-Assessment Recommendations that guide each facility toward improvements in overall efficiency, reduced waste, more efficient use of resources including energy and water, and cost savings
An Energy Assessment which provides tools and insight to reduce energy demand and costs
A Clean Review which results in water and energy conservation, pollution prevention, reduced emissions, and additional cost savings
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Lean manufacturing is a business model and collection of tactical methods that emphasize eliminating non-value added activities (waste) while delivering quality products on time at least cost with greater efficiency. Lean production techniques often create a culture of continuous improvement, employee empowerment, and waste minimization, which is very compatible with organizational characteristics encouraged under environmental management systems (EMS) and pollution prevention (P2). Other related business strategies such as "Six Sigma" can have the same effect.
Value Stream Map
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Lean manufacturing removes and/or minimizes non-value work activity from the manufacturing process, streamlining all company processes from the front officer throughout production to the way products are distributed. Once processes are improved, a key element of Lean is the concept of continuous improvement. Improving processes using Lean techniques makes manufacturing more efficient and creates ongoing benefits. Value Stream Mapping is a method of creating a visual representation of the information and material flows involved in creating a product or delivering a service to a customer. Lean practitioners use value stream maps to understand where the largest sources of waste are in the value stream and to prioritize future process-improvement efforts.
Lean addresses the Nine Areas of Waste
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Motion Quality
Inventory Overproduction
Waiting Time Processing
Transportation Creativity
Information
Implementation Support
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SBA and its Small Business Development Centers (SBDCs) provide business excellence counseling services and financing through guaranteed loan programs
DOL and its Workforce Investment Boards provide green job and skills training and apprenticeships supported by workforce development and training grants
Local and Regional E3 Team provides additional resources and support such as state recognition, internship programs and local funding and grant opportunities
VSM + Kaizen events, energy • $558 k saved in labor costs • 41% improved productivity • $61k saved in electricity
Battery recycler Santa Fe Springs
VSM + Kaizen events, energy • Reduced energy intensity 33% • Saved $100k in annual energy costs
Automated entrance systems North Carolina
VSM, Energy, Safety • 50% reduction manufacturing defects • 50% faster lead time • $200k annual lean savings • $26 k annual energy savings
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100% of all E3 projects identify savings in the 10s of thousands or even the hundreds of thousands of dollars. Kaizen events combine a detailed assessment with immediate implementation of Lean opportunities. These are known as rapid process improvement events. Makes changes during a given event, and stresses non-capital improvements. In kaizen events, which typically last 3-5 days, a cross-functional team of employees identifies and implements process changes to reduce wastes such as idle time, inventory and defects.
Energy Metrics:
Environment Metrics:
Economic Metrics:
• Jobs created
• Jobs retained
• Environmental savings identified
• Lean savings identified
• Other cost savings
• One time potential cost savings identified
• Individuals trained
• Number of small businesses engaged
• Percentage of small businesses engaged
• Number and value of SBA loans granted
• Capital infusion dollars invested
• Hours of counseling provided
• Air emissions reduced (lbs)
• Solid waste reduced (lbs)
• Material intensity per unit of production
• Hazardous waste reduced (lbs)
• Hazardous materials reduced (lbs)
• Water pollution reduced (lbs)
• Water used/conserved (gal)
• Water intensity per unit of production
E3 Metrics
• Energy conserved (MM BTU/kWh) • Energy intensity per unit of production • Carbon reductions (tons) • Carbon intensity per unit of production
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The Business Case for Going Green • Companies that are environmental leaders
have outperformed the general stock market by 25% since August 2005.
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Goldman Sachs, June 2007 -- An environmental leader is defined as a company that that implements environmental, social and governance policies to create sustained competitive advantage. * For proxy season 2008 as reported by Ceres (a national network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges such as global climate change)
Imagine the Results: Bottom line benefits of sustainability
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DJSI World (USD)
MSCI World (USD)
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Global consumer markets and the investment community are driving a trend in the business world towards recognizing the financial benefits of sustainable environmental management. Investors are beginning to associate strong environmental performance with quality management, which is considered a strong proxy for return-on-investment in the financial sector. Simultaneously, companies have moved towards sustainable environmental management to reduce risks and uncover opportunities for potential savings and new business development. As an example of the benefits of sustainable environmental management, this slide shows the relative performance of the Dow Jones Sustainability Index (DJSI) compared to the Morgan Stanley Capital International (MSCI) Inc. World Index from December 1994 through December 2007.
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ETP = Employee Training Panel. CMTC has a contract to give trainings to employees, include green belt training, kaizen event, etc. CMTC has to train 40 hours.
Becoming an E3 Participant
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• E3 manufacturing partner contributes subsidized cost share tailored for the respective E3 project.
• Partner makes necessary time commitment and contribution to E3 assessment activities
• Partner collects and reports appropriate E3 metrics • Partner learns about sustainability, ISO 50001, GHG
reduction, demand response, environmental footprint • Partner shares success story and lessons learned • Partner benefits from awareness of their environmental
improvement efforts (Corporate Social Responsibility)
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E3 teams typically support E3 projects financially by leveraging existing funds. E3 teams have found these funds from project participants who have a practical interest in improving the local manufacturing sector, or from federal funds already allocated and distributed to communities throughout the United States. In addition, E3 teams commonly charge participating manufacturers a modest fee to participate in the project. The return on the manufacturer's investment, as observed in past E3 projects, is quite high and can typically be achieved within the first year of the project assessment. Who decides which recommendations to implement? Manufacturers do. The E3 team will provide a report to management outlining a series of improvements that can be made, but it is up to the individual supplier what improvements they implement. The E3 Team is available to help with implementation or identification of other state programs to assist companies. Are data confidential? Yes. Facility-specific results will not be shared with any organization outside of the E3 Review team unless the facility agrees to do so (e.g., a case study). To provide public E3 data, facility data are separated from company names and aggregated with others across the country. These numbers become available after a minimum of five reviews have been conducted and in rolling batches of five reviews. All facility specific data are always kept confidential.
