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Integrating Environmental Sustainability within Manufacturing SME’s Operations
- Development of Business Support
Tim Woolman - Research Engineer,
Dr Ali Veshagh - Senior Lecturer
Warwick Manufacturing Group, University of Warwick, UK
13th International Conference of The Greening of Industry Network
2 – 5 July 2006
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 2
Integrating Environmental Sustainability within Manufacturing SME’s Operations
INTRODUCTION & RESEARCH CONTEXT
LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS
EXISTING SUPPORT FOR SMES
DIAGNOSING PERFORMANCE IMPROVEMENT
CONCLUSIONS FOR DEVELOPING BUSINESS SUPPORT FOR SMES
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 3
INTRODUCTION
UK SMEs contribute approx;
60% commercial waste, 80% pollution incidents [NetRegs].
Literature shows barriers to action through environmental management are;
lack of training, awareness & relevant information,
lack of sector specific support and solutions,
expense.
To inform the design of effective support for SMEs :
(1) What drivers and barriers are currently faced by UK manufacturing SMEs?
(2) What support for SMEs do current schemes offer?
(3) How can support be developed to be effective in integrating sustainability?
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 4
Part of WMG research project (2003-7)…
Eco-Product Innovation & Clean Manufacturing Technologies
… to investigate how small & medium sized manufacturers in the UK West Midlandscould be most effectively supported in adoptingeco-product innovation & clean manufacturing.
~5,000 manufacturing SMEs in UK West Midlands
Uptake of more environmentally sustainable practices depends on SMEs recognising, and realising, their contribution to current objectives.
RESEARCH CONTEXT
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 5
Existing schemes; Envirowise, EnviroINNOVATEvary in approach to ecodesign,
cleaner production.
Ecodesign : Most successful ecodesign principles in 77 Dutch SMEs
recycling material increasing durability using recycled materials reducing energy use
Cleaner Production : “…conserving raw materials, water and energy; eliminating toxic and dangerous raw materials; and reducing the quantity and toxicity of all emissions and wastes at source during the production process.” [UNEP]
RESEARCH CONTEXT
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 6
LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS
1. Small Business Survey [UK Department of Trade & Industry, 2004/5]
7505 small businesses, UK wide
Potential to incorporate environmentally conscious practices, through:
growth,
~25% predicted company growth from promoting the company as environmentally friendly
innovation,
35% introduced a new product or service in preceding year
25% introduced new processes or way of working “
and the majority being prepared to act
>75% “no obstacle” to reducing energy, water or waste.
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 7
LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS
2. SME-nvironment Survey [NetRegs – Environment Agency, 2005]
5554 SMEs, UK wide, 15 sectors incl. manuf’g
Growing SME awareness of their environmental impacts, since 2003
Action >70% manufacturers implemented at least 1 practical measure
Reasons for addressing environmental issues
Agreement on links between environmentalgood practice and business benefits
64%
22%16%
9%
GeneralConcern
Legislation ReduceCosts
CustomerPressure
80%62%
51% 51%74%
Red
uced
Ris
k of
Pros
ecut
ion
Cre
ates
Goo
dR
elat
ions
with
Cus
tom
ers
Red
uced
Ope
ratin
g C
osts
Mot
ivat
esW
orkf
orce
Impr
oved
Com
petit
iven
ess
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 8
LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS
3. Design Council European Survey [UK Design Council, 2001]
600 manufacturing companies,5 European countries (200 from UK)
Activities approaching Design for Sustainability (DfS) increase with co. size
Drivers Barriers
Influenced by Informed by
61% looked forward to DfS increasing profits, a third expecting +5%
36%30% 22%
Meetingcustomerdemands
Regulatorycompliance
Environmentalbenefit
46%16% 12%
Lack ofcustomerdemand
Costprohibitive
Lack ofconcern
83% 56% 54% 53% 44%
Businessclients
Industry ortrade bodies
EC/EU Nationalgovernment
Endcustomer
21% 18% 15%7%
Industry TradeAssociations
Governement/regulatoryauthorities
Fairs/suppliers/parent co.
Customers
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 9
LEARNING FROM SURVEYS – DRIVERS, BARRIERS & ENABLERS
Observations
~ 25% SMEs recognise environment as driver, but majority are prepared to act.
New products & processes are important to growing SMEs,
- opportunity to incorporate environmental criteria, with justification as;
cost reduction,
improving compliance,
improving customer relations (business clients are a strong influence).
Gaps in existing surveys:
expectations for future customer demand
status of action addressing cleaner production
typical ambitions, particularly for product/production technologies
testing which support enablers are favoured e.g. training, measurement, guides.
need a more focussed survey
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 10
WMG postal survey to 540 manufacturing SMEs in West Midlands,‘05/06
49 returns (11%),
mainly in automotive/general engineering supply chains
Most companies – small, 10 to 49 employees
– respondents: senior management
65%57%
22%14% 12%
4% 4% 4% 4%
Automotive GeneralEngineering
Aerospace Medical Construction Mining Office & RetailDomestic &Recreational
Petrochemical
WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES
4%
56%
21% 13%2% 4%
<10 10 to49
50 to99
100 to149
150 to199
200 to249
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 11
WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES
Results
Important reasons to invest in cleaner manufacturing
0%10%20%30%40%50%60%
Com pliance withenvironm ental
regulations ,including those
anticipated
Com petitivenessto win orders
Creating goodrelations with
cus tom ers
Creating goodrelations with
others e.g.em ployees ,
public
Internal concernfor social &
environm entalrespons ibility
Cos t savingsfrom greaterefficiency or
reducing greentax paym ents
Opportunities todivers ify into new
m arkets
Currently Im portant Could be im portant in future
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 12
WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES
Results
Constraints to adopting cleaner production processes and/or environmentally conscious product design
0%10%20%30%40%50%60%70%
Lack of capitalfor any form of
inves tm ent
Long paybackperiod / high
cos t
Lack ofcus tom erdem and
Uncertaintyabout
environm entalregulations
Cleanertechnologies
are not yetproven / poor
availability
Lack of in-house
expertise
Conflict withother technicalrequirem ents
Belief thatthere would be
littleenvironm ental
benefit
Poor externalsources ofinform ationand advice
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 13
WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES
Results
Cleaner manufacturing actions implemented or planned
0%
10%
20%
30%
40%
50%
60%
Energyef f iciency
and/or w aterreductionmeasures
Minimization ofproduction
consumablesor material
w aste
Identifyingsignif icant
environmentalaspects ofproduction
Def ining anenvironmental
policy andmaking itavailable
Enablingsuppliers tocontribute to
environmentalperformance
Resourcingimprovement
through adistinct part- orfull-time job role
Addressingsignif icant
environmentalaspects in
product design
Implemented Planned in the next 3 years Not planned, but may be some scope in the future
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 14
WMG SURVEY OF WEST MIDLANDS MANUFACTURING SMES
Results
Enablers for making progress
Training
Internet guidance preferred (37%) to printed guidance (10%)
41% interested in spreadsheet for self-analysis of environmental performance
0%10%20%30%40%
Training in generalenvironm ental
awareness and/orenvironm entalm anagem ent
Training in cleanerproduction or
environm entallyconscious product
des ign
Workshops Self-s tudy m anuals
"Money"
"Time"
"Waste / cost reduction schemes"
"Cost effective renewable energy sources"
Suggested
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 15
EXISTING CLEANER MANUFACTURING SUPPORT (UK)
EnviroINNOVATE (WM): accelerate product/process dev’t, tech. transfer
Subsidised expert input – 5 days to 6 months
Envirowise : Waste Minimisation, Resource Efficiency
Free half-day visit from advisors, Helpline, Workshops,Best Practice Guides – printed and internet
GAP
LargeCompanies
Medium Companies
SmallCompanies
Low Depth of service in Environmental Innovation High
BREW- Envirowise- Carbon Trust- NISP
RegionalSMESupportSchemes
In house
EnvironmentalConsultants
Management Consultants
Eco- Design & ManufacturingConsultants
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 16
DEVELOPING EFFECTIVE SUPPORT FOR ENVIRONMENTAL SUSTAINABILITY
Addressing the gap…
Criteria for Content
Address any shortfall/uncertainty in compliance as a priority (NetRegs)
Reduce & justify costs, offering investment appraisal
Address customer and market signals to identify (future) value-add
Respond to internal concerns
Link to process for new product or process development
Provide information and training to address barriers of;
lack of in-house expertise, perceived poor availability of compatible cleaner technology
Raise general awareness and explain likely environmental benefits
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 17
DEVELOPING EFFECTIVE SUPPORT FOR ENVIRONMENTAL SUSTAINABILITY
Addressing the gap…
Criteria for Method
Collaborate with an internal champion
Offer self-study manuals and Internet guides
Channel support through influencers; Industry / Trade Associations customers higher in the supply chain
Enable SMEs to address their lower tier suppliers
Enable use of a spreadsheet, tailored for self-diagnosis
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 18
Environmental Performance Evaluation [ISO 14031] offers framework
Selecting Indicators – are they…
related to meaningful environmental conditions eg. air/water quality? sensitive to causal aspects and their changing? flexible or robust to changes in organisation to reveal trends,
independent of levels of business activity? relevant and understandable by interested parties? obtainable in a cost-effective, consistent, reliable and timely manner?
DIAGNOSING PERFORMANCE IMPROVEMENT
2. Collect Data & Convert to Information
3. Assess & Communicate Results4. Review & Improve EPE
1. Plan & Select Indicators
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 19
DIAGNOSING PERFORMANCE IMPROVEMENT
Simplified proxy measures
cost-effective - to limit the burden of data collection
understandable - suitable to integrate with business measures
Example Quantitative Measures - normalised using production output Non-renewable vs recyclate vs renewable material use Energy use Water use Emissions; solid, liquid, gaseous especially eco/human toxic substances
Qualitative Measures - broaden the evaluation to assess integration, such as: Environmental awareness & participation - highlight gaps Degree of product design-for-cleaner production Degree of conformance of suppliers to environmental criteria
Further work - relate projected measures to value, to prioritize action using ‘eco-efficiency’
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 20
DEVELOPING SME SUPPORT FOR INTEGRATING ENVIRONMENTAL SUSTAINABILITY
Support Process
- with measurementto demonstrateimprovement andtest effectivenessof approaches
- to be developedwith feedbackfrom trial SMEimplementation
Identify (& measure where appropriate) initial environmental performance
Identify priorities for improvementand needs for information, guidance and
training to overcome any barriers
Deliver information, guidance and training to enable action
Action within manufacturing and/or design
Identify (& measure where appropriate) improving environmental performance
CaseStudies
CaseStudies
Feedback
Feedback
MeasureMeasure
Info.Info.
GuideGuide
MeasureMeasure
Plan
Do
Check
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 21
CONCLUSIONS
Support for environmental sustainability in Midlands manufacturing SMEs should:
Address legislative compliance to introduce a change process which can go further.
Seek net cost benefits with an SME-friendly method of investment appraisal.
Appraise both current and future customer / market signals to find sources of value in addressing environmental aspects in products or production.
Build-in consideration of internal concerns and enable people to contribute to solutions through responding to demand for environmental awareness and skills.
Keep abreast of new solutions emerging in the field of cleaner technology and new channels for supply.
Enable cooperation between SME champions and external advisors, also suppliers with key expertise.
Offer guiding information through both the Internet and self-study manuals, backed up by local contact, involving customers, Trade Associations & suppliers.
Demonstrate benefits through measurement (EPE) seeking continuous improvement
Further work needed to help prioritize actions from projected measures of ‘eco-efficiency’
Tim Woolman, Warwick Manufacturing Group GIN Conference 5 July 2006 22
Eco-Product Innovation and Cleaner Manufacturing Technologies
Acknowledgements
Engineering & Physical Sciences Research Council, UK
Pro Enviro Ltd – particularly Mr. Steve Stones
Questions?
Tim Woolman Research Engineer – Warwick Manufacturing Group EngD Programme, UK
Direct Tel: +44 (0) 24 765 75960 [email protected]
http://www2.warwick.ac.uk/fac/sci/eng/engdoc/research/twoolman/
Dr Ali Veshagh Senior Lecturer – Warwick Manufacturing Group
Direct Tel: +44 (0) 24 765 23875 [email protected]