Based on the latest reports from the Intergovernmental Panel on Climate Change (IPCC), it’s clear that there’s no time to waste when it comes to reducing our carbon footprint. In order to be sustainable, businesses can no longer afford to operate using traditional methods. Actually, they need to become leaner and faster by reducing their environmental impact. All while boosting employee engagement and productivity.
Climate Change and Cop26 Climate Summit
With COP26 now behind us, world leaders have been able to take a look at what they have created and focus on how they can implement it. For business leaders, there is a lot of work ahead.
Global climate change poses a problem for companies as their profit margins could be hit if they don’t reduce their carbon footprint quickly enough. As one of the largest contributors to greenhouse gases worldwide, businesses need to take urgent action now. With over 70% of global GDP generated by businesses, countries need them involved in reducing carbon emissions from many different angles – from protecting rainforests and investing in renewable energy sources, all through making smart decisions with their assets.
Why your Business should care about Climate Change
A growing number of businesses are taking action on climate change, both by reducing their carbon footprint and incorporating sustainability into their business strategies. By doing so, these companies are positioning themselves for future growth, better preparing themselves for global weather shifts, and positioning themselves as leaders in their industries.
Business leaders are under pressure to go green. Consumers are motivated to buy environmentally-friendly products, and the need to stay ahead of the competition is growing. The process of incorporating eco-friendly practices is necessary not only for operational excellence but also for sustainability. By eliminating waste, a company can make better decisions and create a better product or service. In addition to a greener, leaner business, this Lean model is also better for the environment.
Lean Concept, Principles and Practices
Lean is based on work carried out by Toyota Motor Corporation in its production system over many years. They were developed in large part by Taiichi Ohno, Shigeo Shingo and Eiji Toyoda based on their experience in manufacturing cars. Other contributors include engineers who worked with them at Toyota Motor Corporation during these same years.
Over time these concepts, principles and practices have been developed further through research by individuals at other companies besides Toyota Motor Corporation including researchers at universities across Japan, USA and Europe. These ideas and methods have also been introduced into a number of service industries such as healthcare, insurance and pharmaceutical organisations worldwide.
Why should my Business use Lean Principles?
The world is changing rapidly. Traditional business models are being tested every day, and managers are constantly looking for ways to identify threats and take advantage of opportunities ahead of their competitors. A move toward leaner, more efficient operations offers one way for companies to better cope with these challenges. Several methods within Lean offer significant value when applied properly, including across supply chains and in businesses themselves.
5 Ways to use Lean in your Business to prevent Climate Change
Even though we can’t stop climate change, we can prepare for it in a way that will benefit our businesses in many ways. And if we don’t, we could end up in a precarious position, one in which we need to make significant changes to how we operate, when there is less time and money for us to do so.
Lean helps us make better decisions about where our future value lies. These methods work well with any team size and budget. By applying these simple business techniques, you’ll be able to detect major issues before they take hold. You’ll also be able to identify opportunities that present themselves during times of uncertainty—times like these.
When you’re considering changes like moving factories inland, reducing carbon emissions through different strategies like buying carbon credits , rethinking transportation routes, reducing packaging or altering production processes, Lean can help support this process.
Companies in every sector must develop strategies that help them respond to these changes in climate and energy
Growing concern over climate change has led governments to take action in an attempt to reduce global greenhouse gas emissions and pollution levels. However, as individuals and businesses, we all play a role in preventing further environmental damage and improving the quality of our planet’s atmosphere. This 5 Part Guide will show you how to use Lean business tools such as Elimination of Waste, Pull and Flow, and Kanban to build greener products and services that better the planet for everyone.
1. Eliminate Waste
As most Lean business tool users are aware, wastes are anything that prevents your customers from getting what they want. The first principle of Lean is value and the opposite of value is waste. Eliminating all forms of waste contributes directly to preventing climate change. If you can eliminate even one item that’s causing you—or your customer—to burn carbon, then there’s potential for significant carbon savings. For example, if you can reduce or eliminate packaging or don’t ship inventory that you don’t need, it will be better not only for your business but also for our planet.
2. Pull & Flow
As mentioned earlier, Toyota is famous for just-in-time manufacturing. This idea, which relies on suppliers providing exactly what is needed and when it’s needed, came from Taiichi Ohno (the man who created and pioneered much of Toyota’s lean methodology) and says: Build only what you need. Make only what you will sell. Deliver only what has been ordered. This system works well in a pull and flow model where products or materials are pulled as needed as opposed to being pushed through as fast as possible. The result reduces waste, increases efficiency, and encourages better collaboration between organisations. Applying principles like build only what you need can be applied to our climate change problems by working together with natural systems so we don’t work against them.
We all know we need to minimise waste and shift toward a more circular economy, but most businesses aren’t where they need to be. You can future-proof your business—and its bottom line—by putting flow and pull strategies into action today. Simply put, flow strategies use materials efficiently and pull strategies ensure that valuable materials don’t go to waste. By integrating these principles into your operations, you can increase profits, reduce costs and lessen your impact on climate change.
3. Value Stream Mapping
We can use value stream mapping, or VSM, as a tool for preventing climate change. It helps businesses understand how waste and inefficiency creeps into their production processes. By doing so, it assists with discovering opportunities for improvement—and, ultimately, reducing your environmental impact. To prevent climate change using VSM, take an honest look at your product or service’s value stream. Are there redundant steps? Can you find ways to eliminate defects? Once you create a basic map of your production process (essentially creating what you do each day on kanban boards), identify areas of waste and brainstorm ways to decrease your carbon footprint without sacrificing efficiency or profitability.
Every company wants happy customers who keep coming back for more. To keep those customers happy after their initial purchase, companies invest a lot of money into customer satisfaction studies every year . Unfortunately, fixing poor quality products comes with hefty price tags since most quality issues require part redesigns or retooling altogether. What might surprise you is that improving quality only needs four percent of your product costs on average. This small investment will go far towards providing long-term return because higher quality equates to lower warranty costs over time, not just happier customers today.
4. Kanban
While Kanban is often referred to as a signalling system, it can also be used to ensure your workflow doesn’t cause unnecessary environmental waste. On a logistical level, streamlining material flow in a factory has been shown to increase productivity. Even a small reduction in supply chain waste could have huge repercussions for climate change.
Kanban’s pull and flow structure is especially useful for projects that involve a lot of people—like large construction or renovation projects—where you need all your team collaborating together. Kanban keeps everyone on task, saves time by eliminating work in progress, and makes sure you use resources as efficiently as possible.
5. Continuous Improvement
Starting today, organisations can implement one action at a time that will help reduce your carbon footprint. The key is just being mindful of every action you take that might impact climate change in any way. Keeping track of these actions can help create positive habits and foster an environment where future innovation is encouraged.
Ideas can come from anywhere, but once you’ve got one, don’t stop there. Once you have a solution in mind, test it. If your team is on board with improvement tools like 5S, Kaizen and Kanban they should be able to give you immediate feedback as soon as something isn’t working as planned. If your office doesn’t already use these tools, take some time out of each meeting or brainstorming session to implement one of them, and watch how it impacts productivity—you may be surprised by what other departments can do if you let them collaborate and run their processes leaner.
Before tackling climate change and pollution, we need to tackle our own impact on the environment. Continuous improvement is a management technique—often associated with lean business tools—that forces us to carefully monitor and assess our individual and collective performance. In its simplest form, continuous improvement involves taking note of what’s happening in your workday, then looking for ways you can do better tomorrow.
Where will Lean be used in the future to prevent Climate Change?
Let’s start with what we already know. According to the OECD Environmental Outlook to 2050 report, the population of the world is expected to increase from 7 billion today to over 9 billion in 29 years. As a result, this growing population will put an enormous pressure on our natural resources. Furthermore, global GDP is expected to quadruple by 2050. We don’t need much more evidence than these statistics to realise that every company must act now.
Lean can help your business to optimise each part of your value stream which in turn helps you win customers, reduce risks, improve product quality, and increase responsiveness.
While it’s impossible to predict exactly how climate change will affect us all, or when it will happen, there are small actions we can take now to mitigate these threats by improving our business processes using Lean tools and techniques.
Be Proactive Not Reactive
As a business leader, you know that climate change is happening. It’s time to make sure your business is prepared for what’s next. We’ve already seen extreme weather events like drought, flooding, heat waves, and massive storms become more common. And when they do strike (which they will), they can affect everything from employee morale to transportation routes. Small businesses are particularly vulnerable because many don’t have formal contingency plans in place.
Eliminating fossil fuels and reducing our carbon footprint is necessary for ensuring humanity’s long-term survival, and, in fact, it can be a profitable activity. That is not an alternative fact. It’s a business reality. The more we start acting on climate change now, rather than ignoring it or hoping it will go away on its own, the more opportunities there will be for innovators and new businesses to create jobs while helping to mitigate some of these risks.
The COP26 climate summit should serve as a call to action—not just for governments around world but also for businesses of all sizes who have a role to play in our collective future.
For further information on how to use Lean Business Tools to help prevent climate change, contact us for a free online consultation.
