integrating environmental sustainability within manufacturing sme’s operations - development of...

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


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?


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


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



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.



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



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



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


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



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



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



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



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


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


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


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


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?


2. Collect Data & Convert to Information

3. Assess & Communicate Results4. Review & Improve EPE

1. Plan & Select Indicators



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’


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


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’


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]

integrating environmental sustainability within manufacturing sme’s operations - development of...

Documents

uk manufacturing smes

introductionuk smes

university of warwick

smestim woolman

uneptim woolman

environmental sustainability

surveys drivers

uk widepotential