Lean manufacturing, also known as the Toyota Production System, is more than just a way to make your company more profitable, meet competitive challenges, and achieve sustainable competitive advantage. It also lowers your company's carbon footprint. Presented at ABB's Automation and Power World 2013, this presentation describes the ways that Lean Manufacturing can make your company not only more efficient, but also a better corporate citizen.

1. Tuesday March 26, Session 10311
Lean Manufacturing's Unexpected
Windfall: A Lower Carbon Footprint
Charles M. Cohon, CEO
www.primedevices.com

2. Lean usually is a way to:
Make my company more
profitable.
Help my company meet
competitive threats.
Achieve sustainable
competitive advantage 2

3. But not for today!
Make my company more
profitable.
Help my company meet
competitive threats.
Achieve sustainable
competitive advantage 3

4. Today Lean is a way to:
Reduce my company’s
carbon footprint.
Reduce my industry’s
carbon footprint.
4

5. Page 129
5

6. “Consider the waste of
overproduction, for
example. It is not an
exaggeration to say that in a
low-growth period such
waste is
6

7. “Consider the waste of
overproduction, for
example. It is not an
exaggeration to say that in a
low-growth period such
waste is a crime against
society more than a
business loss.” 7

8. Agenda
FNGP Seal & Gasket
recast from
Lean Manufacturing to
Green Manufacturing
8

9. Agenda
Transition from
Batch & Queue to
Single Piece Flow
9

10. Agenda
Two examples from
Lean Thinking
Lantech
Wiremold (power strips)
10

11. What are the traditional
ways to:
Reduce my company’s
carbon footprint?
Reduce my industry’s
carbon footprint?
11

12. Atmospheric emissions
Commuting
HVAC systems
Industrial processes
(ovens to fork lift
trucks)
12

13. Atmospheric emissions
Duplicated services
Two airlines that fly half
full planes from O’Hare
to Wichita may decide
to code-share.
13

14. Wastewater emissions
Sewage
Industrial processes
Underutilized
plating operations
may be consolidated.
14

15. Power Gen. Emissions
From lights and HVAC
From industrial
processes
A lean manufacturer can
speed the exit of high-
consuming operations. 15

16. FNGP (seal & gasket mfr.)
Ligonier, Indiana
Source: Mo. 1 Mo. 40
Lean Thinking,
Womack and Jones 1,155 1,800
Workers 21 3
Units/worker/mo. 55 600
Feet 2 utilized 2300 1200 16

17. Green Not Green
Company Company
Mo. 1 Mo.40 Mo. 1 Mo. 40
1,155 1,800 1,155 1,155
Workers 21 3 21 21
Units/
wkr./mo.
55 600 55 55
Feet2 2300 1200 2300 2300
17

18. Green Not Green
Company Company
Mo.40 Mo. 40
Workers 3 21
Units/
wkr./mo.
Feet2
18

19. How does this reduce
the Lean Company’s
carbon footprint?
19

20. Atmospheric emissions
Commuting
20

21. Wastewater emissions
Sewage
21

22. Green Not Green
Company Company
Mo. 1 Mo.40 Mo. 1 Mo. 40
1,155 1,800 1,155 1,155
Workers 21 3 21 21
Units/
wkr./mo.
55 600 55 55
Feet2 2300 1200 2300 2300
22

23. Green Not Green
Company Company
Workers
Units/
wkr./mo.
Feet2 1200 2300
23

24. How does this reduce
the Lean Company’s
carbon footprint?
24

25. Atmospheric emissions
HVAC systems
25

26. Power Gen. Emissions
From lights and HVAC
26

27. Green Not Green
Company Company
Mo. 1 Mo.40 Mo. 1 Mo. 40
1,155 1,800 1,155 1,155
Workers 21 3 21 21
Units/
wkr./mo.
55 600 55 55
Feet2 2300 1200 2300 2300
27

28. Green Not Green
Company Company
Mo. 40
1,200
Workers +2
Units/
wkr./mo.
600
Feet2
28

29. Green Not Green
Company Company
Mo. 1 Mo.40 Mo. 1 Mo. 40
1,155 1,800 1,155 1,155
Workers 21 3 21 21
Units/
wkr./mo.
55 600 55 55
Feet2 2300 1200 2300 2300
29

30. Green Not Green
Company Company
Workers 3+2
3
Units/
wkr./mo.
Feet2 2300 2000
1200
+800
30

31. Green Not Green
Company Company
Mo.40 Mo. 40
1,800 1,155
Workers 3+2 21
Units/
wkr./mo.
600 55
Feet2 2000 2300
31

32. How does this reduce
the this industry’s
carbon footprint?
32

33. Atmospheric emissions
Commuting
HVAC systems
Industrial processes
(ovens to fork lift
trucks)
33

34. Wastewater emissions
Sewage
Industrial processes
34

35. Power Gen. Emissions
From lights and HVAC
From industrial
processes
35

36. The Lean Manufacturer
accelerated the exit of a
high-consuming operation
36

37. Batch & Queue
37

38. V C W P
38

39. V C W P
39

40. V C W P
40

41. Productive Work
V C W P
41

42. Raw
Work In Process (WIP) Finished
Material
Goods
Excess Carbon Footprint
Unproductive Work 42

43. Excess Carbon Footprint
Early/unneeded emissions
Damage to inventory
Repair & scrap costs
Complex mfg. requires MRP
and/or ERP
Bar codes and/or RFID
Data center costs
43

44. Excess Carbon Footprint
Obsolescence
Rust and dust
Warehouse, racks,
warehouse personnel,
fork lift trucks, etc.
44

45. Excess Carbon Footprint
Intermittently defective work
can be hidden by excess
inventory.
45

46. V C W P
46

47. V C W P
47

48. Excess Carbon Footprint
Defects repeated across an
entire batch.
48

49. V C W P
49

50. V C W P
50

51. Single Piece Flow
51

52. Single Piece Flow
V C W P
52

53. Single Piece Flow
V C W P
53

54. Single Piece Flow
V C W P
54

55. Single Piece Flow
V C W P
55

56. Single Piece Flow
V C W P
56

57. Single Piece Flow
V C W P
57

58. Preventing Defective
Batches
V C W P
58

59. Preventing Defective
Batches
V C W P
59

60. Preventing Defective
Batches
V C W P
60

61. Preventing Defective
Batches
V C W P
61

62. Preventing Defective
Batches
V C W P
62

63. We never have the
time to do it ________
but we always find
time to do it ________
63

64. We never have the
time to do it right
but we always find
time to do it ________
64

65. We never have the
time to do it right
but we always find
time to do it over.
65

66. “We have a large salvage department,
which apparently earns us twenty or
more million dollars a year…
66

67. “We have a large salvage department,
which apparently earns us twenty or
more million dollars a year…But as
that department grew and became
more important and more strikingly
valuable, we began to ask ourselves:
67

68. “We have a large salvage department,
which apparently earns us twenty or
more million dollars a year…But as
that department grew and became
more important and more strikingly
valuable, we began to ask ourselves:
‘Why should we have so much to
salvage? Are we not giving more
attention to reclaiming than not
wasting?…’ ” 68

69. “…Our studies and investigations to
date have resulted in the savings of
80,000,000 pounds of steel a year
that formerly went into scrap and had
to be reworked with the expenditure
of labor…of upward of two thousand
men.”
1926
69

70. Henry Ford
Today and Tomorrow, 1926
page 98 70

71. Lantech Stretch
Wrapping Machinery
Disaggregate cutting,
welding and painting
departments
71

72. Lantech
Manufacturing Cells
V C W P
V C W P
V C W P
V C W P
72

73. Lantech (4 Years)
Defects/machine from 8 to 0.8
Lead time went from 16 weeks
to 14 hours.
End to expediting
End to MRP/ERP
Mfg. space cut in half
73

74. Wiremold (power strips)
Inventory substituted for
machine maintenance
Inventory substituted for
planning.
Massive back orders tied up
Customer Service
74

75. Wiremold (power strips)
Guaranteed no lean-related
firings in exchange for union
cooperation.
Co-location on factory floor
75

76. Wiremold (power strips)
Make cord sets as needed.
Customer service only touches
an order to enter it.
Shipping quickly and
completely, so no backordering
and no expediting.
76

77. Wiremold (5 years)
Customer service department:
Smaller
Cut order entry from 1 week to
less than 1 day
Errors from 10% to under 1%
77

78. Wiremold (5 years)
Manufacturing
Manufacturing space cut in half
Annual Productivity Growth
20%
Inventory turns 3.4 to 15.0
78

79. The Drill vs. The Hole
79

80. The Drill: Lean Thinking
The Hole:
Lower Carbon Footprint
80

81. Green Not Green
Company Company
Mo. 1 Mo.40 Mo. 1 Mo. 40
1,155 1,800 1,155 1,155
Workers 21 3 21 21
Units/
wkr./mo.
55 600 55 55
Feet2 2300 1200 2300 2300
81

82. Tuesday March 26, Session 10311
Lean Manufacturing's Unexpected
Windfall: A Lower Carbon Footprint
Charles M. Cohon, CEO
Prime Devices Corporation