FabShop Magazine - March 2012 - 36

››› PERsPEctiVEs

Rethinking SuStainability:
duction of waste in his own operation. There is a common misperception that sustainability efforts increase costs. But business leaders who have seen the benefits of sustainability initiatives disagree. Evan Smith, vice president and general manager at Hypertherm, the manufacturer of plasma and fiber laser cutting systems, explains that “when the quality movement first caught on in the 1980s, there was a common misperception that improving product quality meant increasing costs. In truth, improving quality reduces waste by eliminating defects, re-work and lost efficiency, which in turn reduces cost. Ultimately, companies that embrace quality benefit in two ways: better products (and higher customer satisfaction, price premiums, repeat purchasing and so on) and lower cost of operations for an improved bottom line.” Smith continues, “There’s a similar misperception that environmental sustainability carries a cost without a commensurate payback. As with any improvement project, sustainability initiatives often do have an up-front cost, in terms of investments of both time and money. At Hypertherm we have found the payback – in the form of reduced costs for things like packaging, landfill disposal, transportation and so on – to be clear. Reducing these wastes reduces our costs, which helps us stay competitive, provides increased cash flow to reinvest in research and development, and keeps prices down for customers. These things have become a source of advantage for us and are critical to allowing us to continue to invest in other things that are important to us, such as R&D and U.S. manufacturing.” Fabricators and manufacturers like Hypertherm are not the only ones considering the business case for sustainability. A recent Harris Interactive study found that 90 percent of executives at Fortune 1,000 companies feel a moral duty to sustainability. However, despite this strong support of sustainability, nearly two-thirds of those executives want to understand the potential return on investment before embarking on projects like energy efficiency. The key to determining ROI starts with measurement. It’s the only thing that can enable a business to translate its sustainability efforts into dollars. Answers to questions like “How much energy are we saving?” “How much packaging are we keeping out of landfills?” and “How clean is the air coming out of our buildings?” can provide a starting point for measurement. As the sustainability movement matures, this measurement trend is expected to trickle down to all businesses—including fabricators—to become a mainstream benchmark. Hypertherm began its measurement efforts a few years ago, and in 2010 unveiled new environmental sustainability goals. While the goals are aggressive (they include a commitment to generate zero landfill waste, to increase the energy efficiency of its products by 20 percent and to decrease the carbon impact of its business and logistics operations by at least 50 percent by 2020), Hypertherm is fully prepared to do what it takes to meet them. The company has devoted resources to sustainability, such as hiring a director of corporate social responsibility (CSR) who leads the company’s environmental efforts, but the team at Hypertherm will likely attribute its overall success to the fact that it has made sustainability everyone’s job. “As with anything that we do here, we want our environmental initiatives to be associateowned, team-driven and measurable. Above all, we want to create positive, lasting change in decision-making processes, behaviors and outcomes,” explains Jenny Levy, the company’s director of CSR. grassroots campaign While the company was intensely focused on measuring environmental impacts and identifying waste at the corporate level – efforts which included hiring an external consultant and engaging heavily with the companies’ own engineers, facilities and logistics teams – Levy’s team also quickly moved to engage associates at a grassroots level. Hypertherm asked all its teams to establish a Green Business Indicator (GBI), the environmental equivalent of a Key Business Indicator. The teams, which touch the company’s entire workforce, are charged with creating a GBI as a way to start thinking about how they can personally reduce Hypertherm’s environmental impact and ultimately its costs in a visible, measurable and meaningful way. The unique thing about the GBI program is that each team’s individual GBI is within their sphere of influence and control. For example, a team of office based associates might choose to measure—and ultimately reduce—the amount of paper or disposable cups they use in a given month. A team on the manufacturing floor might focus on reducing its energy usage by removing unneeded light fixtures and installing energy efficient bulbs in the fixtures that remain. A team in the company’s receiving area might choose to reduce the amount of packing material coming in the door by exploring better packaging options with its suppliers. While, for example, the company’s engineering leadership team is focused on long-term ways to reduce energy consumption of plasma systems, the order fulfillment team is focused on the lowest impact (and least costly) way to get those products to market. Levy explains, “As a company, we are striving to understand and reduce our impact on the environment. We manufacture industrial products that utilize electricity and consume additional parts throughout their useful life. We sometimes require critical components from locations far and wide. The fact that we have an impact is inevitable. However, the

FabShop Magazine - March 2012

Table of Contents for the Digital Edition of FabShop Magazine - March 2012