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Antwerp – Atlanta – Köln Phone: +1 (770) 956-7118 London – Paris – Rotterdam www.ompartners.com Sponsored by: Find us on: Use your smartphone [email protected] code reader to learn more: 10124-MHIA MDX_Attnd_Spply_APICS.indd 1 9/13/11 2:49 PM APICS magazine November/December 2011 Volume 21 | Number 6 26 30 34 38 “Many executives are unable to answer even the most basic questions about their companies’ environmental impacts.” page 27 FEATURES 26 Sustainable Shipping 34 From End to End DEPARTMENTS 18 Relevant Research Initiatives The APICS Interview 24 Software Review 4 APICS Report By Kyle Alexander Read about Procter & Gamble’s 49 Case Study 5 Membership Matters sustainability research and related Reduce your company’s 50 Lessons Learned initiatives. 6 Industry Watch transportation costs and environmental impact. 8 Ask APICS Resources 38 Innovation Over 9 Building Blocks 30 Onto Greater Heights Carbon Ideology 42 S&OP Directory 10 Lean Culture 44 Product Showcase By Ingrid Ostby By William A. Levinson, CFPIM 11 Working Green 46 Profile in Manufacting Improve efficiency and productivity Learn how to identify what adds 14 Management Perspective with this step-by-step guide to value and what doesn’t in order to greener buildings. reduce overall waste. 15 Enterprise Insights 16 Executive View View publication, staff, and editorial advisory board information here. View the APICS board of directors and APICS magazine (ISSN 1056-0017) is published bimonthly by APICS The Association for Operations Management, 8430 West Bryn organization contact information here. Mawr Ave., Suite 1000, Chicago, IL 60631-3439. Phone: (773) 867-1777. Canada Post International Publications Mail (Canadian Distribution) Sales Agreement No. 571423. Periodicals postage paid at Chicago, IL, and additional mailing offices. Subscriptions: $65 per year U.S., $77 Canada/Mexico, $93 elsewhere. Copyright © 2011 by APICS. All rights reserved. Printed in the United States of America. POSTMASTER: Send address changes to: APICS, 8430 West Bryn Mawr Ave., Suite 1000, Chicago, IL 60631-3439. 2 November/December 2011 | APICS magazine APICS magazine | November/December 2011 3 APICS We encourage you to share your APICS stories. Membership Report Visit apics.org/membershipmatters today. Matters By Elizabeth Rennie Gain Knowledge, Make Pride and Dedication Gary A. Smith, CPIM, CSCP Connections, and Succeed in 2012 Giving back to the profession through APICS Director, Supply Chain Operations New York City Housing Authority In October 2010, Gary A. Smith, CPIM, CSCP, attended the APICS Whatever your professional goals, APICS channel partners offer courses Move your career forward International Conference & Expo in Las Vegas. While there, he had APICS membership can help you reach across the globe through APICS APICS offers many different resources the opportunity to present a session on what his organization calls “no them. chapters in the United States, Canada, to help you find the right position. excuses supply chain management.” Smith, who is director of supply chain Goal 1: Add to your knowledge, and Mexico, as well as with APICS APICS Career Center. Whether you operations at the New York City Housing Authority (NYCHA), says this skills, and employability. Move your international partners. are just beginning your career in opera- 178,000 low- and middle-income apart- methodology can remove the barriers that stand in the way of process career forward by earning the APICS APICS online courses provide tions management, are unemployed, ments at 334 developments within the improvements. Certified Supply Chain Professional a convenient way to review for your or are just looking for a new challenge, five boroughs of New York City,” he (CSCP) or APICS Certified in APICS CPIM exams. The online, the APICS Career Center offers the explains. “We manage more than 30,000 Production and Inventory Management independent study format gives tools to make your job search easier Smith followed up that presenta- which I am proud to be a part,” [stockkeeping units] and purchase (CPIM) designation. you the freedom to access the courses and more effective. tion this year at APICS 2011 with his he says. “Through my volunteer approximately $60 million annually— Goal 2: Connect with your peers. anytime and anywhere, as well as APICS competency models. The educational session, “The Sustainable activities, I have met a number of ranging from appliance, electrical, and APICS conferences around the world the flexibility to study at your own APICS competency models were No Excuses Supply Chain.” He dis- excellent supply chain professionals.” offer unmatched educational opportu- pace. And APICS CPIM self-study developed to allow professionals to rank cussed strategies to help operations and plumbing parts to office supplies, tools, nities and the perfect setting to network options offer a variety of resources their skills against other professionals supply chain management profession- Sustainable career success and vehicles.” with peers. to help you prepare on your own. and identify areas for improvement. In als dramatically increase the pace of Smith originally joined APICS in Because his department is respon- Goal 3: Find a new and exciting To learn more, visit apics.org/cpim. addition, they are essential for hiring their sustainability initiatives, teaching 1998 with the goal of becoming sible for sourcing such a wide variety of position. Start your job search at the managers who are evaluating and com- attendees how to develop a greener certified. Since then, he has earned materials, Smith says the APICS body APICS Career Center’s job board. Attend APICS conferences paring candidates. supply chain and overcome the obsta- both his Certified in Production and of knowledge has enabled his team to around the world APICS Career Packs. Access these cles to sustainable business that exist Inventory Management (CPIM) and reduce working inventory by almost Earn your APICS CPIM or CSCP Asia Supply Chain & Operations career-focused packages to help you between an organization, its suppliers, Certified Supply Chain Professional 50 percent, maintain in 2012 conferences manage your career growth, strate- and its customers. inventory accuracy at The APICS CPIM and CSCP designa- There are two opportunities to gically set goals, and measure your Both presenta- tions demonstrate to employers your connect with your peers from Asia progress against information provided tions included “Through my volunteer activities, I have met a 5.4 sigma, and achieve dedication to the operations and supply and across the globe in 2012 at the Asia by peers in similar positions across the real-world examples number of excellent supply chain professionals.” a fill rate of more than chain management profession and Supply Chain & Operations conference. globe. Each APICS Career Pack con- from the NYCHA 95 percent in 2010. bring your performance to the next April 2–3, 2012 Seoul, South Korea tains job descriptions, career paths, and and illustrated how “We have also imple- level. APICS has many resources to help April 5–6, 2012 Shanghai, China competency models by title for those the application of mented an early pay- you study, prepare, and succeed. Best of the Best S&OP conferences in the field of operations and supply the “no excuses” technique brought (CSCP) designations. In fact, he was ment discount program where we pay APICS CSCP Learning System Access the most talented presenters chain management. significant improvements to its supply among the inaugural class of CSCP vendors in 10 days and take a 2 percent free demo and industry experts to help you To jump-start your career today, chain. Smith says it was a privilege designees in March 2006. “I believe discount as a result. Our recovery rate is The APICS CSCP Learning System improve or implement your sales and visit apics.org/careers. to demonstrate these successes to certification is extremely important,” more than 96 percent, and the total dis- APICS conference attendees, add- Smith says. “It helps you stay at the is an effective study tool. The program operations planning (S&OP) process counts taken in the last three years have APICS magazine essay contest ing that he believes volunteering to top of your field.” is a complete and easy-to-use learn- at two S&OP conferences. totaled more than $1 million.” ing and reference tool, enabling you June 14–15, 2012 Chicago, USA winner announnced be “extremely important as a way to Smith has been in his current posi- develop leadership skills and give back tion at the NYCHA for seven years, Most importantly, however, Smith to work at your own pace and increase May 9–11, 2012 London, England Congratulations to Erica Jehling, CSCP, to your profession.” after spending more than 25 years in says the APICS body of knowledge helps your understanding of supply chain 2012 APICS International who won the 2011 APICS magazine In addition to sharing his expertise at private industry as a logistics and his team “speak the language of vendors. concepts. To learn more and access Conference & Expo essay contest with a compelling a free demo, visit learncscp.com. Join us for the supply chain and description of how APICS affiliation has APICS conferences, Smith is an APICS supply chain consultant, engineer, We are better equipped to get the best magazine author and codirector of New and manager. “At NYCHA, the sup- helped her succeed professionally. She price, service, and quality.” APICS CPIM exam preparation operations event of the year, October York City programs for the New York ply chain operations department is received an iPad 2, and her essay will options 14–16, 2012, at the Colorado City-Long Island (NYC-LI) chapter. responsible for procurement, inventory appear in the January/February 2012 Elizabeth Rennie is managing editor of Leverage various exam preparation Convention Center in Denver. “The NYC-LI APICS chapter has some control, warehousing, and delivery options to maximize your results To learn more about these events, issue. of the most dedicated volunteers on its of noncapital material used in the APICS magazine. She may be contacted at and expedite the certification process. visit apics.org/events. board and a tradition of excellence of ongoing operation of more than [email protected]. 4 November/December 2011 | APICS magazine APICS magazine | November/December 2011 5 1 2 3 4 5 6 7 8 9 10 i ii Industry News items may be submitted to [email protected]. Watch High-resolution, color photographs are encouraged. Automated storage and retrieval ning the Android operating system. The suite can create Mobile computing status and asset updates can be made Glacier Computer has announced the through global positioning systems, Kardex Remstar has released the Megamat RS vertical tasks and transmit to workers in the field in real time; availability of the T507K, a rugged tablet cell phones and mobile computers, carousel for goods with high picking frequencies. The identify equipment, information, and constraints specific computer for industrial applications. The radio frequency identification automated storage and retrieval system features an to individual tasks; keep track of vehicles such as seven-inch display tablet features a camera, devices, or Smart Track’s own automatic chain tensioner, whereby the drive chain trucks, trailers, cars, and cranes used by radio frequency identification reader, and interface. Features include real- tension is determined using the weight of the motor, a mobile workforce; and ensure legal two-dimensional bar code reader. In addi- time visibility of location, esti- eliminating the need for frequent chain retention- and contractual compliance. tion, it is drop-tested six feet to concrete mated time of arrival, status, and ing. Other features include an emergency crank and includes graspable handles, anti- condition; asset usage analysis by handle for operation during power outages, Syncron has released Global vibration control, and vehicle cradles. facility, region, or enterprise; and a lightweight sliding door, and a clip system Inventory Management, a information sharing with clients, for fast and safe panel assembly. cloud-based inventory man- Radio frequency identification vendors, and carriers. agement software suite for the Bar coding manufacturing and distribu- Switzerland-based Albis Technologies has made available Zone Monitoring and Find (ZOMOFI) gate Swan & Hercules Global Logistics has par- FastPic has unveiled FastPic5, an inventory tion industries. It includes access management system, an RFID tool for ensuring autho- nered with Rockfarm Logistics to create global, end-to- management software suite used with bar utilities for managing inventory rized entry end logistics solutions for small and midsize shipment com- code readers. Pickers scan parts and locations planning across an entire supply to sensitive and controlled areas such as warehouses, storage panies. The partnership specializes in solutions for shipments with a reader, as a part is put into inventory chain, inventory level optimiza- areas, and stockrooms. Active RFID technology enables that include China as an origin or destination. Company verifying it is being placed in the correct storage tion, demand planning and fore- the process without needing to directly present an access leaders say it will give their customers the opportunity to area. In addition, the software can be configured to casting, and replenishment planning. card. Features of ZOMOFI include hands-free badges, compete with larger competitors in both key bar codes to storage locations based on transaction, Global Inventory Management uses a web configurable sizes for monitored zones, and sub-zero total delivered cost and reduction type, or material. FastPic5 is designed for both manual and browser, requiring no software or hardware installation. temperature operation. of inventory. automated storage and retrieval systems and is compatible with single workstations or multiple work zones. Track Software announces Track 6.2, a labor cost manage- Shop floor BEA has released ment software suite. The tool includes an enhanced Fastems has introduced MMS5, a manufacturing execution Matrix, an induction Lucas Systems has partnered with Barcoding to jointly sell reporting module that can schedule email report delivery system (MES) for flexible manufacturing, automated ware- loop detector for and market Jennifer Voiceplus, a mobile software solution and large amounts of data to execute during off-peak hours. housing, tool management, and robotic cell integration. industrial doors and for voice picking in warehouses. The software can be run Features include uploading data from enterprise resources Features of the MES include a dashboard for online report gates. In the single- on industry-standard mobile devices and includes a suite of planning and project management systems, customizable viewing, a data management utility for planning and auto- loop version of the process reporting, productivity management, and other tools alert messages, and schedule and skill change request and matically rescheduling jobs at loading and machine tooling detector, the Matrix that complement existing warehouse management, labor approval utilities. stations, an ergonomic touchscreen operating panel, and activates and holds management, and back-end systems. Material handling job optimization utilities. open a gate whenever Enterprise REMCON announces Rollet, a lightweight, easy-to- a vehicle enters its field Rice Lake has released Counterpart, a configurable piece of view. A double-loop Agentrics has made available Discovery Services, an online maneuver pallet system for material handling. The pallets counter for parts of nearly any size or shape. The Counterpart model also is available, which service for sourcing and procurement, to multiple indus- are composed of polyethylene, resist denting, and have links to floor scales, bench scales, and laboratory balances, can perform a second function tries including manufacturing and service. The online tool no sharp edges. Features include adjustable shelves, modu- and integrates with many bar code readers, label printers, and using the same detector. Features include four frequency enables companies to identify new lar construction, ability to assemble individually or double- inventory management software utilities. settings for reducing cross talk, integrated potentiometer for sources of supply, give complemen- wide, and customizable colors and company logos. A digital readout enables an operator fine-tuning sensitivity, adaption to changing weather and tary information to suppliers, to view weight, description, and temperature, and outage-resistant memory capability. and improve supplier search Robotics developer Seegrid has partnered with quantity simultaneously. criteria. Features include material handling solutions provider Cisco- integration with an online Eagle to develop robotic industrial truck equip- Transportation and bidding platform, email ment. The partnership serves the food and logistics templates, and event beveage, consumer packaged goods, grocery, Smart Track Logistics has reporting. general manufacturing, pharmaceutical, and unveiled Integrated Asset warehousing and distribution markets. The Tracker, a cloud-based soft- Netherlands-based Billoo automated trucking units are intended to help ware suite for asset tracking, Pass has released Appoint, customers optimize workflow processes, increase visibility, control, and optimi- a task-scheduling software productivity, and reduce manufacturing and distri- zation of global freight. Freight suite for mobile devices run- bution costs. 6 November/December 2011 | APICS magazine APICS magazine | November/December 2011 7 Ask Building Send APICS your operations or supply chain To comment on this article, send APICS management questions to [email protected]. a message to [email protected]. Blocks By Jonathan Thatcher, CSCP By John P. Collins, CFPIM, CSCP, and Eric P. Jack, PhD, CFPIM, CSCP Getting to the Bottom incorporate your study knowledge. Is Mindful and Aware Achieving that goal wasn’t easy; the article missing content that SMR nor was it inexpensive. The operations demands? Where is the article right people had to look at each of their of It or wrong? See http://blogs.hbr.org/ One company’s (Puget) Sound sustainability manufacturing processes carefully and hmu/2009/03/four-fatal-flaws-of- initiatives fine-tune them with extreme precision. strategic.html for a good example of Interestingly, this rexamination is simi- To conquer certification exams, think like an article to begin your exploration. lar to what many companies experience a detective Strategic thought can be likened to as they work to become lean. The Pacific Northwest is a beautiful place. The combination of forests, creating a story of processes, decisions, Businesses face many challenges— outcomes, and cause and effect. If snow-capped mountains, and water provides year-round opportunities for especially in economic downturns Reader C.S. writes, “I have taken the Strategic Management of Resources strategy seeks a specific outcome, and people to enjoy the outside—as long as a little misty rain doesn’t stop you. like the one we are experiencing now. (SMR) exam twice without passing, although I have gotten close to the that outcome occurs, what will the The pressure to reduce costs, be more passing score. My main problem is many questions seem to have two or environment look like then? You also The diverse wildlife on Puget Sound • good islanders, working to protect the more right answers. How do I determine the correct one?” must question the basis of your assump- is amazing. Where else can you see water that surrounds their facilities tions. If you cannot make a clear connec- signs that caution you of otter crossings • good employers, providing employees tion to a topic in the exam content and be alerted via text messages of daily with a safe workplace and competi- First, it’s important to note that SMR For SMR, this means case studies, manual, you may need to approach orca sightings? The area also is rich with tive pay stands apart from the other Certified in simulations, and game theory. The MIT the question from a different angle. a history related to Native Americans, • good stewards of investors’ money, Production and Inventory Management Forum for Supply Chain Innovation many of whom still fish these waters. aiming to generate an acceptable (CPIM) exams as it is a synthesis exam, offers a free, online “Beer Game” to Sharpen your exception logic Salmon are considered by many as a return by operating cost effectively demanding the ability to integrate help with supply chain game theory. If you were writing mastery-level treasure that must be nurtured and pro- and profitably. all concepts in CPIM. Mastery-level Replay the challenges that you exam questions and answers, how tected—before eventually being eaten. This evenhanded strategy is most certification exams require knowing not or your organization faced. Draw would you write the incorrect choices? Awareness of past excess guides an evident in the manufacturer’s efforts only what is right, but what is wrong Use methods such as the following: enforcement of environmental codes to protect the sound from pollutants, and why. This is especially critical • “That would be correct, except for …” that is one of the strictest in the country. particularly copper. Copper is fairly in the SMR exam, because strategic • “It’s almost right, but the problem is …” There are approximately 3.5 million prevalent, collecting on city streets If you cannot make a analysis takes a big-picture perspective. • “This doesn’t work as intended because …” people living here, many of whom are from rain and cars. In fact, the copper It examines what is present, what is clear connection to • “This looks complete, but it’s missing …” highly environmentally aware and insist content just from runoff of those streets hidden or missing, and the role of cause a topic in the exam • “It’s on its way to being correct, but …” that work done in the area is performed is 10-to-12 parts per billion. and effect in decision making—specifi- During the exam, stay within the scope responsibly in order to protect the land, The problem is, copper in water is content manual, you cally with regards to facilities, the sup- of each question and answer choice. the air, and the water. As such, busi- harmful to some fish, especially baby ply chain, information technology, and may need to approach Avoid forcing unsupported external nesses in the Pacific Northwest must be salmon. Thus, the business must take organizational design. the question from a presumptions into the question. Use environmentally accountable. into consideration its several acres, competitive, and protect our fragile Once you complete the SMR course- exception logic to identify the property One manufacturer, on Whidbey which accumulate a lot of rain water, work and have read the associated different angle. environment can be consuming. As in the single best answer. For example, Island north of Seattle, has particularly plus considerable work done on and sources and references, it may seem operational professionals, it is up to maybe the right answer is more consis- sensitive sustainability issues. Because of with metal. There is clear opportunity there is nothing more to learn. But put us to figure out how to balance all of tent in its best practices approach. Or it its proximity to the water, the likelihood for copper to get mixed into the rainwa- on your detective’s hat and perform the these demands. Does your business take may require dependencies that rule out of pollutants escaping from the work ter, and this obviously is undesirable. following steps to see what you might on your professional experience to a balanced approach to sustainability? less-than-best practices. site is high. The island where it is located The Washington State Department have missed. make connections to the material. The SMR exam rewards actual experi- is home to a divergent population that of Ecology says that no more than Master the terms and definitions. What strategies were in effect at the John P. Collins, CFPIM, CSCP, is chief ence and hands-on practice that simulates includes retirees, artists, and working 5.8 parts per billion of copper can be This means more than simple memori- time? Did they work well? Did execu- executive officer for Nichols Brothers experience. The exam demands the ability families–and many of them care strongly discharged to the sound. This mandate zation. Know the distinctions between tion of strategy occur as planned? Boat Builders. He may be contacted at to attentively grasp each question in its about protecting the environment. is half the amount that is in normal definitions, why those distinctions exist, What would you change and why? [email protected]. entire scope and apply exception logic to In response, this manufacturer chose a runoff and one of the most restrictive and the situations that require those Also, play the role of consultant, treat- distinctions. A good way to tell if you’ve ing your challenges as the customer. each answer choice. Only the right answer balanced approach in order to achieve its copper limits imposed anywhere in the Eric P. Jack, PhD, CFPIM, CSCP, is reached this level is by explaining the Can you solve all the problems with will survive the power of superior logic. business goals while considering environ- United States. Through a combination associate dean at the University of terms and definitions to a novice. the ability of a skilled consultant? mental impact. For example, company of filtration processes and best prac- Alabama–Birmingham. He may be Jonathan Thatcher, CSCP, is director of Can you convey the nuances in simple Find and read strategy manage- research for the APICS professional leaders there strive to be tices management, this manufacturer contacted at [email protected]. • good neighbors, aware of the noises regularly discharges its runoff to the language and explain why they exist? ment articles—in particular, those that development division. He may be contacted and smells that come from an active sound with copper content of 3.0 parts Put learning into practice. Support bring up weaknesses or flaws in com- at [email protected]. industrial work site per billion or less. your study with hands-on activities. mon business practice. Find areas to 8 November/December 2011 | APICS magazine APICS magazine | November/December 2011 9 Lean To comment on this article, send To comment on this article, send Working Culture a message to [email protected]. a message to [email protected]. Green By Ron Crabtree, CIRM, CSCP, MLSSBB By Antonio Galvao, CSCP Road Work Ahead Top Priorities Finally, she says the risks inherent in a global economy are key issues affect- Overcoming inefficiency starts with people ing the sustainability movement. Supply The right objectives for your green supply chain chain, sourcing, and manufacturing operations are increasingly global—and increasingly interdependent. For that In the last “Lean Culture,” I discussed my work with the Michigan reason, disruptive events pose real Department of Management, Budget, and Technology implementing The fact that sustainability continues to evolve serves as evidence of threats to an organization’s sustainabil- business process reengineering and improvement initiatives. I named two its enduring nature as a major business trend. As our knowledge has ity plans. roadblocks to process improvements: unwillingness to break the status developed, companies have become more demanding of themselves and But this much is certain: Companies quo and focusing on turf instead of outcomes. their trading partners. will continue to develop business models aimed at improving operational My position as a consultant and The people who work in govern- 3. Overlooking the importance of According to recent analysis by generally, green building—particularly efficiency and reducing costs—in other mentor in the Michigan state govern- ment operations are not the problem. public awareness. Only an informed Gartner, businesses committed to in the commercial segment—continued words, business models designed to ment has led me to discover three The problem lies in the wasteful public can support nonpartisan sustainability are marching to the beat to grow, Fernando points out. reduce waste, whether in the form of additional roadblocks, as well as the processes these employees are approaches and the necessary leader- of a new drummer. “The sustainability Water, likewise, is a matter of escalat- carbon emissions, excess energy, water path to take to wring out waste and forced to adhere to. In fact, the ship and resources to effect change. big picture has shifted,” says Hiranya ing concern among businesses today, consumption, or any other form that bring about meaningful change. best solutions to eliminating waste Fernando, senior research analyst. as the gap between demand and supply negatively affects both the environment 1. Not facing the reality of cost. are through inclusive approaches that Getting directions “The focus now is on operational and continues to widen. Fernando says and the bottom line. It just makes good More than 80 percent of the cost So, where do we go from here? For resource efficiency as opposed … competition will intensify, causing business sense to do so. involve current employees. This leads in government comes from staffing. starters, get involved with your govern- heavy emphasis on carbon and carbon professionals to reevaluate their water to the next roadblock. The difficult truth is, if government ment. Make sure your voice is heard. emissions.” use targets. Antonio Galvao, CSCP, is vice president 2. Not leveraging people to enact operations are to cost less, there I once learned a secret from a lobbyist Fernando identified nine issues Information technology also is value chain Europe at Diversey, a provider changes. Who are the experts at need to be fewer employees work- in Lansing, Michigan: When a repre- influencing green business decisions assuming a new role in sustainability of commercial cleaning and hygiene performing value-added work for ing smarter to provide high-quality sentative gets a mere 10 emails about today. Many of them involve goal practices, as software solutions are solutions. He may be contacted at the public good? It is those individu- services to the public. While leaders a particular subject, he or she gets reassessments and follow-up action developed to manage energy efficiency [email protected]. als in government who currently per- already are making efforts to ensure nervous. Not hundreds or thousands, from supply chain, operations, and and reduce costs, rather form those services. If we can engage that government workers are compen- but 10. manufacturing professionals. The than assure regulatory the government workforce in innovat- sated equitably with the population Find the venue that works best trends underscore the position that compliance and track at large, this is not nearly enough. We ing and reengineering how public for you to be heard on the topic of this department has advanced since its progress against carbon- APICS extra services are performed, maganged, must accept that working smarter is improving operations, and speak up. inception: Environmental stewardship reduction targets. At the possible; thus, we need With a loud, frequent, uni- makes good business sense. Indeed, her same time, companies APICS Extra Live: Real-World Strategies for fewer public employees. fied, and nonpartisan voice analysis begins by calling the move- have sharpened their Improving Operational Efficiency Another startling The best solutions to eliminating waste insisting our leaders must lead ment away from regulatory-driven focus on identifying fact discovered through transformation and eliminate sustainability models toward a total- sustainability gaps at lean six sigma and are through inclusive approaches that waste, we have a shot at build- cost-of-ownership model in which all every stage of a prod- Presented by: Date: December 12, 2011 business process reen- involve current employees. ing the necessary momentum water, energy, and waste management uct’s life cycle, with an Antonio Galvao, CSCP Time: 1 :00 p.m.–2:00 p.m. CT gineering is that, on to make fundamental changes practices are taken into account. Energy eye on reducing costs. Author, “Working Green,” APICS magazine average, 50 percent of and implementing lean six efficiency is at the forefront of corporate The spotlight on cost Attend APICS Extra Live to gain deeper insight into the November/December every tax dollar spent sigma, operational excellence, thinking, Fernando points out, due effectiveness is being APICS magazine “Working Green” department by Antonio Galvao, CSCP, and learn from real companies that have used their sustainability initiatives to in government operations is wasted. I and delivered, the results would be and business process reengineering to sharply rising prices for crude oil, driven in part by contin- significantly cut waste and boost the bottom line. am not trying to vilify the folks who amazing. The will and the courage throughout all areas of government. gasoline, natural gas, electricity, and ued uncertainty in the work in government. Nearly every to make operational excellence an heating oil. regulatory environment, In this APICS Extra Live, you will learn government employee I know is at across-the-board mandate are crucial, Ron Crabtree, CIRM, CSCP, MLSSBB, is To be sure, the race for clean tech- where rules at different • examples of the sustainability movement shifting away from compliance and toward a total-cost-of-ownership model least as hard working and dedicated as are the appropriate leadership and president of MetaOps and coauthor of nology, slowed in 2009 by “the great levels of governance • solutions for managing energy, reducing expenses, and identifying as those in the private and nonprofit resources. In addition, we also must four books on operational excellence. He recession,” has once again heated up, often are inconsistent. sustainability gaps at every stage of a product’s life cycle sectors. I have seen many unionized invest in the training, education, and also writes an online magazine; runs an with venture capital investments in Thus, knowing which • why efficiency must be at the heart of corporate philosophy. government employees work willingly support that employees will need to online radio show; and teaches, presents, 2010 approaching 2008 highs. And laws to follow and how off the clock to make sure that public do the heavy lifting demanded by and consults. He may be contacted at although the recession had a negative to follow them can be REGISTER ONLINE AT APICS.ORG/EXTRA. good is served. [email protected]. impact on the construction industry difficult, Fernando says. these changes. 10 November/December 2011 | APICS magazine APICS magazine | November/December 2011 11 In Recognition of APICS Chapter Presidents The APICS community gratefully acknowledges the chapter presidents who have dedicated their time, talents, and unique skills over the APICS is thrilled to recognize the incoming chapter presidents, who will contribute their time, energy, leadership, and unique skills to past year. Their commitment to APICS as leaders and motivators, as well as their dedication to furthering APICS membership, is deeply ensure the vitality and continued success of their chapter. Their guidance and innovative thinking will be essential in shaping their appreciated. APICS commends these chapter presidents and the dedication of more than 2,000 volunteers who serve at the chapter chapters during the coming year and beyond. We wish them all the best as they undertake this challenging and rewarding leadership level. Join APICS in honoring the 2010–2011 chapter presidents for their service. role in the APICS community. Join APICS in congratulating the incoming 2011–2012 chapter presidents. 2010 Presidents Tena M. Coppedge, CPIM, CSCP Ronald L. Isack, CIRM Ryan F. Perrin, CPIM, CSCP 2011 Presidents JoAnn S. Corle Jeffrey T. Kearns Stephen E. Ryther, CPIM Ned Abed, CPIM Michael W. Crist, CIRM Robert L. Jalio, CPIM Steven E. Petersen, CPIM Sara E. Aburto-Layton Michael W. Crist, CIRM Phillip J. Kosik Jr., CPIM, CSCP Todd N. Sabin, CPIM, CSCP Sara E. Aburto-Layton Tammy J. Culp, CPIM David T. Jankowski, CFPIM, CSCP Alexander Polacco, CPIM Jose Bruno Acosta, CPIM, CSCP Tammy J. Culp, CPIM Jean M. Krupinski, CPIM Karen K. Schiebout, CPIM, CSCP Jose Bruno Acosta, CPIM, CSCP John B. Dantas PEng, CPIM Richard G. Johanson, CFPIM, CIRM, Jamie L. Prange, CPIM Brent L. Alberda David J. Curl, CPIM Jody L. LaCroix Joel M. Schipper, CPIM, CSCP Sriram Akella, CPIM, CSCP Roger L. Davis Jr., CPIM, CSCP CSCP Ceylonia I. Pretorius, CPIM Stanley G. Allen, CPIM LeRoy H. Dame Robert B. Lane Marian A. Schlegel Rick M. Alley, CSCP James J. De Modica Glenn Johnson, CPIM Randy J. Priest, Sr. Rick M. Alley, CSCP Roger L. Davis Jr., CPIM, CSCP Francisco Lara Jimenez, CPIM Michael A. Schrader, CIRM Andre L. Alves, CSCP Denise V. Demkowicz, CPIM, CSCP Chuck E. Jones David J. Reynolds, CPIM Lisa Anderson, CSCP James J. De Modica Paloma Leonato, CSCP Theresa R. Scully, CPSM, C.PM, CPIM, Lisa Anderson, CSCP Anthony A. DeVincenzo Michael L. Kalkwarf, CPIM, CSCP Jaime Rodriguez Leiva, CPIM, CIRM Joyce C. Andrzejewski, CPIM Denise V. Demkowicz, CPIM, CSCP Marcus D. Logan, CSCP CIRM, CSCP Joyce C. Andrzejewski, CPIM Erica L. Dickson, CPIM, CSCP Robert KC Kasserman, CIRM, CSCP Curtis A. Ross, CPIM Jessica Arevalo Erica L. Dickson, CPIM, CSCP Mike Loughrin, CFPIM, CIRM Donald M. Simpson, CPIM, CSCP Jessica Arevalo Steven Dightman Jeffrey T. Kearns Steven A. Rudnicki, CPIM, CSCP Dawn Auby, CPIM Steven Dightman Joe D. Low, CPIM, CSCP Ellen J. Smieja Dawn Auby, CPIM Harold D. Dirks, CPIM, CIRM Phillip J. Kosik Jr., CPIM, CSCP Shari R. Ruelas, CPIM, CSCP Michael P. Auriemma, CFPIM, CSCP Harold D. Dirks, CPIM, CIRM Jeffrey A. Lubash, CFPIM, CIRM, CSCP Barbara G. Sorochak, CPIM Michael P. Auriemma, CFPIM, CSCP Brian H. Doane, CPIM, CSCP Anthony F. Kren, C.P.M., CFPIM, CIRM, Todd N. Sabin, CPIM, CSCP Andrew Avery, CPIM, CSCP Margaret A. Dixon Deborah E. Majeski, CPIM Bruce E. Spurgeon, CPIM Lynn H. Austin, CFPIM John M. Donnelly, CPIM CSCP Timothy R. Salaver Kris Baird, C.P.M., CPSM, CPIM, CIRM, Brian H. Doane, CPIM, CSCP John A. Mariano, CSCP Oscar Stern, CSCP Andrew Avery, CPIM, CSCP Kay M. Duarte, CPIM, CSCP Jody L. LaCroix Martin L. Samuels, CPIM, CSCP CSCP John M. Donnelly, CPIM Christopher L. Martin R Douglas Stevens, CFPIM, CIRM, CSCP Pamela B. Bachman, CPIM Rodney D. DuBois, CPIM Pierre Laliberte, CPIM Karen K. Schiebout, CPIM, CSCP Jennifer A. Baker, CPIM, CSCP Kay M. Duarte, CPIM, CSCP Alberto J. Martinez, CPIM Kenneth J. Stuff, CPSM, CPIM, CIRM Jennifer A. Baker, CPIM, CSCP Reed E. DuBow, CPIM Michael J. Langevin Marian A. Schlegel Sean D. Baker Rodney D. DuBois, CPIM Eduardo Martinez Michael A. Tapper Sean D. Baker Kenneth E. Duratti, CPIM Alan R. Leigh, CPIM, CSCP Marc Schmitt Alma C. Ballard Reed E. DuBow, CPIM Tianna M. Marynell, CPIM, CSCP Ron P. Taylor Jeffrey J. Ball, CSCP Ione M. Dykstra, CPIM Marcus D. Logan, CSCP Michael A. Schrader, CIRM Charles T. Ballard, CSCP Ione M. Dykstra, CPIM Mary Ann Mauldwin, CFPIM, CSCP Werner Teichroeb, CPIM, CIRM Charles T. Ballard, CSCP Todd F. Eggleston, CPIM Rhonda J. Long Donald M. Simpson, CPIM, CSCP Brian Bardwell, CPIM Todd F. Eggleston, CPIM Anthony P. Mauro, CPSM, CPIM, CIRM, Arleen R. Teranishi Brian Bardwell, CPIM Deann R. Elfering, CPIM Mike Loughrin, CFPIM, CIRM John D. Skelton, CPIM Sally Barner, CPIM Daniel Emili, CPIM CSCP Russell B. Thorne, CPIM, CSCP Edwin G. Barth, CPIM Daniel O. Ellingson, CPIM Joe D. Low, CPIM, CSCP Gary Sloniker, CPIM Thomas D. Barry Timothy A. Erlacher, CPIM, CIRM Michael G. McCaghren, CIRM James A. Timmons, CSCP Shawn B. Batka, CPIM, CSCP Alberto J. Escobar, CPIM Timothy P. Mackin Ellen J. Smieja Edwin G. Barth, CPIM Michael L. Essary, CPIM Jose Mendonca Linda M. Tryba, CPIM Louise Beauchamp, CFPIM Michael L. Essary, CPIM Larry A. Maggio, CPIM, CSCP Joan M. Smith, CPIM Louise Beauchamp, CFPIM Yvonne M. Ewing, CSCP Samuel A. Metz, CPIM, CIRM David A. Turbide, CFPIM, CIRM, CSCP Robert J. Bielecki, CPIM, CSCP Yvonne M. Ewing, CSCP Deborah E. Majeski, CPIM Barbara G. Sorochak, CPIM Mark A. Betancourt, C.P.M. Kerry F. Fechner, CFPIM, CIRM, CSCP Ed Miller, CPIM Christopher J. Urbane Jon E. Bingol, CFPIM Carlos F. Fernandez James P. Malone R Douglas Stevens, CFPIM, CIRM, CSCP Jon E. Bingol, CFPIM Carlos F. Fernandez Alan L. Milliken, CFPIM, CIRM, CSCP Charles H. van de Putte Jeff Boatman, CPIM, CIRM, CSCP Brian L. Ferris, CFPIM, CSCP Robert A. Marsanico, CPIM Kenneth J. Stuff, CPSM, CPIM, CIRM Jeff Boatman, CPIM, CIRM, CSCP Brian L. Ferris, CFPIM, CSCP Richard W. Monroe, CPIM, CSCP Rosemary D. Van Treeck, CPIM, CIRM, Joseph R. Brackman, CPIM William P. Fitzpatrick Jr., CPIM Christopher L. Martin Julie A. Stumpe, CPIM Bill Bosman Kathryn S. Flatt, CPIM Esteban O. Monroy, CPIM CSCP Bruce H. Brechin, CPIM, CSCP Robert F. Fletcher, CPIM Alberto J. Martinez, CPIM Ty J. Tabernik, CPIM, CSCP John P. Bowler, CSCP Robert F. Fletcher, CPIM Dennis M. Moore, CPIM, CSCP Jerry D. VanCamp, CFPIM James C. Breslin, CPIM, CIRM Henry S. Fujii Eduardo Martinez Ron P. Taylor Joseph R. Brackman, CPIM Sylvia Garces Soria, CPIM Steve Moore, CSCP Joost M. Vles, CPIM, CSCP Carissa B. Brown, CPIM Toyya M. Funchess Tianna M. Marynell, CPIM, CSCP Werner Teichroeb, CPIM, CIRM Bruce H. Brechin, CPIM, CSCP David B. Gardner, CPIM Ronald Myers, CPIM, CIRM Dale L. Walker, CPIM Gary E. Bryant, CPIM Robert E. Gagnon Robert J. Masters, CSCP Russell B. Thorne, CPIM, CSCP Debora Brener Sue German, CFPIM, CIRM, CSCP Kevin L. Nelson Michael T. Walsh, CPIM Gerard R. Buhosky, CSCP Sylvia Garces Soria, CPIM Mary Ann Mauldwin, CFPIM, CSCP William S. Thurston, PMP, CPIM, CIRM, John C. Brewer, CPIM, CSCP Edward T. Giacchino, CPIM Mel N. Nelson, CFPIM, CIRM, CSCP Jian Wang, CPIM Charles A. Busby, CFPIM, CIRM, CSCP David B. Gardner, CPIM Michael G. McCaghren, CIRM CSCP Carissa B. Brown, CPIM Mauro J. Girardo, CPIM Michaela H. Nyland, CPIM Gregory P. Warner, CPIM Cynthia L. Butler-Mobley, CSCP William P. Garrison, CPIM Linda McNeil, CPIM James A. Timmons, CSCP Gregory M. Brown, CPIM Mark D. Gittings, CFPIM, CSCP Jill O’Sullivan Margaret E. Ways Richard A. Butterfield, CFPIM, CSCP Sue German, CFPIM, CIRM, CSCP Jose Mendonca David A. Turbide, CFPIM, CIRM, CSCP Gary E. Bryant, CPIM Thomas H. Gordon, CFPIM Joann Ostrowski Parrinder, CPIM, CSCP Chris Weames, CPIM Carol A. Byrne-Thompson, CPIM Edward T. Giacchino, CPIM Samuel A. Metz, CPIM, CIRM Christopher J. Urbane Thomas A. Buckli Neil N.. Gorski Carla J. Parvin, CFPIM Bradley E. Weaver, CPIM J Rodger Cameron, CSCP Mark D. Gittings, CFPIM, CSCP Alan L. Milliken, CFPIM, CIRM, CSCP Charles H. van de Putte Charles A. Busby, CFPIM, CIRM, CSCP Maryclair Grace, CPIM Lawrence E. Pascoe, CPIM Alvin W. Wentzell Jr., CPIM Kristen R. Cameron Dennis J. Golueke Donald G. Mines, CPIM, CSCP Jerry D. VanCamp, CFPIM Cynthia L. Butler-Mobley, CSCP Joe D. Grigg, CSCP Hiteshree B. Patel Cinda K. Whaley Danielle S. Campbell, CPIM Ken J. Goodwin, CPIM Richard W. Monroe, CPIM, CSCP Dale L. Walker, CPIM J Rodger Cameron, CSCP Glen M. Hall Jr. Debra L. Paton Franklin J. White Jr., CPIM Gary W. Capone Thomas H. Gordon, CFPIM Esteban O. Monroy, CPIM Michael T. Walsh, CPIM Kristen R. Cameron Mark C. Hardison, CFPIM, CSCP Robert E. Patrician Jr. David R. Wilkins John H. Capron, CPIM Maryclair Grace, CPIM Paul J. Montesano Jian Wang, CPIM Jesus Campos, CPIM, CIRM, CSCP Michael A. Harris, CSCP Kenneth W. Perry, CFPIM Chad D. Wilson, CPIM, CSCP Roshni Captain, CPIM Ellen J. Granneman, CPIM James S. Moore, PMP, CCMC, CSCP Bryan Warshofsky, CPIM Tanya M. Cannon, CSCP Fredrick C. Heintz, CIRM, CSCP Steven E. Petersen, CPIM Donna L. Woodcome Gustavo D. Cardenas Dan Green, CPIM, CIRM Nathan A. Muchmore, CPIM Margaret E. Ways Thomas G. Cantin, CPIM Nicolas Hien Dale J. Pinnekamp, CPIM Kelvin D. Wright, CPIM, CSCP Sheryl L. Cavazos Richard C. Greig, CPIM Ronald Myers, CPIM, CIRM Chris Weames, CPIM John H. Capron, CPIM Carlene M. Hoene Alexander Polacco, CPIM Rebecca L. Young, CPIM Robyne K. Chatham, CPIM Jerry W. Hammons, CPIM, CSCP Mel N. Nelson, CFPIM, CIRM, CSCP Bradley E. Weaver, CPIM Roshni Captain, CPIM Wanda P. Holcomb, CPIM Joe Pomeroy Anthony Zampello, CPIM, CIRM, CSCP Mark Chockalingam Mark C. Hardison, CFPIM, CSCP Donna J. NeSmith, CPIM Theresa A. Wells, CPIM Sheryl L. Cavazos Kurt A. Horner, CPIM James R. Prellwitz Jr., CPIM Andrew P. Zeitz, CPIM, CSCP Mark L. Christensen, CPIM Roger W. Harris, CFPIM, CIRM, CSCP James M. Noblitt, CPIM, CIRM Alvin W. Wentzell Jr., CPIM Virgilio A. Charles David C. Hovan, CPIM Ceylonia I. Pretorius, CPIM Jimmy Zepeda Walter J. Ciszczon Steven L. Hasson, CSCP Michaela H. Nyland, CPIM Robert T. Weygant, CPIM Donald D. Clark, CFPIM, CSCP Charles W. Hunter, II, CPIM Randy J. Priest, Sr. Donald D. Clark, CFPIM, CSCP Fredrick C. Heintz, CIRM, CSCP Caroline S. Ogilvie, CPIM, CSCP Cinda K. Whaley Robin J. Clark Edmund R. Huver Jr., CPIM Aaron E. Reinick, CPIM, CSCP Robin J. Clark Brian K. Hickman, CPIM Dennis C. Okocha, CPIM Jonathan L. Williams, CPIM Jacquelyn M. Cline Jon Mikel Ibarreche, CPIM Shannon B. Reininger, CPIM Jacquelyn M. Cline Nicolas Hien Leslie Pagliari Chad D. Wilson, CPIM, CSCP Lloyd M. Clive, CFPIM Ronald L. Isack, CIRM David J. Reynolds, CPIM Lloyd M. Clive, CFPIM Carlene M. Hoene Devendar Pallapati Timothy R. Wilson, CFPIM, CIRM, CSCP Juan Fernando Colin Galvan, CFPIM, David T. Jankowski, CFPIM, CSCP John R. Reynolds Bill L. Cochran Wanda P. Holcomb, CPIM Joann Ostrowski Parrinder, CPIM, CSCP Kelvin D. Wright, CPIM, CSCP CIRM, CSCP Glenn Johnson, CPIM Kathy A. Robb-Williams Juan Fernando Colin Galvan, CFPIM, David C. Hovan, CPIM Carla J. Parvin, CFPIM Rebecca L. Young, CPIM Gregory A. Cook Gary W. Jones, CSCP Maryanne Ross, CFPIM, CIRM, CSCP CIRM, CSCP Pamela S. Howell, CFPIM, CSCP Lawrence E. Pascoe, CPIM Anthony Zampello, CPIM, CIRM, CSCP James D. Cook, CPIM, CSCP David J. Julius, CPIM, CSCP Michel G. Roy, CPIM Gregory A. Cook Edmund R. Huver Jr., CPIM Debra L. Paton Andrew P. Zeitz, CPIM, CSCP Tena M. Coppedge, CPIM, CSCP Michael L. Kalkwarf, CPIM, CSCP Shari R. Ruelas, CPIM, CSCP James D. Cook, CPIM, CSCP Jon Mikel Ibarreche, CPIM Shawn M. Patton Henry W. Zoeller Jr., CFPIM Management Enterprise To comment on this article, send To comment on this article, send Perspective a message to [email protected]. a message to [email protected]. Insights By Philip E. Quigley, CFPIM, PMP By Dave Turbide, CFPIM, CIRM, CSCP, CMfgE rial was eliminated, reducing waste to Seeing Green the landfill. The new process also saved Feedback from the Field money for the company. Even if you work for an organization Evaluating your sustainable bottom line that is not in consumer markets or has A key success factor in new product development no real motivation to green its image, sustainability efforts can be worthwhile. While there are considerable regulatory, special-interest, and market- “Going green can cost less than not IBM recently turned 100 years old. There have been myriad articles driven pressures to go green, companies are unlikely to do much more going green,” says Shel Horowitz, a lately about how and why the company survived, prospered, and still is a green marketing consultant quoted in than the bare minimum unless there also are good business reasons to do powerhouse today. Many of the stories talk about how IBM stays close to Mass High Tech. “Lots of companies so. That is especially true in these times of economic uncertainty, which its customers in order to give them what they want. have adapted good practices to reduce fuels the understandable desire to preserve cash and cut costs. But, that’s their energy, water, and waste—and really the point: Many green initiatives inherently are cost-reduction these are companies that are not selling This brought back memories of being Zara, an international fashion company. efforts with an attractive return on investment. a green product.” a student at the University of Florida’s The executives there use a strategy engineering school. While there, I had called “fast fashion,” whereby the What we do to go green often is the heat-treat ovens, compressed air, and Dave Turbide, CFPIM, CIRM, CSCP, the opportunity to observe IBM in supply chain can take a new product same kind of thing we do to get lean: We lighting, and cut energy consumption CMfgE, is a New Hampshire-based action. A professor had turned down idea, develop it, and have it delivered reduce waste; we look for ways to better enough to pay for the project many independent consultant and freelance a proposal from IBM and instead to stores within two weeks. They key is leverage resources. These are important times over in the first year alone. writer and president of the APICS bought a computer from Digital that Zara’s store managers help develop aspects of both lean and green. For consumer goods companies, Granite State chapter. He may be Equipment Corporation (DEC). Two new fashion ideas. However, there are some differences, such as Burt’s Bees, sustainability is an contacted at [email protected]. IBM salespeople spent two hours plus Compare that with some successful mostly in scope and focus. Lean tends integral part of their a lunch expense to find out why he senior salesmen I know at Cadillac and bought from DEC instead of IBM. BMW: They have had long careers in to zero in on wasted materials and business and public PRODUCTION DP effort. Sustainability is concerned less personas. Nevertheless, I They finally discovered his reason: The the business and tell me they have yet with the details of production and more they often can find a V MAnUFACtUrInG oPerAtIonSSR IBM machines, to give feedback SUPPlY T if powered off on products, sales with the “black box” view of input and way to reduce costs A RO improperly, Can any company afford techniques, or output. Sustainability also covers the and improve perfor- L CHAIno IBC nature of the materials used—renew- mance while saving would lose to disregard insight from advertising to any messaging, there is a wealth of oppor- ables and recyclables, for example— the planet. At the 2008 U Pt UE information senior manager tunity to gain insights. Listen carefully, T I and have to its people? in their compa- conduct these information-gathering whereas lean focuses only on reducing APICS International E SUPPlIerS M IOS be completely nies. They’ve never sessions routinely, and explain how waste, whatever that waste is. Conference & Expo, the PUrCHASInGIZ NS Nevertheless, lean programs often chief executive officer of e rebooted; con- been asked. A you are using the information so generate green benefits, and sustain- Burt’s Bees told the story versely, the DEC machines would not huge source of information and insight people understand the significance ability efforts generate waste-reduction of how an energy audit experience these issues. is being ignored, and—in today’s of their participation. benefits. A lean initiative that increases revealed that the process world renowned. I was impressed by the time spent marketplace, especially—can any Getting feedback is vital in today’s productivity also reduces power con- of sealing lip balm tubes by the IBM salespeople. I told them company afford to disregard insight constantly shifting marketplace—but end to end. sumption and produces less scrap and in plastic (for sanitary so and also asked them what they from its people? it takes time, effort, and money. More waste. A sustainability effort focused and health reasons) con- would do with the information they importantly, it requires that everyone had just learned. They explained that Getting the data speaks truthfully and is ready to hear on reducing packaging likely will result sumed a lot of energy in a reduction in labor and materials, and used an ecologi- With the worldwide reputation of our #2 ranked* they feed the results of their interviews Information and feedback on something they might not like. even though the new packaging mate- cally damaging plastic Supply Chain Management MBA, the Broad into a database and that every Monday products should be collected from rial might cost more per pound or material. The solution College of Business is the logical choice for your afternoon the product manager receives all personnel and customers. The Philip E. Quigley, CFPIM, PMP, is a senior square foot. was to change the paper career, through and through. a report on wins, losses, and why IBM challenge is making sure the data application portfolio manager for Computer label to overlap the cap, won or lost each bid. They said the are fresh and are gathered in a cost- Sciences Corporation. He teaches at Real-world lean and and forming a visible seal * U.S. News and World Report 2011 product manager then would report to effective manner. Using the right Chapman University’s Argyros School of green for the product. The senior management on feature changes information technology solution Business and Economics and California One company embarked on a lean heat-generating process that were necessary to stay competitive. combined with select one-on-one State University at Fullerton. He may be reorganization of its production floor was eliminated, saving Fast-forward to today and a course meetings with people is a great first contacted at [email protected]. and ended up reducing energy costs energy and reducing I’m teaching on supply chain manage- step. With remote meeting tools, by $100,000. Another business applied greenhouse gases; and ment. I start my lessons by discussing surveys, social networking, and instant MBA.MSU.EDU lean principles to indirect costs such as the undesirable mate- 14 November/December 2011 | APICS magazine APICS magazine | November/December 2011 15 Executive To comment on this article, send a message to [email protected]. View AByu tThimor BNeacmkeer Shedding Some Light incadescents, so the high initial costs are from landfills, where most CFLs end manufacture. In fact, some analysts have There also are gaps in CFLs’ spectrum recouped through longer bulb life spans up. (However, it should be noted that posited that more energy is expended of light that can make some color and energy savings. Unfortunately, there on Sustainability mercury also is emitted from coal-fired than is produced or conserved with matching and color code identifica- are conditions (such as moisture, cold, power plants, so the net cost-benefit ethanol and lithium ion batteries. tion tasks more difficult. Newer- and frequent cycling) that significantly depends again on the sources Lesson 6: Differences in the generation CFLs are mitigating these reduce CFL life spans and their return Illuminating green lessons of electricity.) performance characteristics of clean issues and producing a higher quality on investment. CFLs contain electronic components alternatives need to be carefully con- of light, albeit at an even higher cost Lesson 3: Less tangible benefits that are not being recycled and contain sidered. CFLs and incandescent bulbs than standard CFLs. often are overlooked or underesti- additional toxic substances, includ- perform differently. And based on these Sustainability decisions rarely are clear-cut. The unfortunate truth is that mated. The longer life of CFLs can result • Some isolated CFL issues have ing lead and rare earth metals. When differences, CFLs may not be appropri- many sustainability efforts fall in the feel-good/look-good category rather in lower labor and safety costs. The been experienced with degradation considering such toxic substances, it ate for all uses or conditions. Following than the do-good category. That is, many programs (unintentionally) lower change-out frequency of CFLs of power quality, infrared signal should be noted that almost all CFLs are are some performance differences and do little to improve the environment and, sometimes, actually do harm. means fewer maintenance hours, par- manufactured overseas in countries that associated implications: interference, iridescence of window Oddly enough, this point was driven home to me by a middle school ticularly in facilities with hard-to-reach may have lax or loosely enforced safety, • Frequent cycling dramatically film, interference with CFL ballast or highly distributed lighting. Accidents, from other electronics, and damage science fair project. health, and environmental regulations. reduces CFL longevity. A five-minute such as falls, resulting from lighting to light-sensitive materials from UV The mercury poisoning of hundreds of on/off cycle reduces a CFL’s life span replacement also should decrease. emissions. workers at multiple facilities in China to that of an incandescent. The US Like many parents, I find myself generated by an incandescent is wasted, Additionally, fire and burn hazards recently has been documented. Energy Star program suggests that • Lastly, CFLs do not fit all existing drawn into my children’s school right? Not necessarily. The answer associated with hot incandescent bulbs Another consideration is embodied fluorescent lamps be left on when light fixtures and may not be projects. The science fair project is actually depends on where you live are mostly eliminated with CFLs. Such energy, which is energy used in the leaving a room for less than 15 compatible with existing dimming the mother of all such endeavors. It is and the season of the year. On a cold benefits can significantly and positively manufacture and transportation of minutes to mitigate this problem. technologies. However, CFL technol- a three-month slog for student (and winter day, the heat from incandescent affect the business case. components and the finished good itself. However, this action entails higher ogy advances are solving both these parent), from topic selection in early bulbs actually reduces your heating Lesson 4: Computing societal There are other materials expended energy consumption. CFL users must issues. September to final judging in early load. It is only during hot weather that benefits requires a lot of due diligence. in the production and transporta- choose between a lower bulb life span Increasingly, companies’ sustainability December, with countless milestones in an incandescent’s heat is unwanted, Many company decision makers are tion of CFLs. They require twice the and higher energy consumption. decisions will be exposed to stakeholder between. Last year, my daughter, Jaime, as it increases your cooling load, starting to consider societal benefits materials (by weight) of incandescent Either way, the business case impact scrutiny. Lip service and window dress- and I investigated energy efficiency. which increases your cooling costs. in their sustainability decisions, even Replacement of incandescent light Accordingly, the business case for though they often do not influence the bulbs. Furthermore, the materials used is negative. ing initiatives will no longer pass muster in CFLs, such as rare earth metals, • Delays of up to one minute (and bulbs with compact fluorescent light CFLs degrades in colder climates. bottom line. There is much to consider with increasingly discerning constituen- are more valuable and more highly sometimes more) before full light bulbs (CFLs) seemed a no-brainer. In fact, the business case may turn in estimating societal benefits. For cies. Company leaders must get smarter engineered or processed than the is achieved are common in CFLs. After all, CFLs produce equivalent light negative in some situations. In short, example, in almost all cases, CFLs are about sustainability technologies—about materials used in incandescent bulbs. This may make CFLs less suitable for while consuming much less electric- the net CFL benefit is proportional to more energy efficient than incandes- what works and what doesn’t. This Also, because of their use of mercury, applications such as motion-activated ity. However, as we delved deeper into the ratio of your cooling load to your cents. And lower electricity use means means that decision makers must under- recycling of CFLs will increase, further or security lighting. the issue, we found it wasn’t quite so heating load. A higher ratio translates lower carbon emissions. However, com- stand the various and interacting trade- raising their life cycle costs. It turns out • CFL luminosity declines over time. straightforward. In fact, the “CFL versus to more benefits. You will achieve the puting the reduction of carbon emis- offs in choosing one technology over that CFLs require about 12 times more The luminosity decrease is expo- incandescent” question provides impor- oft-touted 75 percent reduction in sions can be tricky. It requires knowing another. Unfortunately, even picking a energy to manufacture and recycle than nential, with the highest reduc- tant sustainability lessons, which com- lighting costs only if you are cooling how your electricity is generated by your light bulb is not as simple as it seems. incadescents do. tion occurring after a bulb is first pany leaders might be wise to learn— your facilities year-round, such as in the utility. Further complicating the issue, Because of their mercury (and their installed. CFLs can be unfit for situ- many involving often subtle trade-offs tropics. this allocation changes according to the Tim Becker is founder of Probity Business fragility), CFLs also need more and ations where consistent luminosity is to be considered when undertaking Lesson 2: Large, up-front sustain- time of year or even the time of day. Group, a consultancy focused on strategy, stronger packaging. This drives up required. sustainability initiatives. ability investment demands consid- Lesson 5: Societal benefits must be transportation costs, including transpor- • Poorer performance and higher growth, technology, and operations Lesson 1: Calculating the net benefit erable downstream benefits. Many netted against societal costs. As with tation energy costs. Fortunately, the sum failure rates make CFLs potentially a improvement. He was a partner with of sustainability initiatives can be sustainability technologies involve most clean energy technologies, CFLs total of manufacturing, transportation, poor choice in some environments. Accenture. Becker also consulted for complicated. More than 90 percent additional investment over and above also have a downside. For example, and recycling costs appears to be a small • The quality of CFL lighting also AT Kearney and Halliburton. He may be of the electricity consumed by incan- that made in more conventional tech- each CFL contains 3 to 5 milligrams of fraction of CFLs’ potential savings from can be poor. CFLs tend to produce contacted at [email protected]. descent light bulbs goes to generating nologies. Investments must be recouped mercury, which is a highly toxic sub- energy conservation and much longer a harsher light with more glare. heat, not light. On the other hand, CFLs through energy (or other) savings. For stance. If a bulb is broken, certain safety replacement cycles. However, this is not Accordingly, CFLs may be ill-suited Editor’s note: This is Tim Becker’s last generate more light and much less heat example, CFLs (without subsidies) procedures need to be followed to avoid true of all clean energy solutions. Solar for situations where softer light is “Executive View.” We at APICS magazine per unit of electricity consumed. In fact, generally are about four times more adverse health effects. The vast major- photovoltaic, hybrid/electric vehicle desired, such as higher-end retail offer our sincere thanks for his excellent CFLs use about 75 percent less electric- expensive than incandescent light bulbs. ity of CFLs also are not currently being batteries, and ethanol, for example, displays or work situations where contributions to the publication and wish ity to produce the same amount of light Fortunately, CFLs, when continuously recycled, which means some of their consume vast amounts of energy in their eye strain is a particular concern. him continued success. as an incandescent bulb. So all that heat energized, last 5 to 10 times longer than mercury is leaking into the environment 16 November/December 2011 | APICS magazine APICS magazine | November/December 2011 17