14 June 2011
14001: a manufacturing odyssey
Gestamp was given a nine-month ultimatum: achieve the ISO 14001 environmental benchmark or lose a key customer. Max Gosney reports on how the company got its green wings and turned cardboard into cash along the way
Nine months is a familiar time frame for extraordinary change. For tier one automotive supplier Washington-based Gestamp, it started with the shock of facing up to a life-changing experience. Then came some discomfort and finally, after months of agonising, the delivery.
With a twinkle in their eyes, Gestamp's senior team reflects on the journey to becoming proud parents of the ISO 14001 environmental accreditation. "It was relatively easy for us because we had a mindset of continuous improvement (CI)," says managing director Josep Parcet (inset pic). "You have to change the culture of the factory from pushing products out the door to doing the right thing... My people understood this was something we needed to do because it was good for the company."
Gestamp's 'can-do' philosophy was to be put to the test in December 2009. "We had a customer audit by Jaguar who wanted us to be an approved supplier," explains Mark Potts, business development and commercial manager. "They said that because we didn't have a 14001 environmental accreditation they couldn't allocate any business to us."
Gestamp was faced with a dilemma. Jaguar accounted for just 3% of the company's business, yet wanted a shake up that would drain time and resource. Securing ISO 14001 entails painstaking assessment of on-site capabilities, with companies challenged to install an effective environmental management system. Still, given time, it's a highly achievable objective for green-minded manufacturers. The trouble for Gestamp was that time wasn't on its side, as Potts explains. "Initially Jaguar gave us six weeks. However, we managed to negotiate up to nine months." Typically firms take 12 to 18 months to make the grade.
For, Parcet the choice was simple. "Jaguar might have been the only customer asking for 14001 but we believed it wouldn't be long until the others did the same. If we went for it, we believed we would secure new business." To ensure success, Gestamp knew it must look beyond in house expertise, Potts says. "I was the only one on site with any environmental experience and we were trying to put this in place against a tough deadline."
The green journey
Gestamp turned to the Manufacturing Advisory Service, which put the firm in touch with local training provider Environmental Academy (EA). The EA and its team of green gurus descended on Gestamp to scrutinise its environmental credentials. The results only reinforced the scale of the challenge ahead. "The analysis showed some big gaps," reflects Potts. "The first was environmental training; there was nobody on site who had any awareness. Also we had no legal procedure to define which environmental laws we had to comply with. And we didn't have any effective waste control."
Gestamp was missing some big opportunities in waste management. "We had no formal process in place for the disposal of oily gloves and rags," says Potts. "These were stored outside and if it rained, water would get into the drums and contaminate the water. We'd then be charged double by the carrier for contaminated waste." Pick up fees soared from £515 to £759 per spoiled drum, costing Gestamp nearly £1,000 in surcharges over the year.
Rags and gloves weren't the only waste having a toxic impact on Gestamp's bottom line. The company disposed of cardboard through general waste and a skip, explains Potts. Gestamp suffered a double hit, with £170 paid to its waste carrier in pick up fees for emptying the skip, followed by landfill charges. The EA inspection helped Potts pull off a spectacular reverse. "Now, we've brought in cardboard balers," he explains. "If we put 25 bales into a skip then we get £70 back. We fill two skips a month so that's £140." Recycling has also meant a drop in Gestamp's general waste volumes and a saving on landfill fees.
Taking a step back to analyse waste disposal has allowed Gestamp to pull off some simple yet highly effective savings. Giant hazardous waste collection boxes (called the Haz Box) have become familiar landmarks on the factory floor. The disposal units contain the discarded rags and gloves that were once spoiling the general waste. Potts says: "It was costing us £400 to treat the general waste whereas now we pay £265 for the Haz Boxes."
A hundred pounds here and there might sound unspectacular. But pretty soon those small savings start to stack up. Going for 14001 appears to have a domino effect with every kind of unwanted goods suddenly being seen as a potential revenue stream. "We've just contacted a company about our old computers," explains Potts. "They'll come and pick them up without charge and we'll get the money back from anything they sell on."
This environmental entrepreneurialism didn't happen by chance. Potts devised an environmental training package with the EA to secure staff support. He targeted environmental champions who could help lead the campaign at shopfloor level. "I just said: 'do you want environmental training?' The best way forward in Gestamp is to show that positive approach."
The green leaders performed audits on the factory floor, which were backed up with full environmental awareness training for all staff. Workers completed the two-day training course and were encouraged to offer opinions on how workstations could be improved. The open and inclusive approach diffused the suspicion and cynicism that has doomed many a management initiative. "We were very transparent; when people feel they are part of what's going on they are more willing to participate," says Parcet. "By putting the emphasis on 14001, people felt like the company was putting something back into the workforce." Gestamp ensured the green emphasis stuck by including related tasks in staff routines, adds Parcet.
A second EA audit showed the focus had paid off, with Gestamp on course for 14001. But while the shopfloor soared, the back office was feeling the strain says Potts. "We have to maintain a register of the area of environmental law appropriate to Gestamp. Every month you get over 200 updates, it's an increasing burden for manufacturers." Respite came with an electronic service that gave Gestamp a quick fire guide to legal changes.
September 2010 and judgment day dawned for Gestamp. The environmental inspectors donned clipboards as site workers reached for lucky horseshoes and four leaf clovers. "I knew we were going to get it," recalls Potts. "We didn't have any other option." The confidence proved well founded with Gestamp achieving 14001 in record time and incurring only five minor faults.
Jaguar's business was retained and the company has used its new found green status as a springboard for securing fresh contracts with other car manufacturers. Overall, site waste has been cut by 10%. In 2010 for example, £7,000 was spent on general waste disposal: for the first five months of this year, that figure is just £750. Not a bad return for the £29,000 it cost to achieve 14001.
But, the duo has a pearl of wisdom for anyone inspired by their feat. "Get a better deadline," says Potts. And for those who may dismiss the idea as something only suitable for a less frenetic site, Parcet has one final piece of advice. "That's a typical mindset of a factory where the goal is to push products out the door. When you pay attention to things like 14001 you find you have more time than you think. We're doing higher volumes than three years ago with less staff while running CI and going for 14001. It's all about your mindset."
Outline of ISO 14001
What is it? ISO 14001 is an environmental gold standard that shows you operate an effective environment management system. It aims to address the balance between greener practice and maintaining profitability.
Why should I bother? Going for the standard delivers multiple benefits: it should help cut waste and associated disposal costs. The scheme could also open the door to cash-generating initiatives and be used to drive new business.
Many OEMs now insist suppliers have the standard.
What does it involve? Manufacturers must develop a robust environmental policy stating the company's commitment to meet legal and regulatory demands. Firms should assess the elements of business that have an environmental impact and produce a strategy for tackling them. Once the strategy is in place it must be rolled out through intensive staff training. A dummy assessment is often carried out; final assessment by a certification body is two-fold – first a document review, followed by a full site audit. Certificates last for three years with assessors performing intermittent checks.
How much does it cost? Price will depend on the size of organisation, number of employees and site locations.
Where do I get help? There are many consultancies offering aid with 14001; some local grants are available. A phone call to your local MAS branch could point you in the right direction.
Earn your green stripes
1 Treat the process as continuous improvement
A focus on operational efficiency, shopfloor buy-in and visual management tools... going green is quite a lot like going lean. Says Parcet."When the model is just to push products out of the door, you will find great resistance to the changes. You need the right mindset." And when you do get your ISO 14001 certificate, don't be tempted to put your feet up, he adds. "It's the same philosophy as continuous improvement. The journey continues." Gestamp has begun investigating other low-carbon cash generators including an on-site wind turbine.
2 Set a realistic deadline
Gestamp made it in nine months, but slow and steady is the way to win ISO 14001. Give yourself 12 to 18 months to build up your expertise and test for any weaknesses, advises Potts.
3 Involve the workforce
Popular support is critical: buy-in will come from proper training and managers must ensure everyone has IS0 14001-linked tasks as part of the daily routine. Win over the workforce and you are on the way to some impressive results, says Parcet. "Engaging in this activity acts as a motivator and makes people proud to belong to the organisation. The result is happier and more committed workers, which is good for the bottom line."
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