By Terry Foecke, managing partner of Materials Productivity LLC, a consulting firm that helps companies integrate environmental excellence with manufacturing improvement.
The challenge of “greening” supply chains begins with an overview of products, processes and energy use. Some products like office furniture, rugs and kitchen goods are manufactured in a steady pull throughout the year. Others — holiday lights, BBQ grills and toys — are made and shipped in madcap seasonal bursts. During certain busy seasons, energy use is not just intense, but also frequently wasteful.
This effort was inspired by a recent article by Dan Gilmore in Supply Chain Digest reviewing Santa’s North Pole operations. The article highlighted the Workshop’s impressive logistics performance in moving vast amounts of goods during a miraculously short time span. Several retail industry leaders were also mentioned as having visited Santa’s Workshop to learn from the logistics masters.
So if some of the best in the retail business had something to learn from Santa on logistics, perhaps we could learn from the “green” side of their activities. The North Pole is, after all, a difficult location for energy conservation. Here’s what we discovered:
Location, location, location…
Heating, cooling and ventilation of facilities are a large part of energy use in any operation. This poses some big challenges for operations at Santa’s Workshop, which for historical and corporate branding reasons has concentrated its physical plant in one of the coldest regions on the globe.
Cooling at the North Pole is never an issue and the jet stream at this latitude does a masterful job of providing airflow for ventilation. Spot heating using electrical resistance heating is provided in a few key locations like product storage and the paint touch-up rooms. Overall, room temperatures seem perfect — somewhat magically so — even though management couldn’t point us to any thermostats or provide much data.
Santa’s Workshop long ago abandoned its vertically-integrated approach to manufacturing, outsourcing most production to…well, they wouldn’t share that information with us. So this reality, combined with a reliance on animal power like reindeer, made a normalized metric for energy use hard to calculate.
But based on our experience, process energy use is typically quite limited in an elf-driven, assembly operation to lighting, conveyors, a few small air compressors, some shrink-wrap machines and testing cabinets. But once again, hard data was difficult to find and our guides could not point us to one electricity or gas meter. We were assured repeatedly, “It’s just not significant.”
This is a mammoth operation with global reach, so we started to get excited about the real potential for energy efficiency we must be about to unearth. We followed our checklist devotedly through assembly and packaging, and our efficiency-seeking hearts quickened when we stumbled upon some light manufacturing devoted to repairs to goods damaged in transit. “Oh, that,” a production manager says, “We hardly ever need to do repairs. Everyone tries their hardest for Santa.” Once again we heard, “It’s just not significant.”
One of our favorite targets for energy use optimization is improving the generation and use of compressed air. Santa’s Workshop has skinny plastic tubes snaking everywhere, full of pressurized air to use for everything from drying glue to blowing snow off the floor.
One of my colleagues, looking for a regulator to see if the air pressure can be dialed back, not only failed to find a single regulator, but she also couldn’t locate an air compressor anywhere. So we added “compressed air mystery” to our agenda for the debrief.
Even at this busy time, Santa’s Workshop managed to gather an impressive team for the debrief, including Santa himself. We went over our suggestions: optimized lighting, especially where candles are in use; motor maintenance; conversion to variable-speed drives on lines that handle both dainty jewelry and weighty entertainment centers; infrared ovens on the glue drying operations.
But we were stumped when it comes to any sort of benefit/cost estimates. We had no hard data, and management had been reluctant to show us the sources of energy production or supply. Santa repeatedly waved off this frustration, repeating yet again, “It’s not significant!” and stressing the value of high spirits, goodwill, warm hearts and other platitudes.
While we’ve heard this from management before, we simply cannot afford to underestimate the significance of every energy efficiency opportunity, big or small. It all adds up. We will continue building this relationship in hopes of drawing Santa’s Workshop into an honest, open discussion. Similar to many other factories around the world, there is too much energy efficiency potential at Santa’s Workshop to just give up.
Here’s to big energy savings and greener global chains in 2011 and beyond!