To Cut Costs on the Road to Sustainability, Try Problem Solving

Whether facing consumer pressure, dealing with regulatory requirements, or simply looking to help the world, environmental sustainability has been built into the strategies of many businesses in a way that was unheard of 30 years ago.

But most of these businesses believe there’s a fundamental conflict between cost and sustainability. Many of us believe that improving our environmental impact will hurt our bottom line. So we face an opposing pressure from investors or from the grim reality of trying to remain profitable in highly competitive markets. Some businesses by nature have a much larger environmental impact, and don’t see opportunities to improve this. Most proposed “green” measures require capital expenditure, even if they promise to eventually pay for themselves. Such proposals include upgrading to new infrastructure that runs more efficiently or uses less electricity, switching their electricity source to a more expensive alternative, or switching raw materials to more expensive recycled or environmentally-friendly alternatives. Even optimistic proposals for going green discuss creating entirely new products for the market.

But there’s an alternative. The reason many of us link spending money to going green is that we don’t believe we can effectively improve our environmental performance using our current assets. We may believe our current business is operating at close to optimal levels, but this is simply untrue. The fact is, most business processes and assets are performing far from their theoretical maximum, and this gap means huge opportunities to simultaneously improve financial and environmental performance through solving the problems that hold us back.

Solving operational problems in our business has the dual benefit of not only improving our environmental performance, but also saves the business money. If we can develop the skills in our employees to identify and solve these problems, we can turn sustainability from a scary word into an addiction.

Here are four examples of companies that did just that. By solving problems, they also accomplished a more sustainable process — and saved on cost.

Reducing Wasted Raw Material

At a business that makes rubber belts, they had a scrap problem. Their belt-cutting process intentionally created a significant amount of scrap in order to make sure the belts were the right width. They had accepted this as a part of the business until the plant’s leadership piled a week’s worth of scrap in the middle of the plant to visually demonstrate how much they were throwing away.

When the business set about to solving the problem, they understood that they were cutting the belts because the process that made them was unreliable, and the width of the belt varied. They dug into how the machine controlled belt width, and were able to reduce variation almost entirely, allowing them to make the belts thinner and cut 90% less scrap, saving both money and generated waste.

Transportation Optimization

A consumer products company shipped materials from its plants to warehouses all over the country in order to deliver it to customers. They found that their deliveries were late over 60% of the time, but struggled to solve the problem–they manufactured each product in a day and could not safely and legally drive the trucks any faster.

They approached the problem by modeling their shipping network and schedule, and challenging every shipping route. They found that they were transporting many products from facilities much farther away than was necessary, and were sometimes even shipping twice to make up for shortages in other warehouses. They rebuilt their shipping schedule to reduce the total distance each product traveled, bringing their on-time deliveries to over 95% and reducing fuel burned per product by over 20%, helping their bottom line and the environment at the same time.

Reducing CO2 Output

A chemical upgrader has iconic yellow flares that are used to alleviate pressure in the plant as variations occur. The business had accepted these flares as part of life, but when they analyzed how much money they were losing by flaring this gas rather than selling it, they found an urgency to solve the problem.

They dug into understanding what controlled the pressure variations, and found that they could greatly reduce variation by eliminating clogging in some of the smaller pipes. They searched for and found the source of the clogging, leading to smoother operation. This saved them millions per year in flaring, and eliminated enough excess CO2 production to offset the carbon footprints of everyone in the facility for their whole lifetimes.

Avoiding A New Facility

A consumer products business was planning on building a large new facility to take on additional volume. But when they realized how much opportunity was in their current facility to produce more, they realized they could increase the production of their current assets and avoid the new facility altogether.

In the span of three months, they solved a number of large, valuable problems in the business that let them take on the new volume almost a year earlier than previously estimated, and eliminated the entire cost and environmental footprint of a new facility.

The lesson, here, is that every business process can run more effectively by solving problems. No matter the business, the environmental impact per product can be reduced by increasing the performance of the process. Even processes that have little marginal environmental impact can improve the impact per product — by solving problems to produce more with the same overhead.

Improve Problem-Solving In Your Business

The road to sustainability and profit is closely linked to solving problems. And businesses can greatly improve problem solving results by investing in developing talent. Support your talent’s ablity to become better problem solvers, and unleashing them on valuable problems in the business. Most problem solving efforts in business are held back by a habit of using brainstorming, guess-and-check, or more structured ways of “producing ideas” to solve problems. Such approaches waste time, often cost money, and frequently don’t work.

To solve these problems, teams need a new approach to stop guessing and improve their skills. To replace the guessing habit, teach your team a new set of behaviors that far more effectively solves problems. Help them practice by unleashing them on easier problems in the business. Then progress them to harder problems as their skills and confidence grow. You’ll not only improve your own talent’s ability to solve problems, you’ll be improving operations, and financial and environmental performance as well.

Nat Greene is co-founder and current CEO of Stroud International and the author of “Stop Guessing: The 9 Behaviors of Great Problem Solvers. Nat has a Masters of Engineering from Oxford University and studied design, manufacturing and management at Cambridge University, in addition to executive education coursework in Harvard Business School’s Owner/President Management program.

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