Software for getting lean and green
Being able to track and manage energy use and carbon emissions with software is a hot topic for manufacturing enterprises right now. Vendors with various backgrounds are tackling portions of this challenge, but it just may be that one of most practical ways of gaining improvements comes not from the higher-level carbon accounting space, but from software that blends the lean manufacturing concept of value stream management with emissions-related resources and green goals.
Earlier this week, I interviewed executives with a software company that does this very sort of lean and green pairing–Future State Solutions. One of the first things that Susan Duke, president, and Phil Coy, chief technology officer, explained to me is that they are not a “carbon accounting” solution vendor. Instead, explains Duke, their focus is on breaking down energy use, carbon output, and other environmental concerns down to the work cell or “value stream” level so that they can be managed in concert with lean goals, while also tying green impacts back to lean accounting functionality in their software.
For those of you not familiar with the term value stream management, it’s a lean technique that maps and analyzes the material flow, information flow, and resources needed to produce a certain product mix under a lean/pull methodology. Future State Solutions, which launched in 2006, began with software for value stream management and other lean manufacturing support, but soon realized that adding the green component was a natural outgrowth. In particular, says Duke, they began their blending of lean and green software functionality after examining some lean and green literature from the U.S. EPA and meeting with some EPA officials on the blending of the two concepts.
The opportunity that became apparent, says Duke, is that “If I’m doing lean, just by paying a little more attention, I can integrate environmental and energy concerns and get additional benefits.”
In practice, when Future State’s software is deployed, users define green-related resources that logically are part of a production process or aspects of running the facility, says Coy. This is in addition to the more classic lean resources the software models, such as materials, cycle times, changeovers, operator, or yield data. “You can define any additional resources–it could be electricity use, or water use, or propane, and assign the rate of use at the process level,” he says. “You also can determine whether it’s a resource that gets used during production, or only during changeovers, like a solvent used in cleaning.”
Once these resources are defined by business users, the company deploying the software can start to manage its value streams in a lean and green way, says Coy. By looking at changes such as demand variations (either volume or product mix), the software shows users green ramifications such as changes in energy use, carbon output, or the level of “non-product outputs” such as packaging waste or spent solvent. This multi-media demonstration from Future State Solutions’ Web site gives an example of the possible decision support.
“We’ve basically built a model that gives you the ability to do what-if scenarios,” says Coy, “so that if, for instance, volume is going to go up by 20 percent in three months, users can see what the new electricity usage will be, what the new non-product output will be, what the new materials requirements will be, and what the projected carbon footprint will be.”
Duke and Coy acknowledge some challenges in blending lean and green. For one thing, energy use and carbon footprint data tends be scattered in spreadsheets, and need to be imported into the software to achieve a better foundation for analysis. By contrast, much of the core value stream-related data comes from bills of materials and routing data in ERP systems, which are more centralized. But the spreadsheet data can be incorporated into the software, says Duke. It’s also important to set parameters and thresholds where they make sense, such as when changes to the product mix cause carbon output levels to be exceeded. “The use of mix thresholds is a very powerful feature,” says Duke.
Other challenges include the inability of many suppliers to provide carbon footprint data for the components or raw materials they supply to a plant. To address this, says Duke, some companies rely on economic input/output models from the likes of Carnegie Mellon. These directories are generic in nature and may be based on older calculations by researchers. Future State is partnering with a vendor called Climate Earth which can provide more current carbon input/output data for green supply chain calculations. Duke notes that a vendor like Climate Earth can help a company with some higher-level, advanced financial analysis for green goal setting, while Future State’s Value Stream Enterprise Management package can help identify and execute improvements at the operational level.
If this lean and green approach sounds like a bit of a data hog, Duke contends it shouldn’t be seen that way. Instead, she says, it’s a matter of putting together the necessary data to make lean & green decisions. “We don’t need a lot of data,” says Duke of the software. “You as a company need to manage data so that you are making the right decisions. The more detail you are willing to look at, the more waste you can eliminate.”
As companies face the prospect of complying with likely cap & trade regulations, there will be many vendors touting carbon accounting, energy management, and emissions tracking solutions. The pairing of lean value stream methods with green and carbon emissions analysis seems like a natural approach that will play a role in between higher-level carbon accounting and corporate sustainability project management solutions, and the more real-time energy monitoring and demand response solutions residing below. In upcoming posts, I’ll be writing more about these various players. Stay tuned, and please pass along any related vendors of interest.
