Tees Valley Resource Efficiency Club Project Initiation Event

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Tees Valley Resource Efficiency Club Project
Initiation Event
John Binns Senior Consultant Atkins Andy
Rogers Principal Consultant Atkins
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Domestics

• Toilets
• Fire escapes/exits
• Fire alarm test
• Breaks tea/coffee lunch flexible

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Welcome

• Talk to the delegate next to you
• Find out
• Who they are and what do they do?
• Their favourite food?
• A little known fact about him/her?
• Introduce partners

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History of Resource Efficiency
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Recent History

• Move towards resource management'
• Benchmarking increasingly important
• IPPC now includes resource efficiency
• Integrate with EMS

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Benchmarked (yield) Efficiencies, Surface
Engineering Sector
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Drivers for Resource Efficiency
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WORKSHOP Drivers for Resource Efficiency

• In small groups discuss the advantages and
  disadvantages of resource efficiency

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Drivers
Financial Benefits
Competitors

• Legislation
• UK
• EU
• International

DRIVERS FOR Resource Efficiency IMPROVEMENT
Pressure Groups

• Government
• Taxation Policy

Suppliers customers
Stakeholders
Environment
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Drivers
Financial Benefits

DRIVERS FOR Resource Efficiency IMPROVEMENT
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Financial Benefits

• Energy Efficiency
• Climate Change Levy
• Reduced costs
• Waste Minimisation
• Landfill Tax
• Reduced costs
• Legislative Compliance
• Avoidance of fines

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Business Benefits of Resource Efficiency

• Improve resource productivity and increase
  profits
• Typically 1 to 3 of annual turnover
• More control over environmental costs
• Plan for environmental factors
• Easier to comply with environmental regulations
• Improve companys reputation

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Drivers
Financial Benefits
DRIVERS FOR Resource Efficiency IMPROVEMENT
Environment
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Business Impacts On the Environment

• Environmental harm
• resources used
• disposal of wastes
• Environmental risk
• pollution incidents
• contaminated land

Cost Control
Cost Avoidance
An EMS provides the framework to stimulate a
critical review of operations
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Key Environmental Issues Related to Resource
Efficiency

• Resource Depletion
• Solid Waste
• Pollution of Water and Land
• Nuisance
• Ozone-layer depletion
• Greenhouse effect and global warming
• Acid rain

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Resource Depletion

• Natural resources are not infinite. Reserves of
  fossil fuels are expected to only last another
  100 years
• Forest destruction may result in the
  disappearance of all forests within 25 years
• 50-100 species are being lost per day
• Renewable and non-renewable resources

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Solid Waste

• 420 million tonnes of waste is produced per year
  in the UK

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Converting Global Concerns to Local Action
Local action
Big Picture
Global warming Acid rain Holes in ozone
layer Loss of diversity Ground level
ozone Airborne particulates Persistent chemicals
Reduce energy consumption Reduce emissions to
air Prevent spillage of chemicals Reduce waste
generation Design for recycling Remove hazardous
process Video conferencing Paper less office Use
public transport
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Drivers
Financial Benefits

• Legislation
• UK
• EU
• International

DRIVERS FOR Resource Efficiency IMPROVEMENT

• Government
• Taxation Policy

Environment
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European and UK Legislation

• EU Directives and Regulations
• Landfill Directive
• Waste Disposal
• IPPC
• Packaging Waste
• UK Legislation
• Environmental Protection Act 1990
• Landfill Regulations
• Hazardous Waste Regulations
• Environment Act 1995
• Pollution Prevention and Control Act 1999 and
  Regulations 2000
• Producer Responsibility Obligations (Packaging
  Waste) Regulations 1997

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Drivers
Financial Benefits
Competitors

• Legislation
• UK
• EU
• International

DRIVERS FOR Resource Efficiency IMPROVEMENT
Pressure Groups

• Government
• Taxation Policy

Suppliers customers
Stakeholders
Environment
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Customers

• Environmental Policy
• Environmental Management System ISO14001/EMAS
• Producer Responsibility
• Supply Specifications
• Alternative/Substitute Products/Materials

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Stakeholders

• General Public and Local Community
• Investors
• Ethical Investors
• Green Loans
• Insurers

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Drivers
Financial Benefits
Competitors

• Legislation
• UK
• EU
• International

DRIVERS FOR Resource Efficiency IMPROVEMENT
Pressure Groups

• Government
• Taxation Policy

Suppliers
Stakeholders
Customers
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Resource Efficiency Hierarchy

• 1. PREVENTION
• 2. MINIMISATION
• 3. RE-USE
• 4. RECYCLING
• 5. TREATMENT
• 6. DISPOSAL

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Some Facts

• Traffic levels increased by seven per cent
  between 2000 and 2004. In 2002 vehicles accounted
  for a quarter of carbon dioxide emissions in the
  UK.
• Emissions of greenhouse gases fell by about six
  per cent between 1995 and 2003 mainly because of
  the change from coal and oil to gas fired power
  stations.
• Small and medium sized businesses produce more
  than 60 million tonnes of waste, but very few are
  aware of their impact on the environment.
• In 2003 only 65 per cent of rivers in England and
  Wales were of good or very good chemical
  quality.

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The 7 Steps Methodology
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7 Steps Methodology
7 - Project implementation,
review and feedback
6 - Assess, implement, manage
5 - Generate and rank options
4 - Quantify wastes and costs data
3 - Process mapping
2 - Assess scope for savings

• 1 - Management commitment

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Step 1 Assess Scope for Savings
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Estimating the Potential Cost Savings

• IF YOU DONT MEASURE IT
• YOU CANT MANAGE IT
• Based on 500 companies, typical cost savings are
  1 - 3 of turnover
• Over 60 of projects involve little or no cost

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Assessing the Scope for Savings

• Inputs
• Raw materials
• Packaging
• Energy
• Water
• Ancillary
• Consumables

• Outputs
• Releases to air
• Waste water
• Solid and liquid waste

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Assessing the Scope for Savings

• Compare the amount of material purchased with
  amount in final product
• Or compare with typical savings based on past
  minimisation projects
• Ranking material costs shows where to focus
  efforts (i.e. focus on costly materials first)

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Typical potential cost savings
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Environmental Costs of Business Operations
INPUTS PROCESSES OUTPUTS
Materials Products/services Packaging
Packaging Energy
Wastes Water
Effluents etc. Air
emissions etc.
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Using EMA to Increase Profits Example

• Small company with annual turnover of 5,000,000
• and pre-tax profit of 10
• Materials, utilities and waste accounts for 30
  of business cost
• To increase pre-tax profit by 50,000
• Increase sales by 500,000
• OR
• Increase resource productivity by 1

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EMA Aims and Objectives

• Analyse materials, utilities and waste costs
• Inform decisions about operating costs
• Identify priority areas
• Compare costs to improve
• Business processes
• Product and service design
• Environmental considerations in project appraisal
• Applicable to all types and sizes of business

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Mass Balance of Product Materials
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Accounting for Energy

• Climate change levy
• Introduced in April 2001 collected by supplier
• Price of energy increased by 15

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Cutting Energy Bills at Reed Business Information

• Building management system for heating, air
  conditioning and chiller
• Control system for lights
• Energy efficient lights
• Gas consumption reduced by 67
• Electricity consumption reduced by 15
• HOW MUCH MONEY WOULD YOU SAVE?

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Accounting for Energy

• Analyse energy costs
• Monitor energy consumption
• Target investment in energy efficient equipment
• Enhanced Capital Allowance

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Monitoring Energy Consumption

• Arrange for meters to be read
• Monthly if invoicing is quarterly
• Weekly if invoicing is monthly
• Check bills against meter readings!!
• Compare current with previous years
• Graph data to identify exceptionally high
  consumption
• Request data file from electricity supplier
• Benchmark against similar businesses

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Accounting for Water

• Water can cost up to 1-2 of annual turnover
• Envirowise 2000 survey
• Purchase costs varied between 46p/m3 and 1.34/m3
• Effluent discharge costs varied from 10p/m3 to gt
  3.00/m3
• Costs increasing faster than inflation
• Can save 20 through no cost or low cost measures

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Accountants Role Leading a water minimisation
Project at F Smales Sons

• Water reduced by 39 - 27,000/year cost saving
• Commissioned water audit and meters fitted
• Staff suggestions for improvements
• Cost targets now a KPI for Section Manager
  appraisal
• Regular monitoring
• Graphs given to Section Managers each week
• Significant anomalies highlighted by Management
  Accountant
• Progress monitored at monthly meetings

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Step 2 Management Commitment
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Workshop 8
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Commitment

• Without commitment, no start can be made
• Typical reasons not to start include
• We have no wastes!
• Our wastes are small or low cost
• The accounts do not show a problem
• We comply with Duty of Care regulations
• It requires a positive decision to start
• We dont believe the savings potential
• We did it last year!

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Step 3 Process Mapping
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Process Mapping

• Inputs
• Raw materials
• Packaging
• Energy
• Water
• Ancillary
• Consumables

• Outputs
• Releases to air
• Waste water
• Solid and liquid waste

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Process Mapping

• Draw a flow diagram
• Identify quantities and costs for each processing
  stage
• Use production logs/process specifications etc.
• Or carry out a live audit
• Draw up a mass balance for the process

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Process flowchart for Metalcutters Ltd
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(No Transcript)
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Workshop 2
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Step 4 Quantify Cost determination
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Quantity and Cost Determination

• Use purchase records
• Quantity and cost data supplied together
• Carry out for a fixed period , e.g. last
  financial year
• Utilities bills (gas, electricity, water and
  sewage/trade effluent from bills)
• Compare total resource spend with turnover of
  business

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Data Information Sources

• Production data
• Electricity and gas invoices
• Water and effluent invoices
• Waste disposal transfer notes
• Raw material invoices
• Stock information
• Meter readings

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Identifying Environmental Costs on Flow Charts

Materials and utilities
Unpack castings
Wastes

Materials and utilities
Drilling
Wastes

Materials and utilities
Milling
Wastes
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Relating Data to Production

• Use Direct or Indirect measures
• Direct
• units of production, tonnes of production
• Indirect
• hours machine operated, sales or turnover for the
  period

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Breaking Down Environmental Costs

• Convert financial costs to physical quantities

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Typical Cost Savings
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Accounting for Wasted Materials

• Waste produced in the UK would fill
• the Albert Hall in one hour
• Trafalgar Square to the top of Nelsons Column in
  one day
• Wasted materials cost UK industry 15 billion per
  year
• ON AVERAGE THE TRUE COST OF WASTED MATERIALS IS
  ABOUT 10 TIMES THE COST OF DISPOSAL

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Improvement Example Reducing Office Waste

• Most offices can save 20
• Good practice benchmark 200kg of
  waste/person/year
• Average office paper use is 1.5 trees/person/year
• Best practice is 0.25 trees/person/year
• HOW MANY TREES DO YOU USE?

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Accounting for Wasted Materials

• Analyse true cost of wasted materials
• Mass balance of product materials
• Identify weight of materials purchased
• Compare with weight of final product
• Remainder is wasted
• Similar to balancing revenues and expenditures
• Waste contractor should provide waste quantities

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Spreadsheet to Analyse Costs
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Data Recording

• All data should relate to the same time period
• Either use
• Paper and pen (and your brain!)
• Spreadsheet

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Cost of Cutting Fluid and Cutting Tools Per
Casting Milled
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Using the Data

• You need to analyse it!
• Best option is to plot graphs

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True Cost of Waste

• Myth -
• Waste costs Disposal costs
• Truth -
• Waste costs Up to 20 times disposal costs

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Waste Cost Iceberg
DISPOSAL COSTS

• REALITY
• raw material costs
• processing and abatement/treatment costs
• rework costs
• impact on capacity from reduced productivity
• staff time
• monitoring costs

• stock and quality losses
• additional utility costs
• safety e.g. COSHH, PPE
• External costshealth, liability, societal costs
  including upstream environmental impact

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Identifying the True Cost of Waste
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Workshop 3 4
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Step 5 Generating and Ranking Options
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Generating Ranking Options

• Cherry picking leaking valves/ packaging reuse
• Problem solving
• Yield is too low
• Reject rates high
• Energy loss high
• Root cause analysis (machine, methods, operator,
  materials etc)

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Prioritising Issues

• Legal controls
• Rank on basis of true cost of waste
• Orrank on basis of resource consumption
• Consider plant capacity - increased yield without
  need for major investment

• Is waste stream associated with additional
  processing?
• Is there a risk associated with storage?
• Could environmental improvement increase market
  share?

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Brainstorming Session Rules
1. For each resource/waste generate as many ideas
as possible to eliminate or reduce 2. Any idea
is valid and may be written down 3. No idea may
be criticised (Foul!) 4. Session leader may ask
for clarification of an idea to ensure that it is
recorded correctly 5. As many ideas as
possible 6. Feed off other ideas 7. Only when
session ends can idea ranking begin.
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Workshop 6
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Prepare Waste Opportunity Checklist

• Tailor to your own site
• Ensures you look at most common areas that offer
  saving opportunities

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Identify the Root Causes

• Identify the root cause, not the symptoms.
• For example
• ...the segregation of waste in the production
  department was poor, with plastic waste being
  placed in the metal bin
• What are the possible root causes for this
  observation?

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Root Causes

• Root causes can include
• Training
• Procedures
• Equipment
• Records
• Communication
• Responsibilities
• Document Control

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Cause and Effect (fishbone) Diagram
CAUSES
People
Methods
Lack of clear instructions
Poor training
Changeover times too slow
EFFECT
Too much process waste
Supplied outside spec
Running too slowly
Waste of material during set-up process
Breakdowns
Materials
Machinery
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Workshop 7
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Input Resource Management

• Use less raw material for same output
• Higher quality raw material - less waste
• Use different raw materials - process
  modification
• Use less hazardous material
• Use material which can be recycled

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Process Changes (Design Manufacturing)

• Clean processes and technologies
• Produce less waste during production
• Good housekeeping
• Materials handling
• Maintenance
• Segregation

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Product Changes

• Lightweighting
• Product substitution e.g. plastic for glass
• Single material construction
• Larger containers (bulk purchasing)
• Less sales packaging
• Better quality products/longer life

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Step 6 Opportunity Assessment
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Opportunity Assessment

• Technical assessment
• Is it feasible?
• Who implements?
• Economic assessment
• Capital investment/pay-back
• Running costs
• Environmental assessment
• Is the problem being transferred?

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Data Recording

• All data should relate to the same time period
• Either use
• Paper and pen (and your brain!)
• Spreadsheet

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Monitoring and Targeting
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Monitoring and Targeting
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Monitoring and Targeting
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Monitoring and Targeting
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Line of Best Fit
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Variance Graph
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Step 7 Project Implementation and Maintaining
Momentum
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Project Implementation Maintaining Momentum

• Ongoing leadership to maintain positive attitudes
• Capital investment appraisal techniques/integrate
  into business plan
• Ongoing monitoring
• Communicate results throughout the organisation

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Achieving the Benefits

• Appoint a champion
• Identify key players
• Identify motivational factors
• Understand how to overcome resistance
• Develop a strategy

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General Motivation How to Make Resource
Efficiency Work

• Champion
• Personal and technical development
• Ownership and management
• Access to senior management
• Considered as part of improved company performance

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Motivating Managers

• Senior Managers
• Reduced costs
• Reduced risks of prosecution and financial
  liabilities
• Improved company image
• Avoided reputational risks
• Help to combat supply chain pressures, (e.g.
  cost-down)

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Motivating Staff

• Operators
• Personal recognition
• Attributed savings
• Working within a greener company
• Possible financial rewards - link to suggestion
  schemes

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Workshop 9
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Examples of Resistance

• Its going to cost money
• Negativity It wont work its a waste of time
• It cant be done any other way weve always
  done it this way
• Nobody will get involved

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How to Overcome Resistance

• Resource management saves money, typically
• 1-3 of turnover
• 5-15 of energy and water costs
• 5-10 of the true cost of waste
• Avoids potential pollution prosecution
• Examples case studies prove it works!
• All staff can identify with improving the
  environment improved team working and culture

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Develop a Communication Strategy

• What do you want to achieve?
• Who can assist?
• How can you motivate people?

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Methods of Communication

• E mail
• Notice boards/white boards
• Newsletters
• Memos
• Posters/stickers
• Intranets
• Presentations
• Item at regular team meetings
• Annual reports

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Communication Formats

• Text
• Pictures/cartoons
• Graphs
• Presentations

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Learning Triangle
LECTURING
READING
Effectiveness
VISUAL AIDS
DRAMATIC PRESENTATION
DISCUSSION
ACTIVE LEARNING
DELIVERING A TRAINING PROGRAMME / TEACHING
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Remember

• Use a method specific for your audience to get
  your point across
• Use a suitable medium to relay the message
• Be aware of the environmental implications
• Be prepared to change your approach

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Site Review Action Planning

• Review opportunities
• Use of costs data and process mapping to identify
  priorities
• Develop a draft action plan
• Review and continue to assess opportunities
• Project management
• Consider an environmental management system

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Achieving Benefits

• People
• Systems
• Technology

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How to Keep up to Date

• Envirowise for free confidential advice 0800
  585794
• Magazines
• Environmental Data Services (ENDS)
• Environment Business Magazine (EBM)
• Handbooks
• NSCA Pollution Handbook annually
• Croners Policy Procedures quarterly
• EBM Environmental Compliance Manual quarterly
• Websites http//www.environment-agency.gov.uk/

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What is Envirowise?

• A programme funded by government
• Free help for UK businesses
• Promotes good environmental practices that reduce
  business costs
• Shows that improved environmental management can
  SAVE MONEY and INCREASE PROFITS
• www.envirowise.gov.uk
• F\Tees Valley REC\delivery-helpline.wmv

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Data Collection Reporting
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Data Collection Reporting

• Key part of club membership
• Need you to collect and report various issues
• Resource data
• Potential savings
• Actual savings
• Activity indicators

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Resource Data

• Outputs
• Packaging out
• Annual Output
• Effluent Volume
• VOC emissions
• Waste to landfill
• Waste recycled
• Hazardous waste disposal

• Inputs
• Packaging in reuse
• VOC producing solvents
• Water
• Electricity
• Gas
• Oil
• Vehicle Fuel

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Resource Data

• Some indicators may not be relevant
• Use purchasing records, transfer notes etc
• Where exact figures not available estimate
• Assist you _at_ face to face visits
• First report soon establish a baseline
• Other reports required during club duration

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Potential Actual Savings

• Potential
• Actions leading to key potential savings
• Potential cost savings
• Estimated cost implementation

• Actual
• Actions leading to key savings
• Savings achieved
• Cost of implementation

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Activity Indicators

• Contacts between leader and club
• Benefits to the organisation
• Number of employees involved/trained
• Any other benefits

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• Questions Answers

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Contact Details

• John Binns
• Senior Consultant
• 0191 2235230/ 0780 3260217
• john.binns_at_atkinsglobal.com
• Andy Rogers
• 01332 225740 / 0780 3260767
• andy.rogers_at_atkinsglobal.com