Did you know that any “green” changes you make in your workplace not only help the planet, but can improve your company’s efficiency?
The New Year is always a time for evaluating the past and looking towards the future. So this year, why not consider these five ways to make your workplace more eco-friendly in 2018:
Improve Waste Diversion
Pretty much every business could do more to reduce and divert its waste output. But you won’t know until you take a good look at what you’re currently discarding.
One way is to engage your staff in an interactive waste audit. This gets everyone involved in identifying what’s in the trash and what can be diverted away from landfills. (New York City and other communities actually impose fines on companies that fail to properly recycle.)
A waste audit helps you to measure the different types of waste generated at your business. The results will help you to figure out how much waste your creating and how effective your current recycling (or composting) programs are. It will also help identify opportunities for reducing the amount of waste you send to the landfill, and potentially save the company some money.
For a free downloadable guide on how to conduct a waste audit, Click Here.
Warehouse automation is everywhere these days. At Amazon and other online retailers, for instance, “pickers” work side-by-side with robots. (See related article “Warehouse Automation New Frontiers.”)
And with good reason. In many instances, warehouse automation has been shown to improve efficiency, speed, reliability, accuracy and (eventually) cost savings.
Is It Right for You?
But just because automation is so prevalent doesn’t mean it will solve every material-handling issue or be the right fit for your facility. Humans are still better at a lot of things. Indeed, even at Amazon — the mother of all robotic warehouses — machines are not quite ready to take over completely.
As you can see, the science of warehouse automation encompasses all kinds of methods to bring inventory directly to the worker, in order to minimize his or her movements within the facility. Some of the most popular systems are carousels, vertical lifts, automated storage and retrieval systems (AS/RS), mini-loads, and automated guided vehicles (AVGs). A separate category of automation includes conveyors that move and direct inventory to the next appropriate operation.
Case in point: A mid-sized industrial distributor made a $3 million investment in carousels linked with an active conveyor. Alas, the system’s performance and reliability were so poor that it was abandoned, at a significant loss to the company. But in hindsight, the owner realized that, even if the system had worked perfectly, it still would have been a really bad investment.
Why? Because even though the automation enabled him to cut his workforce in half (for a savings of $300,000 per year), the five-year return on his $3 million investment would still have been minus 19%.
Like all business decisions, the choice of whether to invest in automation boils down to a reasonable expectation of adequate ROI.
Did you know that every day in America, 13 people go to work and never come home?
That’s right. In 2015 (the most recent statistical year) 4,836 workers were killed on the job.
Another 3.3 million people per year suffer a workplace injury from which they may never recover. No one wants to get hurt on the job. But best safety practices are often neglected because they take a little extra time and effort.
As a result, serious workplace injuries are far too common.
Did you know that most lean manufacturing concepts were developed from the philosophies of Benjamin Franklin?
And Henry Ford cited Franklin as a major influence on his own business practices, which included Just-in-Time manufacturing.
Let’s take a look at some of the guiding principles for implementing a lean manufacturing protocol…
First and foremost is waste reduction/elimination. Historically, this is the foundation of modern-day lean manufacturing, identified by Toyota Production System in the 1990’s.
Many of the other principles revolve around this concept. There are seven basic types of waste in manufacturing:
Overproduction (production ahead of demand)
Unnecessary Motion (moving people or equipment more than is required to perform the task)
Excess Inventory (all components and finished product not being processed)
Production of Defects (leading to rework, salvage and scrap)
Waiting (i.e., waiting for the next production step or interruptions of production during shift change)
Transportation (moving products that are not actually required to perform the task)
Overprocessing (resulting from unnecessary work that adds no value)
Waste reduction/elimination involves reviewing all areas of your organization, determining the source of all non-value-added work, and reducing or eliminating it.
Continuous improvement is sometimes referred to by the Japanese word “kaizen,” which literally means “change for the better.”
As the name implies, continuous improvement promotes constant, necessary change toward achievement of a desired state. The changes can be big or small, but they must lend themselves toward improvement.
To be effective, continuous improvement should be a mindset throughout the entire organization. Lean manufacturing experts suggest that you not get caught up in only trying to find the “big ideas,” as small ideas can often lead to big improvements.
For instance, at Toyota, the culture of continual aligned small improvements has yielded large results in overall improved productivity.
Respect for Humanity
The most valuable resource for any company is its people. Without them, the business simply will not succeed.
When employees do not feel respected, they tend to lose respect for their employer. This can become a major problem when a company is trying to implement lean manufacturing principles.
To achieve this, levelized production takes into consideration both forecast and history.
Your customer orders most likely fluctuate daily. Let’s say on Day 1, they want 10 black and five red parts. The next day, they want 12 red and seven black. On Day 3, they only require 13 parts.
Using levelized production:
On Day 1 you would set the level volume at 15 parts per day, and production would replenish the 15 parts that were ordered.
On the second day, the order is 19 parts (four parts higher than our levelized production volume). Production would still build 15 parts and the shipping area would take four parts from an inventory called “fluctuation stock.”
On the third day, the order was 13 parts, which is two less than the levelized volume. So two parts are put back into fluctuation stock.
The basis behind just-in-time production is to build what is required, when it is required and in the quantity required. In conjunction with levelized production, this principle works well with the pull system. It allows for movement and production of parts only when required.
The goal in lean manufacturing is to maintain finished product inventory at the lowest levels possible, while ensuring delivery does not suffer. Of course, it is nearly impossible to carry zero inventory, particularly in facilities where short lead time is essential. So you will need to carry a store of parts to pull from when required.
To facilitate just-in-time production, companies typically employ a system of “kanbans.” A kanban is a hand-sized card that moves with the product or material. It signals when the product is to be built or when the material can be moved.
The kanban basically serves as a work order or pick list. But it also serves as a visual control, to identify the contents of each box. A third function of a kanban is inventory control, to determine the amount of finished product on hand.
On May 18, 2015, “as the light was fading at the end of a bitterly cold day,” zoologist Tony Martin dropped his last rat bait pellet onto a peninsula at the western tip of an island near the South Pole.
“We had finished. We had really finished,” Martin wrote in his final transmission.
Another consideration was that Martin’s team of conservationists needed the containers to be recyclable and/or biodegradable. They wanted to leave virtually no evidence that they had even been there.
But to save the tortoises and other threatened wildlife populations, the folks at Bell Labs had to ensure that their product would survive the trip to the Galapagos and the tropical Ecuadorian climate. In addition, the containers had to meet the Galapagos project’s strict environmental guidelines.
In 2010, police in Dubai intercepted a container from a Liberian-registered ship that had originated from Pakistan. Suspecting narcotics smuggling, they searched the container’s cargo—heavy bags of iron filings—but found nothing.
Almost as an afterthought, they then decided to check the pallets on which the bags had rested. Inside each pallet was a hollowed-out section containing 500 to 700 grams of heroin.
Which only goes to show you that pallets typically go unnoticed. (A fact that the drug smugglers were no doubt counting on.)
Invisible, But Everywhere
Think about it… This unassuming construction of beams and planks has carried most every object on the planet, at one time or another.
“Pallets move the world,” according to Mark White, an emeritus professor at Virginia Tech and director of a pallet and container research lab.
And, while they may not look like much, these simple shipping containers play a major role in the history of our economy. But just when did the ever-humble pallet become such a warehouse staple?
It All Began…
Before the birth of pallets, wooden crates, boxes, barrels, and kegs were the mechanisms of choice for transporting and storing goods. Skids were also sometimes used. (As you no doubt already know, a skid is similar to a pallet but does not have bottom deck boards.)
In fact, the use of skids dates back to Ancient Egypt and Ancient Mesopotamia, in the 1st millennium B.C.
It wasn’t until the early 1920’s, shortly after the modern forklift was invented, that skids evolved into pallets. (This, of course, helps to answer that age-old question: Which came first, the pallet or the forklift? It was, indeed, the forklift.)
Recognizing that skids did not provide the support and stability often required for heavier loads, bottom planks were added to the design in 1925. And the pallet was born.
This addition resulted in an improved weight distribution and a decrease in product damage. It also led to the concept of stacking, which allowed goods to be moved and stored with extraordinary speed and versatility.
Needless to say, the dawn of the pallet revolutionized the way merchandise was gathered, stored and protected. It wasn’t long before every warehouse across the globe began relying on these simple wooden structures to load and store their goods.
Then the war came. The Big One — WW II. And the popularity of pallets skyrocketed.
Mass production of all kinds of goods, especially for the military, increased sharply. Pallets were used by thousands of small and mid-sized business throughout North America.
As a result, it quickly became obvious that pallet standardization was necessary. Every link in the handling chain needed to know just what it was receiving and had to be prepared to receive it.
That’s when the U.S. Navy’s Bureau of Ordnance set up a Materials Handling Laboratory in Hingham, Massachusetts. Their purpose was to engineer the job of handling as much war material on pallets as possible.
Working together, the Allied countries established a universal 48 X 48 standard size pallet to accommodate easy of shipment and storage of ammunition and other war materials.
One important feature of the standard pallet size is that it fits common 8’ 6” and 9’ 2” railroad box cars beautifully. In addition, the square shape simplified loading and unloading, as well as warehouse stowage.
Pallets Helped Us Win the War
Pallets played a huge role in the Allied forces winning the war. Tens of millions of pallets were employed.
In fact, according to one historian, “The use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war.”
During this time, a resourceful Navy Supply Corps officer, looking for a way to improve turnaround times for materials handling, invented the “four-way pallet.” With notches cut in the side of the pallet, forklifts could now pick up pallets from any direction.
The design change was a relatively minor refinement that resulted in a doubling of material-handling productivity per worker.
This archived 1950’s video footage shows how surprisingly modern warehouses had become by that time:
Today there are approximately 450 million new pallets produced in North America each year. About 1.9 billion pallets are in use at any given time.
Today’s pallets are designed to withstand enormous weights and be lifted on and off trucks, ships, and planes. You might even say that, without them, it’s uncertain whether the global economy would be as strong as it is today.
For a virtually invisible object, pallets are everywhere!
We started off our energy efficiency series for industrial businesses with a discussion of peak energy demand identification. The goal was to identify peak energy demand times and shift the load to flatten your energy curve. This month we cover Part Two of the series: Weekend Energy Use.
The series on energy efficiency measures at a glance:
Peak energy demand identification
Weekend energy use
Compressed air systems
Weekend Energy Reduction
Energy efficiency plays a key role in operational efficiency — it has a direct impact on your business results. Some industrial businesses run weekend shifts, while others may close the shop down for a day or two but unnecessarily leave equipment on. Either way, by putting a little attention toward your weekend energy use, you can lower your total operating costs.
To start, review your energy profiles to find energy waste. If you are a small shop without sophisticated energy management software, you can create your own energy profiles based on interval data by using the charting functions of Microsoft Excel. If provided by your utility, an easy way to collect your detailed energy data is through the Green Button initiative.
According to the US Department of Energy, “The Green Button initiative is an industry-led effort that responds to a White House call-to-action to provide utility customers with easy and secure access to their energy usage information in a consumer-friendly and computer-friendly format. Customers are able to securely download their own detailed energy usage with a simple click of a literal ‘Green Button’ on electric utilities’ websites.”
Once you gain insight into your weekend energy use, it is time to share those insights.
Often weekend energy savings boils down to employee energy awareness. If your employees can see that their wasteful habits make a difference, they are more likely to feel inclined to do something about it.
Per Energy Lens, the most effective way to engage your employees in energy savings is by providing them with targeted facts and figures. “Specific figures are generally best for raising energy awareness among staff. For example: Unnecessarily leaving equipment switched on when we go home is wasting x kWh, y dollars, and z lbs CO2 each day. If your building operates continuously every day, investigate the energy consumption of different shifts.”
The use of energy in industry affects every single citizen directly through the cost of goods and services, the quality of manufactured products, the strength of the economy, and the availability of jobs.” – The National Academies of Sciences, Engineering, & Medicine
When it comes time to share results, savings related to specific days, times, and activities are more motivating than sharing the building’s total energy savings.
Reduction in energy demand can also be achieved by regular production shutdowns (including shutdowns for scheduled maintenance or retooling) and off-shift periods. Savings can be substantial. And data and analytics can offer visibility into shutdown levels to help you optimize savings.
Once energy waste is targeted and employees are engaged, it is time to track performance. Energy Lens offers five rules for tracking your energy performance on a monthly basis (click on the link to read more about each rule):
Remember that months are very different in calendar terms;
Only compare the average kW between months;
Restrict the energy that contributes to each monthly average;
Use energy data that contains the necessary level of detail; and
Be aware of seasonal variations in energy consumption.
You Need a Game Plan
Independent studies indicate that U.S. industry as a whole could reduce energy use by 14% to 22% in the near term through cost-effective efficiency measures. Tackling weekend energy efficiency initiatives can help you reduce your energy use and lower your total operating costs — along with lowering the costs to our environment, to our national security, and to irreplaceable resources.
Summary game plan:
Identify specific weekend energy waste to target
Quantify the energy waste
Raise energy awareness and encourage employees to reduce energy waste
Track the energy performance of the days, times, areas, and uses of targeted energy waste
Share and display achieved savings (and celebrate!) to motivate for continued progress
Among developed nations, the United States has the greatest opportunity for improvement when it comes to energy waste.Complex energy systems play a major part in industrial business. For example, energy use totals roughly $180 billion per year by U.S. manufacturing plants alone.
Time for a Clean-Up
Now is a good time to assess your energy usage and clean up energy waste. As part of a short series on energy efficiency, we will cover five essential measures that every manufacturer can implement to help lower costs, increase competitiveness, and improve your brand by being more environmentally friendly.
This series on energy efficiency measures will include:
Peak energy-demand identification,
Weekend energy use,
Start-up spikes, and
Compressed air systems
Today we will cover the first of these five measures: Peak energy-demand identification.
Understanding Peak-Demand Charges
It all started with a few electric power failures. To combat the severe effects of high demand exceeding the limit of electrical grids (like what happened to the city of Chicago in 1995 and to the state of California in 2000 and 2001), peak-demand charges have been incorporated into many utility bills to help lower peak demand. According to Sustainable Plant, a publication and online resource promoting the sustainability of industrial operations, these peak-demand charges can easily equate to 30 percent of a plant’s monthly utility bill.
Have you read your utility bill lately?
It’s complicated and varies widely based upon your contract. But taking the time to understand your bill is the first step in realizing energy savings. Both consumption (or base) charges and demand charges are part of every electricity bill, and for industrial users these charges are usually broken out based on your rate structure.
Consumption is measured in kilowatt hours (kWh) and demand is measured in kilowatts (kW). With higher demand comes higher demand charges. Basically, two companies with the same amount of total energy consumption could pay different rates based upon one using kilowatts at a higher intensity over a shorter period of time. Peak-demand charges are calculated over the 15-minute interval when the plant uses the greatest amount of energy in a given billing period.
Let’s Take a Closer Look…
To illustrate how a demand charge can effect two companies differently, here is an example provided by Energy Smart, an energy-efficiency company based in Boulder, Colorado:
Let’s assume these rates apply to both companies:
Electricity charge = $.0437 per kWh Demand charge = $2.79 per kW
Example 1: Company A runs a 50 megawatt (MW) load continuously for 100 hours. 50 MW x 100 hours = 5,000 megawatt hours (MWh) 5,000 MWh = 5,000,000 kWh Demand = 50 MW = 50,000 kW Consumption: 5,000,000 kWh x .0437 = $218,500 Demand: 50,000 kW x $2.79 = $139,500 Total: $358,000
Example 2: Company B runs a 5 MW load for 1,000 hours. 5 MW x 1,000 hours = 5,000 MWh 5,000 MWh = 5,000,000 kWh Demand = 5 MW = 5,000 kW Consumption: 5,000,000 kWh x .0437 = $218,500 Demand: 5,000 kW x $2.79 = $13,950 Total: $232,450
It is clear to see that Company A pays significantly more due to higher demand (50 MW vs. 5 MW), even though both companies are at the same consumption level. Same kilowatt hours, but different intensities.
Real-Time Data Helps
Real-time energy data, a component of any good energy-management software program, lets you see more than what your once-a-month utility bill reveals; it lets you manage your energy use in real time. You can monitor energy use fluctuations and easily see when your demand for electricity is greatest. From this visibility, you can develop an energy action plan to lower the highlighted peaks and ultimately lower your demand charges.
Real-time energy monitoring not only provides ongoing feedback and support in planning of your energy use, but can also be used to track the results of your energy-saving initiatives. There are a lot of energy-management software applications available to choose from, with varying degrees of pricing, deployment, features, training, and support. Based on your needs and capital, a good place to start is to review and compare top software options at Capterra.
Measuring, Tracking, Benchmarking
Your most powerful tools for energy waste reduction are measuring, tracking, and benchmarking energy use across all operations. Measuring and tracking help you establish a baseline, a starting point, of your energy performance. Per the EPA’s ENERGY STAR, with your baseline established “you are able to set improvement goals, judge changes in energy use, and determine when to take corrective action. Without good energy data, it is impossible to tell if you are really improving or not!”
Benchmarking is used for comparing your energy performance over a specified period with facilities nationwide that operate like yours. It helps you answer the questions “How are we doing?” and “How do we know?”
ENERGY STAR offers energy tracking and benchmarking tools as an alternative for smaller industrial facilities that may not have the resources to invest in a custom energy-management system. These tools aim to help manufacturers assess their energy performance, establish baselines, and set performance improvement goals. Here is an easy-to-read ENERGY STAR document, Guidelines for Energy Management, that outlines seven main steps, including tracking and benchmarking, for improving your overall energy performance.
Your Turn: Create a Game Plan
Peak-demand charges are one of the most expensive parts of your utility bill. Once you gain visibility into your energy usage, you can take action to flatten your energy curve — your intervals of highest demand — by load shifting and filling in the low valleys.
Load shifting is about staggering the start-up of your building’s HVAC system, mechanical equipment, lighting, and office equipment, or trying to minimize any time-energy use is at its highest, to shave off the peaks and flatten out your energy curve. By flattening your energy curve, you will save significant money on your future energy bills — Cha-ching!
Your summary game plan:
Collect/Track good energy data from the past one year
Benchmark current energy use, how do you compare to others like you?
Automated technologies have become a staple of modern industry throughout the world. The 21st century has seen warehouses and distribution centers, once governed solely by manual labor, transform into highly productive, automated environments.
Today’s operations are so high-tech that extensive material handling solutions are used to move goods to workers, instead of workers moving to the goods. These material handling solutions include conveyors, sorting equipment, and automated storage and retrieval systems (AS/RS), and the latest innovation being robotics.
The Best in Automated Material Handling Systems
The best case in warehouse automation out there, hands down, is Amazon.com. Sneak a peek at Amazon’s human-machine collaborative power at MIT Technology Review’s Inside Amazon’s Warehouse, Human-Robot Symbiosis. Amazon’s fast-paced process-driven environment is crazed with a dizzying array of activity. At the center of it all are robots. Kiva robots are utilized to rearrange shelving units and ferry shelves full of product to human workers for picking and packaging. Human workers no longer need to walk to retrieve products, which in turn greatly improves Amazon’s order fulfillment times. And when a shelf needs restocking, a robot automatically delivers the empty shelf to a human packer.
Kiva Systems, now Amazon Robotics, founded in 2003 by Mick Mountz, employs hundreds of mobile robots to offer integrated order-fulfillment solutions at warehouses and distribution centers for companies like The Gap, Saks Fifth Avenue, Staples, Walgreens, and Crate and Barrel. Watch a play-by-play narrative video of how Kiva robots impressively automate a warehouse environment at A Day in the Life of a Kiva Robot. The results are equally impressive, such automation allows for a warehouse to handle up to four times as many orders as a similar warehouse that does not utilize automation. In non-automated environments, workers can spend 70 percent of their time walking to retrieve goods – that adds up to walking well over 15 miles per shift.
Diapers.com, purchased by Amazon in 2011, is the largest online retailer of baby products and is another user of the Kiva order-fulfillment robot system. Roughly 15 to 20 robots work simultaneously to retrieve products based on digital instructions. The robotic picking system helps Diapers.com consistently achieve one-day shipping. This lightning-fast delivery, along with their award-winning customer service, is a game-changer for busy moms.
It’s Still about the People
In a manual labor-oriented operation, a traditional operation, the basis of success is on managing, motivating, and developing people. Performances of throughput and order accuracy are the key indicators, leaving system vitality directly impacted by individual performance. Basically saying: the recipe is only as good as the least quality ingredient. In a traditional operation, a system is only as good as the people performing the individual tasks within that system.
This changes to a degree in an automated environment because people are not performing the individual tasks, machines are. Of course, people are tasked with managing the machines that perform the tasks. In an automated operation, optimization comes from managing both technology and people; utilizing performance metrics to monitor and optimize the technology investment.
To maximize your investment in automation it is critical to have the right people in place. Yes, a technical skill set with a whole systems mindset is important, but finding people with great communication skills is still a must. To read more about the profiles of key leadership roles for an automated warehouse, click here.
So, What Does the Future Hold?
No doubt, robotics will be the key to furthering efficiencies in warehouses and distribution centers. Once confined to performing repetitive tasks separated from human workspaces, industrial robots are now being utilized to work in conjunction with human workers. With better computer chips and algorithms, robots are now better equipped to learn new tasks quickly. And with better sensors and actuators, they have become safer in working alongside human workers.
For now, robots are still incapable of tasks that require fine manipulation or improvisation. It is just a matter of time before robots will have the functioning to pick goods from a shelf and prepare and pack the items for shipping. Wily Shih, a Harvard professor who studies manufacturing, believes the future will likely see robots become “easier to drop into factory and distribution settings, and easier to integrate with existing manual processes and workers.”
The Coming of the Robot Revolution
With the advances in automation and artificial intelligence, it is easy to worry about job displacement. A MIT Technology Review article “Who Will Own the Robots?“, the third in a series of articles about the effects of automation on the economy, reminds us, “As Silicon Valley has taught us, technology can be both a dynamic engine of economic growth and a perverse intensifier of income inequality.”1
The article wraps up with a valid point to consider in moving automation forward. That with the development in automation and digital technologies in general, whoever owns the capital will gain the benefit. Richard Freeman, a labor economist at Harvard, shares a solution “that far more people need to ‘own the robots.’” Investment programs in profit sharing, employee stock ownership, and others could be utilized here to have ownership more widely shared. After all, sharing the rewards of new technologies “could restore the middle-class dream that has long driven technological ambition and economic growth.”2