Environmental sustainability is a dilemma for today’s organisations and consumers. Organisations generally want to maximise profits—but there’s increasing attention and interest into corporate responsibility and sustainability. Consumers too, are considering environmental and ethical decisions when making purchasing decisions. However, with each of us making hundreds of micro-decisions each day in our business lives, what practical steps can be taken to keep sustainability on the radar?
Appropriate application of “Lean” philosophies and techniques can pay dividends in this area. A key guiding principle of the Lean philosophy is to focus, study and understand demand and reduce waste. In sustainability terms, this can be translated into understanding what is consumed during the production of the goods or services that your organisation offers, and whether that consumption could be reduced. Clearly, particular attention should be paid to the consumption of scarce resources (such as water, oil, electricity etc), or processes which may cause additional environmental or social issues–for example, environmental pollution caused by the processing (burning) of fossil fuels.
Three areas to focus on are:
- Demand: How regular is the demand for your product/service? Could you manage demand or create incentives so that you can produce your goods/services more economically (Example: Airlines have become expert at use demand management systems which vary ticket prices to ensure each flight is as full as possible – this potentially allows environmentally friendly airlines to offer fewer—but fuller—flights, whilst increasing profit at the same time.)
- Process: How much waste occurs during processing? Can the process be carried out more efficiently to reduce waste? Can your service be delivered more efficiently? (Example: If you offer consulting services, do you really need to travel to a client site every day? Could you do some work remotely, using web conferencing—saving fuel and also money?)
- Eliminate: Can processes be eliminated so that resource isn’t required at all?
The linchpin: Data
The common thread between these three areas is having an understanding of business processes and data. It’s important to reflect on exactly how your business works and how much resource is used (and where). Good quality data and analytics underpin this understanding – without accurate, timely and actionable data you’ll be flying blind.
This can be illustrated with an example:
Back in July, the Desert Mountain Golf Community in Arizona, USA (a mid-sized firm), issued an interesting article explaining how they implemented an IBM business analytics capability. Desert Mountain is a large golfing community which exists in a desert. As such, water is a commodity that must be used sparingly. Using water is an absolute operational necessity; without water the grass wouldn’t survive – so reducing water consumption was an important focus.
The article describes how a saving of 10 million gallons of water per year was achieved. This achievement was made possible by measuring the need for water and matching the delivery of water to match as closely as possible, avoiding waste wherever possible. Sensors were installed to detect which parts of the golf course needed watering, and this data was used to ensure that water was only used when and where necessary (without the need for manual intervention). In addition to saving water, this also saved electricity (as the water pumps were used less frequently). Overall, this had a positive impact on the company’s cost-base, with around $120,000 savings due to the reduced consumption. In addition, damage that had previously occurred due to overwatering (where the course turns to mud) was reduced—leading to reduced maintenance costs. This achievement was made possible by collecting and analysing data about soil moisture level and water consumption, automatically analysing that data and then delivering water only where necessary.
A sound understanding of business process and business data, coupled with an analytic capability is important in the journey towards sustainability. As the Desert Mountain example shows, using data to drive sustainability isn’t reserved for global multinational brands; innovative mid-size firms can use the same tools too. No organisation is too large or too small to consider sustainability.
How does your organisation approach sustainability? I’d love to hear your views — please go ahead and add a comment below.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.