10 Steps to Reducing Costs While Saving the Environment

The concern about global warming has produced a new green awareness among consumers throughout the world. Increasingly, green products have moved to the forefront of the hot-seller lists as people become more aware of environmental concerns and more companies seek to ride the trend toward environmentally friendly products.

Some companies, such as General Electric, have implemented programs devoted to green products. Sales of its Ecomagination brand products have grown 4 percent faster than all its other products combined. “Natural” and “organic” have become buzzwords as more consumers become health conscious. Manufacturers can capitalize on this trend by implementing a supply chain management program that increases profits by becoming greener.

The following are 10 steps your manufacturing business can use to become more sustainable and green while reducing your costs and increasing your profits:

1. Adopt a sustainable business strategy

Your strategy should begin by creating a green supply chain management that fits sustainability into your core business strategy. Sustainability is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It represents the means by which your business can achieve reduced costs and increased profits. Commit to building your business green from the inside out by redefining your goals so that they incorporate sustainable thinking into every aspect of your supply chain, from purchasing to production. If you commit to an informed sustainability strategy, it can be a catalyst for innovation in your business model.

2. Implement a system evaluation

You need to review every aspect of your supply chain. Look for areas where significant environmental costs occur. Use teams of people that include members from different divisions to identify these problem areas and determine what you can do to yield significant cost-saving while reducing environmental impacts. After calculating the benefits, you should begin implementing procedures that will correct the problem areas within your overall system.

3. Review your purchasing procedures

Purchasing is the point where materials come into the manufacturing process. Becoming greener means using suppliers with a higher environmental performance. This includes environmentally friendly raw materials that are natural, organic, and biodegradable. One practice being adopted by businesses is to put all purchasing under one department. Advantages include buying in larger quantities at a lower price, storing materials in a central location, and distributing materials as needed, cutting waste due to materials not being used in a timely manner.

4. Make your manufacturing methods more efficient

The goal is to implement a process that is efficient and has little or no waste. This lightens your global environmental footprint while improving the quality of your company’s products. Efficiency pertains to increasing your production rates by producing the same amount of product using less floor space. The past 10 years has brought new ways of thinking that have created more efficient methods for doing things. Building and operating a production line today costs less than its counterpart did 10 years ago.

5. Reduce energy consumption and costs

By implementing an energy-saving program, you could potentially reduce your electrical consumption by half. Another method for reducing energy consumption and costs is by using renewable energy sources. For example, carpet manufacturer Tandus uses 100 percent biodiesel, a renewable energy source. It replaced diesel fuel in its commercial boilers and as a consequence reduced air toxins by 60 percent to 90 percent, particulates by 48 percent, and carbon dioxide by 78 percent.

6. Purchase energy-saving machinery

Facilities and equipment management is an area where manufacturers can improve their sustainability. Recent innovations have increased the efficiency of machines while reducing their impact on the environment. New equipment with energy-saving and eco-friendly features can reduce costs by operating more efficiently, utilizing materials to their fullest, and producing a better product at a faster rate with little or no environmental impact.

7. Produce products that are recyclable or biodegradable

Design and manufacture products that are organic and health-conscious rather than toxic to your customers. Consumers are beginning to demand that the products they buy be either recyclable or biodegradable. Your company should devise a sustainability warranty that guarantees that the waste from your products will not wind up in landfills or be incinerated into the air. This gives your customers proof that you do what you say.

8. Reduce and recycle waste

Reduce waste and create a closed-loop program. This means recycling a product back into itself, essentially creating little or no environmental waste. This is a key element in natural resource preservation and sustainability.

9. Become educated on green manufacturing practices

Environmental literacy, research, and continuous learning are essential to your process of becoming green and creating a safer work environment. Educate your staff. Require everyone to participate in the movement to green manufacturing.

10. Stay informed about government regulations

Take a proactive approach to stay ahead of the environmental regulations that various government agencies impose on manufacturing businesses. Inform yourself regarding both current and impending regulations that affect your business. Honda and Toyota are examples of manufacturers staying ahead of the regulations. Both companies have developed and produced new engines that not only meet but exceed the requirements.

FAQs about reducing business costs while increasing sustainability

Below we have summarized the most important questions and answers on the subject.