The Two Ingredients to Sustainable Facilities Management

David Spence
March 4th, 2014

A Theory of Sustainability For Managing Facilities

Number One: Waste Elimination

In Scott’s view, the first step to sustainable FM is the elimination of waste, which he defines as “not achieving 100 per cent of purchases and investments.” This could encompass anything from what’s considered waste in the traditional sense—like failing to turn lights off at the end of the night to using manufacturing materials inefficiently—to more subtle forms of waste, like suboptimal productivity.

When the causes of waste are identified and corrected, the results can be staggering. Just look at the 3M Corporation. In the 1970s, 3M employee Joseph Ling created a waste-elimination program that attacked spills and leaks, introduced eco-friendly raw materials, and updated machinery for better energy usage. According to the company, these changes have since saved the business approximately $1 billion.

Number Two: Resource-Life Extension

The other step to sustainable FM is resource-life extension. Based on the theory of closed-loop economics, this practice suggests that “businesses should redirect expenditure back into their business whenever possible.” Or, in simpler words: companies should aim to recycle their resources on every level of operations.

Caterpillar has mastered this technique. Rather than using its materials only once, the company sells them, then purchases them after they’ve been used by other companies. By doing this, Caterpillar can sometimes use the same material up to three different times, saving the money that would have been spent on producing new material.

What’s the Difference?

The separation of these two ideas, which seem to be very similar, begs the question: Aren’t they the same thing? The answer is no. While waste elimination and resource-life extension are closely related—Scott calls them “two sides of the same coin”—there is a difference; it’s possible to practice one without achieving the other.

Two of Scott’s business students, for example, had an idea for upgrading industrial furnaces and boilers used by Central and Eastern European businesses. The goal was for these companies to eliminate waste and extend the life of their resources by converting the machine’s excess heat into electricity, which would then be sold to other companies.

The idea was good, but flawed. Once the numbers were crunched, it turned out that the electricity actually cost the company more money than it was losing because of the extra heat. In the students’ case, while they were extending the life of their resources in a certain sense, doing so was losing the company money, because the waste was not being eliminated properly first. This loss negated the purpose of resource-life extension in the first place.

How These Ideas Apply to Your Business

To sum up Scott’s argument: Successful waste elimination leads to successful resource-life extension. To apply this formula to your own facility, you first need to perform a waste audit in your own company. What processes and practices are making the company lose money? Once you’ve identified those, think of ways you can eliminate waste, or convert it into an asset for the company.

Be careful not to fall into the trap of thinking that what appears to be “waste elimination leading to resource-life extension” is saving the company money; it may be the case that what appears to be saving or making you money is actually hurting your bottom line in the long run. Take the time to review numbers before you make any big changes, and you’ll avoid bad results.
photo credit: kevin dooley via photopin cc