Lean and Green

The manufacturing industry has never had a glamorous public image, and to most people, it is not considered a “green” business category.

However, most of the Wisconsin manufacturers that have survived the Great Recession have, by necessity, become leaner and greener companies, greatly reducing their carbon footprints and lowering their emissions of harmful materials, while generating significant cost savings.

Some are finding that “going green” ties into the central tenets of lean manufacturing, said Doug Fisher, assistant professor and director of the Center for Supply Chain Management at Marquette University.

“Lean is, at its most fundamental level, taking waste out of the (production) system,” he said. “When a company makes the leap into green and sustainable practices, there are some immediate linkages. It is efficiency, inventory reduction, taking slack out of the system and eliminating unnecessary action. You’re producing more with less, using less raw materials, producing less waste with a more efficient output.”

“In today’s economy, every job is a ‘green job,'” said Steve Baas, government affairs director of the Metropolitan Milwaukee Association of Commerce (MMAC). “Any manufacturer who has weathered the recession and is still standing is doing so because they have squeezed every last penny of savings out of their operations. They have cut energy usage to the bone in order to cut operational costs.”

Manufacturers that are resisting green practices do so at their own peril, Fisher said.

“(The cost of ) oil will be up again, and there will be some form of cap-and-trade,” Fisher said. “It’s always a question of skating to where the puck will be … The competitors that are getting ahead of it are not only good citizens, but they’re being smart in their cost structure.”

Several Milwaukee-area manufacturers have found ways to reduce their carbon footprints, improve efficiency and drive profits at the same time.

 

Quad/Graphics Inc.

When the late Harry Quadracci founded Quad/Graphics in 1971, he was both an environmentalist and an entrepreneur. Because Quad/Graphics had some lean times until the company started to gain traction in the early 1980s, it was forced to stretch its materials and resources, said Joel Quadracci, president and chief executive officer of the company his father started.

“Back (when the company was young) they couldn’t afford to throw anything away,” Joel Quadracci said. “They were very careful on the solvents or any other materials they used. They recycled whatever they could.”

Quad/Graphics has grown greatly – to the point that it now has more than 11,500 employees in 11 plants in the United States, with more than 11 million square feet under roof. In late January, the company announced its plans to acquire the Canadian firm World Color Press Inc., which will increase its employment to 30,000, and to become a publicly traded company.

While Quad/Graphics has grown, it has not lost Harold Quadracci’s sense of thrift and environmentalism.

“We call ourselves practical environmentalists. We’re not doing this to make ourselves feel good,” Joel Quadracci said. “If it’s not practical and it’s not something that we can justify, it won’t be sustainable.”

Joseph Muehlbach, director of facilities and environmental policy for the company, said, “If you can maximize output and minimize waste, you’re giving yourself an advantage. If you can produce the same product by consuming 25 percent less energy (than your competition), that is a real advantage in the market. And with the positive environmental impact, we’ve used that as a way to market ourselves.”

Initiatives such as recycling, reduction in water usage, installation of high-efficiency lighting and related controls, recapture of solvents and development of its own proprietary inks that contain 27 percent renewable resources have helped Quad/Graphics save money and be environmentally sound.

“Recycling is one of the big ones,” Muehlbach said. “When you look at all of the waste generated from our facilities, 98.6 percent of all solid waste that we generate is recycled. That’s food waste, computers, pallets, everything. Normally, that would have been lost (money) and we would have had to pay landfill fees. And in most cases, it’s now a source of revenue.”

Quad/Graphics’ scrap paper and cardboard are some of its best revenue-generating recycled items. The company has found uses for some materials that are traditionally difficult to recycle.

Solid food waste is sent to worm farms that are part of on-site daycare centers at each Quad/Graphics production facility. The centers use the worm farms to generate compost, which is used in gardens that children help plant, manage and harvest, Muehlbach said.

“The vegetables and produce is sold in our cafeterias to our employees, and the money goes back to the kids to use for field trips or toys,” he said.

The company is now working on pilot projects with several plastic injection molders, which are trying to find ways to incorporate paper dust generated at Quad/Graphics’ plants into the plastic parts that they make.

“That’s cost-neutral now, but if it works it could be a revenue stream,” Muehlbach said.

Quad/Graphics is now working to install new lighting controls to the fluorescent lighting system in its 1.7 million-square-foot Sussex production facility. The company installed its fluorescent system in 2002.

“Historically, lighting was about 8 percent of the total cost of our operations,” Muehlbach said. “When we switched to fluorescent, it was cut to 4 percent. Using this (lighting control system), we think will bring it to about 2 percent.”

Over the last seven years, Quad/Graphics has reduced its water consumption by 50 percent. A large part of that reduction has come by recapturing water used for steaming and cooling paper.

“Last year, we used 150 million gallons of water – most of it is typically for cooling or steam generation,” Muehlbach said. “We produce about 6,000 pages of product for every gallon of water we consume. But with water, you pay for it twice – when you receive it and when you dispose of it.”

Quad/Graphics, which makes all of its own inks, reprocesses all of its waste ink from the offset printing process, which serves as a base for black inks.

The company uses millions of gallons of the solvent toluene in the printing process every year. Through a steam flashing and distilling process, the company is able to recapture 99.5 percent of the solvent, Muehlbach said.

“Gravure ink is very comparable (in price) to gasoline,” he said. “And we operate at the highest efficiency (of recapturing it) in the industry.”

Xten Industries

Southeastern Wisconsin is home to a large number of plastic injection molding companies. Historically, those companies use large amounts of electricity to melt and cool down plastic during the molding process.

 

Xten Industries, a Kenosha-based injection molding company, has found ways to cut its electrical use, giving it a quick payback.

“One of the big ones was putting variable frequency controllers on four of our hydraulic presses,” said Mark Dirr, director of engineering at Xten. “The motors on (typical) hydraulic presses run either at full or no speed. If you don’t need all of that power, you’re just wasting it. The people on the floor report that it’s seamless and we’re getting, on average, 29 percent more efficiency on those motors.”

The company also has replaced resistant heater bands with radiant heater bands on several of its molding machines, which are using significantly less electricity, Dirr said.

Xten was able to pay for its improvement with financing provided by Focus on Energy through CleanTech Partners, a public-private nonprofit entity that helps finance environmental improvement technology and projects.

“This was no money down, 100-percent financing,” Dirr said. “And we did a 30-70 split (for the hydraulic press controls). We keep 30 percent of the savings (from the project) and they get 70 percent until they’re paid off.”

The radiant heater band project was a 50-50 split, which allows Xten to keep 50 percent of the savings from the project. Both of Xten’s projects that were financed through CleanTech Partners carry a five percent interest rate.

Last year, Xten was able to convert 13 of its molding presses with radiant heating bands. The company hopes to convert its remaining 16 presses this year and install variable frequency drives on another four hydraulic presses, Dirr said.

“The low cost financing, at five percent and no money down, with the 50-50 shared savings program is genius,” he said. “It’s really a beautiful thing. We can do a lot more in one company than you can by trying to deal with a lot of homeowners, and you can do it faster.

“We use more energy than 417 homes. Manufacturers really need this kind of help – and this is a great way to help us be more competitive.”

Dueco

Waukesha-based Dueco Inc., a manufacturer of utility trucks, digging machines and aerial lifts, has achieved significant savings since it began switching traditional metal halide and high pressure sodium lights with fluorescent fixtures in 2006.

 

With the assistance of a Focus on Energy grant, the company has converted all of its interior lighting to fluorescent bulbs, with significant energy savings.

“In the first month we looked at (our electricity usage) and it was, ‘Wow,'” said Steve Wienke, industrial and facility manager. “And with the Focus on Energy grants, the return on investment dropped from three years to less than two years.”

The company has also decreased its heating costs and increased employee comfort by replacing weather stripping along the 44 overhead doors in its facility.

“There was a little less than a one-year payback,” Wienke said. “It was about $15,000 to install everything, and there was an immediate enjoyment on the part of the guys (in the shop).”

Dueco has also found significant cost savings by increasing its recycling efforts, said Rebecca Zuhkle, accounting supervisor.

“Through an assessment of our waste contract and pickup times, we found that we could switch a number of garbage pickups with recycling pickups,” she said. “That lowered our total bill. And we’ve added glass, plastic and aluminum recycling. We didn’t have that before.”

Dueco is recycling some materials it had previously thrown away. For example, the company is now encouraging its employees to recycle brass and copper tool tips, Wienke said.

Dueco’s facility, built in the 1970s, will need a new roof in the coming years, and the company is considering adding a three- to four-inch layer of foam insulation at that time. The current roof has an approximate R4 insulation rating, which could be raised to an R10 to R20 when the insulation is added, Wienke said.

In 2008, the company considered adding large-diameter ceiling fans to its manufacturing area.

“That’s now on the back burner (because of the sluggish economy),” Wienke said. “We’ll probably start looking at it again in the fall.”

Perlick Corp.

Milwaukee-based Perlick Corp., a manufacturer of taps, tap towers, bar coolers and related products for the food service and brewing industries, has significantly reduced the amount of hazardous waste it generates in recent years, giving the company significant savings.

 

And Perlick expects those savings to grow in future years.

Since 2001, the company has removed numerous hazardous chemicals and solvents from its plating and part-cleaning systems, removed a liquid petroleum backup energy tank from its facility, greatly increased its use of recycling, and switched to environmentally friendly insulation foam for its coolers, said Douglas Graf, environmental manager at Perlick.

“We used to use a urethane-based foam,” he said. “We went from a product that was so dangerous that if we had a spill we would have to evacuate the whole building, to a product that if we spill it now, we let it dry and scoop it up and we’re good to go.”

Last year, the company began recycling its floor dry product, which was formerly sent to a special landfill that can handle hazardous materials.

“We used to send it out as hazardous material waste and we had to pay,” Graf said. “Now we can send it out as non-hazardous waste because (our vendor) cleans it and re-uses it.”

In 2008, Perlick purchased a new degreasing machine that uses a solvent containing no chlorine or alcohol. And earlier this year, the company switched to a non-toxic polishing dust.

Perlick is now developing a plan with a waste removal firm that will treat some of the sludge generated from the company’s waste water.

“We’ll send it out as a hazardous material and they’ll convert it to non-hazardous,” Graf said. “It means it does not have to go into a (special hazardous waste) landfill.”

Perlick is a member of the Wisconsin Department of Natural Resources’ Green Tier program, which encourages manufacturers to adopt more environmentally-friendly practices. Because it has made so many improvements, the company hopes to receive a lower emission classification from the DNR later this year.

GE Healthcare

GE Healthcare, with financial assistance from We Energies, has installed solar arrays on the roofs of its Waukesha and Wauwatosa facilities. The company began with a 64-panel, 143-kilowatt system in Wauwatosa in 2007, which has been expanded by 1,200 panels. The company’s Waukesha facility has more than 1,800 panels.

 

“If we had built it without the support of We Energies, the payoff would have been 15 to 20 years,” said Chris Jurik, facilities project engineer with GE Healthcare. “Our ROI is now about four years with the support from the Solar Energy Development program that We Energies started two years ago.”

The solar systems generate roughly 2 percent of the electricity that the Waukesha and Wauwatosa facilities consume, Jurik said, giving the company roughly $45,000 in annual savings.

Like many manufacturers, GE Healthcare has installed high-efficiency fluorescent lighting in its manufacturing space, giving it significant savings. The company also has recently installed LED lights for about 75 percent of its external lighting in Waukesha and Wauwatosa.

“With the LED lights, in phase one, which was 75 percent of our campus, we saved 31.43kw on daily use,” Jurik said. “That’s more than $10,000 per year.”