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Case Study 6

Style

How a business chooses to conduct itself through its actions and deeds is often underestimated. But as any parent will know only too well, the day a passer-by tells you what a ‘lovely polite young person’ you have, it’s due to the guidance that’s been shared long before those random acts of kindness are ever uttered. You can liken a company’s ‘style’ in much the same way. Lots of aspects need due consideration and effective resolution for your firm to be recognised.

This was particularly true for this manufacturing client who working in an environment allied to the building and construction industry. For years they had continued to function as best they could, then one day, news arrived which changed their approach for good. You see our client was respected in very prestigious circles, but in order to maintain their association with those circles they were required to deliver a positive response to a Business in the Community (BITC) directive that meant they now had to take steps to measure and reduce their environmental footprint. If successful, this would be a very important step in improving their overall business ‘style’, as well as their responsibility to society and to their staff. By ‘thinking and acting green’ they had the capacity to create advantages for a wide range of stakeholders.

Business premesis

Up until the day this directive arrived, the ethical source of their raw materials and pre-packaged products wasn’t high on their agenda, or amongst many others within the sector. Volume was the driver and that meant a fast turnover of affordable products for their customers. Consequently, as a manufacturer and converter of raw materials they had always targeted growth by sourcing and promoting the sale of fashionable items, such was the demand amongst customers. If they were to embrace this directive, we’d need to show them that there were other ways of developing growth; you either cut your costs or you sell at better margins, but when business runs almost as expected, these two aspects aren’t often considered together.

Once agreement on the plan had been reached with the board, we undertook the role of delivering the results for the BITC directive on behalf of the client. This wasn’t something they needed to fear, loathe or resist but something that should be fully embraced. Once we’d delivered our proposal the board didn’t simply accept it, they helped to further energise it amongst their staff as we got on with preparing the first complete environmental audit the firm had ever undertaken.

Cut costs

Their business had been built on selling high volumes to the masses. But this placed the workforce under an intense pressure to turn things around quickly; from raw materials arriving, to getting them out the door without a hitch. Whilst this works most of the time, on the occasions something breaks the impacts are felt not just on one job, but every job following. If you’re a manufacturer reading this case study, this is something you’ll appreciate very well indeed. Unfortunately, when shop floor activities come under pressure, poor working practises become the norm and waste can often increase to such an extent it adds an additional layer of hidden costs. Too much water and energy are used, recycling is reduced, cleaning materials in the form of cloths and chemical usage increase to clean-up spillages and breakages, more raw materials are required to replace damaged goods and delivery vehicle routes become chaotic wasting fuel and energy as they are pulled from scheduled rounds to overcome ‘urgent’ problems.

Increase profits

On the back of our concerns surrounding wastage, we also introduced them to the ‘Diffusion Innovation’ model (see below).

By targeting growth from the innovators, early adopters and early majority, the company could introduce more innovative products with ‘greener credentials’ whilst also obtaining other products from ethical originating sources. This wouldn’t be some short-term whim, but a structured set of new operational adaptations delivered through internal training, open-book waste assessment reports and a financial summary of unnecessary losses.

We compiled statistics on energy use and costs over the previous five years, damaged components, machine maintenance and chemical and solvent use. We reviewed staff injuries to assess whether any links could be found with operational inefficiencies and brought in contractors to provide assessments about the condition to the fabric of the building, further heat and CO2 loss and rainwater damage/ingress. We undertook a survey of company vehicle use and diesel costs and concluded the process with an internal survey to assess staff members’ modes of transport. The intention of this latter element was to gauge the feasibility of adjusting shift patterns to fall in-line with public transport timetables and improve the quality and working lives of the staff. Finally, we prepared quite a comprehensive survey amongst the existing supplier base to see how they could or would be able to integrate with our client’s new aims.

By starting with these initiatives, we agreed the company would be in a far better position to emphasise a change in policy and mark a new chapter in the firm’s evolution. It wouldn’t be easy, particularly after the staff had been conditioned to work in a specific manner for so long. We expected some pockets of resistance and periods where occasional setbacks would occur, but on the whole the process was met with genuine support.

The requirement from the BITC team was that a formal process was incorporated into the company’s levels of governance so that twelve months later, the firm would be able to report tangible improvements from the position held when the initial report was made and that was indeed the case. Whilst the shift pattern was changed to create longer operating hours and an increase in productivity, we weren’t able to encourage many to travel by public transport. However, that said, some members of staff, did take up the Cycle2Work scheme (supported by Halfords) and others began a voluntary car-share arrangement, with some vehicles bringing three members of staff to work.

Other improvements, which were part funded by the local enterprise partnership and banks’ ‘green loans’ were used to make improvements to the building and lighting, and another specialist scheme commenced where cloths and rags were rented rather than replaced. Once they become soiled, they are deposited in a collector bin and taken away to be washed and returned, rather than destroyed and continually repurchased.

The Prince's Responsible Business Network

On the external side, the survey identified a lack of green engagement from some suppliers and we knew this would continue to compromise the policy and the client’s genuine commitment to it. So, we said goodbye to some suppliers and consolidated product with others thereby giving the client increased buying power.

To round the whole process off, we introduced further changes to some of the staffs’ roles and created the company’s first, genuine Environmental Policy, which closely followed the operational activities being performed. Something experience teaches us is a rare thing amongst many in the SME community

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