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How to Save a Few Bucks While Becoming Sustainable

How to Save a Few Bucks While Becoming Sustainable

Organizations with a formal sustainability management system have to deal with corrective and preventive actions -- often referred to as CAPAs. Most management systems aficionados are well aware of the need to engage in corrective actions as a means of dealing with nonconformities in the system. However, the preventive actions are often relegated to a position of less importance.

The quality management system, ISO 9001, stresses the importance of preventive actions by making them to a separate requirement (i.e., no longer part of the CAPAs). However, nine years later, many quality managers still call corrective actions CAPAs. Old habits are tough to break.

If you are involved in the environmental field, you might choose to call preventive actions by a number of popular terms: pollution prevention, waste minimization, cleaner production or source reduction. All of these efforts can be used to define the preventive actions in a sustainable development management system as long as the focus of this effort has not been the subject of a corrective action at this location (i.e., the rule that separates corrective actions from preventive actions in a management system).

Preventive actions are quick wins designed to lower the operational risk of the organization. In some cases, the resource intensity is diminished. The operation could reduce energy and water consumption along with the conservation of materials used in the activities, products and services. In other cases, there is an increase in resource productivity -- less resource used and less resource as a waste. This is a quick win with a measurable cost saving. Resource productivity gains allow you to make more products or offer more service at a lower cost.

A well designed sustainability footprint can help track resource intensity and resource productivity with a process and systems thinking focus. This tool helps you find the opportunities for the quick wins. Once resources have been conserved and wastes eliminated, the sustainability footprint will facilitate the search for other related opportunities. This helps leverage the preventive actions in the sustainability management system. No matter what kind of process improvement method is used, it is great to have such a tool to systematically drive resource productivity.

Many accountants do not like to use activity-based cost (ABC) accounting to calculate savings. We all know that it costs a certain amount of money to buy a solvent and that it takes many times more money to properly dispose of that solvent. Some of these costs are the activities needed to maintain the hazardous waste management system. ABC accounting would add these activity costs to the cost of the disposal. However, when the resource productivity is high, we can measure the lowering of the cost to make the product. This is clearly within the general ledger domain of traditional accounting. Additional savings will come from the lowering of the operational risks associated with some of the resources. These costs can also be determined and evaluated.

Pollution prevention is making a dramatic comeback during this economic recession. Companies are looking for quick wins to help manage their costs. Just remember that this preventive action program works best within a management system that uses a footprint tool that is kept up to date with a management of change program. Many organizations list aspects without a process focus (activities and supporting activities). It is always best to have a systems approach to the management of resources and the determination of resource productivity. It is also important to have good documentation and control of the records for this program to work effectively. The savings are a key input to the management review. Employees get involved in the program through the "program" associated with the sustainability goals (i.e., objectives and targets). Management system clearly help drive the ability to realize these quick wins and make them part of what every employee does every day. Maybe the organization will even continue to drive these quick wins when the stimulus kicks in! That is what the management system is all about -- continual and constant improvement.

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