Benchmarking for Environmental Excellence

By Bhat, Vasanthakumar N. | Industrial Management, January/February 1995 | Go to article overview

Benchmarking for Environmental Excellence


Bhat, Vasanthakumar N., Industrial Management


American corporations are facing constantly changing competitive challenges. Low cost was the competitive challenge of the 1960s. Flexibility, the ability to respond to changing customer demands and specifications, became the strategic weapon of the 1970s. Quality was the name of the game in the eighties. The world is now entering an era of environmentalism and "zero discharge" and "total pollution management" are some of its goals. Increasing public pressures, skyrocketing cleanup costs, rising criminal and civil liabilities, and stringent laws and regulations are making environmental excellence a number one priority of corporate management. Corporations are not only spending billions of dollars to cleanup wastes, but they are also paying for materials, labor, equipment and other resources used in the generation of these wastes. According to a conservative estimate, only 6 percent of the 20,000 lbs. per person of active materials--including food, fuel, forest products and ores extracted in the U.S.--is included in durable products and the other 94 percent are wasted within a few months of their extraction. Therefore, pollution reduction can eliminate waste disposal costs as well as substantially reduce labor, material and equipment costs that go into the production of these large amounts of wastes. According to the recent data, the U.S. generates almost 230 times as much hazardous waste per capita as Japan, and 23 times as much as Germany. So, it is essential for U.S. companies to significantly reduce pollution to remain competitive. Benchmarking is one of the techniques that can help them to reduce pollution significantly.

Benchmarking

Benchmarking is a systematic adaptation of products, processes, methods and practices of companies that are considered to be state-of-the-art. Benchmarking is broader than competitive intelligence gathering. Benchmarking evaluates competitors and organizations even from other industries that excel in a particular function. Reverse engineering focuses on the finished product. However, benchmarking reviews all aspects of a product including materials, processes, methods and organizations. The purpose of benchmarking is to identify performance shortfalls and take actions to fill the gaps. The aim is to compare and copy operations, products and services both within and outside a company's primary industry. The steps in benchmarking process are outlined in Table 1.

Identifying functions to benchmark

Scarcity of resources makes the selection of benchmarking function a critical one. Increasing variety of materials, efficient processes and a plethora of laws and regulations have made the selection a long and expensive one. Regulatory requirements such as fuel efficiency, building codes, temper-proof packaging and safety guidelines hamper efficient operations of an organization. Some factors to be considered for choosing functions to benchmark include:

* Need to comply with current and future environmental laws, regulations and licenses;

* Waste treatment and disposal costs;

* Potential environmental and safety liability;

* Quantities of wastes generated;

* Toxicity, corrosivity, reactivity and flammability of the wastes generated;

* Effects of waste on the employees and surrounding communities;

* Cost reduction potential;

* Recyclability of materials;

* Low yield process: and

* Bottleneck process.

Training

For the benchmarking process to be successful requires well-trained personnel. The type and nature of training will depend on the qualifications and experience of individuals. Every one must have elementary knowledge about benchmarking process. The books suggested at the end of this article could be used to train personnel in benchmarking. In addition, they should have knowledge about waste reduction strategies. The team members should be technically trained and should have skills to conduct interviews with personnel with a variety technical and employment backgrounds. …

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