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					                     Wisconsin

        Pro table
Sustainability                   TM

Initiative



Wisconsin Profitable Sustainability Initiative
                  PHASE 1 REPORT
                              prepared by




             The Wisconsin Manufacturing Extension Partnership
                                June 2012
                    Contents
                    Foreword  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 1
Table of Contents


                    Executive Summary  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 2

                    Background  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 4

                    Profitable Sustainability Initiative Program and Process .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 6

                    Conclusion  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 8

                    Success Stories  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . 9

                    Partners  .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 11

                    APPENDIX A: Aggregate Results Table by OECD Indicator  .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 13

                    APPENDIX B: Sustainable Benefits Table  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 14

                    APPENDIX C: Breakdown of Energy Intensity Projects  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 15

                    APPENDIX D: Geographic Location of the 67 Manufacturers Included in this Report  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 16

                    APPENDIX E: List of Participating Companies                                                                                .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 17

                    APPENDIX F: PSI Team Members  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 19

                    APPENDIX G: PSI Pilot Program Application  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  .  . .  . 20




                                                                                          Profitable Sustainability Initiative Phase 1 Report                                                                                                                        June 2012
Profitable Sustainability Initiative Phase 1 Report Foreword
In an era of rising resource scarcity and increasing customer demand for
environmentally-friendly products, Wisconsin is leading the country with
an innovative approach that enhances profits while driving sustainability
in small and midsize manufacturing companies . More than 100




                                                                                                              Foreward
manufacturers served thus far by the Wisconsin Profitable Sustainability
Initiative (PSI) have demonstrated that sustainable practices and
products result in higher profitability and increased business value while
dramatically lowering negative environmental impacts .

This highly innovative pilot program has shown that manufacturers can
                                                                                    Paul Jadin
make small to moderate changes to their manufacturing processes and
                                                                               Secretary/CEO, WEDC
logistics, resulting in strong, positive returns on the initial investment .
PSI is a market-proven methodology that drives results – both financial and environmental .

PSI is uniquely customizable for individual manufacturers, replacing the “one size fits all” prescriptive
model, a more common approach in the sustainability marketplace . Across all industries, the
environmental benefits of the PSI program return consistent positive results, underscored by the data and
the numerous testimonials of manufacturers served thus far by the program .

With a three year ROI of 25:1 on the state and federal investment and a break-even in as little as 4 months
on manufacturing’s investment, the PSI program stands alone with respect to return, speed-to-benefit,
and environmental impact .

The Wisconsin Economic Development Corporation is proud to support such an impressive manufacturing
initiative that has produced ground-breaking results and positioned Wisconsin as the most advanced
state in America for driving profitable manufacturing sustainability . Without WEDC’s commitment
and investment to this market-leading effort, the extraordinary outcomes created would never have
been possible . This has represented a keystone investment for WEDC that has measurably bolstered
competitiveness for small and midsize manufacturers in Wisconsin . We can proudly say that WEDC, in
partnership with the Wisconsin Manufacturing Extension Partnership, has led the way for Wisconsin and
our vitally important manufacturing sector .



Paul Jadin
Secretary/CEO
Wisconsin Economic Development Corporation




 June 2012                  Profitable Sustainability Initiative Phase 1 Report                   Page 1
                    Executive Summary
                    The Wisconsin Profitable Sustainability Initiative (PSI), an innovative, customizable and highly-effective
Executive Summary

                    program of the Wisconsin Manufacturing Extension Partnership (WMEP), demonstrates the range
                    of economic, social and environmental benefits that can be realized by the state’s small and midsize
                    manufacturers (SMMs) through the implementation of sustainable business practices . Established in
                    February 2010, and funded by a state grant from the Wisconsin Economic Development Corporation (WEDC),
                    formerly the Department of Commerce, and a federal grant from the State Energy Office awarded by the
                    Department of Energy through the American Recovery and Reinvestment Act, the program successfully
                    establishes Wisconsin as a leader in sustainable manufacturing—a state where a high percentage of
                    manufacturers utilize sustainable practices and/or manufacture sustainable products .

                    The 2008 Next Generation Manufacturing Study, conducted by the WMEP and the Manufacturing
                    Performance Institute (MPI), found that approximately one third of Wisconsin manufacturers identified
                    sustainability as critical to their organization’s success over the next five years . However, less than twenty
                    percent of respondents rated their progress as good to world-class in this area, with more than eighty
                    percent reporting ad hoc or no monitoring of basic green/sustainability efforts . Numbers were even lower
                    for smaller manufacturers .

                    In response to the needs of Wisconsin’s SMMs, the PSI program provides a comprehensive review of the
                    entire product life cycle . It is designed to quickly identify, assess, and implement innovative improvements
                    in material use, production processes, product design and quality that result in improved financial and
                    environmental performance . Following the successful participation of forty-five pilot companies, the
                    program now includes over 100 Wisconsin manufacturers and has been able to:

                    f Demonstrate a clear link between sustainable practices and improved profitability

                    f Document superior return on investment—both public and private

                    f Promote profitable sustainability to the state and national manufacturing communities

                    f Establish Wisconsin as the most sustainable manufacturing state in the U .S .


                    Financial and Environmental Benefit and Impact
                    The PSI program is improving the bottom line for participating manufacturers, creating jobs, and minimizing
                    the Wisconsin manufacturing environmental footprint . The emphasis on return on investment (ROI)
                    clearly differentiates PSI from the majority of sustainability initiatives . Profitability is the single most
                    important factor contributing to the sustainability of a small to midsized manufacturer . PSI participants
                    have demonstrated a willingness to make significant investments in projects that meet their investment
                    criteria . The majority of participants implemented multiple projects . The average participant investment
                    totaled $88,000. Some companies made investments exceeding $1,000,000. Average break-even on these
                    investments is 12 months, more than a third achieved break-even in less than 8 months. This translates
                    to an impressive return on investment .

                    A $2.1 million dollar public investment in the 67 firms represented in this report leveraged $5.9 million
                    of investment in plant and equipment upgrades, generated an increase of $9 million in annual sales,
                    created 43 jobs, and delivered $6.4 million in annual savings, representing a three year return of 25:1 on
                    public funds. Tables of financial benefits are presented in appendices A and C .

                    Page 2                       Profitable Sustainability Initiative Phase 1 Report                   June 2012
Environmental impact came second to ROI but was required of each project . The 67 firms included in
this report have documented reductions of 4 million kilowatt hours of electrical use, 300,000 therms
of natural gas, 9,000 tons of solid waste, and 5,000 metric tonnes of carbon emissions annually. These




                                                                                                                        Executive Summary
outcomes leave absolutely no doubt; profit need not fall victim to the environment and vice versa . A table of
environmental outcomes is located in appendix B .

 Key Financial Benefits and Impacts
                              $6.4M in annual benefit;
 Reduced Costs:               $19 .7M over three years (includes $0 .6M of fuel savings)

                              $27.1M increased/retained sales over three years (includes new sustainable products
 Sales:                       and sales/capacity improvements directly attributed to PSI projects)

                              $5.9M total investment by participating companies;
 Investment:                  average 12 .2 month simple payback

                              43 new jobs as a direct result of PSI;
 Jobs:                        more than 440 new jobs created overall by participants since program inception

                              Over $52 million projected over three years representing a 25:1 return on state and
 Total Economic Impact:       federal investment


 Key Environmental Impacts
               Reduction In                    Unit of Measure            Total Reduction
 Electricity                                          kWh                         12,857,939

 Natural Gas                                        therms                           949,840

 Carbon Dioxide Equivalents                           mt                             14,9745

 Solid Waste Diverted from Land Fill                  tons                             26,794

 Hazardous Waste Reduced                              tons                                  40

 Paper                                                tons                                   2

 Air Emissions                                        tons                                  50

 Transportation                                      miles                           917,334

 Diesel Fuel                                        gallons                          152,889

Note: This table reflects environmental reductions over a period of three years .

The PSI model is innovative, comprehensive, highly-customizable and extremely effective . It is helping
Wisconsin manufacturers reduce their environmental footprint and be more competitive, and has positioned
Wisconsin as a national leader in the implementation of sustainable manufacturing practices .




 June 2012                       Profitable Sustainability Initiative Phase 1 Report                           Page 3
             Background
             Sustainability has become an essential driver of global competitiveness and success . Manufacturers that
             embrace sustainability are gaining competitive advantage, attracting new customers, and driving business
             growth in the U .S . and around the world .
Background




             Traditionally, sustainability has its origins in the environmental space, incorporating performance measures
             in three key areas—social, environmental and financial, also known as people, planet and profits (the 3 P’s) .
             However, for manufacturers it has emerged as a catalyst for improved financial performance, revenue
             growth and risk mitigation .

             The U .S . Department of Commerce, in their Sustainable Manufacturing Initiative, defines sustainability as:

             “The creation of manufactured products that use processes that minimize negative environmental impacts,
             conserve energy and natural resources, are safe for employees, communities and consumers and are
             economically sound .”

             Sustainable manufacturing is all about minimizing risks inherent in production operations and driving
             higher resource utilization, while maximizing new opportunities for improved products and processes . In
             other words, sustainability is the practice of taking a system-level approach to balancing the needs of the
             people, the environment and the economy, ultimately creating long-term viability for all .


             The Business Environment
             A 2008 Next Generation Manufacturing Study identified that one third (33%) of Wisconsin’s manufacturing
             companies recognized the value of sustainability and deemed it as critical to their strategic direction .
             However, the study also found that fewer than twenty percent of responding manufacturers had made any
             progress on implementing sustainable practices .

             The study cited the following challenges faced by manufacturers:

             f No visible link between sustainable practices and profits

             f Lack of time and resources required to identify and institute sustainable practices

             f Very little knowledge about sustainable practices and processes

             A 2011 Next Generation Manufacturing study of Wisconsin manufacturers reports a dramatic change in
             awareness from 2008, with two thirds (66%) of manufacturers recognizing the strategic importance of
             sustainability and almost 30% rating their progress as next to world class . These findings illustrate a
             growing demand for support required by manufacturers to navigate the sustainable landscape . In a 2012
             sustainability market study conducted by Business Development Directives on behalf of WMEP seventy eight
             percent (78%) of participants saw sustainability as a significant or very significant business opportunity . The
             PSI model was developed and continues to evolve in response to this growing need and incorporates the
             basic tools, methods and metrics of the Sustainable Manufacturing Toolkit published by the Organization
             for Economic Development and Cooperation (OECD), an international organization who’s principle role is
             to promote policies for sustainable economic growth and employment, a rising standard of living and trade
             liberalization .




             Page 4                       Profitable Sustainability Initiative Phase 1 Report                    June 2012
OECD Environmental Indicators
Regardless of industry sector, manufacturers utilize natural resources (e .g . metals, materials, fossil
fuels, soil, and water) and discharge by-products into the environment (e .g . wastes, emissions) in the
creation of their products . The OECD has published a set of quantitative environmental indicators to guide




                                                                                                                                                Background
manufacturers in the implementation of sustainable practices . These indicators are grouped around the
three basic functions:

Inputs:         Materials or intermediate products used to manufacture products

Operations: Processes to turn inputs into products and activities necessary for production (e .g . facility
            operation, transport of inputs and products, business travel, staff commuting and other
            overheads)

Products:       Products manufactured and their use and treatment at the end of their lifetime

Indicators assist manufacturers to identify areas for improvement, set goals and track performance . The
eighteen most important and commonly used indicators are shown below . Performance in these key areas
is the driving force behind the development and deployment of the PSI model .


                      Organization for Economic Cooperation and Development
                               Sustainable Manufacturing Indicators




               Inputs                                    Operations                                         Products
 Materials or intermediate products used to    Processes that turn inputs into products and    Products manufactured, used and disposed of or
           manufacture products                activities that contribute to those processes         recycled at the end of their lifecycle

                                                 Water intensity                                  Recycled/reused content

 Non-renewable materials intensity
                                                 Energy intensity                                 Recyclablity

                                                 Renewable proportion of energy
                                                                                                  Renewable materials content

                                                 Greenhouse gas intensity
  Restricted substances intensity                                                                 Non-renewable materials content
                                                 Residuals intensity
                                                                                                  Restricted substances content
                                                 Air releases intensity
                                                                                                  Energy consumption intensity
  Recycled/reused content                        Water releases intensity


                                                 Proportion of natural land                       Greenhouse gas emissions intensity




 June 2012                            Profitable Sustainability Initiative Phase 1 Report                                        Page 5
Profitable Sustainability   Profitable Sustainability Initiative Program and Process
                            Fifty pilot program participants were selected from more than 90 applicants . Acceptance was based on
                            multiple factors, including geographic location, industry sector, size, intensity of energy and environmental
                            impact, demonstration of company’s commitment to see implementation projects through to completion,
                            and senior executive essay . These fifty companies worked with the PSI Partners (page 13) on a 3-step
        Initiative




                            process to achieve results . The 3-step model includes:


                            Diagnostic (30 days)
                            The diagnostic process is a unique approach designed to discover and prioritize a participant’s primary
                            opportunities for profitable, sustainable improvement . The diagnostic introduces aspects of sustainability,
                            and gauges the participant’s maturity in each area, to ascertain the project or projects most likely to provide
                            significant, sustainable gains . Diagnostic teams include subject matter experts from each of the primary
                            partners, offering participants an opportunity to explore multi-faceted improvement strategies . The
                            diagnostic process utilizes a qualitative tool to determine the area of greatest potential impact, including:

                            f Operating processes and materials processing

                            f Energy use and environmental impact

                            f Supply chain logistics and transportation

                            f Packaging


                            Assessment        (60 days)
                            Based on the diagnostic output, one or more assessments are designed and conducted for each participant .
                            Assessments drill down into a sustainable aspect to identify current conditions and costs and determine
                            the feasibility of specific improvement opportunities . The output of the assessment process is a rigorous
                            cost/benefit analysis used to prioritize improvements based on sustainable impact, payback period and
                            ROI . In some cases an assessment is required to establish the feasibility of a concept and to determine
                            the engineering or technical support needed . In the PSI model, early focus is brought to bear on the
                            opportunities that indicate immediate and recurring returns and speed to benefit . The assessment evaluates
                            the data and findings from the PSI diagnostic, including:

                            f Deep analysis of equipment, processes and practices

                            f Collection of detailed metrics and calculation of carbon footprint

                            f Definition of business goals and objectives

                            f Identification of priority projects

                            f Calculation of projected ROI for identified projects

                            f Initial development of an action plan




                            Page 6                        Profitable Sustainability Initiative Phase 1 Report                  June 2012
Implementation (6-24 months)
A PSI implementation plan uses findings from the assessment phase to drive business execution .




                                                                                                                Profitable Sustainability
Implementation projects are planned and prioritized based on a variety of factors, including available
capital, return on investment, ease of implementation, and technical expertise . It is typical that multiple
projects are selected, prioritized and planned .




                                                                                                                        Initiative
The implementation time frame can be dependent on competing needs for capital and the company’s internal
staff capacity . PSI Partner firms have assisted, or are in the process of assisting, several participants in
securing project financing .

The impacts shared in this report are based on projected results for both completed and planned projects
and implementation can take up to 2 years to achieve full potential . Program management and leadership
are provided by WMEP and partner, Northwest Wisconsin Manufacturing Outreach Center (NWMOC) .


                                                   Month
    1         2           3    4        5        6        7         8        9      10      11        12
Diagnostic   Assessment                                    Implementation


On average participants received $32,000 of state and federal funding from WEDC and the State Energy
Office . Cost/benefit analyses were completed for each project leading to simple payback and return on
investment projections . Appendix A presents total participant investment, projected savings, payback, and
return on investment by general project indicators .




 June 2012                    Profitable Sustainability Initiative Phase 1 Report                   Page 7
             Conclusion
             The Profitable Sustainability Initiative provides manufacturers an innovative and comprehensive process
             to discover, assess and implement improved uses of materials, manufacturing processes, as well as
             the design, use and disposal of products . These improvements generate increased revenues, improved
Conclusion



             efficiencies, and positive environmental impacts . The comprehensive approach of PSI sets it apart from the
             vast majority of sustainability programs .

             More than 100 small to midsize Wisconsin manufactures have received, or are currently receiving, direct
             assistance through the PSI program . This report documents the results of the first phase of the program
             representing 67 participants . These 67 manufacturers report a three-year impact of $52,784,382,
             representing a 25:1 return on investment for program stakeholders. Three-year impacts are projected to
             exceed $75,000,000 by the end of 2012.

             Innovation is the design, development and implementation of new or altered products, services, processes,
             and organizational structures for the purpose of creating new value and increased financial returns for
             customers and the organization . PSI has achieved overwhelming success across all aspects of this
             definition and has earned the respect of manufacturers, partners, and state and federal agencies for
             delivering superior economic and environmental gains .

             Seventy-eight percent of manufacturers surveyed by an independent firm see sustainability as a significant
             or very significant business opportunity, and eighty percent of manufacturers believe it is important or very
             important for the PSI model to continue and for WMEP to find a way to offer this service . Two thirds of
             these same respondents believe the model will resonate with other Wisconsin manufacturers . Through
             the PSI approach, the WMEP, the WEDC, and the PSI partners have made profitable, sustainable practices
             accessible and achievable for a limited number of Wisconsin manufacturers . Continued investment is
             required to more fully develop the tools and process, accelerate the pace and expand the reach of the
             program to more Wisconsin companies .

             WMEP, the WEDC, and all the PSI Partners have made the advancement of profitable, sustainable practices
             for the manufacturing community a priority . It is vitally important that the model and services continue to be
             offered to Wisconsin manufacturers . Refinement of the model, more cost-effective delivery methods, and
             alternative funding solutions are being aggressively pursued to expand the PSI program to drive bottom-
             line results for our Wisconsin small and midsize manufacturers to ensure they remain competitive in the
             global marketplace .




             Page 8                       Profitable Sustainability Initiative Phase 1 Report                   June 2012
Success Story - Edstrom, Inc.




                                                                                                                Success Stories: Edstrom
Edstrom, Inc ., founded in 1969, is a recognized leader in automated drinking water systems for animals .
Based in Waterford, WI, Edstrom designs and manufactures products to improve efficiencies in water
delivery systems for various markets including pharmaceutical, educational, governmental, biotechnology,
and agricultural .

Customer feedback from the company’s annual satisfaction surveys showed a desire to reduce the
production time for the manifold product line .

The PSI project team, during the due diligence process, identified two specific areas as needing improvement:
transportation/logistics and process optimization . Lean and clean assessment methodologies, including a
value steam map, were utilized to identify inefficiencies in processing, handling, batch production and
water usage .

WMEP’s partner, LogiServe®, helped Edstrom analyze and identify provider options based on price, delivery
performance and reliability, and negotiated revised freight costs with carriers .


Results:
f Handlings dropped from the original eighteen to a mere two—reducing wear and tear and eliminating
  three minutes of activity time

f Production lead time reduced from seven weeks to under four weeks

f Output increased by 3%

f Water eliminated from product testing, providing significant energy savings

f Shipping management system implemented, allowing transition to paperless freight monitoring

f Inbound and outbound freight costs reduced by more than 35%

f Labor capacity improved by 16 .7%

f Sustainability Impact report for transportation initiated

f Employee involvement encouraged in every aspect of the process




 June 2012                   Profitable Sustainability Initiative Phase 1 Report                    Page 9
                   Success Story - Quick Cable
                   Quick Cable, based in Franksville, Wisconsin, is a privately-owned company that develops, manufactures,
                   and sells battery and electrical connectors, cable, tools and related products for commercial and industrial
Success Stories:


                   equipment . They are the leader in the North American market due to a strong focus on quality, innovation
  Quick Cable




                   and customer service .

                   “Manufacturing processes that use resources efficiently and minimize environmental impact enhance the
                   competitiveness and profitability of our business,” said Robert Hoganson, president of Quick Cable . “That’s
                   why the Profitable Sustainability Initiative (PSI) was such a great fit for our company .” In addition, Quick
                   Cable’s market opportunities have expanded due to the growing demand for renewable energy sources,
                   including batteries, so the PSI program timing was perfect .

                   A diagnostic of the company’s use of resources and manufacturing processes revealed that the best
                   opportunity for savings and resource conservation was in process optimization . The die cast operation
                   (where metal is injected into molds to create battery connectors) was selected as an area of focus . A
                   Value Stream Map (a visual representation of the manufacturing process) revealed that through-put could
                   be greatly increased, raw material could be conserved and waste could be reduced by modifying the
                   manufacturing process to eliminate grinding .


                   Results:
                   Using the funds from the PSI program to install a new trim process (trimming shears off excess metal
                   from cast parts), Quick Cable was able to recover the metal and re-use it . This reduced the amount of
                   raw materials required and eliminated waste destined for the landfill, and reduced the amount of energy
                   used because the grinders and drill press were no longer needed . In addition, the trim process expedited
                   production by relieving a bottleneck, allowing employees to be deployed to other roles in the facility .

                   In addition, LogiServe® implemented automated shipping technology to integrate with Quick Cable’s Order
                   Management System (OMS), reducing freight costs and labor, and eliminating paper freight invoicing .

                   “Quick Cable has really benefitted from the Profitable Sustainability Initiative”, said Hoganson . “We’ve
                   reduced waste in the value stream by 14%, reduced the amount of raw material costs by 2%, and increased
                   throughput by 20% . I estimate our immediate payback for the PSI project to be less than 6 months . In
                   addition, we plan to conduct a Value Stream Map on other product lines and I expect to see similar results .”




                   Page 10                      Profitable Sustainability Initiative Phase 1 Report                 June 2012
Partners
The PSI program is built on an extended enterprise model to leverage the unique capabilities of each partner
organization . The number of individuals and organizations contributing to this initiative are significant and
growing, as noted in Appendix F, however, six partners have played strategic roles in the development,
introduction, and execution of the program . Their insight, passion and scientific and technical capabilities,




                                                                                                                 Partners
as well as unyielding commitment to strengthening the Wisconsin manufacturing economy and natural
environment, are the underlying forces that define the innovative and comprehensive approach of PSI .

Wisconsin Manufacturing Extension Partnership is a private, nonprofit organization committed to the
growth and success of Wisconsin manufacturers . Since 1998, WMEP has helped to generate more than
$1 billion in economic impact and create and save more than 13,000 state manufacturing jobs, according
to results documented by customers . WMEP receives financial support from the Wisconsin Economic
Development Corporation and the NIST Hollings Manufacturing Extension Partnership .

    WMEP provides general program development and management, coordinates work with PSI Partner
    organizations, tracks funding, spending, reimbursements and project status, and maintains and
    facilitates communications with clients and Partners .

Northwest Manufacturing Outreach Center, a sister organization to WMEP, serves 3,584 manufacturing
enterprises in northern and western Wisconsin . In 2010-2011, NWMOC provided technical assistance and
expertise to 101 area manufacturers, delivering 114 technical assistance projects and sponsoring 13 public
events attended by 482 people . During this time, the organization achieved client-reported impacts of
over $29 .5 million and assisted manufacturers to create or maintain 319 jobs . NWMOC receives financial
support from the Wisconsin Economic Development Corporation and the NIST Hollings Manufacturing
Extension Partnership .

    NWMOC provides general program and project management for participating companies in the
    northern and western portions of the state . NWMOC involvement enables the extension of program
    benefits to an additional 33 counties, including Ashland and Superior to the far northwest .

SCS BT Squared, Inc., is a dynamic and multifaceted civil and environmental engineering firm providing
comprehensive services to a wide range of clients, both public and private . Since its founding, the company
has worked to support clients’ needs, protect the environment and ensure that our communities thrive .
SCS BT Squared, Inc ., provides a diversity of services, including civil, geotechnical, and environmental
engineering, and survey and sustainability services .

    SCS BT Squared co-authored the one-of-a-kind, comprehensive diagnostic tool and process .
    They provide scientific and engineering expertise and capabilities for a broad range of energy and
    environmental projects . Energy projects have targeted inefficient lighting, aging HVAC units, heat
    recovery, and leaky compressed air systems; environmental projects have reduced solid waste and the
    use and disposal of hazardous material .




 June 2012                   Profitable Sustainability Initiative Phase 1 Report                   Page 11
           LogiServe® Inc ., a logistics management firm with offices in Wauwatosa, Wisconsin, and Rome, Georgia,
           led the eco-transportation and logistics projects, which include the consolidation of inbound and outbound
           freight, use of EPA SmartWay carriers, automating shipping via technology, continuous logistics improvement
           and electronic processing of freight invoices .

               LogiServe® Inc . worked diligently with the EPA SmartWay carrier program to develop and introduce the
               Eco-Transportation Program™, an eco-version of their tremendously successful Continuous Logistics
Partners




               Improvement Program® (CLIP®) . Along with improving service and reducing freight costs, they also
               provide valuable experience and knowledge to assist participants with the many logistical challenges
               they encounter .

           Baker Tilly Virchow Krause, LLP, focuses on specific business needs with a full range of accounting and
           advisory services, including expertise in the manufacturing and renewable energy industries . The company
           offers financial, operational and tax planning services to a wide range of manufacturers and, as the financial
           expert for the Profitable Sustainability Initiative, will document the financial performance of identified
           projects . As businesses incorporate renewable or sustainable practices, Baker Tilly Virchow Krause, LLP
           can help navigate the transactional, compliance and operational challenges related to those efforts . Baker
           Tilly Virchow Krause, LLP can also provide total capital procurement guidance (including debt, equity, lease,
           grants, and other incentives) in supporting the client’s sustainability initiatives

               Baker Tilly Virchow Krause, LLP created and maintains the PSI ROI worksheet, an invaluable tool used
               by project managers and participants to select and prioritize implementation projects .

           Focus On Energy is a statewide energy efficiency and renewable resource program funded by Wisconsin’s
           investor-owned energy utilities and participating municipal and electric cooperative utilities . Focus on
           Energy works with eligible Wisconsin residents and businesses to install cost-effective energy efficiency
           and renewable energy projects . Its efforts help Wisconsin residents and businesses manage rising energy
           costs, promote in-state economic development, protect the environment and control Wisconsin’s growing
           demand for electricity and natural gas .

               Focus on Energy, a more recent addition to the PSI team, provides energy assessment and facility
               review capabilities as well as additional project installation resources and incentives .




           Page 12                      Profitable Sustainability Initiative Phase 1 Report                  June 2012
                                                      Appendix A: Aggregate Results Table by OECD Indicator
                                                           OECD                                                                                            3 Year
                                                        Sustainable          OECD                               Total            Total        3 Year     Increased      Simple




June 2012
                                                       Manufacturing       Indicator       #        % of       3 Year           3 Year         Fuel     or Retained    Payback    Average Benefit: Cost
                                                         Indicator         Category     Projects    Total   Investment          Benefit      Savings       Sales      In Months          Ratio
                                                                                                                                                                                  1 Year   3 Year   5 Year
                                                       Residuals          Operations        4          4%      $212,285         $1,873,583                              4 .1      2 .94    8 .83    14 .70
                                                       intensity
                                                       Restricted         Input             1          1%      $100,100           $732,661                              4 .9      2 .44    7 .32    12 .20
                                                       substance
                                                       intensity
                                                       Restricted         Product           1          1%       $44,137           $300,000                              5 .3      2 .27    6 .80    11 .33
                                                       substance
                                                       content
                                                       Transportation     Operations       10         10%      $612,243         $2,951,937   $611,556   $16,950,000      11       2 .79    3 .38    5 .64
                                                       Non-renewable      Input             4          4%      $697,992         $2,093,976                             11 .8      1 .02    3 .05    5 .09
                                                       material
                                                       intensity
                                                       Energy intensity   Operations       72         73%    $2,653,066         $7,752,295                             12 .3      0 .98    2 .92    4 .86
                                                       Energy             Product           2          2%      $684,923         $1,818,470                             16 .1      1 .09    2 .24    3 .73
                                                       consumption
                                                       intensity
                                                       Recycled/reused Product              3          3%      $894,463         $1,534,738              $10,200,000    24 .1      0 .67    1 .49    2 .48
                                                       content
                                                       Air release        Operations        1          1%       $32,617            $45,533                             25 .8      0 .47    1 .40    2 .33
                                                       intensity




Profitable Sustainability Initiative Phase 1 Report
                                                       Total                               98       100%     $5,919,634        $19,103,192   $611,556   $27,150,000    12.2       1.18     2.96     4.94
                                                      OECD: Organization for Economic Cooperation and Development Indicators
                                                      Note: Savings realized annually are assumed to be the same for each year . Average benefit to cost ratio excludes diagnostic and
                                                      assessment costs .

                                                      Total Economic Impact: $52,784,382                        (company investment + 3 yr savings + 3 yr fuel + 3 yr sales)

                                                      Total State and Federal Investment: $2,100,000                             (for 67 companies in the first phase of the PSI program)




Page 13
                                                      Dollar Returned per state and federal Dollar Invested: 25 to 1



                                                                                                                                                        Appendix A - Aggregate
                           Appendix B: Sustainable Benefits Table
Appendix B - Sustainable

                            Key Environmental Benefits and Impacts
                            Environmental Impacts                   Annual Reduction                            3 Year Reduction

                            Kilowatt hours                          4 .28 million kWh                           12 .85 million kWh

                            Natural Gas                             316,613 therms                              949,839 therms

                            Carbon Dioxide Equivalent               4,991 .5 metric tonnes                      14,974 .5 metric tonnes

                            Solid Waste                             8,931 tons                                  26,793 tons

                            Hazardous Materials                     26,832 tons                                 80,496 tons

                            Air Emissions                           17 tons                                     51 tons

                            Transportation                          305,778 miles                               917,334 miles

                            Diesel Fuel                             50,963 gallons                              152,889 gallons
                           kWh =         kilowatt hours, unit of electrical energy equal to 1000 watt hours .
                           therms =      unit of heat energy, equal to 1000 BTU .
                           metric tons = 1000 kilograms or 2,204 .6 pounds




                           Page 14                              Profitable Sustainability Initiative Phase 1 Report                  June 2012
Appendix C: Breakdown of Energy Intensity Projects
                                                             3 Year         Annual                 Benefit to




                                                                                                                Appendix C - Energy
                                    # of                    Economic       Economic     Payback    Cost ratio
  Project Category Description    Projects   Investment      Benefit        Benefit     (months)    3 Year
HVAC Optimization                     2         $22,500      $123,498         $41,166      7        5 .4 to 1




                                                                                                                     Intensity
Compressed Air System                20        $221,884      $502,126        $167,375     16        2 .2 to 1
Optimization
Electric or Gas Reduction            19       $1,000,460    $2,321,280       $773,760     16        2 .3 to 1
Waste Heat Recovery                   3        $167,683      $181,847         $60,616     33          1 to 1
Building Envelope                     4         $73,255       $99,352         $33,117     27        1 .3 to 1
Lighting and Control Upgrades        11        $194,492      $225,136         $75,045     31        1 .1 to 1
Process Optimization                 13        $972,792     $4,299,055    $1,433,018       8        4 .4 to 1
Total                                72       $2,653,066    $7,752,295    $2,584,097      12        2 .9 to 1


Note: The benefit to cost ratio excludes diagnostic and assessment costs .




 June 2012                   Profitable Sustainability Initiative Phase 1 Report                   Page 15
                          Appendix D: Geographic Distribution of the 67 Manufacturers
                          Included in this Report
Appendix D - Geographic




                          Page 16          Profitable Sustainability Initiative Phase 1 Report   June 2012
Appendix E: Participating Companies
Company Name                                                        City
1    Absolute Custom Extrusion                                      Milwaukee




                                                                                                   Appendix E - PSI
2    ACH Foam Technologies, LLC                                     Fond du Lac




                                                                                                     Participants
3    Advance Die Casting Company                                    Milwaukee
4    AFW Foundry, Inc .                                             Lannon
5    Alive & Kickin' Pizza Crust                                    Green Bay
6    Amerequip Corp .                                               Kiel
7    Appleton Coated, LLC                                           Combined Locks
8    Ashland Industries, Inc .                                      Ashland
9    ATACO Steel Products Corporation                               Cedarburg
10   Badger Alloys                                                  Milwaukee
11   Ball Metal Food & Household Products Packaging Division        DeForest
12   Cardinal Insulating Glass                                      Spring Green
13   Cardinal Solar Technologies                                    Mazomanie
14   Copps Industries, Inc .                                        Mequon
15   Design Specialties                                             Milwaukee
16   Didion Milling, Inc .                                          Cambria
17   Dutchland Plastics Corp                                        Oostburg
18   Edstrom Industries, Inc .                                      Waterford
19   Engine & Transmission Exchange                                 Milwaukee
20   First Edge Solutions, Inc .                                    Milwaukee
21   Foremost Farms USA                                             Rothschild
22   Foremost Farms USA                                             Plover
23   Future Foam, Inc .                                             Middleton
24   Gordon Aluminum                                                Schofield
25   Graphic Packaging International                                Menasha
26   H Window Company, LLC                                          Ashland
27   Humane Manufacturing Co ., LLC                                 Janesville
28   Hydrite Chemical Co .                                          Cottage Grove
29   Jarp Industries, Inc .                                         Wausau
30   Johnson Electric Coil Co .                                     Antigo
31   KCS International, Inc .                                       Oconto
32   Klondike Cheese Co .                                           Monroe
33   KMC Stampings                                                  Port Washington
34   Lakefront Brewery, Inc .                                       Milwaukee
35   Manitowoc Ice, Inc .                                           Manitowoc
36   Masterson Company                                              Milwaukee
37   Material Recovery, Inc .                                       Milwaukee
38   MEGTEC Systems                                                 De Pere
39   Milwaukee Gear Company                                         Milwaukee
40   Modern Equipment Company, Inc .                                Port Washington
41   National Rivet & Mfg . Co .                                    Waupun
42   NWP Inc ./ Saco Polymers                                       Sheboygan


June 2012                          Profitable Sustainability Initiative Phase 1 Report   Page 17
                   Company Name                                                      City
                   43   Oxbo International Corp .                                    Clear Lake
                   44   Professional Power Products                                  Darien
Appendix E - PSI

                   45   Prolitec                                                     Milwaukee
                   46   Pure Power Technologies                                      Waukesha
  Participants




                   47   Quality Packaging, Inc .                                     Fond du Lac
                   48   Quick Cable Corporation                                      Franksville
                   49   R & B Wagner, Inc .                                          Milwaukee
                   50   Rayovac Corporation (Spectrum Brands)                        Portage
                   51   Regal Ware, Inc .                                            Kewaskum
                   52   Salm Partners                                                Denmark
                   53   Sara Lee (BBU)                                               Madison
                   54   Service Heat Treat                                           Milwaukee
                   55   Shelmet Precision Casting Co ., Inc .                        Wild Rose
                   56   Spancrete Inc .                                              Valders
                   57   Spectrum Industries, Inc .                                   Chippewa Falls
                   58   Superior Die Set Corporation                                 Oak Creek
                   59   Superior Lidgerwood Mundy Corp                               Superior
                   60   TCI, LLC                                                     Milwaukee
                   61   The Marek Group, Inc .                                       Waukesha
                   62   W S Darley & Co .                                            Chippewa Falls
                   63   Washburn Iron Works, Inc .                                   Washburn
                   64   Wausaukee Composites, Inc .                                  Wausaukee
                   65   Webcrafters, Inc .                                           Madison
                   66   Whitefield Industrial Coatings                               Oshkosh
                   67   Wildeck, Inc .                                               Waukesha




                   Page 18                          Profitable Sustainability Initiative Phase 1 Report   June 2012
          Company                     Name                     Title                   Contact Information
Wisconsin Manufacturing         Randy              Program Manager               bertram@wmep .org




                                                                                                                    Appendix F - PSI
Extension Partnership           Bertram




                                                                                                                    Team Members
(WMEP)
                                Janet              Project Coordinator           gassman@wmep .org
                                Gassman
                                Rick Ray           Project Manager - Senior      ray@wmep .org
                                                   Manufacturing Specialist
                                Marie              Project Manager - Senior      mansheim@wmep .org
                                Mansheim           Manufacturing Specialist
                                David York         Project Manager - Senior      york@wmep .org
                                                   Manufacturing Specialist
                                Jim                Project Manager - Senior      fackelman@wmep .org
                                Fackelman          Manufacturing Specialist
                                Andrew             Project Manager -             porter@wmep .org
                                Porter             Operations Manager, MEP
                                                   Supply Chain Advantage
                                Steve Straub       Project Manager - Southeast   straub@wmep .org
                                                   Regional Account Manager
                                Jerry              Project Manager - Senior      thiltgen@wmep .org
                                Thiltgen           Manufacturing Specialist
                                James Steffy       Project Manager -             steffy@wmep .org
                                                   Manufacturing Specialist
                                Dick Welsh         Project Manager -             welsh@wmep .org
                                                   Manufacturing Specialist
Northwest Wisconsin             Larry              Director, NWMOC               blackledgel@uwstout .edu
Manufacturing Outreach          Blackledge
Center (NWMOC )                 Ted Theyerl        Project Manager, CVTC         thayerl@uwstout .edu
SCS BT Squared                  Ray Tierney        Vice President, Project       rtierney@scsengineers .com
                                                   Director
                                Sam Cooke          Vice President, Project       scooke@scsengineers .com
                                                   Director
                                Mark Tusler        Senior Engineer               mtusler@scsengineers .com
                                Leslie Busse       Senior Project Manager        lbusse@scsengineers .com
                                Blair Wilcox       Energy Engineer               bwilcox@scsengineers .com
                                John               Vice President, Project       jtweddale@scsengineers .com
                                Tweddale           Director
LogiServe® Inc .                Gary Glisch        CEO                           gglisch@logiserve .net
                                Jim Norton         Director of Sales             jnorton@logiserve .net
Wisconsin School of Business    Tom Eggert         Director, Business            teggert@bus .wisc .edu
                                                   Sustainability Outreach
Baker Tilly Virchow Krause,     Lisa Van           Manager                       Lisa .vanlieshout@bakertilly .
LLP                             Lieshout                                         com
WI Department of Natural        Mark               Business Sector Specialist    Mark .McDermid@wisconsin .
Resources                       McDermid                                         gov
Focus On Energy                 Ross Bennett       Energy Advisor                bennett@franklinenergy .com
Wisconsin Economic              Shelly             Sector Development            shelly .harkins@wedc .org
Development Corporation         Harkins            Manager
                                Christine          State Energy Program          christine .mcfadzen@wedc .org
                                McFadzen           Manager ARRA


June 2012                      Profitable Sustainability Initiative Phase 1 Report                        Page 19
Appendix G - PSI Pilot Form

                                                                                       Application
                                 The Wisconsin Manufacturing Extension Partnership is looking for candidates to participate in a state-funded Profitable
                                 Sustainability* pilot/grant program. To apply for participation in the Profitable Sustainability Initiative:

                                 1.       Print, fill out & fax to: 608.240.1744 or

                                 2.       Scan and e-mail to: ProfitableSustainability@wmep.org

                                 3.       Or fill out online at http://www.wmep.org/ProfitableSustainabilityForm.aspx
                                 *Profitable sustainability in manufacturing refers to the triple bottom line of People, Planet and Profit. The objective is to profitably reduce the
                                 intensity of materials use, energy consumption, emissions, and the creation of unwanted by-products while improving the value of products to
                                 society. The key driver for profitable sustainability is return on investment to the manufacturer.

                                 Company Contact Information
                                 Company Name:

                                 Address:                                                                 City:                                                Zip:

                                 CEO or Sr. Exec. Name:                                                   Phone:                          Email:

                                 Product or Service:                                                      NAICS Primary Code:

                                 Number of Employees at This Location:

                                 Internal Champion for Sustainability Issues (Name):

                                 Title:                                                                   Phone:                          Email:


                                 Energy/Utility Information
                                 Energy Suppliers: Electricity:                                                      Gas:

                                 Electricity: Maximum Monthly Demand:                                                kW (maximum 15 minute reading)

                                                 Approximate Monthly Consumption:                                    kWh/month



                                 Fuel(s):        Natural Gas:              Therms or Dekatherms/month (circle one) Propane:                                    Gal/month

                                                 Fuel Oil:                 Gal/month                                 Other:

                                                 Avg. January Gas Use:                          Therms or Dekatherms/month (circle one. 1 dth = 10 therms)



                                 Water:          Does your process use water?         Yes       No         If yes, how much?                         Gal/month

                                                 Do you treat process water?          Yes       No         If yes, avg. discharge:                   Gal/month

                                 Other Information
                                 Transportation: Estimated annual freight cost:             $                        Primary Modes:

                                 Packaging: Estimated annual shipping container cost: $                              Estimated annual retail packaging cost: $

                                 Products and types of packaging:

                                 List your five largest energy-consuming activities: (e.g., boilers, process heaters, compressors, HVAC, motors, chillers, furnaces, lights,
                                 transportation, packaging, etc.)




                              Page 20                               Profitable Sustainability Initiative Phase 1 Report                                                   June 2012
                                                                                                                                  Appendix G - PSI Pilot Form
  Current Programs
 Rate your progress in tracking and improving the following areas (check only one for each aspect):

                  Aspect                   Not         No         Some           Audit         Full
                                        Applicable   Program     Tracking                  Program
  Electricity & fuel
  Water & waste water
  Material inputs & waste streams
  Hazardous materials & waste
  Air emissions / greenhouse gases
  Storm water & run-off releases
  Health & safety costs
  Emergency / spill planning
  Packaging reduction
  Transportation efficiency
  Manufacturing process efficiency
  Clean product development

  CEO / Senior Executive Essay
 Briefly describe why your company is a good candidate for the Wisconsin Profitable Sustainability pilot/grant program. What is
 driving sustainability for you? How does sustainability align with your business strategy? What are your most pressing capital
 needs? What are five projects you might consider to make your facility more sustainable? What have been your greatest
 stumbling blocks for making progress on sustainability? Use an extra sheet if needed.




                                        Print, fill out & fax to: 608.240.1744
                               or scan and e-mail to ProfitableSustainability@wmep.org
                              Wisconsin Manufacturing Extension Par tnership www.wmep.org
  2601 Crossroads Drive        Suite 145   Madison, WI 53718-7923           Ph: 877.856.8588      Email: results@wmep.org




June 2012                          Profitable Sustainability Initiative Phase 1 Report                                 Page 21
W is co n s in M a nufactur i ng Ex te nsi o n Par tne rshi p
    M adis on          • Mi lwauke e   •     G re e n B ay
        8 7 7 . 8 5 6 .8 5 8 8 •    www. wm e p. o rg

				
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