Cut your losses
Shaun Ashmead, Managing Director of electronics manufacturer Axiom, reveals the benefits and savings the company has achieved by improving its energy efficiency
In the current climate of high fuel prices and tight environmental legislation, running a successful business need not cost the earth. Axiom has established a company culture geared towards quality and efficiency, using a comprehensive Environmental Management System (EMS) that has made the company more profitable.
Axiom Manufacturing is a contract electronics manufacturer that employs over 200 people in Newbridge, South Wales, and has a wide range of customers in the medical, industrial and automotive market sectors.
The steps taken to make the company more aware of its energy usage have laid the foundations for its current success. Greater efficiency, sustainability and recycling is helping to provide an advantage over the competition and has attracted cleaner and higher-value customers.
An EMS is a documented management system framework that businesses implement to use energy more efficiently and help to reduce waste. Often taken from other models of business excellence, the system encourages all employees, customers and the supply chain to buy into environmental sustainability.
Only energy-efficient businesses will survive
After working within these guidelines for the last four years, the benefits that an EMS can offer are clear. After all, where pollution occurs it is a sign that resources have not been completely exhausted, that processes are inefficient and money is being wasted.
Energy efficiency is in many ways the first basic element of business excellence. If you are complacent about anything, particularly energy efficiency, there is a knock-on effect throughout the business, which costs money.
The green credentials of European industry have been influenced by the growing amount of EU legislation that puts pressure on both customers and CEMs to manage the use of fuel, disposal of waste and the handling of dangerous substances. Companies must continually strive to be ahead of the game to survive, invest heavily in the latest machinery and establish procedures that control waste and emissions.
In future, with more legislation inevitable, and a huge premium on energy because of the imbalance between oil production and consumption, only businesses that use energy most efficiently will survive.
Axiom's EMS is made up of the environmental elements of some of the toughest industry standards. Operating beyond the requirements of the ISO 14001, TS 16949 and ISO 9001:2000, each of its 210 staff is also trained to
IPC-A-610C standard. With strict frameworks for energy efficiency these standards form the backbone of Axiom's EMS.
During the first two years of implementing its EMS, 2001 to 2003, the company recorded considerable savings with virtually no financial outlay.
Initially, around half of our customers were encouraged to use returnable and recyclable packaging. Gas and electricity costs were reduced by 10% with simple steps such as erecting signs reminding people to turn off the lights.
Using its commercial influence, Axiom has persuaded its suppliers to reduce their environmental impact through using recyclable packaging and carefully monitoring transportation costs. Through these procedures and changes to company culture, Axiom has recycled 9.14 tonnes of cardboard and over 2,000kg of solder dross that would have otherwise gone into landfill sites.
The next step was to make further savings by investing in the latest clean and efficient technology. Badly maintained and inefficient motors were brought up to date, leaks were fixed and the operating pressure of compressed-air systems reduced - all to help save energy. One example saw the company replace four ageing machines with one that provided a more efficient, cleaner and high-tech solution.
The latest figures reveal that the company is now making a £12,000 saving every quarter from recycling paper, cardboard, scrap PCBs and solder dross. From 2004 to 2005, electricity consumption was almost halved from 25,389KWh to 13,501KWh and gas consumption was reduced from 4,350KWh to only 373KWh.
Now 60% of customers use recyclable packaging, landfill waste has been reduced by 9% since 2004 (137% since 2000) and paper recycling has increased by 1.5 tonnes. Despite an increase of 20% in sales, paper usage was reduced by 14%.
Axiom reduced the volume of carbon dioxide released and electricity used by about 18.7% despite a sales increase over the same period. Adjusted to take account of sales, the actual reduction is 31.4%. Employees are kept informed of these targets and the results are displayed on a notice board every month to make sure everyone knows in which direction the company is heading.
After reviewing the system, it was clear that it made business sense and could be extended to maximise potential savings. Securing the buy-in of both top management and shop floor staff, the programme showed huge benefits and improved profitability and sustainability at the same time.
Crucially to its success, the EMS was introduced to the company as part of a wider programme to continually push the barriers to achieve excellence. Creating a bespoke system for the company was aided with the implementation of a wide range of quality tools that linked the EMS to other models of business excellence.
Some businesses express concern there is a cost for being environmentally friendly but Axiom is just one example of many companies that have made a return on their EMS investment.
The competitive benefits of these systems that directly affect the bottom line include:
The processes are continually monitored and enhanced in line with continuous improvement plans. Changes in European and UK legislation mean that Axiom must remain nimble and ready for change. The EMS that Axiom implemented helps to prepare for any new legislation in a planned fashion thanks to a structured documented system.
With the introduction of the WEEE directive and RoHS - delayed until June 2006 - organisations that have strict controls of waste and hazardous substances have a head start over competitors. Axiom has recognised this and was the first company accredited to BSI Kitemark IPC-A-610 for lead-free manufacture.
So when the RoHS directive becomes legislation, Axiom will already have one year's experience of producing lead-free products.
The company is now in a strong position to win new contracts and to pick up outsourcing opportunities from original equipment manufacturers that are unable to make the necessary energy efficiency and environmental investments into their own machinery and expertise. For these companies, the only viable option is to outsource.
By eliminating inefficiency and pollution, Axiom is preparing for a future where energy is at a premium and environmental legislation is even tougher. The company now has robust policies and procedures in place to identify relevant legislation in advance.
Many organisations are reluctant to introduce an EMS, fearing increased costs and few business opportunities, but this is not our experience. Huge cost savings, a greener image, better staff retention, increased support from the local community and, more importantly, attracting new customers are just some of the achievements that have made the effort and investment worthwhile.
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