Transcript Slide 1

Great Lakes Pollution Prevention Roundtable
Program Overview
March 14, 2007
Karen Wan
Agenda
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Introduction
Project Partners
History of By-Product Synergy
Chicago Hybrid Model
Status of the Network
Chicago Strategy for Growth
Collecting Success Stories
Introduction the questions leading to the network
• What do environmental technical assistance
providers do with manufacturers and other
businesses after you’ve done everything you know
to make them lean?
• How do you tackle bigger environmental problems
than your own business can handle on its own?
• If you’re a public entity, how do you promote
sustainable economic development?
What is the Chicago Waste to Profit
Network?
• The goal of the network is to improve the financial
and environmental health of the Chicago region by
transforming outputs (wastes) to industrial inputs
(profits)
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How did we develop the Chicago
Waste to Profit Network?
• Timing was good . . .
• City of Chicago, Department of Environment was looking for
ways to assist Chicago industry to become greener AND
promote economic development
• CMC and USBCSD had an idea for a Chicago-based byproduct synergy project
• The EPA Great Cities program and the State of Illinois
Recycling Energy Modernization (REM) Program supported the
City’s leadership
• CMC was able to apply NIST matching funds to this project
Chicago Waste to Profit Network
Funding
• City of Chicago
• EPA Great Cities
• State of Illinois Recycling Energy Modernization
(REM) Grant
• NIST
• Company matching fees
• $2500 – companies under 500 employees
• $5000 – companies over 500 employees
Delivery Partners
• World Business Chicago
• Chicagoland Chamber of Commerce – company
targeting
• Waste Management Research Center
• UK NISP
Goals of the Chicago Waste to Profit
Network
• Demonstrate City of Chicago leadership in green
business - Mayor Richard M. Daley is a project
champion
• Track the economic and social value of by-product
synergy in the Chicago region
• Create a by-product synergy culture in our region
• Lead by example - model implementation of this
concept for cities and regions around the country –
tie into EPA, MEP and USBCSD networks
• Build the case for expanded public funding for this
initiative
Benefits
• Public Good
• Improved Environmental Measures
• Reduced Waste to Landfill
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• Creates New Jobs
90
• Create New Companies
70
WASTE
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PROFIT
• Revenue from new product offerings
Dec
Nov
Oct
Sep
Aug
July
June
May
10
Apr
• Increased Efficiencies
20
Mar
• Reduced disposal costs
30
Feb
• Reduced raw material costs
40
Jan
• Industry
50
Why have businesses joined the
network?
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Add legitimacy to “sustainability” or “green” claims
Reduce or eliminate cost for waste disposal
Transform waste into a revenue stream
Approach product and process design differently
Create new markets
Share environmental expertise with the network
Value to CMC (and other MEP Centers)
• Naturally expands upon lean manufacturing core
competency
• Plays into strengths of being part of a national MEP
network
• Creates short-term, mid-term, and long-term
innovation opportunities for the manufacturers that
we serve
History of By-Product Synergy
• This is not a new concept – the EPA and others have
been promoters of this idea since the early 1990’s
• By-product synergy implementations
• Kalundborg, Denmark – since the 1970’s – several
businesses within a short proximity from each other
• USBCSD – small networks around the U.S. – less than 100
companies
• United Kingdom – National Industrial Symbiosis Programme
(NISP) – since 1999 – 4000 companies
Traditional Material Flow Process
Company A
Products
Target Customers
Co-Products
Revenue Source
By Products
Disposition
Products
Target Customers
Co-Products
Revenue Sources
By Products
Disposition
Products
Target Customers
Co-Products
Revenue Sources
By Products
Disposition
Return
Lost Opportunity
Return
Company B
Lack of InterCompany and
Inter-Industry
Collaboration
is a hindrance
to innovation
and realization
of new
revenue.
Company C
Company D
Lost Opportunity
Lost
Opportunities do
not come
cheaply!
Disposition of By
Products is also
associated with
landfill tipping,
treatment,
recycling, and
storage costs.
Return
Lost Opportunity
The environmental impact of disposition can impact business,
too: landfill tipping fees and the cost of raw materials are on the
rise.
Products
Target Customers
Co-Products
Revenue Sources
By Products
Disposition
Return
Lost Opportunity
By Products are often misconstrued as
“waste” instead of opportunity. Without
dedicating resources to finding
alternatives for disposition, a company
may miss opportunities.
Waste to Profit Material Flow Process
Through the byproduct synergy and
implementation
processes, companies
can reduce disposition
costs and create new
revenue streams—
possibly even new
product lines and
businesses.
By Products
Products
Products
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Co-Products
By Products
Company B
Through the sustainable
cycle of inter-industry
materials management,
Chicago Industry, as a
whole, can reduce its
impact on the environment,
and the environment’s
negative impact on
profitablilty.
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Products
INNOVATION
THROUGH
COLLABORATION!
Company A
Co-Products
Products
Co-Products
$
By Products
Company D
Company C
Co-Products
$
By Products
Through the Waste to
Profit Network,
innovative synergy
opportunities emerge
during and following
collaborative company
discussions of material
streams.
BPS Sister Networks
Alberta
•United
Kingdom
Chicago’s
Network will
tie into
possible
Milwaukee,
NW Indiana,
and SE
Michigan
Networks
•Montreal
•Pacific
Northwest
Milwaukee •SE Michigan
Chicago Ohio
•NW Indiana
•Kansas City
•Fort Bragg
•North Texas
•Gulf Coast
•Tampico Mexico
Industrial Symbiosis
Business Opportunity
Landfill ↓
Learning ↑
Jobs ↑
New Business ↑
Innovation ↑
Transport ↓
CO2 ↓
Pollution ↓
Sales ↑
Costs ↓
Asset Utilisation ↑
Key Achievements (audited)
Apr 2005-June 2006
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1,483,646 tonnes diverted from LF (Hazardous 29%)
1,827,756 tonnes virgin materials saved
1,272,069 tonnes CO2 savings
386,775,000 litres potable water savings
£36,080,200 additional sales
£46,542,129 cost savings
790 jobs
£32,128,889 private capital investment
Regional
implementation
strategy
IS network engagement pool
Strategic
Site visits
Cluster
Data collection
Local
Synergy workshops
‘Funnel Effect’
Coordinator sphere
of influence
Self-selecting
network
IS projects/outcomes
Regional Focus: West Midlands
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Most ‘mature’ NISP region
3 years experience
Today <1000 members
Team grown from 3 – 8
Skills mix: Director (project management), Technical
& Admin Support
• Trialed and developed IS toolkit (training, data
collection…)
• Sector and geographic sector based: aggregate
replacement materials, biomass & biofuels, water &
effluent, automotive & automotive supply
Waste to Profit Network
Objectives
Create:
• One principal network of between 10 and 25
companies
• One community network of 25-50 companies
• Deliverables:
• 5 working meetings in 2007 for principal network
• 1 working meeting for community network
• Metrics:
• 20,000 tons diverted from landfill
• 30 jobs new or retained
• Cost savings for network companies
Chicago Hybrid Model
• Incorporate the best practices from around the
world into a model that works for an urban industrial
region in the U.S.
• Apply MEP knowledge of how to assist small and
midsize manufacturers into this model
• Focus on two key areas:
• Short and Long-term innovation
• Serving communities in the City of Chicago
Five Steps from Waste to Profit
2007-2008
Quantify value in business terms
Coordinate implementation assistance
Perform BPS assessments and map inter-company synergies
Facilitate business helping business
World class organizations develop public/private partnership in Chicago
Innovation Network Strategy
• Targeted Approach:
• Seek out Industry Leadership: Both small and large
manufacturers in Chicago region
• Assist network participants:
• Understand the concept through kickoff and individual
targeting meetings
• Agree to contract terms for confidentiality, fee based
network
• Understand basic material flows: preliminary data
collection
Innovation Structure
• Series of five facilitated meetings throughout the
year
• Development of subgroups and focus areas
• Focus on collecting metrics of success in an
ongoing process
Status - Innovation Network
26 Member Companies:
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Abbott
Acme Refining
Akzo Nobel
Baxter International
Christy Webber Landscaping
Cloverhill
Computers for Schools
Cook Composites & Polymers
Curb Appeal
East Balt
Endres
Engineered Glass Products
General Iron
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Goose Island Brewery
Hydrodec
Kimball International
Kraft Foods
Lafarge
Mittal Steel
Naylor Pipe
S&C Electric
Sara Lee
Schulze Burch
Sherwin Williams
Smurfit
USG
City of Chicago Departments
• Demonstrate leading by example
• Department of Environment staff coordinating byproduct synergy implementation with:
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Aviation
Fleet
General Services
O’Hare Modernization Program
Streets and Sanitation
Transportation
Water
Innovation Network – Results to Date
• Innovation Network Node 1 has held one working
meetings – January 25, 2007
• 3 by-product synergies are being implemented - in
process of collecting ROI and environmental
metrics
• Anticipate about 10 subgroups
• Such as: Plastics, Construction & Debris, Food waste,
Energy, Chemicals, Pallet Recycling
• Will define and prioritize subgroups at next working meeting
on March 29, 2007
Community Network Approach
• Adapt UK process of engagement
• Bring together economically, industrially,
geographically diverse group of companies
• Enlist most engaged companies to serve as network
leaders and diplomats
• Discover company material flows
• Add company information into database
• Bridge to Innovation Network
Targeting Communities and Companies
for the Community Network
• First community meeting will be held on June 21,
2007 at the City of Chicago Center for Green
Technology
• Focus on two communities -- near west and south
side industrial corridors
• Introduce by-product synergy concept to over 100
smaller companies in the Chicago area
• Companies will be knowledgeable, engaged and
prepared prior to the June meeting
Facilitation Process
• Plant a Seed: Quantify company byproducts and
feedstock
• Watch it Grow: Group all products by material type
and need association
• Pick the Low Hanging Fruit: Identify of the obvious
synergy opportunities
• Don’t Leaf anything Hanging: Identify of what needs
are yet unmet
• Branch Out: Brainstorm ways to fulfill these needs
Community Network Status
• In process of targeting companies
• Several companies are creating waste profiles:
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PortionPac Chemical Corporation
Lincoln Park Zoo
Republic Glass and Windows
Chicago Gear
• Will add 40 more companies in next two months
identified in surveys from fall 2006
Pilot Project Timeline
Chicago Growth Strategy
• Attract more companies to participate
• 10-12 companies provides limited synergies based on EPA
analysis of New Jersey by-product synergy effort
• Track economic value to member companies on a
constant basis
• Pursue new public funding for FY08-09 while growing
fee income in 2007
• Grow more aggressively than the current project
requires – beat expectations
• Work closely with Illinois EPA and Region V EPA
Proposed growth strategy benefits
• Increases likelihood of success:
• Increases potential of implementing synergies
• Increases cumulative cost savings for network members
 150% to 300% average ROI for each incremental $10,000 cost
savings per company (based on UK results)
 100 companies = $1,000,000 vs $200,000 for 20 companies
• Develops a viable long-term business model for
managing the network, while public funding
investment is pursued
Collecting Success Stories
• Environmental Benefits
• Adhere to EPA metrics collection through WMRC
• Separately and in Triple bottom line reporting
• Economic Benefits
• Gather information continuously, report bi-monthly
• Create metrics that are useful to our members
• Economic Development focus – creation of new jobs
• Social Benefits
• Possibly more qualitative
• Gather information continuously, report bi-monthly
• Assessing the social impact of collaboration
Progress Report Example
Solution: Recycler to Reprocess By-Product for Re-Sale to Member
Company
Rough Estimate of Materials Savings =100,000
Rough Estimate of Reduction of Disposal Costs =26,000
Rough Estimate of Reduction of Associated Costs
=50,000
-Initial Investment = 2,500
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Transportation
Provided
eliminating
disposal
Fees
Estimate of Total First Year ROI = 173,500
Five Year ROI = 877,500
Ten Year ROI = 1,757,500
Current
State
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Good for Shareholders:
Reduction in Cost
of Raw Materials
Without compromising
quality
Good for Business:
Elimination of Disposal,
Transportation and
Storage Costs
Triple-Bottom Line Benefits
Reclaimed and
Repurchase ByProduct
QTY Purchased
Cost of Purchase
QTY Disposed
100
Cost of Disposal
QTY Stored
50
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Good for the Environment:
Positive
environmental impact,
creation of zero-waste stream
Stability of
pricing
eliminates the
need to stock
and store large
quantities of
raw materials
100% of By
Product is
diverted from
landfills
Cost of Storage
Quality of Product
Raw material costs
decreased by 50%
Added Benefits from Sustainable Marketing
Influence of Sustainable Marketing
on Alpha Consumer Behavior
25
Green Industry
Growth Continues
Unabated at
30-50% Annually
Billions of Pounds Sterling
66% Noted Green
Aspects While
Purchasing
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15
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42% Believe Companies
Carry Responsibility for
Social Problems
5
Years since 2000
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Importance of Corporate Social
Responsibility Practices to Consumers
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Recent Growth in Market Share of Green Products
The Sustainable Marketing Opportunity Gap
A 30% Market Share
Will be Gained or
Lost on the Basis of
Marketing Value of
Green Products or
Services!
Current Market
Share of Green
Goods
Consumers Who
Notice Green
Goods but Are Not
Yet Consumers
Market Share of Non
Green Goods
Synergy Implementation Status Report
Original Process
Material 1:
Material 2:
Material 3:
Current Status of Synergy
Final Process
Synergy Impact Metrics
Company:
Material Stream:
Baseline from Data Collection
Quantity Disposed
(Tons/ Month)
Monthly Cost of Disposal
Quantity Collected
Monthly Cost of Acquisition
Monthly Cost of Transportation
New Monthly Revenue
Synergy
Partnerships
Created
CO2 Emissions
Reduced
Jobs Created
Current Working Meeting
03/29/07
Total Improvement
Additional Qualitative Analysis
Company:
Material Stream:
What was the baseline impact?
Business Impact
Social Impact
Environmental Impact
What is the current state?
What improvements have
occurred?
Reduced
Costs
Jobs
Created
Social Benefits
Business Benefits
New
Revenue
Created
New
Businesses
Created
The Chicago
Waste to Profit
Network Benefits
the Triple Bottom
Line
Environmental Benefits
Solid Waste
Diverted
from Landfill
CO2
Emissions
Reduced
Chicago Waste to Profit Network
Contact Information
Karen Wan
Director of Sustainability and Competitiveness
Project Manager of Chicago Waste to Profit Network
Chicago Manufacturing Center
[email protected]
312.542.0430