Posts tagged sustainability
Heating Trade Supplies Group:
Marek Bidwell talks to Mark Matteo, CEO of Heating Trade Supplies Group and National Boilers Parts about their contribution to the Circular Economy in the North East of England.
Awareness is increasing that something is wrong with our traditional ‘take-make-break’ economy. The BBC’s recent ‘Blue Planet 2’ series highlighted the devastating ecological impacts of consumer waste in the oceans and consumers are growing increasingly sceptical of companies that sell products that have built-in obsolescence, costing more and adding to the waste crisis.
UK government agency, DEFRA, calculated that business could save around £23bn per year by using resources more efficiently and producing less waste. Theresa May’s government is committed to making sure this happens by promoting “reuse, remanufacturing and recycling” in their ‘25 Year Environment Plan’ published in February 2018.
When organisations embark on a journey to reduce waste they often set ‘zero-waste-to-landfill’ targets and focus on sub-optimal outcomes such as incinerating waste for energy. However, the real wins for the environment and business, are achieved when items are reused or remanufactured, thus eliminating waste altogether, often called ‘The Circular Economy’.
Heating Trade Supplies is one company who is turning this concept into reality. They started trading five years ago with the aim of saving money for heating engineers and maintenance companies on boiler parts and at the same time extending the life of boiler components – a first in the North of England. The factory receives faulty boilers parts, such as Printed Circuit Boards and heat exchangers, repairs and tests them in their dedicated workshops, before dispatching them with a 12 months replacement warranty.
I visited their workshop, near the north entrance to the Tyne Tunnel, and waste met by CEO, Mark Matteo. It is a busy scene on arrival due to high demand for parts and repairs following extremely cold weather and snow in Britain the previous week. He tells me that it was all hands on deck over the weekend clearing the backlog.
I start by asking Mark what inspired him to set up the company. “I served my time as a Heating Engineer in Turkey, but then when I started working in England repairing boilers I was forced to buy entire replacement parts at a high price when I might only need one small component, and have to dispose of the rest of it, so I felt really bad having to pay several hundred pounds when I only need one component worth a few pounds. Many of the parts, especially the electronic parts, are fixable. They consist of three or four hundred components, but when there is a fault it is likely that one of only ten moving components has failed.”
Touring the workshop, I observe engineers swapping out components and testing the repaired items. Other staff are reconditioning heat exchangers for a second life. They clearly take pride in their work and show me the spotless results. Mark tells me that having a dedicated facility is essential: “Without a workshop, you are very limited because the only way to test a PCB is to fit it on the appliance. We have developed test rigs that mimic the each of the hundreds of types of boilers, allowing us to find out which components are faulty.”
Following the development of quality management system (ISO 9001:2015) the company developed a standard system whereby when they receive a faulty PCB, they not only swap out the damaged components but replace all the moving components on a PCB that commonly cause a fault. “The repaired board is practically as good as a new, if not better because our replacement components are higher rated than the originals,” says Mark. “Customers also have legitimate questions about the safety of refurbished components for gas boilers. All our work is carried out under the quality standard ISO 9001, replacement components are traceable to their country of origin and we obtain Certificates of Conformity from suppliers. We also employ a number of qualified Gas Safe registered engineers at the factory.”
Mark is clearly enthusiastic about the benefits of the service he provides, not only for the environment and the customer but also the local economy. He says, “every single item we refurbish would have been imported from other countries, so we believe that we are keeping the money in the country”.
Increasingly HTS are attracting larger corporate customers because the service offers a ‘win-win’ for them in terms of reducing the cost of replacement parts and helping them to meet their sustainability objectives. Some of these companies offer a guarantee to domestic customers that they will either get their old boiler working or provide them with a replacement. However, some domestic boilers are over 20 years old and spare parts are no longer available. “It happens very often that heating engineers have to replace the entire heating system in a house just because they can’t source a small part, but there is nothing wrong with the larger system,” says Mark. Walking around the warehouse I observe a library of stacked and labelled refurbished components, many of which come from obsolete models. He adds: “If necessary we can also manufacture such obsolete parts in a dedicated facility”.
Michelle Oliver, who is responsible for environmental management at HTS, shows me how they segregate various types of waste arising in the factory, including electrical waste that is beyond repair, which is collected by a licensed electrical waste reprocessor. Packaging material removed from incoming goods is shredded and used for packing parts to customers. Michelle says that the company is gearing up for assessment against the international environmental standard (ISO 14001:2015) in June.
I am keen to understand what the challenges are in this line of business, with a view to learning lessons for the wider circular economy. “The biggest challenge the sector has is that it is seasonal,” says Mark. “When we are busy we are extremely busy, and boilers all decide to break down at the same time, so everybody needs parts. The other challenge we have is that, although it is great that we do a unique job, the downside is that there are a very limited number of qualified people who we can employ, so we have to look far and wide for skilled engineers, but we have now started training some local young people in these skills. So, expanding the business not as easy as expanding a usual mainstream business.”
Towards the end of our discussion, I ask Mark how he sees the wider political, economic and environmental challenges facing the country may affect the business. “I moved to the UK in 1998 to work as a Heating Engineer, and although prices of food and goods have risen substantially during this period the wages of a typical engineer have remained the same – we are all poorer. Fifteen or twenty years ago when we went to repair a boiler the customer didn’t care too much how much a part cost, but times are getting harder following the recession, oil prices are fluctuating, and people are wondering what Brexit will bring. For example, the day after the Brexit vote, bills for our materials went up 20% against the Euro and Dollar, so we can feel it. People are being a lot more careful to purchase energy efficient boilers, insulate their houses to insure against rises in energy prices, and it is the same with companies. They can’t ignore refurbish and remanufacturing options anymore. I think that our type of industry will become more and more important in the future.”
Following our meeting, I reflect on the success that HTS has had in stimulating the circular economy in the heating sector by employing eco-design principles such as modularity, durability, and efficiency, and hope that the lessons learned here will encourage innovation in other sectors.
Marek Bidwell is Director of Bidwell Management Systems, an IEMA Fellow and a visiting lecturer in Environmental Management at Newcastle University. Marek has led the design, development and implementation of environmental management systems in many organisations across the UK. He is the founder of Green Thinkers book club and author of a series of articles on environmental management systems and ISO 14001:2015.
“Assessing your environmental strategic planning in preparedness for ISO 14001:2015”
Having written previously about the changes to ISO 14001, due to be published in 2015, which are likely to include increased focus on the supply chain, ecosystems, adaptation, and products and services, in this paper I will consider one aspect in more detail, which is giving consideration to environmental performance in strategic planning: ‘what you do’ – compared with an organisation’s direct environmental impacts: ‘how you do it’. I will use the Green Operations and Strategy Assessment Tool (GOSAT) to illustrate these ideas throughout, which may be used by organisations to develop a high level strategy in this area:
In the past, quality management systems (ISO 9001 and its predecessors) got a bad name, because there was a view that you could specify rubbish and make rubbish; conformance with specified requirements was key. To a greater or lesser extent this changed with the publication of the 2000 edition, which placed much greater emphasis on monitoring processes, products and customer perception, thus driving improvement in all areas of the organisation that contribute to meeting customer requirements. This in turn encourages innovation.
ISO 14001 suffers from a similar image problem today in some quarters, as 9001 did pre-2000, but in this case the customer could be seen as the environment. As long as the organisation complies with legal and other requirements, improves in some areas, and prevents pollution (normally considered to be from its direct activities) it can continue do what it does, or making what it makes, without considering its ‘raison d’être’ and overall life-cycle impacts.
As an example let’s consider a hypothetical manufacturer of patio heaters that has ISO 14001. Their environmental policy includes a commitment to ‘greening the earth’, although perhaps ‘warming the earth’ would be a more realistic objective given the product. Such a manufacturer could have a spotless factory, use solvent-free paint, and operate a fleet of electric delivery vehicles, but it will still be making a product that many see as unnecessary and highly unsustainable. Its position on GOSAT would be in the top left-hand corner.
If the 2015 version of ISO 14001 contains a requirement for the organisation to ‘consider the result of the evaluation of significant environmental aspects as input into the design, development or change of its products and services’ it would be interesting to see if the organisation readily retained ISO 14001 with no changes, dropped that product line, redesigned it, or substituted it for something that provided an equivalent service, such as thermal underwear. Redesigning the product could include partially addressing the core issue of heating outside air, such as we saw with the electric patio heater pitch by Eddie Middleton on Dragon’s Den in 2009. They may consider ‘improving’ the product through de-materialisation or perhaps increasing its life expectancy. One way of doing this might be by switching to solvent-based paints that may be more durable, but have a greater environmental impact at the production stage. Another might be by providing a take-bake service for the product at the end of its life. The company could use GOSAT to help plan their overall environmental strategy.
Our patio heater company is not alone in this journey; there are many well-documented examples of organisations that are beginning to, or have already, re-imagined themselves along more environmentally sustainable lines. The late Ray Anderson described in his book Business Lessons from a Radical Industrialist how his flooring company, Interface, re-engineered its process to harvest used carpet tiles, thus reducing fossil fuel dependency and waste to landfill. Other organisations, such as Green and Black’s, embedded sustainability principles in their businesses from the very beginning. Green and Black’s founder, Craig Sams, always believed that organic farming was not only essential for soil quality and ecosystem integrity, but that it also resulted in tastier food. With rising resource prices, climate instability, and degradation of ecosystems there are many sound business reasons to take a long-term holistic approach to running a business.
However, does this mean that all organisations who have strong environmental credentials from a product and service point of view (what they do), have also eliminated environmental compliance and pollution risks from their business (how they do it)? My counterintuitive theory is that this is not necessarily the case, and in some areas the opposite may be true. Before reading on can you think of any examples?
I will explain by considering a different hypothetical organisation: a recycling company that specialises in diverting food waste from landfill, capturing methane, and producing renewable electricity. Its core business model is aligned with sustainability principles. It does not have ISO 14001, possibly because it is considered to be unnecessary, and such controls would be an added cost and constraint. However, while it has grasped the green opportunity, it is less competent with regards to operations. It does little in the way of process monitoring, and frequently has problems with waste deliveries backing up in its yard. Odour from one of its plants is so bad that local residents often feel trapped in their homes, which is having a direct effect on their quality of life, health, and wellbeing. The regulator has received hundreds of complaints, and despite having contacted the plant, residents are taking legal action because they are convinced the problems will continue. The recycling company’s position on GOSAT would be in the bottom right-hand corner, and they could use the model to consider improvements to their overall business strategy, thus closing the gap to the ideal greener trajectory.
I won’t give specific examples here but the Environment Agency’s Sustainable Business Report for 2011 states that the number of serious pollution incidents per 100 permits issued is actually highest for the biowaste sector at 5.5; ironically this is well above the landfill sector, which only had 0.3 serious pollution incidents per 100 permits issued.
Therefore, while some organisations have made a logical progression from pollution prevention and compliance to an all-encompassing green business model, the two do not necessarily go hand in hand. Increasingly we will have to rely on diverse and novel technologies to solve critical challenges that we face, such as resource scarcity, adverse weather, food shortages, increasing migration of pests, rising CO2 emissions, and degradation of ecosystems. These technologies will not necessarily be risk free, and in some case may have greater safety and environmental operational risks than their predecessors. I have always said that there is no silver bullet when it comes to environmental management.
In summary I believe that ‘what you do’ and ‘how you do it’ must go hand in hand in order to solve global problems, prevent local pollution, and preserve the overall reputation of an organisation or brand.
The increased emphasis on environmental sustainability in the 2015 version of ISO 14001 will encourage many organisations to embed it into their business model, not only raising the profile of environmental management with the organisation but engaging leaders with opportunities presented by the green economy. Organisations exploiting new technologies however, large and small, would be advised to consider pollution prevention and neighbourhood impacts in equal importance to the bigger picture.
Please use the Green Operations and Strategy Assessment Tool (GOSAT) presented in this article to assess your organisation referencing the source. For more detailed analysis and guidance Bidwell Management Systems provides an ISO 14001:2015 Preparedness Service; contact Marek Bidwell (email@example.com) for more details.
By Marek Bidwell (2013)