The job of a corporate remediation executive is daunting. Not only must they transform contaminated sites into safe, useable properties, they must understand the complexities of soil, water, air, geology, and regulatory issues, just to name a few; manage numerous stakeholders, spanning community members, regulators and corporate management; predict costs; and oversee multiple teams. All while economic pressures continue to tighten budgetary reigns.
When we consider the complexity of the remediation process, it’s no wonder that projects are often ripe with wasted effort, problems, delays, misunderstandings and overruns. Yet, sub-optimizing certain steps tends to simply increase ‘waste’ and compound errors, eventually reducing efficiency and quality while increasing costs.
This complex landscape requires new methods and thinking to streamline responsibilities and enable executives to focus on the big picture, while also ensuring that important details don’t slip. Lean principles—typically associated with manufacturing—can help corporate remediation executives consider important aspects, such as value versus waste, and bear in mind the entire “value stream” to achieve maximum efficiency.
Although not yet commonly applied to remediation projects, the systematic application of Lean principles and tools can enable corporate remediation executives to reduce wasted time, money and effort—and create enduring results faster and more cost effectively. Two crucial components of Lean include value vs. waste and the value stream.
So, how does it actually work? A Lean advisor can help engage your teams and provide insight into Lean fundamentals and tools. When combined with strong technical expertise, corporate remediation executives can simultaneously speed things up, reduce risk, save money and, importantly, simply make their work easier. Below are two examples that demonstrate the power of Lean in the remediation process.
Portfolio Site Management: A Whole Systems Approach
While Lean can reduce waste and boost value for individual sites, the impact is often even greater with a portfolio of 10, 20, 50+ sites. Here, value stream management comes into play. By looking over the entire portfolio, executives can systematically consider the remediation value stream for the whole system of sites. Therefore, they can direct their attention to those aspects that will optimize the entire portfolio. Lean principles and tools can streamline site models, budgets and reports, time requirements around activities such as invoicing and accruals, and so on.
So how does Lean help here? First, by using Lean tools to systematically assess performance by site, a team can identify sites with poor, average or strong performance. In one case, the organization learned that the low bid contracts ended up being their most expensive!
Second, by mapping the value stream, a team can take a whole systems approach and view sites as a group. This reveals hidden connections, problems and strengths. For example, you might find that a selection of remediation technology has been biased more by contractors than by site conditions. In the above example, teams reduced the number of wells or analyses when facing budget pressures. This saved up-front costs, but led to inadequate site characterization – and the selected remedies did not effectively remove contamination, resulting in more years than necessary for site closure.
Ultimately, this team applied Lean to improve advocacy; develop a consistent strategy for closure; improve stakeholder collaboration and management; prioritize site spending; standardize remedial strategies; and reduce short term and lifecycle costs. Overall, Lean resulted in a 7x site closure rate; fewer budget surprises; operational cost savings of nine percent; a risk reduction of 15 percent; and a reduction in the need for consultants. It works!
OM&M
Lean principles can add tremendous value and cost savings in the Operation, Maintenance and Monitoring (OM&M) of sites. Let’s look at a major aerospace company’s application of Lean to a site previously impacted by research and testing of rocket engines. While the company battled ongoing regulatory challenges, the site required expensive OM&M for years.
Through applying Lean, the team was able to reduce waste, better manage stakeholders, and devote more time to creating value. For example, workers were spending hours each day—much of it unnecessary— traveling to supply areas on this huge site and searching for parts or equipment. New sustainable processes dramatically cut inefficiencies, e.g. frequently needed parts were stocked in accessible locations and standardized kits were placed on vehicles. The team also found ways to radically reduce time to prepare daily samples for shipment. As waste was also rampant for off-site personnel, the team cut out inefficiencies around lab testing, data management, validation, and reporting—radically reducing time and effort.
Through Lean principles, the team was able to identify and reduce waste, while safely and cost-effectively completing remedial actions. In short order, the team began using their new skills to make daily improvements; subsequently, the corporate remediation executive was able to succeed through the team’s energy and focus. And, the bottom line speaks for itself: OM&M costs at this site were reduced by more than 32 percent (a savings of $400,000 annually) through applying Lean principles.
Where else can Lean be used?
Additional possibilities abound for Lean across all aspects of remediation efforts. For example, as environmental SEC reporting continues to become increasingly important for public companies, Lean can streamline efforts here. Lean is even successfully applied to that traditional “fire drill” – providing environmental due diligence surrounding an acquisition or a divestiture. When selling, divestiture due diligence requires a full report and back-up documentation that goes beyond soil and groundwater liability into waste management, air emissions, and major potential environmental risks.
When buying, acquisition due diligence requires an assessment of health, safety and environmental risks, quantification of potential costs, and compliance assessments. Companies must move fast, without mistakes, and Lean can streamline the process and reduce errors.
The Implications of Lean for Corporate Remediation
There is no question that the job of a corporate remediation executive is more demanding than ever. Lean principles and tools can transform the role and enable executives to take a higher level view and increase value in measureable ways. What key factors can enhance success?
More information about Haley & Aldrich can be found at www.haleyaldrich.com.
