Week of March 4, 1999 Manufacturing News Battelle Helps Business Stay Green, Competitive Several companies have achieved substantial cost savings and environmental, health and safety (EH&S) improvements by systematically using life cycle accounting approaches. In fact, Commonwealth Edison has realized $75 million in financial benefits since beginning with their program in 1993. These life cycle accounting efforts are gaining momentum because they reveal opportunities to reduce direct, hidden and contingent costs that can occur throughout a company's supply chain, according to Battelle management expert Joseph Fiksel, senior director for Life Cycle Management. Fiksel and his colleagues at Battelle (Columbus, Ohio; www.battelle.org) have been collaborating with industry since 1992, conducting detailed analysis of product and process life cycles in search of ways to reduce material and energy use, minimize waste, and reduce capital and operating costs. More recently, Battelle has been working with the U.S. Environmental Protection Agency's Office of Pollution Prevention and Toxics to enhance the state-of-the-art of environmental accounting. Battelle's work with the EPA is focused on the pragmatic application of life cycle accounting to materials management, which includes the acquisition, handling, storage, processing, disposition and recovery of materials that are used in industrial processes. Materials management is a natural area for applying the principles of environmental accounting. "Many firms have adopted pollution prevention strategies that emphasize eco-efficiency, which involves minimizing the resource consumption and waste generation per unit of production," Fiksel says. "Environmental accounting often reveals opportunities to prevent pollution and eliminate waste in ways that contribute to profitability and competitive advantage." Life cycle accounting is an extension of environmental accounting that systematically addresses all quantifiable costs and benefits throughout a company's supply chain, including material acquisition, manufacturing, distribution, customer support and final disposition. Battelle's work for the EPA involves several thrusts: Investigating and documenting the industry's best practices, particularly the linkage between environmental accounting and materials management. Preparing case studies that provide in-depth understanding of how leading U.S. firms have implemented such practices and improved their supply chain performance. Development of a guidebook for the incorporation of life cycle accounting into day-to-day materials management decision-making. The Manufacturing Report © Copyright 1997, 1998, 1999 by Lionheart Publishing, Inc. All rights reserved. E-mail Editorial Dept: tmr-editorial@lionhrtpub.com Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: 770-431-0867 | Fax: 770-432-6969 E-mail: lpi@lionhrtpub.com Web Design by Premier Web Designs E-mail: lionwebmaster@preweb.com