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Sustainability - hand-in-hand with profit15th of March 2011
Pedro Chidichimo, president of customer solutions and innovation at global cleaning solutions provider Diversey, starts a series of exclusively written articles for ECJ. In this edition, he examines the link between sustainability and profitability.
It is well known that the facility management and cleaning industry is facing challenging times. The recession has placed great strain on cleaning service businesses as economic strains are shrinking margins for the overall industry.Many of our customers decided to cut budgets to sustain cash flow and are trying to improve their cost structure in some cases, driving headcount reduction.
Many articles and books have been written about sustainability, and it is not my intention to write another generic essay about the efforts we need to take to reduce the environmental impact of our industry. Rather, I will tailor some of my learnings as a business leader and encourage the cleaning industry as a whole to become more profitable and more sustainable.
I firmly believe that sustainability and a healthy bottom line should go hand-in-hand. Solutions that protect the environment are more profitable and good business practice for now and the future. At the same time, they allow us to deliver on our responsibility to the wider community, a key component of our purpose as an industry.
The cleaning industry must adopt the sustainability imperative because it is the right thing to do, but also because it makes good business sense. Our business is about creating more profitable, sustainable enterprises for our customers that help them improve performance and efficiency while contributing to the well-being and greater good of our communities.
The key challenges facing this industry: How to manage the increasing complexity of running our businesses and workforce; how to maximise productivity; and how to deliver more sustainable solutions.
I recommend a threefold approach to solve these questions:
1. Reduce complexity in operations through simplifying by outsourcing of processes, harmonisation of products and equipment and rely on partners who are accustomed to dealing with complexity to handle their areas of expertise. I have personally been involved in the development of an online platform through which a building service contractor is able to standardise the products and services that all its subsidiaries buy from a vendor.
The benefits for this BSC were notable: reduced number of SKUs, minimised training requirements and improved working capital. We provided a substantial added value and economic profit, and we learned that customer experience drives continuous learning and improvement that is critical for innovation.
2. Improve productivity through innovations and solutions that incorporate mechanisation and training. It is clear that to gain some of the benefits of increased productivity, all the players in the industry need to make some kind of investment. Proving beforehand the level of return expected from such investment is not easy. In my own company, we have seen a level of return of reducing our global carbon footprint that is more than double the initial investment in less than four years.
Investing in innovative floor cleaning equipment is not an easy decision to make from a capital expenditure point of view, but it can potentially drive the daily savings in increased productivity. This makes the decision much easier. There is a new generation of modern scrubber dryers that already incorporate cleaning solution dosing systems which automatically dose the precise amount of chemical matched to the machine’s speed. This eliminates product wastage and reduces water consumption by up to 50 per cent. Sustainability is further enhanced when the machine is powered by new 'fast charge' batteries - energy consumption is reduced by around 20 per cent.
3. Develop sustainability solutions that capture value from your customers’ inefficiencies. Sustainability challenges us to reduce overhead and production costs by saving energy or water in your cleaning operations. Not only do you contribute to the environment, but you also spend less money and become more profitable. One of the examples I appreciate the most is chemical products with integral dilution control measures. They reduce the amount of energy used in manufacturing and transportation to and from the manufacturer. Dilution control also dramatically saves the customer and waste packaging.
The most advanced beverage bottlers are beginning to conduct water usage audits in order to understand the level of wastage and the savings opportunities at hand. Our industry needs to help them optimise their operations at their plants, ultimately enabling them to increase production capacity while using less water and chemicals and saving money in the meantime.
You have an opportunity to make sustainability part of your corporate purpose and a key requirement for any innovation or new service that you bring to the industry. Whatever your current profitability or approach to sustainability, I hope I have given you some ideas on how sustainability can and should be profitable to your company, your employees and the planet.
•Read the second part of Pedro Chidichimo's series in the April/May edition of ECJ.