Mr John Holbrow, Mr Michael Glass, Dr Claire Barlow and Mr Marcus Long

15 JANUARY 2008

  Q160  Lord Lewis of Newnham: Can I be clear. You are saying that at the moment there are certain waste streams that are coming from small industrial companies, which are being refused by local authorities?

  Mr Holbrow: Yes.

  Q161  Lord Lewis of Newnham: Is this very extensive? This is news to me.

  Mr Holbrow: All I can speak for is where we have had examples of this. There have been some examples in parts of Surrey; there have been some examples in parts of the Midlands; and some examples in parts of northeast England.

  Q162  Lord Lewis of Newnham: So what happens to this waste?

  Mr Holbrow: It either goes to commercial contractors if the volume is of sufficient interest, or it ends up in landfill. Those are the stark choices and more needs to be done to help small businesses dispose of their waste. They want to dispose of it properly, they want to get it to recycling, but the system is against them.

Lord Lewis of Newnham: Thank you very much, that is very important.

  Q163  Lord Howie of Troon: I am told that there are existing programmes with names like Lean Manufacturing and the Six Sigma approach, which are intended to reduce waste. Could you explain what these are and how do they actually improve waste?

  Mr Glass: I myself and most of my organisation spend much of our time doing exactly that with companies. The approach is basically good common sense and it starts with ensuring that there is proper measurement in place of manufacturing performance and all forms of waste, so not just material waste but downtime and other forms of loss and inefficiency. Having measured it, it is then about selecting the most important areas of loss to the business and going for a structured approach of problem solving, simplifying and defining processes, standardising certain things so that they are done repeatedly the best way. By working in that way things are often greatly improved. The example you heard earlier of taking the sample where the sample was much larger than necessary, because people had always taken a sample that size it had occurred to no one that it was too large, and it takes some sort of process to highlight that actually this is costing business a huge sum of money—it takes something to force people to rethink because people very readily take hold of a presumption, a paradigm and stick with it and fail to recognise the opportunities for improvement unless there is some sort of stimulus which causes people to think again. This is really why I was saying that much of the challenge I think in waste is cultural because unless you see that opportunity for change, unless you are willing to challenge the assumptions with which you have so far gone through life then you will never really change anything and you will never improve. We worked with a business, for example, where 14 per cent of the material going through the process ended up as waste. They fully expected that, because inherent in their process was that they were aiming to produce something that was ultra pure and therefore with impurities you have to throw away stuff, so some waste is inevitable. They had no way of gauging whether a 14 per cent loss was good or bad and it was only because I came from other related industries and said, "That seems rather high to me; I have run processes a bit like that at much lower levels" that they, after some persistence, agreed to have a go at going through a structured process. The end result was to take it from 14 per cent down to four per cent. Many of the solutions would not be immediately foreseeable beforehand; some of it was actually to recognise that what they were throwing away had a commercial value. That had not occurred to them, and it had not occurred to them because they do not see it because of the lack of measurement within their processes. I could go into great detail but I do not think that would be appropriate, but I hope I have given an overall flavour. To drive improvement in manufacturing takes a bit of time. Very often people are very busy and the simplest thing to do is to carry on doing what they have always done, and to make improvement one has to make time, to stand back and to re-examine how things are done; to go through a thorough structured approach of mapping and measuring and challenging why things are done a certain way. It takes time and you need to involve the people who are intrinsically involved at different stages in the process. Often managers are totally unaware of some of the things that people close to the production process actually see and those close to the production process are not aware that the managers are not aware.

  Q164  Lord Howie of Troon: This sounds to me what I used to know of as production engineering and in that sense the waste question is kind of incidental, although a good idea. When you say that the managers do not realise this I suppose that relates to what PICME says when it talks about a people-based approach.

  Mr Glass: Yes.

  Q165  Lord Howie of Troon: You talk to them and you convince them, do you? That is the idea?

  Mr Glass: To convince them is generally by demonstrating what can be done. We have worked within the process industries, which is chemicals, pharmaceuticals, polymers and a bit of food industry and to convince some people they will only believe it when they see it, so one has a bit of a chicken and egg and one has to have the opportunity to give it a try first of all, but great strides can be made providing the process is properly supported. I think these days it would be fair to say that the majority of managers in manufacturing will have heard of Lean Manufacturing, will have heard of Six Sigma, but they will not necessarily truly understand how it applies to their specific environment. They can read books on it, they hear how Toyota makes cars better but they will struggle to see what that means for them in their particular circumstance, and they need a more practical form of guidance, support and implementation to actually make change, and often they are shocked at what comes out.

  Q166  Lord Howie of Troon: You say that people can take ownership for the performance of their area. I do not fully understand that; can you tell me what that means?

  Mr Glass: One example would be in a pharmaceutical environment, where I first visited one of their package lines I asked an operator about the graph that was beside their line and the lady said to me, "A manager puts it there; I do not know why he gets so excited about these things, but it means nothing to me." Later we facilitated a process of improvement on the line which trebled the output of the line, which has a resource efficiency implication because they are using the same energy but producing three times as much. They had fewer items scrapped as they went through it and during the process, as people understood much better the major impact they could have on the business and understood the business and what they were doing much, much better they wanted to measure things, they displayed what they were measuring and they owned that area. Later I was told a story by the same person of how a manager came along to stick up a graph on her notice board and she told him to get lost, that it was her board and that he should ask her first, and what was he putting up anyway because she already knows how her area is performing. That to me is ownership.

  Q167  Lord Howie of Troon: Thank you. Did she get her P45?

  Mr Glass: No, she got a clap on the back, which goes to show that some managers actually are supporting people out there, and if only everybody was like that.

  Q168  Chairman: Dr Barlow?

  Dr Barlow: Waste production is built into Lean and both Lean and Six Sigma would help a lot with waste reduction. But particularly for a small company it is very difficult to get to the stage of fully understanding Lean or Six Sigma, or Lean and Six Sigma, the two combined. There are training courses but they cost a lot, both in money and time. Even the first stages are useful and there are programmes which try to help companies to at least get on to the starting blocks in fact. I was searching on the Internet and for a couple of hundred pounds you can get a course which helps you to understand the beginnings. I sent some of my students on a waste awareness course, which does highlight many of the starting blocks and is a useful thing and at £100 it is something a company could send a person on. But thinking about the wastes which we come across in a company, there are things which are easier to deal with than others. The packaging waste for a small company, there is not a lot that they can do because they have no impact on their supply chain; all they can do is to try to dispose of it in a sensible way. But reducing the defects is something on which they really can make improvements; so doing the equipment maintenance to make sure that what comes out is of specification standard. It does not take very much intelligence but it can take a bit of resource to see that that is necessary. Improving the process of efficiency is built into all of these programmes. But for small companies even things like office waste is quite an important part of the amount of waste that they produce, and a lot of them end up taking it home and so bringing the sorts of ideas that they have at home into their small company.

  Q169  Lord Crickhowell: Can I ask a question about comparative international practices? I did refer in my previous intervention to the Japanese techniques. It happened in my time in government and I did a great deal with Japanese companies, and they very often had a system by which they set up small worker groups in their factories and gave very substantial rewards in encouraging people to come out with suggestions for improving product techniques and profitability, and it is sometimes extremely impressive to see that working in practice, how the person on the factory floor could come up with just the sort of ideas that we are putting forward. That was a very standard technique of Japanese manufacturing companies, sometimes giving almost bizarre rewards to the way in which they dealt. I came across some really rather extraordinary examples in the companies in the way in which people were rewarded for such work. How far are British companies adopting that kind of encouragement and incentive to their own employees to come up with the bright ideas, the suggestions and the solutions?

  Mr Glass: That is very much at the heart of a modern approach to Lean Manufacturing, to do exactly that, but perhaps not simply through suggestion schemes. A great many companies have tried suggestion schemes and then have later allowed them to lapse. I myself once when going into a role inherited such a scheme and let it lapse because I was simply inundated with a huge register of ideas that needed much further development to be able to examine them and to sift through them and I did not have the time because it is a very time consuming process. What is required by business leaders is for people to take a further initiative in making the suggestion, and that is to get the agreement to get on and actually implement it, to do something with the ideas. Many of the ideas people can actively take forward themselves or help to bring a few other people together to do, but to begin with people need to learn a process for implementing improvement, and that is often where people struggle. I hope I have answered it; I would say that the majority of businesses have given that a go.

  Q170  Chairman: One small point before we leave manufacturing. Mr Holbrow, you referred to waste clubs. Are you aware of sustainability clubs which have been set up specifically for small businesses to try and help them? Discussion groups you might say, and things like that.

  Mr Holbrow: There are one or two around the country; I am not that familiar with them but the one or two that I am aware of do seem to do a good job, again on awareness raising and sharing of best practice, and of "This works in this company could that not work in other companies?" Also, within the FSB we are split up into regions and areas and often small businesses talk to each other at regional meetings; they may not be formal clubs but if there is a piece of information that will make life easier for one business they will quite readily share it with the next business.

  Q171  Chairman: Would you say that the onus or the responsibility for this should be local authorities, RDAs or government?

  Mr Holbrow: No, for it to work it has to be generated in the small business world, from the small businesses themselves; they have to see the benefit of it and the need for it. We have done a survey recently on the work that small businesses have done, for instance in the community, and that is another example where small businesses see their place in reducing waste, helping the community, et cetera, and it is all part of the same culture, which I believe is improving. I think it would be wrong for government to get involved with that and start legislating in those areas because I think there is a great chance it will be counterproductive.

  Q172  Chairman: So you would say bottom up rather than top down?

  Mr Holbrow: Absolutely.

  Dr Barlow: I have been helping a company to set up such a network and it is proving to be very successful, but it is driven by the ambition by one person, and that is the way it has to be.

  Q173  Lord Lewis of Newnham: If we can talk a little bit about standards. Mr Long, I think you referred to the ISO series a little while ago, the 14000. What exactly are the ISO 14000 international environmental standards; how widely is it applied and how has it helped companies to reduce waste?

  Mr Long: As you say, the 14000 is a series of standards; there is something like 28 standards looking at a variety of different things, including auditing, labelling, design, greenhouse gas management, the most well known of which is ISO 14001. What ISO 14001 does is to help organisations create an environmental management system and it works on the principle of the plan, do, check, act system, which is effectively a virtual circle of looking at your organisation, ways in which you work and ways in which you can improve how you are doing things, with the view of improving your environmental performance. In terms of numbers, at the end of 2006 worldwide there were about 130,000 organisations who were certified to ISO 14001. Of course, that is just the organisations that have an external auditor to look at their systems for them and have said, "Yes, those are good enough to be certified." What that does not tell us is how many other organisations are using that process of 14001, but have not actually gone through to certification as well. In the UK at the end of 2006 there were over 6000 organisations that had certified to ISO 14001 and it is about ten years old as a standard. To give a measure, relating to one of the previous questions there are something like 22,000 organisations in Japan that are certified, which is the most certified country in the world in terms of 14001. Also in relation to one of the other comments about small businesses and the support to small businesses, one of the things that British Standards developed was something called BS 8555, which is a six-stage process to help smaller organisations work towards developing an environmental management system. So I think it relates back to some of the earlier points about small businesses finding it difficult to find the time and the resource to do these things. By taking a staged process hopefully it enables smaller organisations through the use of BS 8555 to get to the same point as larger organisations might with the use of 14001. We have put together a number of case studies and talked to various organisations about what 14001 does for them, and it is really about being able to understand what you are doing, how you are doing it, why you are doing it and then to say, "How do we improve on that?" Maybe a more dramatic example we had from having looked at an organisation in America was that they looked at their four-day Thanksgiving holiday and they found that they were using an awful lot of machinery that was effectively there and idle. It sounds very simple but they actually cut their energy consumption by something like 61 per cent over that period because they just had a look. People were doing simple things. There is another organisation that introduced something called energy walks within their organisation where managers and staff would go round and they would look and they would say, "Why is that water disappearing down that pipe over there and why is that machine on standby?" and things like that; and I think it is a good example of the involvement of a whole load of different people within an organisation and it goes back to some of the questions earlier about involving both managers and people on the shop floor, or wherever that might be.

  Q174  Lord Lewis of Newnham: Do I gather then that this is an international standard?

  Mr Long: Yes.

  Q175  Lord Lewis of Newnham: If so, who actually does the certification and what is the incentive for a firm to actually get itself involved in going through this? I can see that you have designed it for small firms by breaking it down but what is the advantage to a small firm to take one of these?

  Mr Long: The advantage to any business taking them is that it will help them improve what they are doing, which will mean that they have a more sustainable operation. Vast numbers of the organisations that have actually gone through the process of using both 14001 and BS 8555 give them significant cost savings as well within their operation, and I think that that was raised earlier as an incentive for any organisation. If you can cut your waste, design it out of your processes you are going to help the bottom line in what you are actually doing there. To actually then go into certification, in the UK for example you have an organisation called UKAS, the UK Accreditation Service, and they actually have the responsibility for certifying certifiers so that you know you are actually being audited by a valid organisation. The advantages of being certified—it depends on the organisation, whether they want that certification or not. A lot of evidence shows that it can help people in terms of marketing, so that people understand who they are. We have an excellent example from an SME talking about what certification does to them and they said, "Nobody knows who I am as a small business, but when I tell them I work to certain standards they understand who I am because they understand the levels of quality that I am working to." So people can use it from that point of view as well.

  Q176  Lord Lewis of Newnham: But is this an international standard? Is it a standard that is exactly the same in Italy, the same as it is in the UK?

  Mr Long: ISO stands for the International Standards Organisation. The way that ISO works is it is an international organisation based in Geneva that brings together all the national standards bodies in the world; so it brings together BSI in the UK, AFNOR in France and DIN from Germany. It gets all of those national standards bodies to contribute to the thought process that goes into a standard. So in the UK, BSI as the national standards body will make sure that we consult widely over the introduction of the writing and publication of any new standard. We can proudly say that the roots of 14001 was actually BS 7750, so it started life as a British standard and ISO recognised its strengths, took the intellectual property in that standard from 7750 and developed that into 14001. But any standard that is produced by ISO BSI will make sure that the UK view is heard on that standard, and indeed we are actually chairing and secretariat of many ISO international committees to make sure that the UK is represented as we wish.

  Q177  Lord Crickhowell: In your papers on standards you say that one of the difficulties of implementation is that local authorities' practices differ right across the country—a major barrier to the successful implementation and waste reduction strategy for organisations with multiple standards, and so on. So you have a standard and you are finding it difficult because every local authority functions in a different way, and you identify this as a need for a major change here. Could you just comment on that before we leave it?

  Mr Long: I think there is a great opportunity here. In fact just before the meeting started I was talking to someone from WRAP about this and saying that there is a whole load of good practice out there, and is there necessarily the best practice in any one part of the UK? I think there is huge potential there for the creation of a standard that would say what are the best methodologies for waste management by local authorities, because it does vary enormously. So people will implement one of these standards but when it comes to interface with other organisations it can often not be as good as it possibly could be. So I think there is a great potential there and we would be delighted to get involved in the creation of some kind of standard that would bring together best practice. The method in which we produce standards is that we bring in any intellect or passion in the particular area, whether it is within government business, representative bodies, consumer groups, local authorities, academia, wherever there is the intellect and the passion for a subject we bring that into the committee, the standards making process, and we produce the best practice out of that. So I think we are in an ideal position to be able to help out with that.

  Q178  Earl of Selborne: I was going to ask about how designers can be best informed on the choice of materials for minimising waste and in the BSI evidence the point is made that information on the necessary physical properties is information that is not always readily available, although it is often part of a standard known as a specification. The BSI goes on to say that it can arrange this information in a number of innovative formats to present this kind of information usefully to interested parties, such as the designers. I wonder if we could hear on how this information is standardised across different products and between different countries.

  Mr Long: You highlight some of the gaps there. What we are talking about there is that a whole range of different products and services will actually have standards attached to them, so that that does enable businesses and organisations to actually design into their process and into their product the reduction of waste and more sustainable products. What we are trying to highlight there is that not all sectors have those particular opportunities, and we are talking about how the standardisation process can actually help people to do that. As I have just mentioned, standards are created by bringing together communities of expertise in an area. We create standards where there is the demand for it, be it from industry, be it as a lighter touch regulation tool as well, and we will bring together the right groups if there are gaps in what standards can actually do. And we will produce the right document for the right people, so we might want to take something right up to an international standard or we might want to produce it locally in the UK as a standard. But we will produce a performance based standard to help that out, and as a national standards body that is our role, to make sure that we bring together those groups. If I could give you a couple of examples about how we are trying to plug gaps in particular areas. In new areas like nanotechnology, for example, we have just published something like ten new standards in that area and previously there has been a lack of standardisation in that area. The first standard we produced was a standard merely about the vocabulary in that sector and is a good example of helping an industry, helping out a sector but not restricting it, so that you still have the innovation and the growth going on, and we are not restricting in any way; but it just helps the development there. Another example was the publication of BS 8901, which is a specification for sustainable event management, so people producing anything from festivals to concerts to the local village fete, and again is an example of an area that needed some help but there was nothing there that existed. So we put together a community that would help us design and build that standard. So as an illustration, if there are gaps we can actually help put together something to help out that particular sector.

  Q179  Earl of Selborne: You gave an example from the nanotechnology sector, which is by its nature an international sector—you have to be a big player to play in it. Is it practical to have British standards; do they not have to be international?

  Mr Long: The international standards making community is very keen on making sure that resources are used efficiently. So whenever we start a work programme we will always go to the international standards making community and see if anybody else is doing anything, either nationally or indeed internationally through CEN and CENELEC in Europe and ISO on the worldwide stage. If anybody else is saying, "Yes, we are looking at that, we are thinking about doing that," then we will clearly have a debate and say, "Who drives this work, should it be done nationally, should it be done internationally?" Nano is a good example of the vocabulary specification that I mentioned; ISO has now picked that up and said, "We would like to publish that not just as a BS document but actually as an international ISO standard now." So the community works well to make sure that there is no replication going on and we will push stuff into the international arena if that is what the international arena demands.