Green Manufacturing: How Your Business Can Reap the Benefits

Being a Green Manufacturing Company

A major focus for manufacturers, especially those with hazardous waste, is the safe disposal of waste created through manufacturing processes. Over the years, we’ve seen movies regarding the fatal outcomes of dumping waste in water, landfills, or the air. The environmental protection agency is tasked with preventing this type of abuse; however, taking steps to handle waste properly is pivotal in protecting both the environment and public health.

1. For manufacturers that have been in business for many years, taking steps to go green could involve equipment upgrades to more energy conserving machines.
2. Recycling waste such as plastic, metal scraps, etc. keeps unneeded materials out of our landfills.
3. Changing manufacturing processes could lower consumption of raw materials and reduce waste.
4. Controlling emissions to reduce carbon footprint.
5. Following lean manufacturing principles to reduce waste and excessive labor will also lead to financial savings. SOS Inventory can be of great assistance in this area by minimizing time spent on entering data, reducing administrative hours significantly.
6. The larger companies that generate their own power must properly train their staff to follow certain protocols.

Many businesses/consumers choose to work with green manufacturers exclusively. Making the decision to go green can open doors to new customers who only spend their money on climate conscious businesses.

Tax Benefits for Going Green

The goal of green manufacturing is to reduce waste of all kinds. It could be in the form of energy used, raw materials for production or hazardous material outputs from manufacturing.

While our government may not be effective at most things, it does provide tax benefits to companies who employ green practices.

Here are some examples¹ of practices that qualify for tax credits:

• Commercial clean vehicle credit – up to $7,500 per electric motor vehicle, up to $40,000 total.
• Biodiesel income tax credit – $1/gallon biodiesel fuels used in a business’s operations.
• Energy-efficient commercial buildings tax deduction – up to $1.88 per square foot towards the cost of making energy-efficient improvements, i.e., HVAC systems, lighting fixtures, water systems, walls, windows, and roofing.
• ENERGY STAR deductions and initiatives – to install energy-efficient products and equipment, such as LED and fluorescent lighting. It also provides deductions for businesses that install ENERGYSTAR-rated appliances and equipment while demonstrating their improved energy efficiency. Through the initiative, your business can receive assistance in installing monitoring equipment for energy and water usage while also gaining access to free technical advice and resources.
• Alternative Energy Tax Credits – to encourage investment in renewable energy sources, you may receive up to 26% of costs related to the installation of a solar energy system, fuel cells with a capacity of 0.5 kilowatts or more, and small-scale wind turbines with a capacity of 200 kilowatts and below, plus an additional 10% towards costs relating to geothermal energy systems and microturbines 2 megawatts and under.

To qualify, businesses should retain records demonstrating compliance to claim each type of credit including invoices and receipts for installation, maintenance, etc.

Steps to Become a Green Manufacturer

There are several concrete steps you can take to initiate your journey towards environmentally responsible production. Your first step should involve a comprehensive assessment of your manufacturing workflow. Consider the following questions:

1. Are your production processes characterized by inefficiencies and wasteful practices?
2. Is there room for improvement in your supply chain management to enhance sustainability?
3. Can your customer base actively contribute to your green manufacturing efforts?

Whichever aspect of your business you choose to address first, your focus should be on adopting strategies to produce sustainable and eco-friendly materials, decarbonize your energy sources, conduct Product Lifecycle Management (PLCM) assessments to extend product lifecycles, and leverage technology to optimize your manufacturing inventory management. The goal is to establish a “zero waste to landfill” framework, often referred to as the “cradle to cradle” approach.

When we mention the “cradle to cradle” concept, we are essentially emphasizing the need to consider the entire lifecycle of your product, from its creation to the point where it no longer provides value.

For instance, if you are exploring ways to enhance your customer base’s contribution to green manufacturing, you might contemplate incorporating eco-friendly packaging solutions, such as wheat straw packaging. Such a switch can result in significant energy savings (up to 40%) and a substantial reduction in water usage (up to 90%).

Another approach could involve establishing an arrangement with your customers that allows them to return your products when they no longer need them. This way, you can repurpose the components, minimizing waste and maximizing resource utilization. Or create packaging the customer can reuse. (Think back to the days of jelly jars which were repurposed as drinking glasses).

It is essential to recognize that manufacturing invariably involves the utilization of raw materials, and in many cases, not all components of these materials are fully utilized. This results in the disposal of surplus materials, which can have detrimental environmental effects. To align with green manufacturing principles, explore options to make use of these leftovers or dispose of them in an environmentally responsible manner. Consider alternatives that are more eco-friendly whenever possible.

Explore the potential for recycling or reusing your raw materials, and if these options are not feasible, investigate partnerships with other companies that can benefit from your waste materials. An excellent example of this practice is how peanut butter manufacturers redirect their discarded waste to farms for use as animal feed, as discussed in our article on continuous manufacturing.

Once you have identified areas for improvement to achieve green manufacturing, your next step is to identify suitable tools and technologies that can assist you in achieving your waste reduction objectives.

SOS Inventory – An Intelligent Green Manufacturing Solution

Manage all your raw materials from arrival to your facility through delivery to the customer with ease. SOS Inventory will track every stage of production, including workflow actions, material quantities, costs and overhead for accurate and transparent reporting. With over fifty different types of reports at your disposal, assessing product performance to identify and address areas of waste is simplified and organized.

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