Ecolink Protects Profit and Prevents Pollution

A Business Case for Sustainability

Ecolink Protects profits and prevents pollution

Case Study 1 // Tucker, GA // August 2010

Ecolink

Text Box: Lean and Green  strives to eliminate non-value added components, assess baseline conditions and operations, capture the details of process inputs and outputs, and strategize to design and incorporate changes that will reduce environmental or productivity inefficiencies.  Source: 2008 Pacific Northwest Pollution Prevention Resource CenterEcolink, Inc., a member of Partnership for a Sustainable Georgia since 2007, is a small company that distributes industrial cleaning compounds and provides less and safer industrial chemicals commonly used for maintenance and repair.  Their products are used in power generation, aerospace, defense, manufacturing, mining and transit companies.  Ecolink annually ships more than 3,000 packages around the US and exports to Asia and the Middle East.  For years, Ecolink has been implementing lean principles throughout their 12,000 -SF warehouse/office building.  In 2009, Ecolink accepted a grant from EPA and technical assistance from the Sustainability Division of the Georgia Department of Natural Resources to study their accounting, logistics and energy use.

Ecolink organized a team of 10 employees from all facets of their company, including their receptionist and members of their sales, warehouse and logistics, accounting, and management departments. In three weeks employees challenged their “We’ve always done it that way” mentality and asked themselves: Is it essential? Is it efficient? These two questions raised company-wide awareness and generated over $100,000 in cost savings while significantly reducing Ecolink’s overall environmental footprint.

Accounting

Prior to going through the Lean and Green process, Ecolink operated a cumbersome and inefficient financial accounting software program. Ecolink replaced their financial accounting software program and developed standard operating procedures for their new system. By the end of the Lean and Green event, Ecolink had designed a streamlined workflow for each task or activity resulting in the least number of clicks, screens and tabs to navigate and organize the system. Ecolink optimized their new program by leveraging the “duplicate” and “memorized transaction” features to reduce sales order and invoice processing time by at least 10 minutes per transaction.  Ecolink conservatively estimates an annual savings of 500 hours, or more than $15,000 in labor costs.

Ecolink’s logistics department was also mired down with the same software program, which caused a breakdown in communication with the front office. By analyzing the department’s process, Ecolink learned there were software modules not installed in the warehouse computer terminals and that appropriate permission rights were not granted to certain departments. As a consequence a vacuum had been created for necessary information and a significant amount of paper copies had been created and retained to combat the lack of trust in the system. On average, the typical shipment generated 5 pieces of paper and considerable time walking back and forth (over 300 feet roundtrip). Ecolink solved this problem by allowing equal access to see ‘all’ screens in the system from front office and back warehouse terminals.

Electronic Purchasing

As Ecolink’s team walked through the accounting procedures, they began to realize the tremengo green @ Ecolink.jpgdous amount of time and money spent processing purchase orders, invoicing, and payments. As a result, Ecolink conceived and implemented their “Paper or Pixel” campaign to increase customers and vendors use of electronic purchase orders, invoicing, and payment processing.  Ecolink also formatted all their invoices and applied stickers to every envelope with information on how to establish electronic payments for shipments.  As a result, 10% of current customers moved to electronic billing almost immediately. Ecolink has set a goal of 30% adoption by the end of 2010 and will actively promote “e-terms” with all new customers by offering them incentives to go paperless.

 

Text Box: Ecolink conceived and implemented their “Paper or Pixel” campaign to increase customers’ and vendors’ use of electronic purchase orders, invoicing, and payment processing.In addition to customers, 80% of Ecolink’s vendors accepted “e-terms” right away. Ecolink had been storing copies of invoices and bills of lading for audit purposes but electronic documents made the storage of paper copies obsolete. As a result, Ecolink estimates that over 5,000 sheets, or 10 reams of paper, will be eliminated per year and an annual savings of 200 hours, or more than $5,000 in labor costs plus $1,000 in combined mailing expenses.

Email tracking of shipments has become a standard operating procedure, which eliminated inbound phone requests for tracking information. Ecolink promotes customer account vs. pre-pay & add (PPA), which saves warehouse and accounting time, paperwork, and phone calls while reducing margin for error. Ecolink conservatively estimates an annual savings of 2,000 hours or more than $60,000 in labor costs (includes estimated 300 phone calls eliminated per year), and almost $1,000/year in combined office supply expenses.

Logistics

The greatest amount of solid waste reduction came in Ecolink’s logistics department. Ecolink used to over-fill shipment boxes to prevent damage in transit. Staff would add extra cardboard layers, bags, and paper in boxes in an attempt to protect their product. By over-filling packages, Ecolink was shifting the burden of extra material from their facility to customers’ facilities.

Extra filler as a standard shipping practice was scrutinized and repealed.  Ecolink expanded their recycling program by contracting with a dedicated third party to measure and shred paper. Ecolink also identified recycling partners for their metal and plastic containers.

By analyzing the packages returned due to damages, Ecolinknoticed that most of the damages were from one particular shipping company. By moving away from that company, Ecolink expects to save around $4,000/year in non-reimbursed freight damage claims.

Energy Use

Prior to the Lean and Green event, energy management was an omission from Ecolink’s sustainability corporate culture and mission. With over 10,000 square feet of mixed office and warehouse, Ecolink was unaware of their energy patterns or costs. Several recommendations were immediately implemented to reduce energy use. EcoLink installed several ENERGY STAR appliances including 2 printers, a microwave, a refrigerator, and laptop computer. They also installed programmable thermostats to prevent accidental heating or cooling during off hours. EcoLink also eliminated the electric water heater and unplugged two drinking fountains that were not being used by employees. Moreover, they removed a physical server in favor of virtual hosting from a server off-site. This made the office quieter, cooler, and saves over $700 per year in electric costs. EcoLink also promotes working remotely since employees can access the server anywhere virtually, including from mobile phones.

Next Steps

After getting lean and green, Ecolink is promoting their experience with hopes of being recognized and their success being replicated by others. The company’s future goals include educating other companies about the business case for sustainability, making lean and green process information available, and sharing their story. Their experience has been shared on a monthly Partnership for a Sustainable Georgia conference call, and was presented at the 2010 National Environmental Summit on May of this year in Orlando, Florida.

For more information please view Ecolink’s Lean and Green presentation or contact:

Brandon Pelissero, COO
Ecolink, Inc.

800 886-8240

bpelissero@ecolink.com

www.ecolink.com

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