SEE THE SHOW NOTES AND LISTEN AT:  What Circular Economy Can Learn from Lean and Green Thinking

Katherine Whalen [00:00:00] Today, we're diving into the world of lean thinking with lean and green expert Dr. Kevian Zokaei. In this episode, we learn about what it means to be lean and green. Diving into the Japanese roots of lean thinking and exploring what we can learn from the concept when it comes to the circular economy.

[00:00:22] Hi, I'm Katie Whalen and join me each week as I talk with experts around the globe about Circular Economy. You'll find out what's being done to make it a reality and if it can really solve the problems it promises. It's time for Getting in the Loop.

[00:00:42] Hey, it's Katie, and I'm so happy that you're here for another episode of the Getting in the Loop podcast. As always, I wanna thank you for taking the time to listen to this podcast and for checking out the show notes and other resources that we have related to the podcast at gettinginthelooppodcast.com. I have one quick update for you before we get started. If you haven't checked out our slide deck, which gives information about circular economy, then definitely head over to slidedeck.gettinginthelooppodcast.com and check it out. So it's 20 slides. It starts off with why we need a circular economy, what is the concept and how can we implement this in practice, and then at the end it finishes with some links to different reports and other resources so you can learn a little bit more on your own. Okay, now then today's podcast.

[00:01:35] Dr. Keivan Zokaei is founding partner of enterprise excellence and is a lead thinker, management consultant and author. Keivan has over 15 years of experience in lean thinking, specializing in operations and supply chain management. He has led transformation projects working with many organizations, including Work-zilla, Unilever, Walmart and the Scottish Government. Previously, Keivan was partner at S.A. Partners and director at the Lean Enterprise Research Center at Cardiff University. He is also the 2014 recipient of the prestigious Shingo Research and Professional Publication Award and I'm pleased to welcome Keivan to the show today.

[00:02:14] Thank you so much, Keivan for coming on the show today.

Dr. Kevian Zokaei [00:02:18] Thank you. Thank you for having me, Katie.

Katherine Whalen [00:02:21] I'm excited to jump in and talk about what you've been doing and what you're working on and what you what you've learned. But let's start off with a bit of a general introduction. Could you tell us about your background?

Dr. Kevian Zokaei [00:02:35] Of course. I'm a chemical engineer by background, and I used to work in oil and gas industry. I don't think we were very sustainable in some of the companies I worked in, very fossil fuel dependance really, and a very different world radians. I went to do a master's degree at Work University when I finished my master's degree. I had the choice for my dissertation and it was between strategy, which was always the love of my life and my career, if you like. And then the other topic was sustainability, Lean and Green, to be precise. And between the two subject I had to choose and I ended up choosing being in green because I was introduced into both concepts of sustainability and lean and I love both. And as soon as I finish that dissertation, the opportunity came over at the Lean Enterprise Research Center for me to go there and pursue the same research. However, there wasn't enough funding ever at the Lean Enterprise Research Center. So we always did that on the side on our own. We had eventually we had a little bit of funding so it helped us to sustain it. I did my PhD on the same subject on the side as a part time PhD. I was a project manager and later became a tenured academic.

[00:04:10] Finally, after a few years, we had accumulated a wealth of knowledge. We could publish tens of articles and a couple of books on the subject.

Katherine Whalen [00:04:22] Fascinating. So your topic has been and continues to be lean and green, and I think a lot of our listeners can kind of guess what green means. But what does lean mean? Could you tell us what it means to be lean?

Dr. Kevian Zokaei [00:04:40] Well, it is about continuous improvement. So organizations often big organizations have big departments working on continuous improvement in an economic sense. And they aren't there aren't that many medium size and large corporations that don't have a continuous improvement department. It is referred to a Six Sigma lean, continuous improvement process improvement, enterprise excellence or operations excellence, amongst other things. We are often in touch with these corporations of helping them to become better in an economic sense. That's what lean really means.

Katherine Whalen [00:05:27] And it comes from. Maybe I'm wrong, but it comes from the Japanese, right?

Dr. Kevian Zokaei [00:05:32] You spot on. It comes from Japan. It comes from Tokyo. So in fact, so it hails from the automotive sector, manufacturing in particular, automotive sector. And would be interesting for you to know that the Japanese in particular Toyota, are also very big into the idea of sustainability. Obviously, we know about Prius, but it's a long war happening into that than just the price. So the concepts of lean and sustainability are really joined at the hip at the very birth place if you like.

Katherine Whalen [00:06:11] And and we had a little call earlier to talk about this this interview. And you had explained to me a little bit about lean and green and how it had been adopted sort of in the Western sense. Could you maybe expand on like the differences between lean and green in lean in the Western world versus like lean and green in the Japanese? I think you're here hinting at this.

Dr. Kevian Zokaei [00:06:37] Yes. What is interesting is a lot of the so-called lean implementations in the Western world have not succeeded. We want to become economically better. In other words, we want to expand our sales and we want to become more profitable in the Western world and we adopt what the Japanese did.

[00:07:02] And many of the lean adaptations that I know in the Western world have been either a complete failure or a partial failure. This is really a sad story. If you think about it similarly around the same period of time in the sense this 50s and 60s and other movements has evolved in Powerball and that is the Green Movement, Sustainability Movement, or circular economy, as we often refer to it these days.

[00:07:33] And these two movements grew in parallel in different parts of the world and with different groups of people coalescing around these concepts. In the same vein, the sustainability experts may be expecting better results after so many decades of working on continuous improvement in a green sense.

[00:07:58] Maybe we were expecting more corporations to be only adopting the concepts or governments for that matter. Maybe we didn't expect United States America to pull out of the Paris treatments and so on and so forth now. So there are lots of parallels happening then. What is interesting for you to know is that we have codified in the world of living, we have codified what the Japanese did and wanted to have a direct implementation of those codified tools and techniques. However, that turned out to be the wrong approach. In fact, there is more to it.

[00:08:38] In places like the or so, there is a whole cultural movement behind it that underpins it. And we go to Japan. In fact, we take a tours every year to Japan, to Toyota for people to go and study on the senses. Those are the rules of Toyota. And what they keep telling us is that this is not about learning the tools and techniques. This is about learning to create and not to implement. I emphasize the word create the same culture in your own organization. That is what we have failed to do. And maybe you can argue the same for sustainability and green.

Katherine Whalen [00:09:18] Okay. So it's interesting. So it's not just about applying the tools, but fostering this sort of sense of internal internal culture. And maybe you could characterize kind of what this internal culture looks like for the Japanese.

Dr. Kevian Zokaei [00:09:35] It is all about deep rooted commitments to becoming better every day. In fact, what is interesting into you, they have five principles that they follow in order to make to do any project, in order to make any improvements. They have five principles. And in the order of priority, it is safety, environment, quality, delivery and cost. Those are the five things that's the mantra into your life. So if I want to do a project, does it make the company or the product safer for the consumers and the employees? Is it better for the natural environment? Is it going to make the product better quality? Is it going to help our delivery to the customer? And is it going to drive the cost down? In that order, you have to meet those five principles. Otherwise, you can't do that improvements or do that project now. So this tells you these are some of the characteristics that to you it's as follows. A while back I was talking to this Japanese sensei. And lean is, of course, the Western world is an English word to do.

[00:10:57] It's in the 60s and the 70s. What the researchers at the time observed. Those who went to Toyota, those who went to Japan to study what they observed was that Toyota was doing a lot more with a lot less. They were having a lot less equality at a lot lower cost. And therefore they called it lean as in doing more with less. Now, a lot of those forefathers of lean thinking, I happen to have come across and when you ask them, they regret the choice of words. In fact, they tell you that it's a very inapt words to describe what the Japanese were all about. It wasn't about leanness. It wasn't about cutting the fat. If anything, it was all about building the muscle. It was about creating that culture. That's 80 days. We couldn't see it. We didn't know anything about it. It was all about working with people to create a culture of continuous improvement. And more interestingly, when I was talking to this Toyota executive and I asked them about whether there is an equivalence with that word in Japanese for the word lean and of course, there isn't. Toyota calls it Toyota production system, Nissan calls the Nissan production system. Oh, Nissan. And so on and so forth. Now there is one word in Japanese mono sukuri that is roughly translates to craftsmanship or making making things, manufacturing things. And when I was inquiring from this person about the meaning of mono sukuri in Japanese, he explained to me that mono sukuri means manufacturing in harmony. And I asked them, okay, what do you mean in harmony with what? In my naivete, I was trying to understand harmony with what, what was interesting was that this person wasn't really understanding my question. If you understand my meaning and it took me a while, maybe a few  throws in that line of questioning for me to eventually realize that in harmony, in harmony with everything, there is a meaning of harmony or yin and yang. And of course, mono sukuri considers natural environments. In fact, the early day in Japanese manufacturers were all about not wasting because waste is bad for their environment. You don't waste natural resources, especially in a country like Japan, which is not rich with natural resources.

Katherine Whalen [00:13:36] It's so fascinating that our sort of interpretation of it has cut out sort of this green aspect. But from what you say in terms of mono sukuri and even you can, even with the five principles embedded in Toyota's production system environment is there and it's a key aspect.

Dr. Kevian Zokaei [00:13:58] Absolutely, it is right there at the heart of what Toyota does. As you said, it's number two after safety, of course. You have to be safe. And I know that they had arguments whether they put the environment first or safety first, but eventually they decided to put safety of the consumers and their own staff first.

Katherine Whalen [00:14:18] Yeah, exactly. And it goes hand-in-hand with the environment as well.

Dr. Kevian Zokaei [00:14:24] Of course, yes.

Katherine Whalen [00:14:24]  So it's not you've got me curious. You've talked about why a lot of lean manufacturing initiatives or lean manufacturing initiatives fail and why it's a challenge to implement it. And you've talked about how a lot of it is about culture and really embedding it in the culture, not having just the tools. So I'm curious, could you give some examples about how you have been working with companies and the benefits and challenges that you faced when trying to implement these lean and green initiatives?

Dr. Kevian Zokaei [00:14:59] Of course, around 2008, we started more aggressively working with Western companies to to work on lean and sustainability together. Now, here is the dilemma for all of us.

[00:15:20] All of these big corporations in this world have a department. When I say all, I haven't come across one that doesn't. So if, as I'm sure there must be one out there that they don't. But we haven't come across it. Now they all have a department that works on economic continuous improvement that you refer to as operational excellence or mean or 60. They also all of them have a department that works on sustainability, continuous improvement that you might refer to as corporate social responsibility HST. Invariably there are various terms that you hear them refer to them. Now how many of these departments ever work together? So in fact, all in all these organizations, you have two silos that work on continuous improvement and they have a ton of knowledge on how to bring about change in two different areas. Yet it's all about change. Now, how much have we brought them together? And this remains a challenge for me. I go around the world and I do workshops. And one of the things I do in my workshops is that I ask people show of hands if they even know someone in the other department.

[00:16:42] So let's say if you're from the lean continuous improvement department, you know, you even know what they're doing in the green continuous improvement department and so on and so forth. And in only one workshop, one gentleman put his hand open. That was in Cork in Ireland.

[00:17:02] And he said, Oh, well, I do actually know what they are up to. He was from the lean department. He said, I know what they're up to in the sustainability department. And I was delighted to hear that. So finally, somebody has this personal urge to go and make that connection. And when I inquired. It turns out that the German explained, Oh, no. My wife runs that department, the sustainability department. So we we live together, obviously. And in the evening we have a lot of time to talk about these two condemn and so on and so forth. So you can think about this big opportunity that we haven't tapped into.

[00:17:39] So since around 2008, we decided to do exactly that to bring the two together. The Lean Department have learned to work with tools and techniques in the economic sense. They have learned to work with people in psychological and changed management sense. It's the same for the sustainability departments because often you have more than one department and they also have learned to work with tools and techniques.

[00:18:11] They have also learned to work with people in psychological sense to bring about change by working with them. We have seen massive improvements. We put together a very simple, I want to say, lean and green approach to focus on utilities. And we have worked with many, many different companies in different sectors. Always. One hundred percent of the cases we work between 10 to 30 percent of the utility bill will save. And this is astonishing numbers because they are professional engineers and professional environmental experts work. On these areas, so on energy efficiency, on water efficiency and so on and so forth. In one hundred percent of the cases we managed to save between 10 to 30 percent of utility bill in a financial sense. And these were simple changes.

[00:19:07] For example, we often come across a heated area that is adjacent to a cooled area, or we find that in one case in a dairy company that's actually the case study was published. We found that one pipeline that was being flushed several times a day, one valve, it was 30 yards away from where it could optimally be. Meaning that every time you flush that line, you had 60 yards worth of milk in this milk line being flushed down the drain and so on.

[00:19:40] And these are big corporations I'm talking about. Every time we work with them, we have observed these massive savings resource energy, water, so on and so forth. So it just shows you the power of these two departments coming together and working.

Katherine Whalen [00:19:59] Definitely, definitely. And I'm thinking back, it is crazy just what you can do with smart- like smart design and observing the system and rethinking it in a different way if I'm hearing you correctly.

Dr. Kevian Zokaei [00:20:14] Absolutely. In one case, a very large sandwich factory. They think they are the largest sandwich factory in the world. For the data that we can find in their case and this isn't the case, the city which is in the public domain we can talk about by adjusting the optimal with of the slices of bread they saved 600 tons of bread per annum. These are incredible numbers economically and environmentally, of course. That was two jumbo jets full of breads being saved every year and actually and actually a lot of waste. We managed to recycle back to human consumption because eventually in some of the these big food food industry factories, you do have some food. Why not redirect that to human consumption? Because there are people in poverty. You would meet that.

Katherine Whalen [00:21:11] Yeah. Yeah. Exactly. And I remember something that we talked about as well earlier on our preparatory call and it kind of- What you've been saying exemplifies this right now as well. You were saying just being smart and learning not to pollute in the first place. You've used the example of how you can match quality with smart design. Maybe you can expand on that a little bit.

Dr. Kevian Zokaei [00:21:40] My pleasure. Yes.  You see, Katie, there was a movement in 1970s and 80s, and that's America predominantly and that was led by a gentleman called Phil Crosby. Crosby Colleges ensued,  some 60000 Americans went to Crosby Colleges and received their badges as well. These were the quality colleges, if you like. So this was a movement that Phil Cosby started and some other quality gurus. They called it quality is free. What they were referring to back then was that we always so quality as an extra cost, because if you make a product and you wanted to be perfect quality, meaning that is reliable and you well, you needed to have a quality check department. So having people in the tech department at the end of the line to check the quality of every single product costs money. Also, when you find these bad quality products, you have to rework them. So that's extra money too. Therefore, it was always understood until the 80s. Maybe that quality cost you extra money. Now Phil Crosby comes along and he has a simple argument. He says quality doesn't have you, doesn't have to cost you a penny more. It is in fact, free. It's not a gift. So what he meant was to build quality into the line. So teach every person who is doing the work to make perfect quality. By better training, you will end up having quality built into the same production line. You don't need to have another quality check. The department at the end of the line checking in was called total quality movement. Basically, everybody is involved. Now, this was a cultural move. It was a simple argument and he won that battle. Today, engineers go to school and they all come out graduating, knowing that quality is free. What sort of gift? We have accepted these basic facts in manufacturing in this equal to quality is pretty much given now. Can't we all do the same thing about natural environments? Can't we say, look, we don't have to have end of pipe solutions. We can have environmental thinking design built into the product, built into the production with a cultural move towards it that everybody in the company is committed. This even takes us away from the unnecessary debate between whether global warming is happening or not. Who cares? You know, if you change your thinking like that, you don't even need to go and argue with the skeptics. I mean, who cares about them anymore? Because this is about creating a better culture. Obviously, it pays off economically, too. I would like to share something else with you. When those forefathers of been thinking in 70s and 80s were going to prove their case, what they did, they did a benchmark study of Toyota against all the other automakers in the world. So take theater and take, for example, the big, big, big three in the United States of America. What was happening was that Toyota had almost twice better quality for half as much costs in terms of manufacturing hours or employee hours going into making the car so twice better quality, but half the costs and 20 times lower inventory levels to 20 times less, nearly 20 times less capital tied up into production. Now, this was incredible when they did this benchmark study and published in the book called The Machine that Changed the World. They really changed the world. They changed the way we thought about and we still think about the economics of manufacturing and then later outside of manufacturing, the service sector. We repeated that same benchmark, of course, from the quality and cross point of view. The same benchmark is being repeated every year.

[00:25:51] The gap has been blocked to a large extent in the sense that Ford and GM are catching up. They've caught up to a large extent the Toyota and Nissan and demand from the Japanese manufacturers now. Still, Toyota is at the top of the charts in most categories. And what we did was to repeat the same benchmark this time, except this time we looked at it from an environmental point of view, and it showed that the greener the more the leaner the companies are, the greener they are, too. So there is no trade off between being a conservative, viable and environmentally suitable.

[00:26:30] The two go hand in hand when you don't waste products is good for the environment, is good for your economy. There is no trade off there. We just have to abolish that trade off. Thinking invited. By the same token, environmental history was not the gift as invite that I mean being green. Of course, natural environment does cost money. I mean, these are not free resource. What I mean is to be green is free. It's just not a gift. You have to change your thinking about.

Katherine Whalen [00:27:00] Do you have any examples of what these companies were doing that made them superior like superior to their competitors that you would be able to share with our with our listeners?

Dr. Kevian Zokaei [00:27:11] Of course. We published some of these in the book, Creating a Lean and Green Business System with my coauthor Hunter Lovins, who is also my guru on sustainability. You know him from Natural Capitalism and all the books and some of the coauthors. Now, what is amazing is that companies such as take Marks and Spencer, what they've done, they have taken environmentalism very seriously with a plan, a program. And the first introduction of lean thinking into Marks and Spencer was through Plan A, it was Plan A that gave us a small seed funding at the time to do a small lean supply chain intervention.

[00:28:03] And they did not give us any environmental targets to hit. That was amazing. They had this deep down conviction and that, you know, when I asked them, so why aren't you giving us any targets? They said, well, didn't you say the lean is green, so do lean and green will come out of it. And that's precisely what happened. So we did a small study and we save around a thousand tons of food waste in one supply chain, also 20 swimming- Olympic-size swimming pools worth of water. This is a lot of food waste and water to be safe in one simple study.

[00:28:41] Well, when I say simple, it was actually not that simple. Because in this a technical sense, it wasn't very complicated. But in a people's sense, it brought together people from Marks and Spencer, from their logistics team, from the retail team, from their Tier 1 supply, which was a ready meal manufacturer, and from a meat factory. That was the meat packing. They all came together, worked together. And the principle was we all go and visit each other's again. But that's one Japanese word that probably you and your listeners may want to remember. That means the workplace.

[00:29:16] We go to the workplace. We go to the shop floor of each other. And we visited and we going to roll up our sleeves and get our hands dirty, because when you go to these two factories, often you will find the GM. That's very important man, by the way, the general manager. You will find them all the time on the floor.

[00:29:35] And if you didn't know who they are, you wouldn't know they are the GM of the site, but they are there all the time because that's where the work is working. That's where he need to manage. That's where we need to spend our time.

Katherine Whalen [00:29:47] Yeah. Yeah, exactly. It goes back to what you were saying in the beginning about it's with the people and it's with the internal culture, it's not just someone sitting in an office coming up with a design, it's really down hands on and talking with everyone.

Dr. Kevian Zokaei [00:30:03] Absolutely. You know, this same Japanese executive told me when, as you could see, some more, no means an item that is being made. Monozukuri is also hitozukuri means making people. So making things is all about making things, is about making people, engaging people's talents.

Katherine Whalen [00:30:24] Yeah. Wow. I think sometimes in terms of the Circular economy concept, we talk a lot about environment and economic benefits and compared to sustainability, it sometimes lacks I think the social aspect, you know, people emphasize with circular economy like, oh, we're gonna do repair, we're gonna do recycling, we're gonna do remanufacturing. And yes, you do involve people.

[00:30:47] So there is an aspect of, of course, job creation and, you know, high quality labor and things like that. But, yeah, it doesn't emphasize. There is some sort of human aspect I think that's lacking.

Dr. Kevian Zokaei [00:31:04] Yes. And I think maybe we should bring that emphasis back in.

Katherine Whalen [00:31:09] Yeah. Yeah.

Dr. Kevian Zokaei [00:31:10] Okay. As you just named it, it's all about people. If people stop behaving in the right way, we're back to the old days and what do we do that we put people in, as you call them, meaningful jobs that is engaging not just their limbs, but also their brains. You want the psychic energy doing jobs and not just in the sense that in not polluting the environment, that's very important, but also fulfilling to themselves.

Katherine Whalen [00:31:39] Yeah, definitely. So thinking about this. What do you think our future for future challenges with Lean and Green and sustainability circular economy?

Dr. Kevian Zokaei [00:31:52] Katie, I think in your previous question, you point to that very important issue and that is about the role of people in all of this and when equality movement was introduced. There were two types of quality managers, quality directors and companies.

[00:32:12] One, that saw this quality street is free movement as a huge opportunity. And of course, they became the future. Today, that future, they are the ones that have created total quality movement, something that is a lot closer to everyday culture now. There were also all the types of quality managers that wanted to resist it, that they saw this as a threat to their own jobs. Now we are going to go there with environmental and sustainability movements and circular economy. No doubt there are two types of environmental managers, the ones that see Circular economy as a great opportunity, as a gift, and they are going to build future. Now, in all of this, as you said, the role of people is very important. How do I engage every single person in my organization? How do I sustain the right behaviors around circular economy and sustainability? This was the problem and still is the problem in the world of me. And that's why, as I said, a lot of the movements in the US, they failed. Whereas in other cultures they have become the norm.

[00:33:35] And I if you ask me, my honest opinion is that you have the same challenge with circular economy. Sustainability is how do we engage people, minds and hearts and how do we sustain the right behaviors?

Katherine Whalen [00:33:50] That is a good sort of question to have us end the podcast and leave the listeners feeling inspired. You know, how can they do this in their own organizations? So the final question that I ask all of the guests is about the in the loop game that I created about Circular economy. And I ask if they could create an event for the game, which what would it be? So what kind of event focus do you think you would like to have in the game?

Dr. Kevian Zokaei [00:34:21] So when earlier in our previous call you told me about your ideas on gamification and how you have used games to convey some of those messages. I'm fascinated by that way of thinking, and I congratulate you on having not only a good but very interesting podcast program. What's also working on games to disseminate the ideas of separate content? And as you know, my personal passion is about people and engagement of people in all of this. So mine obviously my adaptation to the game will also be about how do we people go outside of their silos and work together in the way that our forefathers, our ancestors would collaborate to sustain their own villages.

[00:35:10] How would they people go back to our roots, if you like, now? So there is a game called the Red Blue Game. It's based on game theory and it's based on prisoner's dilemma. So you could maybe incorporate that. Players are given the opportunity to collaborate or tweet or not to collaborate and face the consequences, of course. Collaboration creates win win, and as soon as there is trust, broken things go south. So I suggest incorporating the red blue prisoner's dilemma game into this.

Katherine Whalen [00:35:51] Brilliant. I love it. I think that's a great idea. We're going to link to your book and some of the other resources that you mentioned on the podcast in the show notes at our Web site, GettingintheLoopPodcast.com. But could you tell listeners where they can learn more about you and the topics that we discussed?

Dr. Kevian Zokaei [00:36:11] Of course. So up until recently, we had a dedicated resource on the book that I you know, we create the lean and green websites for everybody to have free resource on. Fortunately, I gave up following that through. Now, maybe I shouldn't have. I regret it. But going forward, there are two other websites. There is enterpriseexcellence.com enterprise with a Z or a Z. Depends on whether you're English or British or American. So enterpriseexcellence.com and sapartners.com. Those are two websites that you will find a ton of resources, webinars, case studies on the subject of lean and sustainability and how the two can come together.

[00:37:04] Also on the subject of engaging people and engaging in the right behaviors of people. We also do lots of events and some of them are free webinars. So we would very much welcome anybody who wants to join. And by the way, I am personally always contactable via LinkedIn or websites. If anybody is interested in the topic of making their own company in their own organization leaner and more sustainable simultaneously, more than happy to bounce ideas off each other.

Katherine Whalen [00:37:39] Brilliant.  Yeah. Well, we'll link to these on the show note pages and then people can attend these webinars or get in touch with you. Thank you so much, Keivan, for coming on the podcast. It's been a pleasure talking with you.

Dr. Kevian Zokaei [00:37:51] Thank you. Thank you for having me. And thanks again for having this beautiful podcast on Circular economy. We need more of this. Thank you.

Katherine Whalen [00:38:00] Thank you so much.

[00:38:02] Thank you for listening. I hope you enjoyed this episode for show notes and links. Go to our website at gettinginthelooppodcast.com. And while you're there, subscribe to our mailing list to have new episodes delivered to your inbox every Monday. See you next week.