1. PREMA - Profitable Environmental Management

2. Introduction or: Lessons learned
Over 30 Years of „saving the environment“ tells us that the topic „Environment“ should not handled
isolated and theoretical

3. Introduction or: Lessons learned
Over 30 Years of „saving the environment“ tells us that the topic „Environment“ should not handled
isolated combined and but and theoretical practical

4. PREMA Profitable Environmental Management
developed by :
GIZ - Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH German International Cooperation -
implemented by:
PREMAnet - Association of licensed trainers
financed by:
BMZ - German Ministry for Economic
Cooperation and Development

5. Countries where PREMA has been implemented
Europe: Germany, Rumania, Montenegro, Croatia, Bulgaria, Macedonia
Centralamerica: Mexico, Costa Rica, El Salvador, Jamaica, Cuba, Guatemala, Nicaragua
Asia: Philippines, Indonesia, China, Vietnam, Thailand, India, Sri Lanka
Latin America: Brazil, Bolivia, Chile, Ecuador, Peru, Venezuela, Uruguay
Africa/ Middle East: Zimbabwe, Zambia, Republic South Africa, Kenya, Nigeria, Algeria, Tunisia, Morocco, Ghana, Jordan, Egypt
in total: > 40 countries

6. PREMA means a triple win for companies
PREMA = triple win
PREMA means a triple win
for companies
Cost savings and increase in productivity
Economic
efficiency
Less waste,
air emissions and effluents
Environmental
performance
Enhanced capacity to implement changes
Organisational
Learning

7. Non-Product Output (NPO)
Input Process Output
desired final
product
Raw material
Energy
generation of NPO
Water
disposal of NPO
Non-product
output (NPO)
10-30% of
total cost of
production
Input-costs
of NPO +
Processing-
Costs of NPO +
Disposal-
Costs of NPO =
Total
NPO-costs
NPO = all material, energy and water which is used in the production
process but does not end up in the final product.

8. Examples for Non-Product Outputs (NPO)
Raw materials not up to requested quality standards
Auxiliaries
Rejects/ defects and costs for reprocessing
Wastes (solid, liquid, toxic, non-toxic)
(Waste) water
Energy
Emissions (including noise and odours)
Losses in stock (due to storage conditions)
Losses during manipulation and transportation (intern, extern)
Packaging materials (with little exceptions)
Client reclamation and client retours
Losses due to insufficient maintenance
Losses due to accidents
Virtual NPO (opportunity costs = missed production)
Production capacities used for reprocessing
Machinery standstill times

9. Model NPO Flow Chart The main input appears on the top (in blue)
Raw Material
Non-Product Output (NPO) is shown on the right (in red)
Additional inputs are shown on the left (in blue)
waste water …… m³
atmospheric ... m³/kg
emissions waste energy.....kWh
solid waste kg
water
energy m³
Production
step 1
kWh
auxiliaries kg
Intermediate Product 1
water m³
energy kWh
auxiliaries kg
Production
step 2 kg
waste water …..m³
atmospheric….m³/kg
emissions
waste energy …kWh
solid waste kg
Intermediate Product 2
water m³
energy kWh
auxiliaries kg
etc.
waste water m³
atmospheric.....m³/kg
emissions
waste energy......kWh
solid waste kg
Production
step 3 kg
The final product is
shown at the bottom
of the process (in green)
Final Product 3

10. PREMA Cycle of Implementation1
Flow analysis
Analysis of costs / environmental
impact
Analysis of Causes
Development of measures
Implementation
of measures
Integration in company structure 2 3 4 5 6

11. What are the elements of a PREMA programme?
PREMA is a 6 to 8-month programme for innovation teams from medium-sized companies.
Network meeting
~8 weeks
Evaluation & Integration
Network meeting
Implementation
of measures
~8 weeks
Cost Management (EoCM 2)
Network meeting
Development
of measures
company visits
by trainers
~8 weeks
Cost Management (EoCM 1)
company visits
by trainers
Analysis and
first measures
Good Housekeeping (GHK)
company visits
by trainers

12. Substitution of raw materials achieves significant savings
Metal industry China -
Substitution of raw materials achieves significant savings
Procedure in the company
Economic savings
Annual net savings: approx. 2.5 Mio. €
Additional costs: 250,000 €
From low quality raw materials…
The problem:
Low quality raw materials required three additional preprocessing steps, which lead to high rejects rate, energy losses and wastewater discharges
Environmental impacts
Acid wastewater discharges are reduced by approx. 30%
The measures:
NPO calculation helped the company to realize that it is better to pay higher for better quality raw materials than to pay more for the three pre-processing stages
..to high quality steel
Organisational development
Establishment of an internal PREMA team
Stimulation of PREMA-oriented re-assessment of additional processes

13. Carpentry Germany - Reorganisation of product range offered
Procedure in the Company
Achieved environmental benefit
reduction of timber waste by 4-5%
reduced resource (wood) use
The problem:
Cut according to customer requirements
High amount of waste, since the timber cannot be optimally cut.
Economic benefit
investment costs: 1,000 € for the extension of the storage room
annual saving: 15,000-30,000 € through the reduction of raw material costs by 4-5%
payback period: < 1 month
The measure:
Production of various pre-defined cut sizes for standard parts (steps and banister bars), which are stored in clear arrangement
Organisational improvements
Increased awareness of the significance of the raw material wood and its costs among the staff
Optimised use of timber

14. Action taken within the company
Food manufacturer China – Temperature control for full production during all seasons
Action taken within the company
Economic benefits
Investment costs: ,636 €
Annual net savings: € (during the 1st winter = 0,5 year)
Payback period: app months
The Problem and its Causes
High energy losses due to lack of insulation
Unreliable system for temperature control made use of main production unit during summer or winter impossible
The Idea
Thermal isolation of all operating parts and of the factory building
Refurbishment of the production unit, installation of effective tem-perature control
Environmental benefits
Decreased energy losses
Less air pollution per amount of product
Organisational benefits
Improvement of overall manage-ment capability and of professional level throughout the company
Occupational Health & Safety Improvements
Improvement of health standards in order to comply with HACCP requirements

15. Action taken within the company
Food manufacturer China – Reduction of solid waste through incentive system
Action taken within the company
The Problem
The Idea
2 % loss of glass bottles accepted by standard
3 % of bottles broken during filling process
2 % or more losses
2 % or less bottles broken
Application of a new policy
additional costs,
if more than 2 %
costs
benefit
whole company absorbs costs
Filling unit absorbs additional costs
50 %
filling unit staff
50 %
company
Economic benefits
Investment costs: None
Annual net savings: € (if loss is reduced from 3 % to 2 %)
Payback period: immediate
Organisational benefits
Enhanced responsibility of the work unit and better self-management
Environmental benefits
Reduction of solid waste (broken bottles)

16. Action taken within the company
Chemical manufacturer China - Recycling of water for steam production (closed circuit)
Action taken within the company
The Problem and its
Causes
The Idea
15 % of the water used for steam production was directly released as waste water into the water-treatment plant
Installation of a closed water circuit by rehabilitating existing tubes and pumps
The new system of water re-cycling
Economic benefits
Investment costs: €
Annual saving: ,070 €
Payback period: 0.8 months
Organisational benefits
Staff learned to manage water in a closed circuit
Environmental benefits
Less water consumption

17. PREMA® implementation in China
Tianjin
Changzhou/Yangzhou
Hangzhou
Guiyang

18. Results achieved through PREMA® in China
11 training programs implemented in 5 cities
local partners: Environmental agencies, Productivity Promotion Centres, Consulting firms
64 enterprises: with about ,300 employees
implemented measures: 840
investments: Mio. CNY ≈ 5.77 Mio. €
net economies per year: Mio. CNY ≈ Mio. €
average payback period: 5.2 months

19. Potential economies in Chinese enterprises through PREMA
Realised economies
Energy
Water
Steal
* billion
- 30%
- 20%
- 8%
Potential economies in Chinese enterprises through PREMA

20. Type of measure: Which results could be achieved with PREMA®?
Analysed Case Studies: 296 from 22 countries and 53 sectors

21. Which results could be achieved with PREMA®?
Investment costs (US $)
Analysed Case Studies: 296 from 22 countries and 53 sectors

22. Which results could be achieved with PREMA®?
Payback period
Analysed Case Studies: 296 from 22 countries and 53 sectors

23. Which results could be achieved with PREMA®?
Environmental benefits (n = 348 effects)

24. Instruments belonging to the ‘PREMA family’
Good Housekeeping (GHK) (with different check lists: ….)
Environmental oriented Cost Management (EoCM)
PREMAplus
Sustainable Management of industrial Areas (SMIA)
Profitable Social Management (PSM)
Chemical Management (CM)