At Fiat Group, one of our key commitments is to reduce our environmental impact during the production phase.
Proof of this is the expansion of World Class Manufacturing (WCM), a system that has been in place for several years and now covers 97%(1) of our plants.
WCM is a structured, rigorous and integrated methodology covering every aspect of the entire organization, from safety to the environment, from maintenance to logistics and quality. The WCM system is aimed first and foremost at improving production processes to ensure product quality with the aim of meeting or exceeding customer expectations.
At year-end 2013, a total of 121 Fiat Group plants were part of the WCM program: 26 have achieved bronze level, seven silver and four the gold level (Bielsko Biala engine and transmission plant in Poland, achieved in 2012, and assembly and stamping plants of Tychy in Poland, Tofas in Turkey and Pomigliano in Italy).
The projects developed within WCM are designed to achieve the broadest engagement of employees and to systematically reduce losses and waste, ultimately reaching zero accidents, zero waste, zero breakdowns and zero inventories.
The WCM system reflects our commitment to environmental and sustainability issues. WCM, and in particular the Environment pillar, is an integral part of the Group’s Environmental Management System. This pillar is dedicated to the development of instruments and methods that provide support in reaching targets to curb the environmental impact of plants while aiming to cut waste and optimize energy use. The Energy sub-pillar, included under the Environment pillar, plays a key role in improving energy performance through specific projects targeted at eliminating inefficient energy use.
In 2013, about 2,400 specific energy projects were implemented, resulting in approx. 180,000 fewer tons of CO2 emissions. The total number of roughly 3,000 environmental projects started during the year resulted in cost savings of €70 million.(2)
To manage and minimize environmental and safety risks, a preventive and proactive approach is employed. In the event of an accident, WCM calls for a rigorous analysis of the causes and application of the most appropriate procedures to reduce the risk of recurrence. Moreover, in the event of an environmental accident or a natural disaster (e.g., hurricane, flood, earthquake, fire) all plants are covered under a contingency plan whose purpose is to limit the event’s environmental impact, as well as to preserve the integrity of physical assets, the continuity of operations and limit financial implications in general.
The success of WCM is highly dependent on the participation of employees, who are periodically involved in targeted training programs. All Group plant employees worldwide are encouraged to make suggestions, each of which is assessed for potential application to be transformed in a project. In 2013, Fiat Group’s plant employees submitted a total of 1.3 million proposals for improving processes, representing an average of 15 suggestions per employee.
Furthermore, an essential contribution to extending the best processes to all plants derives from the sharing of innovative best practice projects, with approximately 10,100 approved and disseminated across the Group’s plants through 2013.
WCM tools and methods can also be applied to other activities not strictly related to production. Fiat Group is transferring these principles into its Logistics, Manufacturing Engineering and Design activities as well, to integrate this approach in other areas of the company.
Moreover, we are committed to implement WCM also among suppliers. The engagement of plants and suppliers enables the most relevant environmental impacts to be minimized as an integral part of the daily management of production processes along the entire value chain. This entails reducing greenhouse gas emissions, conserving energy and raw materials, and reducing water consumption and waste generation, by maximizing reuse and recycling.
WorkPlace Integration (WPI) - a new way of designing the process
In production system development, the Group has refined the design and workstation improvement phase at plants through the use of WPI.
One of the strengths of WPI is that the design phase begins earlier; in fact, studying production cycles already starts during the development of the new model. Thus, the product and process are developed to optimize the technical and methodological synergies, which results in many fewer changes later on and has a positive effect on station ergonomics and costs.
For the first time, a project of this nature brings together process engineers, quality specialists, research and development managers and plant personnel to plan the process from the very beginning. The activities are carried out in the WPI Room, an area equipped with the technology needed for design and simulation. The assembly line personnel are involved in organizing their future workstation, proposing improvements based on their direct experience at the plant and giving suggestions to the planners who create the new workstation layouts.
First developed at the Pomigliano (Italy) plant and then spread to all Group plants with new model launches, WPI applies all WCM principles. The workstation is centered around human beings, making it safe, ergonomically sound, comfortable and functional for the designated worker's job.
Naturally, environmental sustainability aspects are also included. In order to ensure that the impact is kept to a minimum, WPI works by reducing disposable packaging, hazardous chemical products and the generation of waste, as well as by aiming to eliminate energy waste. During each individual phase, quality aspects are analyzed, introducing systems geared toward avoiding human error in the process.
This way, the workstation is efficient and organized from the very start, consistent with the most sophisticated concepts of logistics engineering and material flow management, and is aligned with the best technical solutions for processes and products.
At the same time, as an integral part of our management of industrial processes, we are committed to implementing and maintaining our Environmental Management System (EMS) at all of our production plants worldwide, compliant with the ISO 14001 standard. At year-end 2013, 133 plants, representing 100% of industrial revenues(3) in 2012 scope and 99% of manufacturing employees(4) were ISO 14001 certified.The plants still awaiting certification have adopted an EMS which complies with the ISO 14001 standard. These plants are regularly audited by the central Environment, Health and Safety (EHS) unit, which verifies compliance prior to third party audits. By the end of 2014, all Group plants operating worldwide in 2012 will be ISO 14001 certified.
With respect to the Energy Management System, efforts continued in 2013 to integrate an Energy Management System compliant to the ISO 50001 standard into the Environmental Management System. At year-end 2013, 43 Group plants were certified, representing approximately 36% of the Group’s total energy consumption. By 2014, all of the Group’s main plants, accounting for more than 90% of total energy consumption, will be ISO 50001 certified.
An Environmental Management System certified by accredited third parties, associated with WCM methodologies and tools, ensures the achievement of a steady and continuous reduction in the impact of manufacturing processes, as well as achievement of environmental objectives.
Both WCM and the management systems are based on the Group’s Environmental Guidelines, which reflect our commitment to being a responsible environmental steward.
These guidelines apply to all employees worldwide. They specify the correct approach to environmental issues and provide clear instructions on setting and updating environmental objectives, developing new products, and conducting daily activities around the globe. While implementing these Guidelines, the Group complies with all relevant environmental legislation and regulations and constantly strives to outperform them.
Action plans and related short-, mid-, and long-term projects aimed at reducing the environmental footprint and ensuring financial sustainability are in place at our plants. In 2013, expenditures and investments for the environment amounted to almost €100 million,(5) clearly demonstrating the Group’s commitment to environmental protection.
(1) Percentage based on the total manufacturing cost base.
(2) Data is prorated to include carry-over from projects launched in 2012.
(3) Industrial revenues are those attributable to the activity of plants directly controlled by the Group.
(4) Manufacturing employees are those directly and indirectly involved in manufacturing processes.
(5) €96.67 million, of which 65.8% for waste disposal, emissions treatment, and remediation costs, and 34.2% for prevention and environmental management costs.