Green Sigma is based on Six Sigma, the successful business strategy that has been used to analyze operations to improve overall efficiency, lower costs, increase quality, and add, change or eliminate activities and processes to improve overall performance. The goal of Green Sigma is to apply principles of energy and water usage to lower environmental impact, increase efficiency and reduce costs.

“There’s a fundamental truth to understanding and improving any aspect of a company’s performance-if you can’t measure it, you can’t manage it,” says Dave Lubowe, global leader of IBM’s operations strategy consulting practice, which is spearheading the Green Sigma initiative. “This applies as much to a company’s energy and water consumption as it does to anything else, and our new offering can help clients apply this principle to make their businesses greener.

“The constraints and costs of energy and water usage are rising at an accelerating rate, with a significant impact on business operations and financial performance,” Lubowe points out. “In addition, companies are coming under increasing pressure from governments, advocacy groups, investors, prospective employees, and consumers to make their operations, products and services more socially responsible, particularly regarding the environment.”

Green Sigma consists of a five-phase approach to managing operations and environmental practices:

• Establish key performance indicators defined and tailored to operational environment, industry and business. Activities include building key process indicator sets for carbon and water, including regulatory and stakeholder requirements.
• Identify areas where activities and practices should be measured. This can include developing a facilities management plan and determining where to use sensors to collect information for analysis.
• Use a carbon and water management dashboard system to monitor key performance indicators and analyze performance data. This can be linked to other systems to help initiate processes such as carbon trading.
• Apply statistical tools and techniques to analyze and improve processes to reduce energy usage, carbon emissions and water inefficiencies.
• Create ongoing optimization of processes and key performance indicators through the carbon and water management dashboard, and identifying new areas where improvements can be made.