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Qualtek Manufacturing: Fabricating Success through Sustainability

Part 1 and Part 2 of this case history have shown how a 70-person metal fabricator in Colorado began to realize significant financial benefits from applying the principles of sustainable business to improving the efficiency with which it used resource inputs in its manufacturing operations.

These types of energy and resource conservation efforts are often seen as the low hanging fruit that gets sustainability off the ground. That’s true in Qualtek’s case too, but CEO Tony Fagnant and his son Chris are both quite clear that the sustainability initiative’s biggest benefit to the company is the positive impact it has had on employee engagement and productivity. Can they measure this? No, not precisely. Do they see it? Absolutely. Says Tony, ”You KNOW there’s a response when employees step up without prompting, telling us we should do this or that, and telling us they’re taking some of these ideas home for personal implementation.” THAT means the company is well on its way to its making sustainability part of “the fabric of its business process.”

Good leaders can build a corporate culture around many things: great customer service, super-efficient operations, “insanely innovative” products (as Apple calls them). The great thing about sustainability, however, is that it engages people in the idea that they are doing things that go beyond just enabling their company to make money for its stockholders, things that deliver benefits to the environment and the community. Other things being more or less equal, that’s a powerful incremental driver that will motivate employees to go above and beyond.

The E-team was wondering how it might contribute to the company’s 2012 Development Day when just this type of thinking led to the idea of creating a garden for the employees. Within a few weeks, an area of unused land on the company’s property was cleared and turned into a garden, complete with eight planter beds constructed from broken pallets awaiting disposal and a couple of old excavator tires donated by a local company. Water for the green refuge was accomplished at minimal cost by reusing water from one of the stamping department’s cooling processes. Now the employees have a pleasant area in which to take their breaks, and a plentiful supply of fresh fruits, vegetables and herbs to take home in summer months. How do you put a value to the company on a project like this? Not easy. But if a single competent employee thinks it’s a good reason to stay with the company when s/he might otherwise have left, the costs saved by not having to find, hire and train a replacement will repay the minimal cash costs of building that little garden many times over.

As is so often the case, in a sustainability journey, one thing leads to another: growing momentum leads to escalating ambitions. Qualtek recently secured a $33,000 grant from the Colorado Energy Office to commission a Level III Technical Energy Audit. Iconergy Energy Management Services, an ESCO, will identify design build options that could potentially revamp many of the company’s manufacturing operations with a view to reducing energy consumption. This may involve capital expenditures in the range of $300,000-500,000, once again supported by tax incentives, rebates, grants and any other free money the company can find to make the numbers work. As a starting point, Qualtek has given Iconergy a mandate to focus on projects that will deliver an acceptable ROI over a 5-year period; Qualtek is confident that a range of viable projects will emerge from the study.

Asked to give advice to other smaller companies on how to create and execute a successful sustainability strategy, Chris singled out three key factors:

  • Commitment: Genuine support from  company leadership with a point person responsible for making things happen. Qualtek’s leaders are committed in spades to sustainability.

  • Collaboration: All staff, bottom-up involvement so that everyone is heard and engaged in the process. Collaboration also involves learning what others are doing – customers, competitors, industry peers. To this end, Qualtek is a member of several local sustainability-focused nonprofits and advisory organizations.

  • Metrics: Different for every company. Qualtek is installing an Environmental Management System (EMS) which will provide a framework for measuring results and driving follow-up and verification of successful outcomes.

As American manufacturing charts its course for survival and potential revival, Qualtek will be at the leading edge of the process. You can be assured that its sustainability strategy will be a key component of its ongoing success, continuing to drive innovation, competitive advantage and improved financial performance.

To read the entire Qualtek sustainability case history, visit: www.sustainability4smes.com/, the premier source of sustainability information, tools and resources for small & mid-sized companies (SMEs).

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Sustainability4SMEs: Graham Russell & Martha Young

Graham Russell brings 25 years of CEO experience in the environmental services industry to his current role as a sustainability professional. He currently teaches sustainable business in the University of Colorado, Denver MBA program and chair’s the School’s Managing for Sustainability Advisory Council. He provides sustainability and cleantech consulting services to SMEs through TrupointAdvisors and is on the board of the International Society of Sustainability Professionals.

Martha Young has been an industry analyst and writer for 20 years. Her expertise is in small and mid-sized businesses, information technology and energy. Young co-authored four books on virtual business processes (cloud computing), and project management for IT. She is on the board of two small Texas-based businesses, and acts in a technical advisory and business strategy capacity for an east coast venture capitalist.

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