Posts filed under ‘Environment’
How a New Design Revolution will Change Supply Chain Management
Howard Brown
Stories about Henry Ford’s genius with manufacturing abound, though it’s rarely clear which ones are actually true. One of my favorites is his insisting that parts manufacturers deliver their products to his plants in wooden crates of his design, which he then dismantled and used as floorboards in his cars.
Supply chain management has grown in sophistication and importance since Ford’s time. The quality movement, just-in-time manufacturing, corporate responsibility initiatives, enterprise-wide information systems, environmental impact analyses like life-cycle assessments, and growth in transparency and public access to information have all brought about major changes in supply change management. Now a new design revolution is about to create an even bigger change in supply chain thinking. The change will come both from new materials and products and from new manufacturing technologies.
Radical new materials and products (such as the ones we feature in the dMASS Insights newsletter) will themselves disrupt traditional supply chain relationships. For example, there are composite materials that exhibit behaviors with the potential to replace mechanical appliances, tools, and other machinery – even entire factories. There are materials that can be used to generate electricity by movement, temperature differences and solar energy conversion. Others have the ability to interfere with the growth of harmful bacteria, actively transfer heat or emit light with minimal energy subsidy. The cumulative effect of new materials and products will be shorter and simpler supply chains.
New manufacturing technologies will be at least as disruptive as the products themselves. Nano-scale manufacturing technologies such as Additive Layer Manufacturing (including 3D printing) and bio-manufacturing (the growing of products) stem from recent advances in the scientific understanding of how nature organizes itself at the most fundamental levels of matter and energy. Similarly, biomanufacturing stems from new discoveries in the fields of genetics and micro-organisms. The common thread among each of these technologies is a growing knowledge of nature’s tendency to self-organize, and an ability to leverage this knowledge.
Three-dimensional (3D)printing, in particular, has the potential to drastically cut resource demands, costs and dependence on resource-intensive supply chains, as well as pollution and waste. Advanced computer-aided design (CAD) systems bring design down to the level of individual molecules. The entire downstream supply chain for a 3D-printed product can be a set of printer cartridges containing different chemical elements. When laid down in precise proportions, the atoms arrange themselves into material structures with the desired characteristics. Printing can often be done in small shops, portable facilities, or even in the home. There is little or no need for high-temperature smelting in parts manufacturing, high-speed grinding or stamping that produces manufacturing scrap, or glues, adhesives, staples, rivets and other parts to hold separate pieces together.
Henry Ford’s tactic saved resources a century ago by creatively taking advantage of existing supply chain resources and harvesting value from waste. Nano- and bio-technologies will radically transform supply chain management in a new way. Business success will increasingly require understanding these technologies and taking advantage of the changes they will bring about.
What are your thoughts? Have you begun to experience supply chain changes due to commodity prices or supply problems, or due to the availability of new materials, products, or technologies?
Howard Brown is a noted entrepreneur and the founder of dMASS.net, an organization focused on helping businesses improve resource performance. For more than 20 years, he was CEO of the consultancy RPM Systems, Inc. (Resource Planning and Management), where he worked with companies such as International Paper, Mobil, BP, Duracell, Avery- Dennison, Whirlpool, SaraLee, and Wrigley, earning a worldwide reputation for developing practical strategies that merge environmental and business goals. To learn more about dMass, visit: http://www.dmass.net/wordpress/
Meet the NAEM Board of Directors: What are the EHS and sustainability trends to watch in 2012?
As part of NAEM’s 2012 Member Appreciation Week celebration, we sat down with members of the NAEM Board of Directors to talk about the EHS and sustainability trends to watch in 2012. Featuring Michael Miller of Dean Foods; David Newman; Mark Hause of DuPont; and Verne Shortel of NRG Energy.
Life in the Fast Lane: Electric Vehicle Observations
Bruce Klafter
Recently I had the opportunity to use a Nissan Leaf™ for several full days, a much more interesting exercise than a simple test drive. As someone working in the sustainability area, as a co-chair of the California Clean Cars campaign and as a likely car buyer in 2012 (my current vehicle has over 230,000 miles on it) I am very interested in the electric vehicle (EV) market.
Nissan’s Leaf™ is among the handful of low emission cars that are presently authorized to carry a Clean Air Vehicle Sticker, entitling a single occupant to use the carpool lanes during rush hours – a very nice side benefit to EV ownership that helped speed my commute this week.
My general impression of EV driving is very favorable. This particular model is roomy, it has all the bells and whistles (bluetooth, navigation, backup camera, etc.) and most importantly, it really drives well. Acceleration, handling and power are all indistinguishable from a gas powered vehicle.
The only issue I’ve had this week is the one that continues to slow down growth in the EV market, namely range anxiety and ease of recharging. I have been charging the vehicle at home and at work using conventional 120v outlets and while the process is simple and easy, it certainly takes a while, e.g. 11 hours to get a full charge last night.
When I left my home the range indicator read “100 miles”, but 35 miles of highway driving depleted that amount to 42. In other words, at 60+ miles per hour, a 35 mile trip used up 58 miles of driving range. Keep in mind, I tried to use the EV just like I use my current one, driving as fast as usual as opposed to crawling along in the slow lane just to conserve the charge. With the indicator staring at you the entire time, you also start thinking about all of the devices that consume electricity in the car, such as the lights, the radio, and the seat warmers and so on. Since I want a fully functional vehicle, the notion of driving around in a dark, cold vehicle is not a selling point.
My conclusions: I love just about everything in the EV experience other than the limitations on range. If the car had a 200-mile range, I would be placing an order tomorrow. Until batteries are improved, however, fast charging 240v stations are essential and the buyers for whom EVs work perfectly may be limited. By the way, Applied Materials is among the companies working to address some of the battery issues. It will also be exciting to see a whole slew of new EVs and plug-in hybrids (PHEVs) in 2012.
Bruce Klafter is head of Corporate Responsibility and Sustainability at Applied Materials, Inc. and leads the effort to fulfill the company’s commitment to sustainability in the design and implementation of business strategies and worldwide operations.
Sustainability rankings: Which are real, which are rubbish?
Richard Crespin
Albert Einstein once said that not everything that counts can be measured and not everything that can be measured counts. While I remain a dyed-in-the-wool free market capitalist, the measurement systems we’ve used to date have gotten us in a hole with disasters economic, environmental and political.
In 2000 the world had 21 sustainability-related ranking systems; we now have more than 100. As a result many folks now want to know how to prioritize the “real” rankings from the “rubbish”.
As Executive Director of the Corporate Responsibility Officers Association I represent you: the responsibility and sustainability professional. I know the difficulty different reporting regimes pose. I also know how hard it is to rate companies because I serve on the Methodology Committee for Corporate Responsibility Magazine’s 100 Best Corporate Citizens List. As a result, I have discerned a few hallmarks of the better rating systems. Here’s what I can offer as a guide to prioritizing ratings:
- Transparency. Their methods, criteria, and decision-making should be public. Any commercial relationships between the rater and the firms on its list should be clearly disclosed as well.
- Consistency. While evaluation criteria continue to evolve, the rating should have some constancy year-over-year. The criteria should also be applied evenly to all companies in the rated universe.
- Relevance. A list should relate to your company’s industry, brand or strategy.
- Acceptance. Pay more attention to lists that have broad acceptance and/or use widely accepted criteria like the Global Reporting Initiative.
- Prediction. The most effective rating systems will predict future performance. This is the “holy grail” and will likely remain elusive for at least another 10-15 years. To be predictive a rating needs to incorporate a full business cycle’s worth of data, typically 30+ years. No rating system that I know of has been around that long.
What do you think? Are these the right criteria for evaluating information requests? When it comes to the flood of sustainability surveys, what is your strategy for responding? Which do you respond to? Why?
Richard Crespin is the Executive Director of the Corporate Responsibility Officers Association and chair of the upcoming COMMIT! Forum on Sept. 26-27 in New York. To participate in the conversation about the “New Rules for Disclosure” visit http://www.commitforum.com/index.php/agenda/.
A Pragmatic Approach to Green Product Development
Balaji Jayaseelan
Why do companies talk about and pursue ‘green’ products when there is often very little resonance among consumers? Is it because it is the right thing to do? Does it offer a competitive advantage to their brands? Or is it a strategy to achieve cost savings through energy and waste reduction?
It depends upon who you talk to.
There are some companies that get it right with the consumers and become successful, while others are constantly looking at ways to get it right. For the latter companies, here is my advice for a possible approach towards greener product development.
At Newell Rubbermaid, our first step is to understand that there is no such thing as a ‘green product’. Every product has potential trade-offs and we need to understand what ‘green’attributes can be a good incremental value or a game changer. Some of the methods in understanding consumer relevance are through market research, either by primary or secondary insights and/or benchmarking with your peers and competitors.
Questions we need to answer to influence green product development in early stage gate processes are:
- To what extent are your consumers interested in ‘green’products?
- To what extent are your consumers demanding ‘green’for your product categories in particular?
- To what extent are consumer ‘needs’related to environmental issues being met in the marketplace?
- To what extent are market trends forming that might drive greater desire for green solutions among consumers, retailers, and governments?
- Are there certifications/Eco labels available in the market that resonate with the core consumer of this product? To what extent is certification required to make a credible claim for this product category or market segment?
It is important that we understand these answers before we influence green product development. In the case of existing products, we should map out the green benefits using product mapping exercise like Value Analysis and Value Engineering. For those of you in pursuit of the green products,
- What kind of roadblocks have you found in innovating green products?
- Are we constantly looking out metrics to measure the green attributes to our revenue growth in our brands?
- What kinds of Green platforms do the consumer really care?
- What are the other effective methods to map out green attributes in our products?
Balaji Jayaseelan is Program Manager of the Global Environment and Sustainability group at Newell Rubbermaid. He is in charge of providing strategic advice to business units on a wide range of sustainability issues including energy/climate change, waste management, product claims, green product innovations and Life cycle management. He is a Chemical Engineer and holds a Masters in Environmental management concentrating on Sustainability. His professional interests and research focus on designing different models on socio-economics towards sustainable development and innovating green products. You can reach him at saravana.balaji@newellco.com.
Confronting Conflict Minerals
Gary Niekerk
Most environmental professionals don’t hang out with the Wall Street crowd. We don’t typically have a lot of designer suits and six figure bonuses (although I do own a pair of wing-tipped safety shoes). However, Wall Street and environmental, health and safety (EHS) are a little more connected these days than you think. What I’m referring to is a piece of legislation buried in the 800-plus-pages of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, called “SEC 1502 – Conflict Minerals”.
The intention of SEC 1502 is to increase transparency in the minerals supply chain, with the hopes of reducing the terrible violence in parts of Central Africa related to the minerals trade. This somewhat controversial regulation is garnering a lot of attention as the final rulemaking is expected in the next few months.
If your company manufactures products where, “conflict minerals (tin, tantalum, tungsten, or gold ) are necessary to the functionality or production” of the product, you could be one of the 5,000 or more public companies the SEC estimates may be impacted by this legislation.
NAEM will be covering the topic at the upcoming EHS Management Forum on Oct. 19-20, where I’ll talk about Intel’s approach to this complex issue. For more information, please contact our Corporate Social Responsibility team or read the white paper we wrote about trying to achieve a ‘conflict-free’supply chain.
In the meantime, I’d love to hear from you. What are you doing to address this important issue? What are some of the unique challenges this legislation will present for your company?
Gary Niekerk is the Director of Global Citizenship for Intel Corp., where he works on corporate strategy related to sustainability, corporate reputation and stakeholder management. He has spent 25 years working with employees, customers, and stakeholders to protect and build the brands and reputation of some of the world’s leading high-tech companies, including Hewlett-Packard Co., Apple Inc. and Intel Corp.
