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Waste recycling management concept

Sustainability for manufacturers Driving profitability and growth

Jun 20, 2017

Sustainability is an increasingly common theme in the market today. The feature reviews the top environmental issues affecting the manufacturing sector and explains how taking action on sustainability can help mitigate perennial business challenges. It also outlines a sustainable design methodology that can assist in lowering the environmental impact of any product, quickly and cost-effectively, with the help of advanced design software tools. The article will encourage manufacturers to integrate sustainability into their corporate strategy to drive both profits and growth.

Sustainability is usually defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” The sustainability of a manufacturer is measured by the effect of its operations and its products throughout their lifecycle. Issues related to sourcing (where applicable), downstream impact, and strategies are addressed below in the context of the most pressing environmental matters of the day.

Materials

Sourcing: Manufacturers use raw materials as inputs and transform them into finished goods. Materials like wood, copper, and steel were once cheap and plentiful. However, today, they are growing ever more expensive and harder to find. Cost and availability of raw materials are likely to worsen as rapid growth in newly industrialising countries consumes natural resources faster than they can be replenished.

Impact: The harvest and extraction of natural materials can cause substantial environmental harm, especially as supplies dwindle and resource recovery becomes more invasive. Industrial materials often emit pollutants as by-products of their production process. A lifecycle assessment of a manufactured good will include the environmental impact of the product’s material inputs as well as the production process. The lifetime impact of a product may vary significantly based on the materials selection and on the amount of materials consumed.

Strategies: All manufacturers can minimise environmentally related business risks by using materials efficiently—the minimum necessary to do the job—and when feasible, choosing materials that are:

  • Plentiful—such as rapidly renewable natural materials such as bamboo or readily available industrial materials such as recycled aluminium, and

  • Healthy and safe—not subject to regulations, restrictions, grassroots campaigns or questions about their environmental impact on humans, wildlife and habitat.

Water

Sourcing: Manufacturers often use water as an input in the production process, and some industries are particularly water intensive. However, as humans, wildlife, agricultural, and commercial interests increasingly compete for access to clean water, the price of water is steadily climbing. Many observers predict that future wars will be fought over water.

Impact: Manufacturing processes that use water frequently emit waste water containing chemicals, suspended solids, and other impurities. Depending on its composition, the waste water may be subject to local health regulations and require expensive treatment and remediation. Even non-hazardous waste water (sewage) rates can be expensive.

Strategies: Manufacturers can reduce costs and risks related to water and waste water by:

  • Minimising the use of water in manufacturing processes

  • Using recycled water rather than potable sources

  • Minimising contaminants in waste water

  • Investigating the feasibility of capturing, recycling, and reusing water onsite

Energy

Sourcing: Energy prices have escalated over the years. Unless manufacturers have invested in energy efficiency, energy costs now represent a larger share of operating expenses. The electric grid infrastructure is aging, inadequate and vulnerable to outages in many parts of the world. On-site power generation and alternative sources may be more reliable than power purchased from a central utility.

Impact: Most energy is produced by the combustion of carbon-based fossil fuels such as coal, gas and oil. The resulting greenhouse gas emissions are a major cause of global warming and increasingly subject to regulation. Large emitters, including businesses that consume large amounts of electricity and natural gas will soon be required to monitor and report, then limit their output. The more carbon-based energy a manufacturer uses in its operations, the more affected it will be by reporting requirements, emission limits and carbon taxes. Its higher operating expenses will be reflected in its higher cost of goods.

Manufacturers also need to consider the energy cost and related emissions of packaging and shipping their raw materials, component parts and finished goods. Purchasers also care about the energy consumption, financial and environmental impacts of a product. The energy efficiency of a product is a newly important feature and a competitive differentiator.

Strategies: As a hedge against future cost increases and a way to improve competitiveness, all manufacturers are encouraged to:

  • Minimise the energy used in operations, both in business operations and manufacturing processes

  • Minimise the energy consumed by products

  • Limit product packaging and shipping distances

  • Consider using renewable energy to meet operational needs

Waste

Impact: Worldwide, the problem of waste is growing acute. Landfills are at capacity and difficult to site; decomposing trash emits greenhouse gases more potent than carbon dioxide, and escaping chemicals can contaminate the soil and water supply. Incinerators are under pressure to close because they emit benzene and chlorine, carcinogens that endanger human health and the environment. In response to the growing acknowledgement that there is no place on earth to throw things ‘away’, over 50 government entities worldwide have adopted a goal of zero-waste. High waste disposal fees reinforce the policy, and are common where waste disposal options are scarce.

Pollution is another form of waste. Particulates, gas emissions and the solids found in waste water, sludge and ash can all cause significant harm to humans and habitat. Pollution mitigation measures are required under local, state and/or federal regulations, and compliance measures can be expensive. Failure to comply with regulations can lead to steep penalties, possible civil and criminal litigation and consumer boycotts.

Manufacturers must consider the waste produced by their products as well as their operations. Products that generate unwanted by-products will be more costly and troublesome to their purchasers than ones that operate more efficiently. Products covered by extended producer responsibility policies, either mandatory or voluntary, will impose higher costs and hassles on manufacturers if they are not designed for efficient disassembly and resource recovery.

Strategies: Waste is a symptom of a non-optimised manufacturing process. Any unwanted by-product increases expenses and the cost of goods but does not increase the product’s value or selling prices. However, what constitutes waste for one business may be a valuable input for another. Transferring unwanted by-products to another manufacturer is a financially sound business practice, regardless of whether a fee is collected. Eliminating waste by improving the efficiency of the process is an even more cost effective practice.

Every manufacturer can increase profitability by reducing its waste stream. This can be achieved by:

  • Buying materials accurately, and using them efficiently

  • Improving process efficiency

  • Controlling pollutants

  • Finding a productive use for industrial outputs

Regulatory and voluntary standards

Impact: The use and disposition of specific material inputs is increasingly subject to regulations intended to minimise environmental harm.

‘Soft’ requirements, while not legally enforceable, are also gaining momentum. The media and the market are beginning to demand that companies publish information about their product contents, corporate emission levels and climate action plans. Grassroot campaigns targeting the use of specific materials (such as polyvinyl chloride, or PVC) may affect consumer preferences, spur lawsuits and foreshadow regulatory action.

Strategies: To facilitate compliance with environmental regulations, manufacturers are advised to:

  • Monitor the regulations that govern their products

  • Understand the environmental impact of products

  • Track emerging policies and opinions affecting the same

  • Take preventive action by reducing the environmental impact of their products and diversify by adding a “green” product in the same space

The business benefits of sustainability

The increasing importance of environmental issues to manufacturers poses risks and offers opportunities. The following section briefly connects the opportunities to the business challenges commonly faced by producers.

Profitability

  • Using less energy lowers overhead and product costs

  • Using fewer materials also cuts costs

  • Companies that use natural resources wisely and take positive steps to lower their environmental impact are more successful in attracting and retaining loyal customers & staff

  • Manufacturers that take responsibility for products after point of sale can create an annuity-based service business

Competition

  • Sustainability is still a differentiator, but not for long – it is quickly becoming an expected part of doing business

  • Customers claim in surveys that they are willing to pay more for a safe, healthy, green product. Recent concerns about the presence of dangerous chemicals and materials in imported goods give domestic manufacturers a chance to regain market share for some types of consumer goods

  • Products that use minimal energy and water will cost less to own and operate than less resource-efficient alternatives

Compliance and managing risk

  • Regulatory pressures will continue to increase and expand to cover materials and products whose cumulative environmental impact is deemed unacceptable

  • Pro-actively reducing the carbon and chemical footprint of a business now can minimise negative regulatory impacts

  • A sustainable approach reduces risks at every stage of business, leaving businesses less exposed to the possibility of material shortages, energy price increases, higher fees for waste disposal and pollution abatement, liability and unwelcome shareholder actions

Implementation options

Manufacturers can lower their expenses by improving the resource efficiency of their operations in the front office, back office and factory. Opportunities for growth will come from improvements in product design.

Production process

Two factors reduce the risk of updating a production process to improve its sustainability: one is using a proven methodology and the other, a proven technology. Lean manufacturing and Six Sigma are well-known process improvement methodologies that target and eliminate waste to drive profitability; they improve the environmental performance of a process at the same time. Using a sustainable design methodology that borrows key elements from Lean and Six Sigma can help a producer target areas for improvement efficiently with minimal risk.

The other way to reduce risk is to take advantage of the latest software technology. Businesses that use a design platform with digital prototyping capabilities, such as Autodesk® Inventor™ software, can develop a single 3D model that evolves from concept through manufacturing. The model allows the designer to evaluate opportunities to reduce environmental impact in the manufacturing process—such as, by reducing weld energy through optimisation of material thicknesses in an assembly.

Product design

The greatest environmental impact of some products comes not during their manufacture, but during their useful life. Industrial equipment, consumer electronics, cell phones— anything with an on/off switch—may consume more energy in a year than was consumed during its production or embedded in its raw materials. In other cases, the choice of materials may be the most critical environmental factor associated with a product. Both issues are of growing importance to customers, supply chain partners and regulators. Products with low eco-footprints offer a lower total cost of ownership, less chance of liability and fewer regulatory hurdles for producers and buyers alike. In short, such products are more competitive than their traditional counterparts are and may fuel a manufacturer’s growth.

To minimise the lifecycle impact of a product, producers can use a sustainable design methodology modeled on proven improvement methodologies. Like Lean and Six Sigma, sustainable design “starts with the end in mind,” a clearly defined outcome or end state. Because the interplay of inputs and process steps dictates the outcome of a process—or in this case, a product—sustainable design practitioners work backward and analyze the impact of materials choices and production processes on the product’s overall sustainability and the desired outcome.

Understanding the interplay allows a designer to modify elements of the process as needed to achieve the desired result. In Six Sigma terms, the process output is a function of process inputs (Y= f(X)), so achieving a specific outcome involves
manipulating the input variables until the desired result is achieved.

Optimising for outcomes with digital prototyping

Once the desired outcome is selected, the design team can pick a strategy and analyse the inputs and process steps to understand the impact of each on the
outcome. The team can then build a 3D virtual model to facilitate its analysis and
decision-making.

Regardless of the specific sustainable outcome and strategy selected, a digital prototype will save the design team time and money as it analyses and tests alternative options. In many cases, the digital prototype will be able to predict the impact of the proposed change on the product’s characteristics and the energy consumed during its manufacture. Armed with such data, the design team can quickly and cost-effectively experiment with different material and process variables until it discovers the optimal combination. Multiple options for the same product can be saved at any stage, from concept through manufacturing, allowing the team to pursue multiple strategies in parallel. If the market or regulatory environment changes, the product can quickly be optimised to meet the latest conditions. The digital prototype reduces risk by keeping options open as long as needed.

Conclusion

Manufacturers are increasingly choosing to improve the sustainability of their business operations, production processes and product designs to drive profitability and growth. A sustainable design methodology and digital prototyping software are both essential tools to help designers develop products meet one or more business-oriented, environmental outcomes.

The article is reproduced in courtesy with Autodesk

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