Category Archives: Sustainability

Sustainable Manufacturing is the Future, But It’s Further Away Than You Think

A recent article in Industry Week on sustainable manufacturing indicated that there are “only a few bumps in the road before a smooth, green ride”. In fact, immediately after noting that while, as a concept, sustainability in manufacturing is easy to define, it is far harder to practically interpret and adopt, the article immediately diverges into how to design an effective sustainability roadmap.

While the advice is good, I think it does a great disservice by completely skipping over a discussion of the bumps in the road, how big they are, and how long it’s going to take to get around them, especially in North America. In North America, we’re facing the following bumps, and they are all biggies:

  • marketing
  • mindset
  • money

Specifically,

  • How do you market the benefits of sustainable manufacturing? Most people care about the end product, not the plant. And the last thing you want to do is be another greenwasher!
  • Most people are not of a sustainable mindset. They’re of a profit mindset, and they still see sustainable as a cost and not a savings.
  • Even those that understand that sustainable is not a cost but a benefit don’t want to spend the money it costs to upgrade production lines and factories to use more sustainable production methods. And this is the real kicker. Until this changes, it’s a long road ahead to sustainable manufacturing in North America.

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Don’t Exclude Natural Disasters from Continuity Planning

Even though the probability of certain events may only be once every one hundred years, the reality is that they’re going to happen eventually, and now that your supply chain is global, the chances of being affected by a natural disaster, even half a world away, are many times greater than they were even twenty (20) or thirty (30) years ago. Plus, as per this recent article over on the ISM site on being “in the eye of natural disasters”, the Emergency Events Database (EM-DAT), managed by the Centre for Research on Epidemiology of Disasters (CRED), recorded 3,770 natural disasters worldwide recorded between 2000 and 2009 with an economic impact of over $863 Billion. In other words, on average, there are 377 natural disasters a year costing the supply chain 229 Million each — more than enough to bankrupt even your average large company if it is operating on a razor-thin margin and unprepared for the disaster!

You need a plan for major disruptions caused by natural disasters, be they local to your operations or halfway around the world where they are local to your raw material / component / contract manufacturing suppliers. A natural disaster in either location, or anywhere in between along your normal distribution routes, will knock out your supply chain for an indeterminate amount of time. Thus, as suggested by Bernie Hart, an Executive Director of J.P. Morgan, supply management professionals should be assigning weights to specific transactions of components and products in the supply chain and planning appropriately. What-if scenario simulations are imperative for anything with a significant weight, such as high-volume shipments, high-value shipments, customer-critical components or shipments with delivery penalties associated with them. These simulations should include participants throughout the supply chain to ensure a uniform understanding of what is critical for the business, where the key process triggers are and how suppliers will meet your commitments in the event of a mass-scale interruption.

You need to be planning proactively and putting plans in place for contingencies when your operations get knocked out by a natural disaster — especially considering disasters of all types (hurricanes, tsunamis, volcanic eruptions, etc.) seem to be increasing in recent years. You don’t necessarily have to spend money preparing for execution until the need arises, but you have to spend money creating and fleshing out the plans that will allow you to act fast when a disruption does occur. And, as the article suggests, you should invest in the appropriate analysis technologies to help you identify the biggest risks upon which your contingency plans should focus.

The article is very well written and I would suggest you check it out — it also has some good ideas for contingency plan components. If you are unsure where to start, consider bringing in some outside help who are experts at continuity and disaster recovery planning who can bring with them additional benefits. After all, consultants are cheap.

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Is it Green, or Just More Greenwashing?

Terrachoice recently released its annual “Sins of Greenwashing” study and the results are, unfortunately, not surprising to anyone familiar with the reality of today’s green marketing. According to the study, 95% of the 5,296 products that were reviewed are still making some kind of green claim are still committing at least one greenwashing sin.

And some of the sins are getting worse. 70% of products offer no proof of their claims and over 30% include a label that looks like a third party certification, but isn’t. In other words, in an attempt to part you from your green, some marketers are making up green claims. It’s appalling.

So how do you spot a fake? You can brush up on your Greenwash Guides, such as the one put out by Ogilvy Earth, or you can remember this one simple rule of thumb that, while not always true, is a good start: if it’s green, it costs less green.

Think about it. A product that is produced through a green manufacturing process uses less water, less power, and/or less non-renewable/non-recyclable raw material. Water costs money. Power costs money. And non-renewable/non-recyclable materials cost more in the long run than renewable/recyclable materials. So if it’s truly green, it was made green, and cost the company less to make than non-green products using non-green methods. So you shouldn’t be paying a premium.

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The Best Supply Chain Ideas for a Greener Planet

SupplyChainBrain recently ran a good article on Ten Steps to Optimizing Your Supply Chain for a Greener Planet that had ten (10) great ideas for making your supply chain more sustainable. However, the following ideas, sometimes overlooked, are the ones that will really green your supply chain.

  • Demand-Driven Production

    If you really want to be planet-friendly, the first thing you have to do is stop producing excessive amounts of waste — and if you’re wasting valuable resources to produce product that ends up in the trash, that’s end-to-end waste.

  • Network Planning

    Worry about how you are going to get your product or service to your customer before you start production, not after. Then you’ll realize that it’s not necessarily cheaper or better to produce your product halfway across the world and then ship it by air. And you’ll realize that it’s not always easy to find the right carrier at the last minute. If the only carrier available to truck your product at the last minute is one that uses lanes through a central distribution centre (DC) half-way across the country, that’s not green.

  • Quality Improvement

    If you shift from low-cost to high-quality, and produce items that last for decades or years, instead of years or months, you reduce the amount of waste going to landfills every year. And it is possible, even in consumer electronics where better models come out every year and everyone feels the urge to upgrade. There’s no reason you can’t build to upgrade. Instead of building one integrated device, build a device modular so that an end consumer can easily plug and play a new memory module, processor, or battery — and settle on uniform form factors so that these plug and play modules can be recycled into lower end products that can still serve a functional use, especially in schools or developing nations. Product life spans can be tripled. And, if possible, shift unnecessary processing power “to the cloud” so that a thin client device can be used for decades. Oracle gets this. The Sun Ray III is expected to last 25 years!

  • Preventative Maintenance

    If you use predictive modelling and regular inspections and repair faulty parts before they cause a breakdown, your equipment will often last much longer, at a lower lifetime Total Cost of Ownership! This is as true of personal electronics (if a fan dies in your dual-fan laptop, replace it before the other dies and your core overheats and takes your machine with it) as it is of production line equipment.

  • Integrated Planning

    If everyone is on the same page, it’s more likely that your attempts to reduce waste will succeed. Otherwise, if you make a decision that doesn’t sit well with another department, and order a “wrong” part, you might end up wasting an entire shipment when the other department reorders the “right” part.

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To Make Your Supply Chain More Socially Responsible, Find the Value

An article late last year in the McKinsey Quarterly on “making the most of corporate social responsibility” — a topic that is at the forefront of everyone’s minds given the recent headlines about the rash of Foxconn suicides — made a great point: if you want CSR (Corporate Social Responsibility) initiatives to take off, find the value. Without it, you’ll be limited to pet projects, propaganda, and philanthropy — and while the latter can be good if you donate to the right organization, you’re not really doing anything as an organization if you’re just passing the buck.

The article suggested that the way to develop an approach that can truly deliver on lofty ambitions and achieve real success for the business and for society is through smart partnering which focuses on key areas of impact between business and society and develops creative solutions that draw on the complementary capabilities of both to address major challenges that affect each partner, and it made some good points. By combining strengths to overcome each partner’s weaknesses, two organizations can often make more of an impact than one.

But if you read closely, and think about the examples the article presents, the real key to success is finding a solution that brings short and long term value to society and to the business. If it only brings value to society, as soon as times get tough, funding for the initiative will be the first item cut from the budget. If the only real value is to the business, the recipients of the initiative won’t be that interested in participating and the company risks being, correctly, accused of propaganda and / or greenwashing. But if the initiative helps society and the business in the short term and contributes lasting value to society and the business in the long term, then the initiative will be a success (and the company will look like a hero in the eyes of the media, which will generate even more success for the company as it will increase its brand value).

The Unilever examples provided in the article are prime examples of how value insures success. In the Kericho example (in southwestern Kenya), where Unilever applied sustainability principles to the production of tea and focussed on productivity, sustainability, and environmental management, even though Unilever had to invest more money up front, Unilever won in the long run as they gained greater control over a critical supply of raw material while improving productivity. And the initiative was a success for society as the farmers made more revenue and increased their skills and living standards. Both parties win from the initiative, so both will continue to support it through the long term.

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