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August 16, 2009

‘Green’ Manufacturing Should be Part of Your Strategy

David Dornfeld
Director
Laboratory for Manufacturing and Sustainability, University of California, Berkeley

It is important to define, as best as we are able, why it is important to focus on green manufacturing. Green manufacturing is an important part of business. And business must be analyzed “holistically” – that is, let’s not fiddle with just little parts. Do it right for the whole system. Here’s what Paul Hawken and the Lovins said in “Natural Capital” (Little Brown, 1999, pp. x-xi):

“Without a fundamental rethinking of the structure and the reward system of commerce, narrowly focused eco-efficiency could be a disaster for the environment by overwhelming resource savings with even larger growth in production of the wrong materials, in the wrong place, at the wrong scale, and delivered using the wrong business models.”

They go on to say that the best solutions are not simply some kind of tradeoff between the objectives of economic, environment and social capital (recall our definition of sustainable?) but an integrated approach at all levels from “technical devices to production systems to companies to economic sectors to entire cities and societies.”

Sounds like manufacturing is a big part of that.

Okay, let’s say you are not impressed with these guys’ opinion. Think about the following in response to a question “why should industry care?”

• Pressure from government (and let’s think global … EU, Asia, US, South America, the whole world’s governments – yes, even the UN) in terms of regulations, penalties, tax benefits or obligations. – The EU has been very proactive here; the U.S. is working on it (reference recent legislation working its way through Congress); China, for example, is working hard on new regulations for both domestic industry and imports.

• Interest in efficiency/reduced CoO (remember Deming?) – His principles apply here. Waste is waste; reduced cost of ownership (CoO) is still the mantra in most industries (check out the semiconductor industry where this is the motivator). Time is money…energy is money…consumables are money. If you can make the same product using fewer resources/energy that seems like a good strategy.

• Scarcity of resources/risk – If you need water for your product and, suddenly, you can’t get it in the quantities you need for manufacturing … this is a problem! And a risk to your business. Or, more likely, one of your suppliers will experience this. The vulnerability to this risk may be noted by your investors or lenders. This is not an abstract concern. We need to be able to assess these risks. Green manufacturing applies to resource availability as well as energy and emissions.

• Continuous improvement (back to Deming!) – While we are working to improve our systems and processes let’s integrate green practices as well.

• Pressure from society/consumers/customers (Not to mention your kids!) – Your customers may not be able to define it, but if you can’t show a serious effort in green manufacturing they may go to someone who does; and it may be for a variety of reasons … but why take that chance?

• Pressure from competitors – If they can do it, and win market share and be profitable as part of an integrated strategy in their business – shouldn’t you? Let’s not repeat the mistakes of past industries who felt they were isolated from (or simply misread) the shifting market or the consumers demand for higher quality/performance/reliability at a competitive price.

We’ll continue this in a later column.

Future posts will include more details on how to assess what you need to do, examples of companies who are working on this in a serious way, and examples of doing the wrong thing (just Google the term “greenwashing” to see – or go to GreenwashingIndex.com as an example – more on this later!)

David Dornfeld is the Will C. Hall Family Chair in Engineering in Mechanical Engineering at University of California Berkeley. He leads the Laboratory for Manufacturing and Sustainability (LMAS), and he writes the Green Manufacturing blog.

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