Green Manufacturing:ERM

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Sustainable Operations Environmental Issues in OM
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Learning Objectives

• Understand
• the impact of production operations on natural
  environment
• end-of-life (EOL) product management choices
• factors affecting EOL choices
• how EOL affects existing operations management
  practices

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Energy Use and National Wealth
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Migrant workers polishing diamonds at Hari
Krishna Exports, a family-owned business in
Surat, India. Hundreds of thousands of people
have found work in the diamond industry in
Surat, where more than 7 of 10 diamonds in the
world are polished. Workers earn about 2,400 a
year - nearly five times the average per capita
income and sometimes more.
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Why Do We Care?

• Health impact
• Liability publicity
• Energy and material supplies
• Regulations public pressure
• Potential business opportunity and challenge,
  esp. in operations

22 billion disposal diapers in landfill/year 100
million cell phone put out of service/year 2
million tons of e-products disposed/year 63
million computers in the U. S. became obsolete in
2005
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• Circuit boards - lead cadmium
• CRT Monitor - lead oxide barium
• Flat screen switches - mercury
• Printed circuit boards, cables, plastic casing -
  brominated flame retardants.

What Is in a Computer?
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(No Transcript)
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80 of Toxic Wastes are from Electronics Products

• The electrical and electronic waste (WEEE) law,
  in 2005, EU authorities introduce legislation
  for free take back of waste goods by final owners
  and ensure that equipment producers are
  responsible for financing the collection,
  treatment, recovery and disposal of all waste.
• 30 of Fortune 500 companies business are in
  Europe
• Silicon Valley Toxics Coalition
• http//www.svtc.org/ecomaps/svtc_ecomaps/index.htm
  l
• Oregon Natural Step
• Zero-waste Coalition
• etc, etc.

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How Is It Related to OM?

• Lean manufacturing
• JIT defines waste as anything more than
  absolutely necessary so any environmental
  residual is bad
• End-of-Life product management choices and its
  relations with
• Product design
• Supply chain structure, relationship
• Operations strategy

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Lean Manufacturing

• Look at the wastes and impact in the overall
  system
• Production process
• Inventory
• Material choice (recycled vs. virgin)
• Energy usage of the product
• Product impact on the local community

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Black Friday Shopping Weekend Sales in US is 28
billions in 2005
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End-of-Life Product Choices

• Repair, refurbishment, reuse
• Remanufacturing
• Recycle with disassembly
• Recycle without disassembly
• Disposal to landfill

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End-of-Life Product Strategies (Comet Diagram)
raw mtl. supplier
material producer
component producer
product vendor
product producer
recycle no disassembly
reuse
remanufacturing
users
refurbishment
component remanufacturing
recycle w/disassembly
disposal
service
take-back center
shredder
landfill
incinerator
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Illustration A Electronics Recycling Plant
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The Nature of End-of-Life Product Choices

• Value of product recovered diminishes as we move
  from 1 (repair) to 5 (disposal)
• Down-cycling
• Monstrous hybrids
• Choice is contingent on the following factors..
• product design modular vs. integral design
• supply chain networks and logistics
  infrastructure
• who owns the technology of the product/component
• product wear-out life relative to product
  technology life cycle

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Product Design

• Design for disassembly and remanufacturing
• Modular product design
• Snap fit, push fit instead of glue, screws
• Material choice
• Non-toxic
• Common material

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Modular Design Example - Apple Computers
Easily accessed memory expansion slot on
portables, iMac and eMac Convenient Power Mac G5
Serial ATA hard drive installation Tool-free
installation of AirPort Extreme Card on portables
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HP Ink-jet Printer Cartridge modular design
Steelcase's 'Think' chair
99 recyclable. It's made without benzene, lead,
mercury or solvents.The 900 chair can be
disassembled with basic hand tools in about 5
minutes.
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Supply Chain Structure, Relationship, OM Have
Not Thought These Though

• Forward supply chain and reverse logistics
• Has global outsourcing considered EOL needs?
• Location of End-of-Life activities
• where to set up collection center?
• value recovered vs. cost of recycling
• Time-to-market
• Channel relationship consideration
• Supplier (retailer) as competitor?
• Disruption of returns on forward supply chain
• Uncertainty of quantity, timing of arrival,
  quality

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Operations Strategy First Movers are Industry
Leaders

• Company will only do what makes economic sense
• Given its concern for environment, company still
  to consider competition and bottom line
• Early-mover advantage
• Look for better solution
• Coastwide Lab (extra credit)
• Service-based business model
• chemical management services (Nortel)
• floor-covering service (Interface)
• leasing (Xerox)

fractal pattern, modular design
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Looking beyond. Business as Part of Eco-social
Environment

• Triple Bottom line a new framework to think
  about business, equity, growth, community
  interdependency

Ecology
The world will not evolve past its current state
of crisis by using the same thinking that
created the situation. - Albert Einstein
We do not inherit the earth from our ancestors,
we borrow it from our children. Indian proverb
Equity
Economy
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Conclusions

• We create product, process, supply chain,
  business model without much consideration of the
  reverse supply chain.
• (Perhaps) environmental costs are not fully
  considered in product price.
• New ways to understand the relationship between
  human and natural environment create business
  opportunities
• The opportunities are beyond waste reduction or
  lean manufacturing.
• Interesting reading (on blackboard)
• The End of World as We Know Them or,
• The Collapse
• Both are reviews of Collapse How Societies .
  by Jared Diamond
• Our footprint on earth