Global Manufacturing

In the not-too-distant future, environmentally benign manufacturing will become one of industry’s greatest strategic challenges, not only from an engineering perspective, but from a business and marketing perspective as well.

Many large, multinational companies are cognizant of impending overseas environmental regulations and growing consumer demand for a new generation of environmentally friendly products, and they are beginning to formulate their response. Some have embraced the notion that green products and production techniques are a competitive weapon. But many manufacturers, especially smaller ones in the United States, are far behind in acknowledging and addressing the environmental concerns of governments and consumers, according to a soon-to-be released analysis from the World Technology Evaluation Center at Loyola College in Maryland.

“There is a real serious concern in Japan and Europe and we don’t see the same thing here except for one trend which is for larger multinational companies to attempt to project an image of social responsibility,” says Timothy Gutowski, chairman of the WTEC Environmentally Benign Manufacturing panel and a professor at MIT. “My feeling is that in many cases it’s sincere. They offer their own environmental assessment and metrics which look real, but they might be difficult to confirm from an outside source.”

An example of a company that seems to be headed down the wrong path is General Motors, says Gutowski. Over the summer, the company said it would mass market the Hummer, the gas-guzzling behemoth that is based upon a military design. “I would hope that social responsibility would be a better business strategy because the other one in which they acknowledge their automobiles are bad for the environment is really flirting with the old kind of mold,” says Gutowski. “There is a potential business risk to doing what GM is doing.”

GM’s Hummer and its widespread use could trigger legislation and heated reaction from consumers who are driving smaller, energy efficient vehicles.

Other companies complain about environmental regulations and their inability to meet more stringent requirements. For example, when the European directorate for the environment said it would eliminate brominated flame retardants used in electronics, Siemens said that it was going to be difficult to find a replacement. It wasn’t long thereafter that Sony Corp. said it had a viable alternative and asked how many tons of the new material anybody cared to buy.

In California, most automobile companies are complaining about meeting new clean air emissions limits. Yet Honda and Toyota have developed and produce new engines to meet and exceed requirements. “For many of these companies, it is part of their business strategy,” says Gutowski.

U.S. manufacturers must drop their skepticism of the green movement and begin to address the deleterious impact they and their products have on the environment. The trend lines are alarming, and when Gutowski started as chairman of the WTEC panel looking into the subject, he counted himself as a green movement doubter. “I asked if they really wanted me to chair this panel because I was skeptical myself,” he says. As director of the MIT Laboratory for Manufacturing and Productivity, Gutowski was familiar with trends regarding emissions reductions, and felt there were not serious problems. “I’m a convert,” he says after studying the data.

“There is a master equation for the environment where you multiply the per capita GDP by the impact per unit of GDP,” he explains. The world’s population is projected to increase by a factor of two over the next 50 years and the GDP per capita is likely to go up by a factor of four or five. “To keep things the way they are right now, the environmental impact has to be reduced by something on the order of a factor of 10,” he says. “You have to roll up your sleeves and get to work.”

Looking at it from a global perspective of population growth, total emissions, rainforest depletion and all the other maladies afflicting the earth, “it’s pretty easy to see that in the next 50 years there are going to be major disasters,” but they are probably not going to happen in the United States, he notes. “If you’re a multinational, those will be your customers and your labor source. You don’t want to be the tobacco industry poster boy for manufacturing.”

Industrialists would also be well advised to stop arguing about what they perceive to be as a lack of scientific evidence to support environmental degradation and global warming theories. “There is something going on [with the Earth] and you’d have to be pretty foolish to ignore that there is something going on here,” he says. “It’s like O.J. Simpson. You can’t quite connect the dots…”

No other sector of the economy comes close to the manufacturing sector in generating vast volumes of waste. The Europeans have implemented take-back laws for autos, electronics and appliances. Without comparable take-back laws in the United States, multinational companies are going to be forced to decide if they want to design a separate product for the North American market. I got my car hire Honolulu Airport after recent visit to the manufacturing factory.

To take a look at the slides from WTEC’s upcoming Benign Manufacturing analysis.

• As much fresh water has been withdrawn in the last 30 years as in the last three centuries.
• Globally, there is a 160 billion cubic meter overdraft of groundwater per year.
• The rate of increase in atmospheric carbon dioxide between 1970 and 2000 is nearly double that between 1960 and 1970 (1.5 ppm vs. 0.88 ppm per year).
• Carbon emissions have increased by more than 1.5 times since 1970.
• The U.S., EU and Japan are by far the world’s biggest producers of solid waste, with the U.S. at about 14 times that of Japan and the EU combined.
• Solid waste strategies: In Japan, it’s “Minimize at source”; In Europe, it’s “Producer responsibility”; In the U.S., it’s “There’s always more space.”

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