Monday, October 18, 2010

Where's the beef?

Or, how manufacturing affects product use performance

First of all, this has nothing to do with meat clothing!

Remember our discussion a while back about "buy-to-fly" ratio? This was referring to the amount of the materials that actually end up in the product as one metric of material utilization efficiency (July 2, 2010 posting). The variation in that ratio was impressive with some of our more sophisticated products having very low ratios (structural elements of aircraft, for example, due to the challenging requirements of shape and strength.)

Another consideration is impact, or resource utilization, from manufacturing the product versus using the product. That is, the use vs manufacturing phase trade-off.

One of my research students, Teresa Zhang, had done an interesting analysis for a number of common products some time ago as part of her early work on her PhD in my lab. One of her charts is shown below and plots use phase resource intensity as a function of manufacturing phase resource intensity.
We see here that "things that don't move or need power to operate" like bridges, furniture, etc are dominantly manufacturing phase consumers of resources and, by extension, impact. Things that do "move and need power to operate" like automobiles, airplanes, etc. are use phase heavy. Interesting to note are the items that are close to the break-even 45 degree line. Personal computers overall, but not the chips in them, are a bit heavier in the manufacturing phase than use phase. Cell phones more heavy (but likely not if you include the embedded impact of the infrastructure needed to operate a cell phone network.) As usual, the details matter.

I was reminded of this during a presentation at a conference I attended recently in Germany during the presentation by a representative of the automaker VW in Germany. In the course of his slide show, he mentioned that, by their analysis, about 20% of the impact of a typical VW Golf A4 car came from manufacturing while 80% was due to the use phase. I had seen data on the GolfA3 (marketed from 1991-1999, also called the Polo) from some time ago and the comparison was similar. The figure below, from Volkswagen AG, and Harald Florin, PE Europe/IKP-University of Stuttgart, Germany (PE is the supplier of Gabi LCA software), shows the energy consumption during the manufacturing phase of the GolfA3 in Gj/auto.

Materials and part suppliers account for much of the embedded energy in the manufacturing phase. Machined components, such as the gear box and engine are a small percentage of the total (accounting for about 10% overall or about 25% with materials and parts from suppliers excluded).

If we look at the impact of the auto, including car production, fuel production and use phase, see below from the same source, we see that the fuel production and consumption in the use phase dominates all categories of emissions to air and water with the exception of dust generated by material production and casting of some components and painting of the vehicle and biological oxygen demand impacts on water.

More recent data I've seen from Volkswagen for the Golf A4 indicates that some improvements have been made (for example reduction of primary energy used in production, use and end of life due primarily to improved fuel consumption (a 20% improvement from 8.1 liter of fuel/100 km to 6.5 l/100 km for the gasoline engine).

In a posting on September 1st 2009 discussing the influence of precision manufacturing (and manufacturing in general) on environmental impacts I started out reviewing the basic impact equation (in terms of environmental damage, consumption, etc.) which is simply:

  Impact = Population x (GDP/person) x (Impact/GDP)

I commented that population grows with time and most countries strive to improve GDP/capita since that drives living standards, etc. The rate of consumption or environmental impact per unit of GDP is the "rate of damage" done as a result of the technology driving the growth in GDP and is really the only "knob" we can adjust to reduce impact. I noted that engineers are most effective at changing technology that affects Impact/GDP. To the extent we can reduce that impact we are, effectively, greening the process.

So, if we look a bit closer at the VW numbers, does this make sense in terms of reducing the impact/GDP? If we focus only on manufacturing phase we may not be encouraged - specially if the predominant impact is in the use phase. Let me elaborate.

Let's go back to our VW Golf example of 20% manufacturing phase impact versus 80% use phase impact. If we then think about the area I work in a lot, machining, and we assume about 20% of the manufacturing is machining or machining related, that gives us a potential for improvement of 20% of 20% or only 4% (and then if we get rid of all machining!). Let's assume that some of the snappier technology for improving machining efficiency is employed, say some specialty tooling material that reduces machining power consumption, and that is worth another 20%. Now we are down to .8% (20% of 4%).

Hardly worth the effort it would seem. Of course, if you are paying the electricity bill for the factory and this .8% technology wedge is added to a lot of others in machine operation it can add up to real savings. But, maybe still not impressive compared to use phase impacts. That is, over the full life cycle of the auto.

But, if we follow that logic we are leaving a lot of potential impact reduction from manufacturing "on the table."

In the precision posting I referred to above, I mentioned that a major German auto manufacturer has been working to improve the "power density" of some of its diesel engines over the past years and has seen an improvement of almost a factor of 3 in power per unit of displacement. That means, for the same engine size (displacement) they have managed to squeeze three times as much power out. Coupled with advanced fuel injector systems operating at very high pressures (once thought absurd) they see enhanced performance in a small engine - increased fuel economy, improved acceleration (due to reduced mass), and reduced emissions.

The chart below, from Daimler, shows the improvement in power density as a function of time. The different colors indicate the increasing pressures in the fuel injector systems feeding fuel to the engine.

This is impressive and seems to keep growing without bound. Same size engine, better fuel efficiency and power generation.

How can this be?

Precision manufacturing! The posting on precision gives an example of how this could work for a Boeing aircraft based on tightened tolerances allowing increased structural performance by better control on dimensions - resulting in lower weight components. It is similar for the Daimler engine whose performance is tracked in the graph above. With better tolerances, better surface finishes, better control of orifice size and shape on the fuel injector nozzles (with diameters on the order of 60 microns), tighter control on cooling channels and fluid flow in the engine due to enhanced casting techniques, and on and on, the engine (still working on the same old Diesel principles) performs dramatically better.

The "dog leg" in the chart above corresponds to the introduction of high performance, precision, manufacturing to the power train in the automobile. Similar improvements can be see in the transmission as well.

That is how to reduce the impact per GDP.

Manufacturing dramatically increasing the efficiency of fuel utilization in the internal combustion engine. The small percentage of manufacturing phase improvement has a giant leverage effect on use phase impact. Since the principal element in use phase impact of the automobile the reduction in consumption (due to increased power density of the engine) hits both the fuel production impact as well as the fuel consumption impact. In the Golf A3 figure for emissions, 90% of the CO2 impact was due to use phase (81% from driving and 9 % from fuel production). A doubling of the fuel economy, by manufacturing induced engine efficiency improvements, by precision machining and processing will essentially halve that (same distance driven) - or account for, in the case of the Golf A3, a reduction of some 16 tons of CO2. And if, in the process of manufacturing enhancement, we save most of our 4% impact from machining, that's .4 ton of CO2. So, for our .4 ton we get a return of 16 tons (a factor of 40!)

Now that's a return you can't beat.

OK, the calculation may not be quite that simple, but we are seeing the same order of magnitude of leverage effect here. And some may argue that this improvement can't be really counted as a greening effect of manufacturing. But, the motivation is enhanced performance which includes reduced impact. And it is due to manufacturing capability. I'll take that.

That's the true impact of greening manufacturing.

Finally, in an interesting follow on to the last posting about risks associated with material supply, specially for rare materials, Environmental Leader had a reference to a special report on "Eco-competitiveness: safeguarding profitability and the world’s natural resources"  by Sonny Masero Vice President CA ecoSoftware EMEA, CA Technologies (download report). The report addresses the challenges of managing a business dependent on, or influenced by, complex labor, resource, or material supply chains. One quote from the report summarizes it well - "Whether it is a skills shortage, a scarcity of raw materials or a lack of capital investment — every organization can be impacted by the shifting availability of external resources. Although businesses can do little to control such fluctuations in supply, they can put strategies in place to limit their dependence on scarce resources. Taking such a proactive approach is particularly important given the ongoing depletion of natural resources, such as oil, gas and water." Great reading!

Thursday, October 7, 2010

The rare earth "connection"

Or, be careful what you ask for

At the very beginning of this blog I presented a number of postings on "why should industry care about green manufacturing." (see post) This included to minimize risk to the business due to supply chain problems for critical resources needed for production or other material related disruptions (like no material available.)

I came across a perfect example of this while traveling recently (and, hence, had access to the Financial Times and International Herald Tribune - neither of which I subscribe to.)

The October 7th edition of the Financial Times newspaper has an article entitled "China tightens its grip on the production of rare earths," written by Leslie Hook. Rare earths are a group of 17 minerals that have strategic applications in a wide range of products and processes. And they are hard to come by (hence the name "rare"!)

Of the earth's supply of these rare earth materials, 97% come from China, 2% come from India, and the remaining 1% come from "other" countries. The US used to be a producer of these materials but the mining and refining can be highly polluting if not properly controlled. So, costs of extraction and processing and environmental regulations encouraged the movement of production to places with lower costs and, regrettably, more lax restrictions or, at least, compliance.

So what? The use of these rare earths is ubiquitous in a wide range of high tech products, processes and products designed to reduce the environmental impact of operation. For example, the FT article cites the following statistics for use:

- 25% in automotive catalytic converters
- 22% in petroleum refining
- 10% in lighting, televisions, etc.
- 11% in materials for polishing glass and production of semiconductors
- 20% metallurgical additives and alloys
- 22% other

It turns out that these rare earths are key to "performance enhancing" materials and products important to us. For example,

- the rhodium in catalytic converters helps to remove harmful by-products of internal combustion engines (even highly fuel efficient ones)
- rare earths in "super magnets" help improve (a lot it turns out) the performance of electric motors in terms of power output with respect to input power (and remember that electric motors account for a major portion of electrical energy used to day - both domestically and industrially; and a number of the greening technologies (wedges) we've been discussing rely on improved electrical motor performance.)
- improved refinery techniques for less polluting fuels
- flat screen TV's and monitors with reduced energy consumption, and
- optical products ranging from specialized lenses for lithography and imaging applications to the bazillions of little lenses in cell phones and small cameras that a whole generation of young people are using to capture inane images of goofy behavior that will be posted on their social networking pages to impress their friends (and in 'cyberspace' in perpetuity) so that later in life when they want to get that dream job at a major corporation some recruiter can find it and say - not impressed. (Sorry, I got a bit carried away there - you get the point!)

The Chinese recently, and I assume entirely coincidentally with the Japanese detention of a Chinese fishing boat in disputed waters and the arrest of its captain, shut off the spigot of rare earths to the Japanese. And, thus the FT article I am referring to. Japan is the largest importer of rare earth materials.

Risk, you say?

Let's follow the trail of bread crumbs.

Japanese seize Chinese boat in disputed waters. Disputed, I believe, because of uncertain ownership following a conflict over 50 years ago precipitated by a country trying to, among other motives, secure sources of natural resources and energy (I am not a historian - if someone thinks I am off on my analysis let me know!). The Chinese interrupt the shipment of rare earth materials, materials needed to produce high tech products and enable processes to reduce the environmental impact of other processes and products. Companies relying on the supply of these materials see the supply chain stretching taut - panic thoughts emerge in heads of these companies (or at least in the supply chain manager.) Fortunately, the Japanese release the boat captain and materials, again by sheer coincidence, begin to flow again. Whew, close one.

How can a company watch out for an extemporaneous event on the high seas that might, in domino effect, interrupt its production?

I am reminded here of a great book (and BBC series) from some years back by a British author James Burke called "Connections."  Using some fascinating history sleuthing to "connect the dots" he shows along several lines the connection between technology development (and what is driving it) and commercial and political development. One line he followed was the nexus between precision engineering and fabrication techniques, the invention of the sea-worthy chronometer (previous instruments had suffered from the rolling action of ships, temperature variations, the high salty humidity of the air, and lower quality of fabrication to render them practically useless on long sea voyages), and the spread of British naval and commercial influence worldwide. Seafarers could now reliably get there and back with improved navigation aids and maps - all synchronized by accurate time keeping. Sort of a 18th century equivalent to GPS of today.

Today, we could build a similar story about anticipating and reducing risk in manufacturing.

I've a lot more to say about precision manufacturing and sustainability impacts prompted by some recent conversations I've had and remarks heard at conferences by industry leaders. More on that next time.

In the mean time, the world may be flat as Thomas Friedman points out, but some folks are sitting on mountains of critical resources, and the view from up their is decidedly different! Fortunately, as one of the Japanese researchers pointed out in the FT article, scarcity and risk of supply interruption drive innovation - in this case to find replacement, more commonly available, materials to substitute for the rare earths or ways to more efficiently use them. And the more the costs of these materials go up (remember, the market place rewards risk and uncertainty with higher material prices) the more incentive we have to find replacements or, in the case of the US which has reasonable wealth of these still in the ground, resume producing them with all the necessary safeguards and procedures in place.

That's a business strategy to reduce risk.

Finally, a comment from some time ago from one of the readers is appropriate to this discussion. It is complicated, so I am repeating the whole comment, and question posed from Steve Hanna following the post):

Let's say company "A" learns of a green house gas (GHG) "hot spot" in its supply chain, say manufacturer "X" of widgets.  Company "A" is purchasing substantial widgets from company "X" whose attributable production equals 80 tons of C02 emissions annually. Company "A" finds company "Y" who produces the same quality widgets (and pricing) that only takes company "Y" 1 ton of C02 emissions per year to produce. If company "A" decides to dump company "X" for company "Y", it is indeed a good steward to the earth but does company "A" receive any credit (offset or anything) for mitigating C02 emissions within its supply chain via Scope 3 indirect emissions?

In other words, are their any incentives/credits for companies who lean out their supply chains? After all, company "A" is mitigating 79 tons of C02 emissions from entering the atmosphere by switching to company "Y"'s product over the energy-intensive company "X" product. Can any of the savings be attributable to company "A"s footprint?

This is a great hypothetical and although I am not an expert on all the associated counting mechanisms over the different scopes, I have to say that I believe Company A can take credit for the reduction due to this switch. Certainly if they are tracking this in their annual corporate sustainability report (CSR) they can count this. And, specially in California where we are looking at how to identify and then, I assume, count GHG in products coming into the state.

But, there may be other opinions out there. Let Steve and I know  (i.e. comment!). I also like the concept of a GHG (or any other) "hot spot" as a way to identify sources of loss or potential savings in a process, facility or supply chain. And, apropos our discussion above, how about risk "hot spots"?

More on this next time also.

One last item, Energy Secretary Dr. Steven Chu has a blog! He is in government now but remember he was a Berkeley professor before! In his recent posting he commented on the need to revitalize American manufacturing. He starts out with "Some people think our economy can run on white collar and service jobs alone, but they are wrong. We can and must make high quality products in America. We are on the verge of a new Industrial Revolution and I believe it will revolve around the greatest untapped opportunity of our time, clean energy."

I couldn't agree more. The potential for manufacturing technology to address the emerging clean energy market (he continues talking about battery manufacturing), greener manufacturing technologies and facilities, and greener products manufactured in the US is huge.