Monday, June 18, 2012

Green Manufacturing and Resiliency


What's resilience?

This week the discussion is on "resiliency". And, how it relates to manufacturing and, in particular, green and sustainable manufacturing.

But first, a final comment on leveraging (the subject of the last three posts). In a discussion about leveraging with some of my researchers last week it was suggested that, in fact, leveraging works in both directions - from manufacturing towards the product and from manufacturing back to material selection. We'd been discussing the "forward" direction with respect to changes in the manufacturing process that may require some investment of resources (or energy, materials, etc.) but which will yield a substantially larger reduction in life cycle impact of the product in use and, hence, a good 'return on the investment.'

The "backward" look is equally sensible but I don't have an immediate example in mind but, when I do, it will be the subject of another posting. Here, we can make decisions in the product design or manufacturing that influences material selection. For example, we can choose to use a production technology that is, perhaps, more energy intensive but allows us to choose from a wider range of materials including some that are less energy intensive to produce (lower embedded energy), less hazardous or better for operation of the product to reduce impact.

That is, we can mirror leveraging in both directions about the manufacturing process. And, interestingly, this could make our systems more reliable and resistant to disruption due to, say, materials shortages or other disruptions due to impacts.

This is a great lead in to our discussion here - resiliency.

The dictionary (Merriam-Webster on-line) defines resiliency as "1: the capability of a strained body to recover its size and shape after deformation caused especially by compressive stress or 2: an ability to recover from or adjust easily to misfortune or change" (and they give the example of "emotional resiliency"). The second definition is probably closest to what interests us here - recovering from unexpected or unwanted change or misfortune. Think supply chain disruption due to, for example, floods in Thailand or earthquakes in Japan.

Actually, we can characterize these disruptions in terms of our ability to foresee or predict the disruption or plan for it. Things like earthquakes are unpredictable. You can choose not to build your factory in an earthquake zone (but some choose not to worry about that if you can build the structure "resiliently"). You can't always predict or anticipate other system stressors like labor disruptions, mineral or material shortages, equipment malfunction, etc. But you can try to take steps to reduce the impact (or inoculate your system from their effects). Planning, redundancy, alternate sources, careful choice of components/suppliers/sources, etc. all can help.

If you "Google" the term 'manufacturing resiliency' you will get a number of postings and articles dealing with reducing downtime due to disasters and other unanticipated events that result in reduced employee productivity, revenue loss, damaged corporate reputation and missed service levels. These "unanticipated events" can be caused by power outages, natural disasters, or other disruptions to a manufacturers’ supply chains and critical material or part suppliers.

Of course, many suggest that IT is the solution … more information faster means fewer surprises. Maybe.

Others suggest that a cause of concern is the volatility of prices in the materials/metals markets. A recent article by consultants KMPG titled "Global Metals Outlook: Manufacturing Resilience" discusses this in some detail. These are not manufacturers - but metals processors and suppliers - the folks that provide materials to manufacturers. Logically, their strategies include cost optimization, trying to gain more control over raw materials and, interestingly, locating assets closer to customers or suppliers. The report states "More than one-half (53 percent) of respondents from metals companies say their organizations are considering localizing or customizing operations to improve the efficiency of their supply
chain, compared with 43 percent of manufacturing companies more widely. Given the size and bulk of their products, shipping costs are a major concern."

Interestingly, the report did not mention anything about helping their customers make better use (increased yield) from materials or lengthening the product life cycle to better control demand. Honestly, most of the experts interviewed in this report were not the operating engineers but from the financial and management side. So that is not a big surprise. But, that would work!

Back to resilience. An excellent review of "resilience thinking" is in Ecology and Society in a 2010 paper reviewing resilience as part of adaptability and transformability - all key aspects of the dynamics and development of complex social-ecological systems. We're going to dive into social metrics and manufacturing at some time in the future but, for now, keep it close to engineering. From the paper cited above, we see that "Resilience was originally introduced by Holling (1973) as a concept to help understand the capacity of ecosystems with alternative attractors to persist in the original state subject to perturbations… In some fields the term resilience has been technically used in a narrow sense to refer to the return rate to equilibrium upon a perturbation (called engineering resilience by Holling in 1996)."

Hollings wrote a foundational paper on resiliency (the full cite is Holling, CS (1973) Resilience and Stability of Ecological Systems, AnnualReview of Ecology and Systematics, 4:1–23.) In this paper Hollings discussed the difference between engineering resilience and ecological resilience. He considered that the engineering system has one equilibrium state only, while the ecological system has more than one equilibrium state.

So, simply put, resiliency is the ability of a system (say a supply chain or production system) to return to a stable operable state in the presence of "attractors" (or in engineering terms, disruptions) that would tend to move the system into another state of operation - presumably less stable, or less profitable, or less environmentally benign.

It is not too hard to see where risk comes into this and, if the risk is induced by unexpected events (like floods) the resilience of the system will be the ability of the system to return to normalcy with the least disruption. And, with respect to "equilibrium states" it is clear that manufacturing systems may have many (since they have many different components) and it might be preferable to move to a new equilibrium state if it can be shown that it is more green or sustainable!

So, let's draw the conversation back to manufacturing. Equilibrium is a very well understood engineering term and refers to a state of rest or a natural condition that a system will revert to when left alone. In the case of manufacturing, say a production system, equilibrium might be when the system is operating as designed with the requisite result or output. A complex supply chain might be said to be at equilibrium not when it is stopped or doing nothing (as in the engineering definition "state of rest") but when it is functioning smoothly. I realize this is not a precise definition but it will suffice for our discussion of resilience here.

I recently was exposed to the use of resilience with respect to green manufacturing and sustainability in the context of the National Institute of Standards (NIST) use of the term as part of a description of their sustainable manufacturing program. The site explains that "the sustainable manufacturing program will enable advanced manufacturing processes that include new manufacturing methodologies, manufacturing information systems, and effective industry standards. The Program results will advance U.S. leadership in sustainable manufacturing, resulting in technologies that support the application of Key Performance Indicators (KPI’s) to access and decide on production networks which require much less energy and materials, reduced waste and optimal logistics. By using these technologies industries are ideally positioned to optimize their processes and maximize their efficiency and resilience."

Lot's there - methodologies/technologies, information systems, key performance indicators (KPI's), standards - all with the purpose of helping to make decisions on production processes and networks that use less energy and materials, reduced waste and optimal logistics. And, hence, make the processes and networks more resilient!

Let's continue with how that might work in practice next time.

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