Thursday, May 9, 2013
Green and Frugal, Part II
In the last post (an embarrassing long time ago!) the discussion centered on "frugal engineering" or, as it is sometimes referred to as "frugal innovation." It was noted that frugal engineering usually refers to reducing the complexity and cost of some good and the production of it so that, for example, it might be more accessible in developing economies. It can also include simpler (or fewer bells and whistles) products that are devoid of non-essential features. One market for this is the so-called developing economies where there is an emphasis on simple basic performance and durability and less on glitz. The theory is that selling such products, made cheaply (but well!) would couple volume with thin profit margins to address the growing markets in these countries for basic goods and services - cars, cell phones, appliances.
The expectation is that result frugal engineering will not create products (or processes) with inferior quality. Hence production must be similarly efficient and, it would be assumed employ "frugal use of resources" as well.
An article in mid 2010 on "The importance of Frugal Engineering" published by Booz and Company reviewed some of the fundamentals of this new way of designing and producing products for the "bottom of the pyramid." These include elements we should already be doing - but focused laser sharp on a different segment of the consumer market: understanding the consumer, bottom up innovation, organizational agility including cross functional teams, nontraditional supply chain and top down support.
They give several great examples in the article and we'll summarize on here - that of the Nokia 1100 cell phone. With the first glimmer of economic prosperity in pretty much any country people buy a cell phone. Not a fancy one. A functional one. One that might work in agricultural conditions - dusty and dirty. One for field workers in humid environments. The describes the development of a phone for such circumstances. Nokia engineers noticed that the humidity of the working environment made the phones slippery and hard to hold on to or dial. The result was a phone with a nonslip coating on the keypad and sides. To resist the damage from dust and other contaminants in some of the factory environs the handset was designed to minimize dust infusion. The phones are also very basic - send/receive calls and texts, monochrome screens, fewer features so power draw is lower and they can last longer between charges. The Nokia engineers added only one feature that might be an "extra" - a small, energy efficient flashlight that is a big hit in areas with frequent blackouts or poor lighting - meaning pretty much most of the markets this phone was designed for. It sells (in 2010 at least) for $15-20 and is apparently a best seller.
So, what can we learn from this for a broader market - one that is already enjoying the fruits of be "further up the development curve"? If you "google" the term frugal you get quite a screen full. The usual implication is getting more but spending less. Well, that works! It also starts with clothing - buy second hand, buy fewer, buy better quality (things that last), chose versatile over stylish (ok…let's see how that works!), repair/modify as needed, make your own. You can find more on this line at a number of websites - like frugal girl.
Importantly, this does not mean buy cheap clothes if you want to include sustainability in your wardrobe. The trend to "throwaway fashion" based on cheap, rapidly changing styles made with inexpensive materials and low labor is anathema to sustainability. One only need to reflect on the recent tragedy in Bangladesh to drive that point home.
But, remember the first paragraph above and the discussion in the last posting - frugal does not mean low quality or, importantly, lower value (quality for the price).
That last one, quality for the price, is the one to watch. Recall our discussion in the past on the IPAT equation for estimating impact of technology? The acronym is defined as IPAT: I = P x A x T or Impact = Population x Affluence x Technology. The key term green manufactures and engineers need to keep in focus is "Impact/GDP" - that is, the environmental and social results or impact associated with the value of the product or technology. That's the one we can influence. Being able to increase the value of the product or technology while at the same time reducing the impact from using the product is green. If this is done sufficiently over a wide enough range of products (or manufacturing processes) we can become sustainable.
This should apply across all economic domains and the elements of frugal outlined in the Booz paper should equally apply.
Understand the customer - let's assume the customer is interested in being truly green (and on the road to sustainable); certainly in the San Francisco Bay area this is appealing to the "developed" crowd. But we'll need to make sure we can address the customer needs straight off but include enough style to make the product acceptable.
Bottom up innovation - rethink all aspects of the product or process; specially with efficiency of resource use, and recovery, in mind.
Organizational ability - this is more than beating up the supplier for lower cost. This implies less obvious tradeoffs between similarly capable but less impactful solutions; Often suppliers can or will work with the designer to insure the specifications are met but not just by using something "off the shelf" or, perhaps, off a different shelf. An interesting article on frugal engineering (albeit in a slightly different context) in supply chains was in the Financial Times in May, 2011.
Top-down support - this is the Kennedy Moon Landing mission declaration - but for frugal engineered and manufactured products; "We will make a X for $Y." That might mean not adopting the same product platform that serves another market demographic. Or developing one that extends across a broader range of market.
In the Booz article one of the bolded text box statements is "In mature industries, companies are optimized for their main customers. For emerging markets, a different approach is required." True. But, let's consider the "sustainable-minded consumer" (including the manufacturing engineer or factory manager) as an "emerging market" too. How would we design and build our products for that growing market? As we are able to deliver products with equivalent capability/functionality/value but with lower impact those consumers leaning in this direction will go for it.
Companies are already on board. There are already so many examples on the web and in the media about companies being more productive and profitable using fewer resources, less energy and water and, more and more, with lower social impact throughout the supply chain. This is the solution to greenwashing - deliver real measurable green value in a product that meets the consumer's needs - whether in a field in India or a start up in San Francisco. How about we focus "laser sharp" on that?