Dimensions and Metrics of Green Manufacturing

We will discuss this topic in two sections - first, dimensions and then metrics. They are linked, as we will see, but best described sequentially.

The dimensions of design, manufacturing and environment can be represented as follows (and see the figure.) Think of three axes defining a volume (a cube, one axis along each principle face.) Along one axis (x) we express manufacturing throughput (quality, yield, production rate, lead time, flexibility, "lean-ness, etc.), from low to high; Along the second axis (say the y axis) we show design related attributes (functionality, complexity, life, maintainability); and the third axis (say z) represents environmental impacts (including energy, consumables, waste, hazards, end of life, etc.) from low to high. In this volume space we can plot "cost" as a function of these three axes (meaning ... the particulars of the elements of each axis will drive the cost up or down, or, in some cases, have no effect.) Our challenge is to find the "sweet spot" in this domain where we maximize production (and all its features - specially quality), minimize environmental impact, and optimize design - all at the same time. This is not easy but is our goal.

We measure our success or failure in this space using measures of performance - for example amount of waste, materials used and resources consumed (recall the Interface Carpet example?), energy consumed in production (primary and secondary) often expressed as specific energy or energy per unit of volume/mass or product, and the production rate (inverse of production time per piece, feature, etc.). Increasing process yield is a green option of course but, as we discussed some blogs ago, is usually done in the normal course of continuous improvement. But, if motivated by reduction in use of some resource, certainly supports green manufacturing.

My friend from Cambridge University in the UK, Professor Julian Allwood, outlines five options for sustainable manufacturing which I have adapted towards "greening manufacturing":

• Use less material and energy
• Substitute input materials: non-toxic for toxic, renewable for non-renewable
• Reduce unwanted outputs: cleaner production, industrial symbiosis
• Convert outputs to inputs: recycling and all its variants
• Changed structures of ownership and production: product service systems and supply chain structure

(see http://www.ifm.eng.cam.ac.uk/sustainability/seminar/documents/050216lo.pdf)

These are solid elements that, if pursued, can lead to a greener process, system, facility, enterprise. But, the question arises - how much "less material"? or "less energy". Or, how much substitution is needed? How much do I need to change my distribution or supply chain? Basically, how do I know how much is enough to really make a positive change?

To answer these questions we need metrics.

I define a metric as a type of "measurement used to gauge some quantifiable component" of performance, such as a return on investment (ROI) for a company's revenues, etc. These metrics are used by engineers and designers for accumulating and analyzing information and data to enable better decision making, including trade-offs among several alternatives. According to SearchCRM.com Definitions (a source I googled when defining 'metrics') these types of "systematic approaches ... can be employed to transform an organization's mission statement and business strategy into specific and quantifiable goals, and to monitor the organization's performance in terms of achieving those goals."

(see http://searchcrm.techtarget.com/sDefinition/0,,sid11_gci940481,00.html accessed 8/24/09).

For green manufacturing these metrics could include:

• Global warming gases emission (CO₂, methane CH₄, N₂O, CFC’s)

- per capita

- per GDP

- per area/nation

• Recyclability (or percent recycled)
• Reuse of materials
• Energy consumption
• Pollution (air, water, land)
• Ecological footprint - “fair share” - footprint (discussed in an earlier blog)
• Exergy (available energy) or other thermodynamic measures

And, these can be represented in terms of a "return on investment" - for example, greenhouse gas return on investment (GROI). Other forms of return measure include:

• Energy payback time
• Water (or materials, consumables) payback time
• Carbon footprint
• Efficiency improvement (for example, wrt exergy)

For green manufacturing these need to be linked to traditional design and manufacturing parameters. And they need to be assessed over all three scopes of ISO 14064 (1- direct emissions from on-site or company owned assets, 2- indirect emissions created on behalf of the company from energy generation or supply, 3- all others resulting from your business operation including business travel, shipping of goods, resource extraction and product disposal).

Some examples of how these links are set up and the application of these metrics will follow.

Reminder: "Why Green Manufacturing?" Join my webinar on September 17th - go to

https://www2.gotomeeting.com/register/187277227 to register.

Green Manufacturing News Items

I am preparing my class material for the graduate course on "Sustainable Manufacturing" I teach this fall (http://www.me.berkeley.edu/e290c/). The course attempts to do much of what this blog is aimed at - defining the key terms, understanding motivations, introducing metrics, tools and analytical techniques to assist manufacturing engineers in developing the processes and systems to implement green (at least) and eventual sustainable manufacturing. We also talk about "communicating" this information to our customers and shareholders.

I like to read a variety of information sources. And, when something is interesting or catches my eye, I present it to my class or, in this case, to the readers of the blog as constructive information. I'll do this from time to time.

As a preamble to my "selection criteria" for these articles and books, I try to make sure I am not distracted by idealistic arguments, unrealistic proposals, unfounded bias or political jingoism. I've found, after 30 years of teaching, that if you present material based on any of that the students (undergrads more aggressively than grads) will catch on early and pull at the loose threads on my cheap suit of logic until I am standing there with sleeves dangling and cloth around me on the floor. No respect for my long resume or vast experience! So, please feel to tug away if you sense some "dangling threads."

Here are a couple of recent finds in the "why green manufacturing is important" category.

The McKinsey Quarterly article "Profiting from the carbon economy" (http://www.mckinseyquarterly.com/Financial_Services/Banking/Profiting_from_the_low_carbon_economy_2412?gp=1) accessed August 17, 2009 discusses the opportunities presented by the carbon economy. They predict a "massive shift of industrial and financial resources. To cut emissions of greenhouse gases (especially carbon dioxide), consumers, companies, industries, and even entire countries will have to abandon current forms of carbon-based consumption and switch to new, less-polluting alternatives. New industries will be forged, going far beyond the nascent companies we see today. New financial products and markets will be necessary to manage and transfer the risks and costs of carbon emissions. Investors and regulators will demand better information about the economic impact of climate change." Later in the article it states "Many parts of the world have begun to ask the businesses to bear the costs of the carbon emissions they create."

And the EU is moving rapidly on this. They've agreed to increase the range of industries covered by their emissions trading schemes (called ETS) and to enforce a minimum of a 21% reduction of carbon emissions (relative to 2005 levels) by 2020.

One of these days we'll look at what that really means in terms of changes to basic manufacturing and material conversion - it is not putting more insulation on the furnace or turning the lights out when we leave the shop floor! We're talking substantial changes in the way manufacturing converts and processes materials. Flat world indeed - and increasingly low carbon!

What is the takeaway here? This highlights our link - manufacturing doing what it has been doing well for centuries now being forced to include the costs of carbon emission associated with their business. Not just in the plant ... in the materials and components coming in the plant from the supply chain ... in the transportation to deliver our goods to our customer ... and so on.

This is where the next big shift in manufacturing comes from. Define the impacts, see how they are linked to our production process, machinery, plants, supply chain - and then change them, redesign them, re-organize them, and so on to reduce our risk to this "new expense." And gain competitive edge.

This will be a constant theme here.

On the other end of the equation is the technology needed to supply the growing demand for alternate energy and where we fit into that market. The Christian Science Monitor, August 9, 2009, includes an article on "China's Green Revolution" by Peter Ford. The author quotes an energy legal expert at the Wilson Sonsini firm in San Francisco as saying "The rest of the world doesn't even realize we are very likely ceding the next generation of energy technology to the Chinese." He is referring to the aggressive development of energy technology to meet the impressive need for energy in China - much of this development (industrial and infrastructure) is built on forward looking government policy. This applies to the electric car sector, solar and, "clean" coal. One of the closing comments in the article includes an observation by an expert indicating that China sees this as a market not presently "claimed or controlled by any one nation" thus giving them the opportunity - using education, manufacturing technology and careful substantial capital investment.

Finally, the Economist, August 15, 2009, includes an article on "Greening the rust belt" reviewing the balance between an evolving clean energy industry and potential stifling of that due to carbon emission regulations. The concern is that the developing alternate energy business may be thwarted by the increasing regulation of carbon emissions. The midwest is specially sensitive to this (recall our discussion some blogs ago about the varying energy mix throughout the US - some states relying heavily on coal power for a large carbon dioxide to electrical power ratio). With respect to the stimulus spending in green technology, the president of a young solar power company in Toledo (and a professor to boot) comments that "... this is an investment for our economy, and our future."

And, a key part of realizing the benefits of that investment is the growth of a manufacturing technology base capable of scaling up these green sprouts using low carbon machines, processes and systems.

Finally, in the "This may interest you" department - a Webinar.

Thanks to this blog I've been getting some very interesting contacts. One, a company called Climate Earth in San Francisco (http://www.climateearth.com/), offered to allow me to use one of their regular "webinar" slots to present some of the material on "Why Green Manufacturing?" (sound familiar?!).

The details are- Date: Thursday, September 17, 2009; Time: 11:00 AM - 12:00 PM PDT. Registration for the webinar is at https://www2.gotomeeting.com/register/187277227 and after registering you will receive a confirmation email containing information about joining the Webinar. Did I mention it was free? Hope you can join us for this.

And, I have no involvement with this company myself but one of my PhD students is working part time with them.

Two other interesting sources I've come upon since the blog began that will stimulate some discussion are "manufacturing crunch" - http://mfgcrunch.ning.com/, and "environmental leader" - http://www.environmentalleader.com/. They've both been very supportive of some of the ideas expressed in this blog.

What's your manufacturing footprint!?

Footprints can reflect many things (carbon, world's resource share, water, green house gases, etc.) and usually refer to a conversion of some aspect of the energy, materials or other resources used in a product or consumption into a common metric and then compared to some average. A carbon footprint is defined as "the total set of GHG (greenhouse gas) emissions caused directly and indirectly by an individual, organization, event or product" (UK Carbon Trust 2008; http://www.carbontrust.co.uk/solutions/CarbonFootprinting/what_is_a_carbon_footprint.htm).

Or, a popular measure reflects our individual lifestyles and the impact of that compared to how much of our "fair share" of the world's resources we consume with that lifestyle. For example, http://www.myfootprint.org/ purports to calculate the amount of land and ocean required to sustain an individual's consumption and absorb their waste based on their reported consumption pattern and lifestyle. It then tells you how many times your share of the earth's resources you consume (based on some estimate of how much is available world wide divided by the world population.) Another one is http://www.carbonfootprint.com/ which is linked to a business site. There are many more. Warning: read carefully and do not assume the same data entered into another calculator will give you the same results!

One that I use in class is from colleagues at UC Berkeley, http://bie.berkeley.edu/files/ConsumerFootprintCalc.swf. It allows much more detailed entry information on types of autos used and gas mileage, flights (long or short- it matters since, I understand, the takeoff and landing have a different impact than a long flight at altitude), and dollar values for expenditures in housing, food, etc.

This is fun when we apply this to our personal lives but it would not help much in manufacturing analysis. That is much more complicated since, as we discussed in an earlier posting, this conversion from consumption to impact varies tremendously depending on the source of energy and, importantly, the bill of materials/supply chain providing the components for your product. We'd like to see the quantitative link between a machine or system design and its performance and impact. Otherwise it is not much help to us as engineers.

It is even more complex than one might envision when we try to determine "how low can you go" in your footprint - that is, how little of the earth's resources can you use?

Overall, energy use scales with disposable income (above a certain base level of income). So, your "footprint" will reflect your consumption of a number of resources:

• energy - heating, lighting, food/cooking

• housing: how big, how many share it, what climate do you live in, do you have air conditioning/heating, etc.

• consumables (in addition to energy) including dietary choices (eating locally raised food rather than out of season food from afar, or food transported some distance to you
  

• transportation: whether or not you carpool, ride a bike/walk/public transportation, take long airplane trips- business or pleasure (short or long?), have an efficient auto/hybrid
  

• entertainment/leisure preferences (ie are you a surround sound mini-theater blue-ray junkie or do you take long walks on the beach),

• plumbing/showers/gardening water use, etc.

You get the idea. When you see this list you understand why consumption follows available income - it is a lifestyle issue.

A friend of mine, a professor at MIT, Tim Gutowski and his students conducted a study as part of a class project assessing life styles and the resources required to sustain them - in the US. (Source: Environmental Life Style Analysis (ELSA) Timothy Gutowski, et al, IEEE Int'l Symposium on Electronics and the Environment, May 19-20, 2008, San Francisco USA). He and his students studied 18 different life styles ranging from homeless people and Buddhist monks to multimillionaires and an "Oprah approximation” (their words!). In many of the cases they also tried to consider variants on the life style (meaning for a given life style, variations in income and variants for a given life style within a fixed income.) Recall the discussion of my father's activities in the depression - that describes an "income variation for a given life style."

The MIT folks used an economic input-output life cycle analysis technique available for such calculations. Sort of a total cost of ownership calculation for the environmental impact. "Services" and subsidies were included in the assessment (such as those provided by the government). I can't summarize the whole study here but one major finding was that housing, transportation and food often dominate the environmental impacts of individuals.

Included in their summary from the assessment is the following - "...by including the subsidies, we identify a floor, below which environmental impacts for people living in the United States do not drop. For example, none of the life styles studied here ever resulted in an energy requirement below 120GJ (in 1997). This includes the life style of a five year old child, a homeless person and a Buddhist monk. [This] is almost double the global average energy use in that year (64 GJ)."

Even Buddhist monks, if living in the US, will consume the equivalent of double the global average energy/person in a year!

This study also re-iterated an important point - if you cut down in one area but use the savings to engage in riotous living in another area ... the impact may be negative. For example - if you buy a hybrid vehicle and then use the savings in gasoline to fund an airplane trip to Paris for vacation, the impact of your airplane ride may wipe out the gains of your energy conscious purchase.

But, you are probably asking at this point, what does this have to do with green manufacturing?!

This is a big issue - one of the key issues I would say. How can you tell whether or not the cure is better than the disease? How do you know your careful system to reduce cutting fluid and lubrication during machining (so called MQL for minimum quantity lubrication) does not require additional part cleaning capability, dust/particle evacuation or chip handling hardware, or specialized tooling that, combined, require an investment in materials and energy (production, installation and maintenance) that exceeds the savings anticipated with the new system?

This is what metrics are for and, if embodied in analytical tools, can give the engineer, designer, and technical specialist the ability to make a "cost-benefit analysis" (except this time it is environmental cost) as part of the due diligence. And insure it covers enough of the life cycle. If we can determine the "footprint" of our product or process or system, and we know what parameters affect it, then we can start to make informed decisions about our manufacturing processes and systems.

This part of the discussion is to be continued in a future posting.

By the way ... my footprint is 5.6 "earths" - meaning if everyone lived like I do we'd need that many earths to support us all. I'm working on it. What's yours?

Green Manufacturing Note: Here is an informative site if you are following green business trends and practice, http://www.environmentalleader.com/.

Grappling with Sustainability

Subtitle: "Why should I care about future generations? What have they ever done for me?" — Groucho Marx

In the posting on July 17th we started to address this issue of "what is sustainability." The Brundtland Commission, 1983, of the United Nations defined sustainable development as
"development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:
• the concept of 'needs', in particular the essential needs of the world's poor, to which overriding priority should be given; and
• the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs."

The full report is available at http://www.worldinbalance.net/agreements/1987-brundtland.php.

We may disagree with the approach or conclusions reached by the report but the topic is worthy of consideration and, increasingly, the term is being used to promote action (legislative, business, social/consumer) that will affect how we do business. We'd better be comfortable with how we fit into this discussion and know where it is heading.

The Brundtland Commission report points out the need for recognizing the social, as well as economic and environmental, aspects of sustainability. This has been one of the problems with understanding what sustainability is and how is applies to our particular area of interest - manufacturing.

I referred a few blogs ago to a simple definition that has been offered by the Japanese copier company Ricoh (http://www.ricoh.com/environment/policy/5.html). Ricoh has defined sustainability, in terms of development and progress, as follows: "We are aiming to create a society whose environmental impact is below the level that the self-recovery capability of the natural environment can deal with." They gave a simple example: "... the reduction target of CO2 emissions is generally based on the 1990 emission level, but in the future we need to limit emissions based on the estimated emission level that the self-recovery capability of the Earth could deal with.” This example is what Brundtland Commission report was referring to with respect to "limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs." Ricoh addresses technology. Social organization is more complex.

Ricoh have started to bring this definition closer to earth for manufacturing practitioners. How to define, measure, react/modify - that is, how to tell whether or not you are "sustainable" or on a road to sustainability - is a big challenge. This is specially acute with respect to social aspects.

We need to first define a metric for assessing our level of activity with respect to any of the critical elements (from energy and resource consumption to social impact). Once having that, we can determine where we are and, over time, assess or rate of change and the "slope" of our actions. The term "changing the curve" is used more and more these days to indicate that we need to take action to, first, reduce the movement away from a desirable outcome (for example growing deficits moves us away from a balanced budget), then reduce our impact so that we approach a more sustainable level of operation (to continue the budget analogy, reduce spending so that our outflow is appropriate for our income to balance our budget). That's what Ricoh was referring to.

I was preparing a lecture for my graduate class this fall on "Sustainable Manufacturing" and came upon the corporate sustainability report of United Parcel Service (or UPS). Companies issue these reports annually, for UPS see http://www.sustainability.ups.com/sustainability/index.html. The content varies depending on how seriously the company, and its management, take sustainability as a critical element of their business. UPS does a pretty good job and I was impressed with their definitions, or characterization, of three legs of sustainability.

They define economic prosperity with respect to "strengthen[ing] the enterprise," social responsibility with respect to "improv[ing] the human condition," and environmental stewardship with respect to "protect[ing] the environment." They give details:

• environmental stewardship includes conserving energy, protecting natural resources, reducing, reusing and recycling, delivering green services and operating efficiently (these last two are shown overlapping with economic and social aspects.

• economic prosperity includes growing the business profitably, focusing on customers, building the brand, providing value added solutions, supporting global trade and acting responsibly (this last one overlapping with social and environmental aspects.)

• social responsibility includes supporting communities, embracing diversity and human rights, providing competitive compensation, promoting wellness and safety, developing people and leading by example (these last two overlapping with the other aspects).

So this is a good start. Some of the terms are still a bit fuzzy and, maybe, "buzz wordy" but they are on the right track. There is more on the UPS site. And, of course, many other examples from other companies.

When reading these keep in mind our prior discussion about greenwashing (posting of July 30th) and think about how you would measure your current level and rate of change in any one of these elements if you were tasked with doing the "balance sheet" on sustainability for your company. Then, another challenge, how to report it to the public (so some professor writing a blog doesn't find it on line and quote from it and make critical comments!)

Next time we'll start on defining metrics with a special emphasis on our "footprint."

Why Green Manufacturing? (Part 4) Some Examples.

There are a number of companies already addressing some of the green manufacturing challenges ... and there are many who are not (yet).

We'll take a little lighter look at green in this posting. Let's start with what folks are saying in the name of green.

The 'term of art' is "greenwashing" - I referred to a site that has a greenwashing index (ranging from authentic to bogus) in the blog posted on July 20th.

According to Wikipedia (and I don't consider this as an academic source of information but it is a popular, and easy, one!) greenwashing is "a term used to describe the practice of companies disingenuously spinning their products and policies as environmentally friendly" (http://en.wikipedia.org/wiki/Greenwash.) It includes the "six sins of greenwashing" from Terrachoice (see http://www.terrachoice.com/) to help you determine is something is, or is not, greenwashing. I note, parenthetically, that these sites are very popular with my students at Berkeley and, I suspect, with many others as well and actually serve a very useful educational (or at least awareness) purpose. And, they are smack on in most cases! And, some of the ads and videos posted are thought provoking and, for sure, amusing. Andy Warhol said "Art is what you can get away with." Ditto for advertising. Unfortunately also ditto for much green advertising.

We've all been in hotel rooms with the placard about reusing our towels to save water and detergent. That is usually next to the heated mirror or, in the case of one hotel I stayed in recently in a foreign country, the electric toilet which required the use of buttons/electric motors to accomplish simple tasks - like raising the seat! What's wrong with this picture?!

A recent advert for a lawnmower with an exceptionally tight turning radius proclaimed it was green because you could cut your lawn in less time (due to fewer maneuvers I suppose) thanks to this feature. Let's be clear. Things that are done in the normal course of product or process improvement to enhance productivity, reduce cost, etc. should not really be claimed as green. We'd like to think that smart manufacturers follow a path of continuous improvement anyways.

If, however, you consider the impact of any process changes or improvements on the environment, or energy consumption, or green house gas emission, water use, etc as part of your continuous improvement - that counts. And, if you make decisions on how your improvements or modifications evolve with that impact in mind, that's green.

This is not always a clear decision. If I run a copier company, and I change my business strategy to take back used toner cartridges from my customers, re-manufacture (or at least refill them) and send them back out as part of the normal resupply (at no cost penalty) that is smart business. If I can lower the price a bit due to my savings and gain market share that's even better. And, good for the environment. I'd probably call that green - even though the major impetus for this was perhaps not environmental impact. But, if in the tradeoff analysis between the materials, energy, transportation, handling, etc. expended in providing virgin toner cartridges vs re-covering used ones and returning them to service shows that the reuse is also better on all these counts- that's green.

In my classes, I use a couple of examples of companies that are pursuing this with a passion and are consistent with green principles (which we've not clearly defined but let's let that go for the moment). Suffice it to say, they are not greenwashing.

Prominent in this list is Interface Carpets (see http://www.interfaceglobal.com/ and the link on sustainability). Interface was very early in this movement, defined a corporate strategy, defined metrics for measuring how they are doing and tried to include a balance of the three legs of sustainability in their approach - social, economic and environmental. And they report their progress annually. Their CEO, Ray Anderson, developed "Ecometrics" as the term for their measurement system to track their progress. These indicators include waste reduction, renewable energy, carbon emissions, water and energy usage, and percentage of recycled and biobased materials in products. Much more detail on their site including data on the reduction of energy used per unit of product manufactured, waste diverted landfills, etc. They are green manufacturers and one of the leaders of developing a business strategy for green manufacturing and, eventually, sustainability. Some may argue that "carpets are not semiconductors" so this is easy to do this in such an industry. Not fair. The principles they are developing and following are applicable across a wide range of industries of varying complexities.

Green coal is another story and a good example of the confusion over what is green. I won't weigh in on this but just Google "clean coal" and you'll get several screens full of various opinions. And the subtle mix of "clean" and "green" is even more interesting.

You can do your own research on this. But, awareness of the issues is step one and I hope that the material above will help with that. We'll speak more about metrics and tradeoffs in the future.

Next time we move beyond "What is green manufacturing."

Why Green Manufacturing? The next great leap forward! (Part 3)

Last time part of the discussion included the comment that regardless of your feelings towards the severity of the situation, there are forces moving to make it more and more expensive and difficult to continue "business as usual". This is only one of the motivators for embodying green manufacturing. Reduction of waste (in any form) is desirable. Henry Ford (yes ... that Ford) said over 80 years ago in his book "Today and Tomorrow" (1926) that "…we will not so lightly waste material simply because we can reclaim it— for salvage involves labour. The ideal is to have nothing to salvage." What a great restatement of green manufacturing!

Any one who has parents who lived through the great depression (the one in the 30's that is) will have observed their behavior with respect to resources. My dad, who was a just out of high school during the depression, set a high standard for use, reuse, repair, life extension - the whole package. One of his remarks, when observing something that, to me, had little use was "it will come in handy even if we never use it!" He was a tool and die maker, then department supervisor for John Deere Horicon Works in Wisconsin. He got me interested in manufacturing as a kid by taking my brother and I to "the shop" on Saturday morning so he could see what the second shift on Friday night had accomplished in the tool room. They certainly subscribed to Henry's philosophy and he'd be very upset today to see the throwaway society we've evolved into.

I suspect that Henry Ford's observation was less motivated by his concern for the environment (I won't touch that one) than with his concern for wasting money. There is nothing wrong with that. In fact, if you review the major leaps forward in manufacturing over the last several hundred years they were prompted by, first, a realization of the cost of something that had been considered "free" or of insignificant value, second, of a way to modify or fix the procedures or system to remove that cost and realize the savings (meaning - convert to money) and, third, reduce the price of the product/increase the quality or functionality of the product manufactured reflecting this savings. In the case of folks building things off shore, and subject to the whims of exchange rates, etc., they would use this new found savings to insure themselves against currency swings or other export related challenges.

What am I speaking of? Let's review some of these big leaps.

The evolution of manufacturing in terms of productivity, flexibility, response time, work philosophy or business model, and market responsiveness/customer “pull” shows the evidence of tremendous changes from the earliest organized industry or manufacturing in the 1800s up to today. These changes correspond to distinct periods of production. These periods can be characterized as the craft period, mass production period, flexible production period and lean manufacturing period as follows:

• Craft production: In the early days of industry, skilled workers, or artisans, worked on a variety of machines to create specially built products with high labor input. Very little mechanization was available, and these artisans were completely on their own in terms of process planning, timing, and techniques used.

• Mass production: The late 1800s to early 1900s saw the development of mass production. (or example Eli Whitney’s cotton gin, or Henry Ford and the assembly line) Mass production yielded a dramatic reduction in direct labor (at the expense of the craftsman), higher production rates, more control of the process, ability to satisfy larger customer demand, interchangeable parts, and the first elements of automation. The cost per piece dropped substantially as a result. F. W. Taylor was a driver of this also.

• Flexible production: In the 1980s, thanks to visionaries like Eugene Merchant in the United States, and Japanese manufacturers like Taiichi Ono and the Toyota Production System (among others) the efficiency of these production systems increased tremendously. Unnecessary operations are done apart from the manufacturing process on the machine, resulting in high levels of machine availability and utilization. This is due, in part, to computers and clever methods of preparing workpieces and tooling for the machine offline, while assuring quality and accuracy.

• Lean Manufacturing and “Mass Personalization”: The late 1990s and early 2000s saw the introduction of true response to customer demands. This came because of the ability to manufacture customized products in small quantities with mass production efficiency and short lead times (that is, the time from when an order is placed to when the product is delivered). Strict quality methods insure the “first part correct,” built on Ohno’s ideas and the quality control methodology taught by W. Edwards Deming and others. These methods eliminated backup stock, inventory, and the cost associated with keeping mounds of parts and products available to cover manufacturing faults or an inability to plan for or respond to customer demand. That is, make it right - don't stock extras to cover mistakes or out of control processes.

Each of these changes noted above occurred because of a realization that an improved system of manufacturing could be attained if the system was “designed and optimized” based on an understanding of some new criteria. These criteria included more control of the process and standardization introduced by Henry Ford, better use of manufacturing machinery and increased productivity introduced by Taiichi Ohno, and reduced inventory and buffer stocks for quality production, the ideas of Edwards Deming and Taiichi Ohno. And, they all had a monetary value that could be assigned to do the required "cost-benefit" analysis.

What is the next big change? I believe it will be a move to account for the "embedded costs" associated with energy, carbon footprint, re-use and re-manufacturing leading closer to sustainable production. But, how will this be accomplished?

The motivation for this change is the need to include the true cost of producing goods, from the point of resource extraction to the end of life and reuse or recycling, in the cost of the products. This true cost is more than the “value added” through these stages (which one might argue is already included, according to the best of capitalism).

The environmental and social costs associated with the lifecycle need to be added as well. This will not be easy; we don’t purport that all the information or tools needed to do this exist today. We need to incorporate costs for all the embedded energy, materials and other resources, labor, impacts on the environment, and accompanying social requirements and impacts (among others) in the price of the product. Then, when consumers purchase a new computer, automobile, airplane ticket, machine tool, or other goods, they will “see” the true impact of that product reflected in the price. Just like the Ford website listing grams of CO2/km traveled of a vehicle.

Furthermore, on that basis, they can shop around. Today, the cost of recycling or disposal, often covered by local governments or whoever is paid to pick up the trash at the curb every week, is not reflected in the cost of the product. Tomorrow it most likely will be. We better anticipate all of these costs - just as Ohno did when thinking about lean manufacturing.

We will be speaking about means to estimate these costs, metrics for assessing tradeoffs between alternate means of production, design of machines and equipment for green manufacturing and so forth in upcoming blogs. Stay tuned!

And, again, those that incorporate "environmental economics" in the design and production of their products are likely to be ahead of their competition.

Why Green Manufacturing? (Part 2)

Last time we discussed some of the motivators for companies paying attention to green manufacturing - that is, drivers for incorporating green in your business strategy. I have posted, on my lab's website, a set of slides presented recently to an industry group meeting titled "Challenges & Opportunities for Sustainable Manufacturing: Green as a Competitive Advantage" (see http://lmas.berkeley.edu/public/?cat=3 and click on the image in "featured work" for a pdf download). You'll see some familiar material there but this will be useful background for some of our discussions from the last posting, today and future postings on "Why Green Manufacturing?" I will post more material in the future to back up this discussion.

All the data on energy consumption, global temperatures, CO2 levels in the atmosphere, other impacts of industrialization and population growth head up and to the right in the graphs...meaning things are moving toward more challenging conditions. You may or may not fully agree with the predictions but, from the perspective of cost of energy, availability of energy, cost of treatment/disposal of waste products, etc. things will get more expensive. And, as mentioned in the previous posting, legislation marches on. The recent deliberations in the US Congress have a goal to reduce CO2 emissions from utilites, manufacturers and other emitters by 83% by 2050 and envision some form of cap and trade program (see http://www.nytimes.com/2009/06/27/us/politics/27climate.html?hp).

Regardless of your feelings towards the severity of the situation, there are forces moving to make it more and more expensive and difficult to continue "business as usual" with respect to environmental impacts of manufacturing around the world. We should be prepared and use this to our advantage.

Consider where something, say an auto, is manufactured. One can make a simple analysis of energy needed to make an automobile. This is called "embodied energy" and expressed in units of kWh and is a representation of the energy needed to make the car, not to operate it, the so called manufacturing phase not use phase requirements. Then, through the magic of conversions, we can estimate the green house gases (GHG) attributable to that embodied energy by converting from kWh to GHG using factors that are based on the source of the electricity; that is, from coal or other carbon-based energy sources, or hydro, solar or wind and other renewable sources, or nuclear. Carbon based energy has a higher GHG impact than renewable. This allows us to see the impact of where we manufacture something. Interestingly, making the same vehicle in different places (depending on the energy mix) will result in dramatically different GHG output. If you'd like to see the data on this...send me a note...I can send the links.

Let's look at some examples. If I build my "typical auto" in France, which has most of its electrical energy generated in nuclear plants, the GHG impact of manufacturing that auto will be about one seventh that of building it in the US, or less than one tenth that of building it in China. If we zoom in on the US we see great differences between states also. Building a car in California with its mix of renewable energy vs Kentucky with its dependence on coal fired plants means a factor of 4 difference in GHG impact between the same manufacturing process - only based on location. Maybe manufacturing automobiles in California is not such a wild idea!

So why does this matter? Regulations already exist that apply penalties for excessive GHG emission in products during the use phase. For example, if you want to buy an auto in France you will see listed, along with fuel consumption in liters/km, the GHG generated in units of grams of CO2/km traveled. The auto adverts on the web in France are in French (!) but here is one for a Ford site in the UK. CO2 emission is listed in g/km and you can compare performance over a range of engines (http://www.ford.co.uk/Cars/NewFiesta/FueleconomyandCO2emissions). And, if you buy a vehicle with a large engine that emits GHG above a certain level you'll pay more. If you buy one below a certain level, you pay less. Same manufacturer, same quality vehicle, same operation, same manufacturing process - but costs more if it emits more GHG in operation. This will happen in due time for manufacturing based on embedded energy in the product due to manufacture (that is, embedded energy in the materials, water, energy, consumables, etc.)

If your product is a machine tool your customer will worry about (because it may affect the cost) the energy and resources used to build the machine tool. And then, when it is installed in the factory, the customer will be worried about how much energy the machine uses in its "use phase". And then there is the transportation cost from the manufacturing site to the distribution site and customer. We should include those impacts as well.

And so it goes! The smart manufacturer will optimize where to build the product in terms of energy mix and transportation costs to the consumer. We probably need to add availability of water and the energy cost of providing that as well. These kinds of considerations will, in my opinion, greatly influence the location of manufacturing (and, hopefully, offset some of the fascination with low labor costs as the sole determiner of location).

Paraphrasing Lord Kelvin, "If you can't measure what you make, you don't know if you've made it or not." We need to be able to understand and measure the resources used in our products and their use. Then we can make informed decisions about their design, distribution and utilization. This really encourages us to think about the life cycle costs of energy and consumables in the manufacture of a product - an important driver for green manufacturing.