Product Sustainability - A core business strategy -

1
Product Sustainability - A core business
strategy -
PE Group - Our Mission Your Success!
Germany USA Canada Japan

• UEF Conference
• Clean Products and Processes
• Dr. Konrad Saur
• PE Product Engineering GmbH
• Lake Arrowhead, CA
• 18. November, 1999

2

• Presentation Overview
• Trends and Drivers
• Why product focus?
• Introduction to approaches and tools
• Implementation framework
• Linkage to business strategy
• Discussion

3

• Drivers for a Change
• Government actions, legislation and changing
  policies(i.e. product take-back programs,
  extended producer responsibility)
• Global efforts like the Kyoto Accord on Global
  Climate Change
• Marketplace demands for environmental friendly
  products
• Consumer, non-governmental and societal groups
  are increasingly, demanding environmental
  information
• Demands from institutional investors (investment
  and pensions funds, banks) for environmental
  information on the companies and products
• Expanded notions of board of director liability
  under which responsibility for environmental
  aspects of the company

4
Product Positioning
5
Companies are already product focused

• It is their mission to provide products and
  services
• Products generate revenue and profit
• Traditionally, environment is cost
• Companies already manage products
• market their products
• improve their products
• organize product systems
• production, distribution, maintenance

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Implementation Strategy
Source SETAC Task Force
7
Where to implement?

• Design is responsible for the technical,
  environmental and economical performance of
  a systems life cycle.
• The cost expenditure takes place in the
  production, but with only minor influence on
  the actual amount.

• Life Cycle related considerations therefore have
  to be included in the design process.
• If used properly, life cycle considerations save
  money and burdens.

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Life Cycle Engineering
9
History of LCA
Oil Crisis Toxicants Global
themes
Packaging Consumer goods auto parts
recycling systems
Energy 8-10 Emissions 20-30 Parameters
over 500 Parameters
10
Phases of an LCA
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Structure of ISO TC 207 (11/99)
ISO TC 207 (ISO 14000 Series)
SC 1 (14001)
SC 2 (14010f)
SC 3 (14020f)
SC 4 (14030f)
SC 6
SC 5 (14040f)
Environmental
Environmental
Environmental
Environmental
Terms and
Life Cycle
Management
Audit
Labeling
Performance
Definitions
Analysis
SC5 - Structure Status WG1 LCA -
Principles and Framework ISO 14040 (07/97) WG2
Life Cycle Inventory Analysis ISO 14041 (12/98)
Data Documentation Format TR 14048
(?) WG3 Life Cycle Inventory - Guidelines TR
14049 (11/99) WG4 Life Cycle Impact
Assessment ISO 14042 (03/00) LCIA
Guidelines TR 14047 (?) WG5 Life Cycle
Interpretation ISO 14043 (03/00) TC Technical
Committee ISO International Standard SC Sub
Committee WG Working Group TR Technical
Report
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Life Cycle Assessment (LCA)

• LCA studies the environmental aspects and the
  potential impacts
• Throughout a products life (cradle-to-grave)
• General categories of environmental impacts
• Resource use
• Human health
• Ecological consequences

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Environmental Management Techniques

• LCA ...
• ... is one of several environmental management
  techniques - other techniques are
• Risk assessment
• Environmental performance evaluation
• Environmental auditing
• Environmental impact assessment
• ... may not be the most appropriate technique in
  all situations
• ... typically does not address economic or
  social aspects

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Modularization as foundation oflife cycle
consideration of technical products
Painting
Production
Life Cycle
...
Base Coat
...
...
...
Mining
...
Press Shop
Injection-
Degreasing
molding
Base Coat
Intermediate
Paint Shop
...
...
Filler
Production
Filler
Sub-Assembly
Usage
Clearcoat
Drying
Assembly
...
...
Recycling/Disposal
...

• The Depth of a Study depends of the Study
  Target and Object, as well as the required
  or expected degree of detail.
• Applications like e.g. Optimization require
  more Detail and Depth, as well as the Use of
  System Theory and Simulation in Addition.
• Applications like e.g. Screening could be based
  on existing standardized Modules.

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Environmental Perspective
Environment All material- and energy flows are
collected.
Product (amount)
Material (amount)
Intermediates (amount)
Intermediates (amount)
By-product (amount
Energy (amount)
Waste (amount)
Emissions (amount)
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Possible New Business Understanding
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Environmental Management Hierarchy

• Sustainable
• Competitive advantage
• Market driven
• Informed
• Compliant

Strategy

• EMAS
• ISO 14000
• Responsible Care
• Integrated MS

Management Systems

• Design for environment
• Eco-efficiency
• Pollution prevention
• Life Cycle Management

Programs

• Benchmarking
• Training
• LCA/RA RM
• Environmental
• cost accounting

Tools and Techniques
Emissions data Input data Compliance info.
Data and Information
Source Fivewinds Intern. LCRT
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Each Strategy Has Different Business Implications
Business Implications
Costs
Savings
Revenue
Sustainable
Competitive Advantage
Market Driven
Informed
Compliant
Source Fivewinds Intern. LCRT
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Sustainable Strategy

• Sustainable
• Strategy

Product Management
Operations Management
Management Systems
Design-for-Environment
Environmental Management Systems
Remediation Management
Facility Management
Management Commitment/ Policy
Life Cycle Assessment
Compliance/ Pollution Prevention
Remediation
Planning and Implementation
Liability Management
Full Cost Accounting
Activity Based Costing
Auditing/ Continuous Improvement
Stakeholder Valuation Analysis
Community Relations
Public Relations
Source Fivewinds Intern. LCRT
20
Book Recommendation Mapping the Journey Case
Studies in Strategy and Action towards
Sustainable Development by Loringa Rowledge,
Russell Barton and Kevin Brady US 55 (hbk) -
ISBN 1874719 25 X US 30 (pbk) - ISBN 187 4719
26 8 Greenleaf Publishing Ltd. www.greenleaf-publ
ishing.com
21
Case Study Cross Car Beam - Energy
Source Adam Opel AG
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Case Study Cross Car Beam - GHG
Source Adam Opel AG
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Case Study Cross Car Beam - Life Cycle Cost
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Cross Car Beam - Project Evaluation

• Project Duration 6 Months
• Project Cost 60.000 DEM
• Cost Savings DEM 1.40 per car production
  volume 1 Mio / year DEM 1,400,000 a year
• Return on Invest 15 days
• Environmental Savings GM requires its suppliers
  to not use SF6 110,000,000 kg CO2 saved
  annually
• Note Emission rights for Carbon are currently
  traded for 2-8 US/1000 kg

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Refrigerator Manufacturing Simulation
surfaces - heat exchanging area - ...
processing - steel - ABS - polyurethane - ...
LCA data- base for materials and energy
para- meters
Design - height, width, depth - insulation
thickness - ...
masses - inner case - outer case - ...
energy for processing
masses for the LCA - ABS - steel - polyurethane -
...
impact asses- ment
volumes - net volume - insulated volume - ...
heat exchange and heat demand by door opening and
filling - electricity for use
inventory
Thermodynamic parameters - choice of PU-type -
heat transfer - temperatures - ...
Use parameters - lifetime - rate of door
openings - masses - ...
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Refrigerator Example - Use Phase Simulation
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Refrigerator - Contribution Analysis
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Refrigerator - Project Evaluation

• Project Duration 18 Months
• Project Cost 350.000 DEM
• Cost Savings DEM 8,20 per refrigerator produc
  tion volume 250 pieces / day DEM 500.000 a
  year
• Return on Invest 8 months for 1st iteration 2
  months for 2nd iteration

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Refrigerator - Design Conclusions

• Reduce material variety
• Consider material bans or avoidance lists for,
  i.e.- CFCs- Heavy metals and other
  carcinogenics- PVC- Solvent based paints- GHG
  as inert protection gases
• Consider use of recyclates
• Use low impact materials
• Design to use
• Improve process yields (e.g. stamping, injection
  moulding)
• Minimize pressurized air consumption
• ...

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Research Project Life Cycle Engineering of
Automotive-Paint Concepts
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Material- and process innovations
32
Automotive Painting
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Automotive Painting Cost
2500-3000
2000-2500
1500-2000
1000-1500
500-1000
3000
0-500
2500
2000
1500
costs DM/cars
1000
500
production
cars/h
0
repair
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Automotive Painting Components
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Inventory Results - Primary Energy Demand
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Paint Concept Comparison Sensitivity
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Case Study Garden Chair Recycling vs. New

• Main Materials
• Frame Steel, Stainless Steel
• PVC
• PE
• Coating
• Powder

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Material and Energy Flow Modelling in GaBi 3
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Material and Energy Flow Modelling in GaBi 3
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Inventory results - Primary Energy
41
Analysis of the Results Energy Use
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Economic Evaluation Cost Carriers
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Project Evaluation

• Project Duration 3 Months
• Project Cost 50.000 DEM
• Cost Savings DEM 8.000 per week
• Return on Invest 6 weeks
• in addition future market increase
  expected due to longer life and consumer
  satisfaction

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Conclusions

• Encourage environmental responsibility and
  simultaneously reduce costs, promote
  competitiveness, and enhance innovation.
• Proactive approaches should replace reactive
  approaches.
• If done properly, environmental assessments pay
  back in short time.
• Business benefits realized areCost
  savings/avoidance, risk reduction, revenue
  generation and enhanced image.
• Creates opportunities for sustainable enterprises
  which provide maximum social, economic and
  environmental benefits.
• Once a product or process moves from the drawing
  board into production, its environmental
  attributes are largely fixed, manufacturing, use
  and disposal are largely determined DfE helps to
  integrate environmental aspects into product
  development processes.

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Take Away Messages for Today

• A Product focus is inevitable.
• Taking product focus leads to environmental and
  business benefits.
• There are strategies, management systems and data
  to realize this today.
• No benefit without a strategy
• Economy and Environment are two sides of a coin.

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PE Group - Our Mission Your Success!
Thank you very much for your kind attention!
Success!
Germany USA Canada Japan
k.saur_at_pe-product.de