"Visions of World Benefit & Global Responsibility: Perspectives of McGill Students

Friday, August 17, 2007

Designing Your Company for the Environment

Designing for the Environment Quiz: How Conscious is your company?
New Concept Development
□ Our company tries to make products smaller and lighter
□ Our company tries to replace physical products (like paper mail) to non-physical products (like e-mail)
□ Our company tries to reduce use of material or infrastructure
□ Our company tries to share equipment within the work environment as much as possible (e.g. 1 photocopy machine per floor)
□ We try to use suppliers and pay for services as much as possible
□ Our company tries to provide as much services for our products as possible
Physical Optimization
□ Our company tries to integrate various functions in our products (e.g. printer/fax/scanner)
□ Our company tries to optimize our product functions
□ Our company tries to increase our products reliability and durability
□ Our company tries to make our products easy to maintain and repair
□ Our company tries to make our product simple to upgrade rather than requiring replacement
□ Our company tries to design our product so that the user does not have to replace the product (e.g. durable surface)
Optimize Material Use
□ Our company tries to use cleaner materials such as less hazardous chemicals/materials or biodegradable chemicals/materials
□ Our company tries to utilize renewable materials such as biodegradable plastics or alternative energy sources
□ Our company tries to utilize materials which lower energy requirements (e.g. using products which require less energy to manufacture)
□ Our company tries to recycle material and utilize as much recycled materials in our products
□ Our company tries to reduce the amount of materials used in our product as well as in distribution of our product
Optimize Production
□ Our company tries to find alternative production techniques which lower costs and are more environmentally friendly than older techniques
□ Our company tries to make our products in fewer steps therefore requiring less machines tools (our machines multi-task and do several different operations)
□ Our company tries to make our production line more energy efficient through more energy efficient machines, cleaner energy sources, and other systems
□ Our company tries to optimize production by producing less wastes
□ Our company tries to utilize less consumables (like solvents, water, tools, etc) or use cleaner alternatives to them
Optimize Distribution
□ Our company tries to reduce our product’s packaging or utilize cleaner or re-usable alternatives
□ Our company tries to optimize distribution by finding energy efficient methods to transport our products to our consumers
□ Our company tries to make transportation methods more energy efficient (e.g. regular maintenance, alternative fuels, etc)
Reduce Impact During Use
□ Our company tries to lower energy use (e.g. proper insulation, passive solar heating)
□ Our company tries to utilize cleaner energy sources (e.g. hydro, solar energy)
□ Our company tries to reduce consumables (e.g. water, oil, filters, paper)
Optimize End-of-Life Systems
□ Our company tries to implement or is implementing a system to re-use old products (take-back policy)
□ Our company designs our products so it may easily be disassembled facilitating maintenance, replacement, and recycling
□ Our company tries to remanufacture/refurbish/reuse some or all components from out products to make a new product
□ Our company tries to recycle materials
□ Our company tries to use safe incineration methods with possible energy recovery when there are no other alternatives

0 – 5: Your company has not put or has not found ways to successfully implement environmental strategies to your production line. More works needs to be done on where to implement such strategies.
6 – 11: Your company has started implementing some environmental strategies to your production line however can benefit from adding more. Focus should be on areas which there have been little effort or work done.
12 – 17: Your company has put some effort into implementing environmental strategies. Database which strategies have worked and why and try to mimic these successes in other areas with less work.
18 – 23: Your company has done a lot of effort into implementing environmentally conscious strategies to your business. Try to improve existing systems or focus on harder to solve areas.
23 + : Your company is a leader in implementing environmental strategies! Work can be done on finding more innovative ways to implement them in your business and leading the way into greater innovations!

3.0 New Concept Development
The first stage of the designing for the environment strategy wheel is new concept development. This is one of the most innovative sections of the strategy wheel which fosters creative ideas to expand regular usage of a product. Traditionally, the life-cycle of a product was: design, production, distribution, use, and end life. Once the product reaches end life the product is thrown away by the consumer. Ideally companies sought this strategy to encourage more purchases by the consumer. However, with environmental laws being more stringent and in some cases requiring companies to take in the used products, this option may become more expensive. Furthermore, some environmental concepts when applied to business can increase profits by having multi-revenue sections on the product’s life cycle. The three main concepts in this first stage therefore are:
1) Dematerialization
2) Increase Shared Use
3) Service Availability

3.1 Dematerialization
Dematerialization is a concept that can cover a wide range of techniques to reduce raw materials or make the product smaller. This can be either physically such as making a product smaller and lighter to more abstract concepts such as replacing a physical product with a non-physical product/service. For example, a company which relies heavily on paper materials for mailing or catalogues may offer an online catalogue.
The advantages of this concept can be very advantageous for companies. The most obvious impact is by reducing raw materials, energy, and labor we can increase revenue quite substantially. Furthermore, some changes may provide a more flexible, productive and multifunctional solution. For example, instead of costly traveling expenditures for more common business meetings a company may implement a far cheaper online/web conferencing program. In certain businesses allowing workers to work at home (through the use of online networks and other office programs) may reduce costs and in some cases even enhance employee satisfaction, something which has strongly been demonstrated to affect quality and service performance.
3.2 Increased Shared Use
This second concept may seem abstract but it is one of the most common environmental strategies being used by companies. In essence this concept applies joint ownership of a product without actually owning the product. A common example is a photocopier which everyone in a company utilizes. Another way of viewing this concept is through a suppliers’ perspective. In other words, a company supplies products or services in which a user pays per unit service of the product instead of actually owning the product.
The benefits for increasing shared are numerous. Like dematerialization, since fewer products are bought/used by the company materials, energy and transportation costs are reduced. Another aspect is that this may provide more efficient use of the product. For example, if a company utilizes a given service or product from a company instead of buying it, they may have a more specialized and efficient usage of the product. In the end, the lack of ownership of a given product may also be beneficial since a company won’t have to worry about recycling and disposal of a product. For example, if a company bought a photocopy machine and at some point in time the machine breaks down and is irreparable, the company will have to pay for disposal of the machine as well as purchasing a new one. However, if the company where to rent a photocopy machine and the same situation would occur, the disposal costs would fall upon the photocopy machine’s company.

3.3 Service Availability
This third concept is one of the newest ones currently being employed by companies world-wide. As the name states, a company provides a service to compliment their product and therefore increasing their profits (from the service provided) as well as adding value to the product. Services that can be offered are numerous such as maintenance, repairs, disposal, or more specialized services. In a traditional product life-cycle, revenue is earned only once which is after the distribution phase. By providing a service, revenues can be earned throughout the usage phase of the product.
The advantages by implementing this concept are quite obvious. By providing a service one can extend the life cycle of a product and at the same time generate additional revenue throughout the products life-cycle. Therefore instead of a static one time earning system a company can implement a multiple earnings system to their product, especially if one offers upgrades such as Norton’s Anti-virus yearly fee. There are other advantages as well such as increased interaction with one’s customer base. This can increase customer satisfaction and loyalty. Furthermore, by interacting more with the customer one will be able to analyze information for what the user and market needs. This can therefore allow one to implement new services of products which will generate further revenue.

Case Study: Nortel
In 1996 Nortel decided to stop buying component-cleaning chemicals which they used in their manufacturing operations. Instead it hired a supplier which would clean their products directly in their facilities. They therefore bought a service instead of purchasing a specific product. Since the supplier they utilized were experts in the process as well as the chemicals they used, the supplier managed to use less chemicals for the overall process. This lead to a significant drop in costs for Nortel, improved health and safety in their manufacturing facility and reduced their hazardous waste disposal requirements as well as costs. To build a strong relationship between both companies, Nortel agreed to share some of their savings with the supplier. Therefore, the supplier makes more profit despite selling more chemicals to Nortel. Their interest in satisfying Nortel’s need motivated them to provide superior service and reduce chemical usage.

New Concept Development Strategy Thinking:
1) What new concept development strategies has your company employed?

2) Which new concept development concept has been most successful in your company? Why?

3) What services for your products are provided by your company?

4) Does your services department complying with the needs of the client? If not why?

5) Is your service department aware of the customers/market needs? If so what actions are taken to satisfy those needs? If not what steps can be taken to be aware of these needs and implement them?

6) Which new development concept has not been or is least used in your company? Why and what can be done to implement/enhance it?

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