The New Era of Eco-Entrepreneurship
Issue:Winter 2015 : Columns
No discussion of manufacturing entrepreneurship would be complete without reference to the emerging field of creative manufacturing that is making astounding progress in sustainable or green manufacturing – the vanguard of eco-entrepreneurs. The modern environmental movement began in 1970 with the first Earth Day and the creation of the Environmental Protection Agency (EPA). Way back then our waterways and lakes were badly fouled with industrial wastes. The Cuyahoga River in Cleveland actually caught fire. Large portions of Lake Erie were a dead zone where no aquatic life could survive. The air in many of our cities was virtually unbeatable – much like Chinese cities today. The American people said enough was enough and made a commitment to clean it up.
Of course, manufacturing was caught in the headlights. Public utilities contributed their share to the pollution as did mining and agriculture, but manufacturing by its very nature – transforming raw materials into finished products – was a primary source of air and water pollution.
Manufacturing came grumbling to the table in the early years as government agencies were hammering out regulations to restrain pollution and clean up our air, water and land. From the beginning there was a dynamic tug of war between the regulators who were largely indifferent to the costs of their rules and the companies that had to fund the cleanup and still produce a profit – a tug of war that continues. A major bone of contention was the government’s reliance on strict prescriptive regulations and the industries that sought to replace them with “performance standards” that invited companies to find creative ways to achieve environmental goals.
But manufacturers took the lead and over the last 44 years have done a remarkable job of developing new technologies for operating factories with minimal impact on the environment. Over time, our entrepreneurs forged a new environmental industry in and of itself that enabled us to sell many of our breakthrough technologies to other industrialized countries. Today these entrepreneurs – increasingly referred to as eco-entrepreneurs – are on the verge of a new era in sustainable or “green” manufacturing that promises to be even more dramatic and productive than that earlier generation.
By sustainable manufacturing, which can have different definitions, I mean essentially the creation of manufactured products with processes that reduce negative environmental impacts, conserve energy and natural resources, are safe for employees, communities and consumers, are economically competitive and add value to finished products. The movement is being driven mainly by economics. Increasingly scarce and expensive raw materials, rising energy prices, demographic shifts and concern about climate change are driving manufacturing companies to redesign production processes.
To some, sustainable manufacturing is synonymous with “green” manufacturing and without question environmental concerns are a key aspect of it. The movement is being driven in large part by a new generation of young people who are acutely conscious of threats to our environment and determined to improve the communities they live in. More fundamentally, the increased interest in sustainable manufacturing is a major extension of the continuing drive to improve quality, and the explosion of new technologies that apply to both products and processing in our dynamic manufacturing sector. I have long believed that the sustainable/green manufacturing movement is a logical extension of the innovative mind of the great W. Edwards Deming, widely considered the father of the quality revolution. In his relentless quest for quality, Deming was a sworn enemy of waste – wasted materials, wasted time nd wasted money. I have no doubt he would be an enthusiastic champion of the sustainable/green manufacturing movement.
The heart of sustainable/green manufacturing is the critical understanding that all natural resources are finite and that if we are serious about preserving our manufacturing operations we must invest serious time, thought and resources into finding ways to preserve those natural resources to the maximum extent feasible. To that end, our best and brightest manufacturing minds — a new generation of ecoentrepreneurs — are finding new ways to look at the manufacturing process as a circular flow or loop from material extraction through production to use and then after use through recycling, recovery and return to the supply chain.
This concept is not necessarily news. I recently watched a video report about the U.S. Mint in West Point, New York, where our government makes gold coins. The basic alloy of gold, silver and copper (gold by itself is too soft to make coins) is flattened out in sheets from which small circular plates are stamped, that will become the coins when struck with a die. The remaining metal in the sheets is obviously not thrown away, but rather melted down and used to make more sheets. The essence of modern eco-entrepreneurial manufacturing is to treat all metals as if they were gold and to recapture all of the material for practical use. As a practical matter, 100 percent use is seldom achieved (though I think the gold coin makers must come close). Professor David Dornfeld, Chair of Mechanical Engineering at the University of California Berkeley, offers a set of guidelines for advancing sustainability that reflects the ecoentrepreneurialmentality at work.
• Avoid use of scarce resources in the first place if possible. If the product can be produced with less material or more readily available material, go with it.
• Light-weighting which employs lighter materials with higher strength to weight ratios (either by shape, allow content, material type or strategic reinforcement) that can meet the operating demands of the product with less material.
• Seek increased yield through improved manufacturing processes that result in more product from the input material stream. Reducing scrap, in other words. (Deming would have seen this as an extension of reducing defects).
• Reduce the footprint of resources, usually through new product development, meaning use of resources that require lower energy for processing or preparation for use in production. Here again is the need for creative eco-entrepreneurs to apply innovative thought to reducing energy consumption.
• Ensure high re-use yield and low “cost” of re-use. Re-use yield refers to the degree to which similar value of use is maintained for re-used materials. The use of gold in making coins is a prime example. Cost of re-use is the added resources required to re-use the resources which is not free. This must be accounted for in the re-use calculation to insure that you have a positive balance.
• Leveraged resources. Process technology in and of itself is not necessarily low impact but adds features to the product that over time make it a much lower impact. There may be situations in which use of a “higher impact” resource may be leveraged to produce a much lower life cycle impact in the use phase of a product.
• And finally – extended life. The longer a product lasts the lower the amortized impact. Generally this is better. It requires the ability to update products, accept “older” styles, design and build products to last longer, change consumer preferences to accept the longer use of the product – such as cars and trucks that last indefinitely.
An excellent example of corporate eco-entrepreneurship can be seen at Volkswagen’s manufacturing plant in Chattanooga, Tennessee, the first and only automotive manufacturing facility in the world to receive platinum certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design certification program.
The VW plant is a classic example of eco-entrepreneurial spirit at the local level. It collects and re-uses rainwater, to flush toilets and cool its welding machines, a highly-reflective membrane used on 1.8 million square feet of roof surface to minimize the heat island effect by up to 50 degrees F, and superior building insulation provided by six inches of mineral rock wool, which results in 720,000 kilowatts each year in savings.
Unlike traditional shops that use water to collect paint overspray, the Chattanooga paint shop is the world’s first to use a dry-scrubber system. It collects the powder and sends it to a local company where it is used to make concrete. The ultra-clean paint shop will save 50 million gallons of water over a 10-year period. Also the dry-scrubber system makes it possible to recycle 85 percent of the air in the spray booths. This results in conservation of 42 percent power and 85 percent of heating energy. Skylights are generously used throughout the building to provide natural lighting, reducing energy demand from light fixtures. Green power is supplied by the local hydroelectric dam. The use of LED lighting on the building’s exterior results in a 68 percent reduction in energy consumption accounting for up to 262,500 kWh savings each year as well as a reduction in light pollution. The plant features the state’s largest solar array which provides up to 12 percent of the plant’s energy during peak production and 100 percent during non-production times.
There are dedicated carpool and vanpool parking spaces in the main lot in addition to preferred parking for low-emitting and fuel-efficient vehicles. The automobile manufacturing facilitywas built on a 1,350 acre brownfield site with no destruction of untouched nature. This plant is in the vanguard of eco-entrepreneurship – and it is poised to grow. VW recently announced it would invest $900 million to expand the plant to build SUVs, adding 2,000 jobs to the 3,200 already working there. Clearly, Volkswagen’s commitment to green manufacturing is not an impediment to growth.
Few U.S. companies can boast a more dynamic commitment to sustainable/green manufacturing than DuPont which first formally committed itself to sustainability in 1994 and continues to be a leader 20 years later. DuPont’s primary areas of emphasis are food where it invests 62 percentof its R&D budget in an effort to help end hunger; reducing energy consumption by reducing use of fossil fuels in favor of alternative sources; and protecting the environment. In all of these areas, DuPont is bringing to bearthe formidable eco-entrepreneurial
resources of an old-line company that has always been committed to innovation.
DuPont’s advances in energy efficiency and conservation are perhaps the company’s most significant in terms of overall potential for the entire manufacturing sector. In 2006, DuPont set a goal of growing its annual revenues by at least $2 billion from products that create energy efficiency and/or reduce significant amounts ofgreenhouse gas emissions. By 2011, they had already reached $1.9 billion in annual revenues from products that reduce greenhouse gas emissions and presumably have reached the $2 billion goal by now. DuPont estimates that its products will eventually contribute at least 40 million metric tons of additional CO2 equivalent reductions by its customers and consumers. Some examples of DuPont’s innovations:
• DuPont Photovoltaic Solutions represents the broadest portfolio in the solar energy industry with more than 10 products critical to photovoltaic production – designed to increase efficiency and lifetime of crystalline silicon and thin film photovoltaic solar modules which reducing systems cost and enabling the industry to reach grid parity faster.
• DuPont is developing a portfolio of biofuels to help meet global transportation energy needs. Biobutanol and cellulosic ethanol are two advanced biofuel technologies that will diversify the energy sector and reduce reliance on petroleum.
• DuPont aims to be the leading supplier of Proton Exchange Fuel Cell Membranes into fuel cell systems that power automobiles, electronics and residences. DuPont invented and continues to advance Nafion® membranes and dispersions which provide durability, performance and lower cost.
• DuPont is in the forefront of wind energy which is expected to generate about 12 percent of world electricity needs by 2020, but success depends on reliability of generating equipment. DuPont protects wind turbines by encapsulating the key components of the generator that protect them from extreme heat inherent in the generation of electricity. Products range from DuPont™ Kelvar® mechanical paper, which reduces weight and improves the structural rigidity of wind turbines to DuPont Electrical Insulation Systems.
• DuPont contributes substantially to the continuing quest for greater vehicle fuel efficiency. High performance DuPont engineering resins make possible replacement of metals parts and components, contributing to weight reduction, fuel savings and reduction of C02 emissions. In a life cycle analysis of the use of virgin glass reinforced nylon in place of secondary aluminum for an engine component of the Ford F250 truck, it was found that lighter weight offset energy consumption in manufacturing, and over a 10 year period 100,000 trucks recorded a 77 billion BTU net energy savings and 11 million pounds of C02 emissions were eliminated.
In sum, there are myriad technologies being developed by industry to advance the cause of sustainable/green manufacturing – some already in practice and others under development at universities, research labs and R&D facilities. The critical ingredient in this multi-faceted explosion of creative innovation is a burgeoning population of determined eco-entrepreneurs determined to find new ways to perform old tasks that preserve our natural resources, protect the environment and enhance the quality of human life. We are building on the creative genius that propelled the explosion of industry, transportation and consumerism beginning in the latter 19th century and today holds the promise of even more profound change in the years ahead.
Noted economist and author Jerry Jasinowski served as president of the National Association of Manufacturers and, later, The Manufacturing Institute. He writes regularly for CAPACITY.