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Sustainable manufacturing revolution

By Leon Gettler - posted Tuesday, 23 June 2009

Around the world, companies are rolling out new and innovative techniques to create a more sustainable sector and a more sustainable planet. Over time, this is likely to create the biggest change to manufacturing since the Industrial Revolution.

In the United States, BMW Manufacturing announced it would invest $12 million ($A14.8 million) to expand its landfill methane gas to energy program. With more than 60 per cent of the plant’s total energy requirements met by burning methane gas, the program will help BMW Manufacturing use the gas siphoned from its landfill via a pipeline to its production plant more efficiently. Up until now, the landfill project has saved the car manufacturer about $US5 million in energy costs annually. The new system, which replaces four turbines with two new ones, will improve efficiency nearly 30 per cent and still generate the same amount of methane. It will deliver $US2 million more of savings while reducing emissions by 92,000 tonnes a year.

In the Czech Republic, Panasonic will open an “eco-ideas factory” which will work with local communities such as governmental institutions and NGOs. The plan is to have a factory which reduces CO2 emissions by more than 10 per cent.


Coinciding with when General Motors filed for bankruptcy, startup lithium-ion battery maker Boston Power announced it would build a manufacturing plant to make the batteries for the next generation of hybrid and electric automobiles. Boston Power said it would develop batteries that would set new benchmarks in energy density, long life, safety, weight, cost and environmental sustainability.
In Brisbane, architectural coatings company Rockcote Enterprises picked up a state government award for developing environmentally friendly paint products. Located on the Sunshine Coast, Rockcote has a facility that is water self-sufficient, uses worm farms and compost systems, and has solar panels and energy-efficient furniture, fixtures and equipment. Rockcote bans harmful chemicals, glues, cleaning fluids and pesticides.
At the other end of the scale, EDS, a Hewlett Packard company, and SAP Australia and New Zealand have announced plans for a new carbon accounting solution to make it easier for Australian companies to comply with new Federal Government emissions guidelines. This might be critical with Australia setting up a carbon trading regime in 2011.

These developments signal new trends and opportunities emerging for manufacturers around the world. It is a lesson for advanced manufacturers: companies are starting to identify niches in the sustainability space. In the new manufacturing economy, the only producers that will thrive will be those working in areas that they have carved out as unique territory. Sustainability offers many potential corners of competitive advantage.

There are other drivers for sustainable manufacturing. These include company reputation, customer demand, industry trends, cost savings, competitive advantages through new products and processes and shareholder demand. Furthermore the increasing focus of governments around the world on sustainability puts sustainable manufacturers in a stronger position to pick up government contracts when tendering for work. Other drivers include international standards and protocols, compliance with regulations, community expectations about the company’s impact on the eco-system, risks and liabilities associated with investments and costs associated with meeting regulations.

Creating a sustainable operation is not easy and presents manufacturers with many challenges.

Customer demands for example can be perplexing. On one hand, consumers want reduced costs and packaging materials. At the same time, however, they want customised sizes and lots. Consumers certainly want greener packaging. But they can also demand single serve containers. Add to that the network complexities, unclear metrics and economic uncertainties.

So how should companies embrace sustainability?


The first step is to target areas of effective manufacturing improvement and waste reduction. This is the low hanging fruit that companies should embrace anyway. This might involve focusing on installing lights and equipment to reduce energy emissions, focusing on lightweight containers and reducing primary and secondary packaging.

A report from Manufacturing Skills Australia last year recommended that companies target lean manufacturing techniques to build sustainable operations. These involve empowering and engaging employees at all levels of the organisation, facilitating new ways of thinking that examine work processes and technologies to ensure efficiency and minimise waste, educating all employees about waste and inefficiencies, communicating this effectively throughout the organisation and linking it to a platform for leadership. These companies should also encourage innovation, learning and improvement. All employees, including managers, should be encouraged to take personal responsibility for engaging sustainable work practices.

Sustainable manufacturing would also include designing new machines, equipment or systems and research in various areas. These would include the use of different types of fuel and energy, materials handling, heating and cooling processes, the storage and pumping of liquids and gases, and environmental controls. The companies would also use computer-aided design (CAD) to assist in design and drawing, developing standards for the installation and management of factory production and machinery. They would need to set up work control systems that would regularly test equipment, to make sure that standards of performance, quality, cost and safety are met.

Sustainable manufacturing is also likely to usher in a whole new range of skills sets. These could be in planning and design; entrepreneurship; project management and procurement; management expertise in such areas as architectural practice, broad acre farming, fleet management, specialist manufacturing and retail; trade skills such as green plumbing, construction of energy efficient buildings, renewable energy, low input gardening; assessing project requirements covering such areas as finance, approvals, costs and outcomes in, for example, water and energy use, as well as marketing and communication.

Industries could also look to the CSIRO for support. The CSIRO is now doing research in such areas as technologies for reducing emissions and energy use in the extractive and process industries, cleaner metal production, sustainable manufacturing systems for light metal products, remediation and prevention technologies for corrosion, electro-biochemical biosensors, engineering and computational techniques for analysing and modelling of infrastructure systems, technologies for industrial waste management and recycling and using plants as “bio-factories” for use in pharmaceuticals or industrial raw materials.

The move to sustainable manufacturing is nothing short of revolutionary. It will require a massive shift in the approach to management and workforce skills. It will introduce new processes for industrial and agricultural production, new research and investment in low-emission technologies, new patterns of consumption, and innovative thinking. This will affect not only manufacturers but many other aspects of business life. The risk for those not embracing it is that they will be left behind.

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About the Author

Leon Gettler is a senior business journalist, writing for The Age, BRW, CFO and AFR Boss magazine. He is also the finance writer for the green lifestyle focused G Magazine. He writes on mining for Australian Resources and Investment, human resources issues for HR Monthly and is the management writer for CRN which focuses on computer resellers and the IT market. Leon also does the weekly Talking Shop podcast for Sensis.

Leon manages three blogs. One,, is focused mostly on the American business market and has a strong following in the US. His second blog, Management Line is for The Age and Sydney Morning Herald and his third blog is Business of Green is published by G Magazine.

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