Next Generation Manufacturing

Of Interest to Manufacturers

There have been a lot of manufacturing methodolgies introduced in the past 20 years and it is time to bring the same improvement process to the sales-and-marketing arena. Here are some tools for applying lean to sales and marketing from a leanjourney.com

According to The Hackett Group's 2011 Key Issues Study, future opportunities for manufacturers are predicted to come from some unexpected and often uncharted quarters according. Read more at businessfinancemag.com

The current once-yearly model of commercial sustainable development reporting will be replaced by myriad forms of reporting, according to research by Acona and SABMiller who conclude that current sustainability reporting methods are "outdated." Read it at environmentalleader.com

Putting your digital possessions in the cloud isn't tough. There are many sensible ways to do it, each with its own particular upsides, plus a downside or two. Herewith, a quick guide to four of them from Time.com

Of Interest to Manufacturers

Green.biz asked its readers what their favorite books on corporate sustainability and the response was overwhelming including a top 20 list from a sustainability professor and even more from their readers. If you are manufacturing leader looking to go green or stay green, check out Green.biz

 How do you mitigate your supply chain risk from 200 to 10,000 miles away? JDA Software offers these risk-mitigation guidelines for food manufacturing companies that can be applied to any manufacturing operation. From Manufacturing.net

A Report for Food and Beverage Manufacturers on Going Green

Here’s a pulse-check on business-performance challenges and opportunities for food and beverage manufacturers from Grant Thornton. The Fast Facts on Food Processing series includes analysis and translation of the findings from six mini-polls to form a series of reports for its food and beverage clients. This particular report examines the green movement and how food and beverage companies are focusing on the three Rs (reduce, reuse, recycle) as they green their facilities, supply chains, products and packaging, in order to capitalize on the growing consumer appetite for environmentally friendly products.

Download the sixth report in the Grant Thornton Fast Facts on Food Processing series.

Dominance Isn’t a Sustainable Form of Energy – in Business and Politics Alike

Next Generation Manufacturers wondering about whether sustainability is a fad or for real might want to take a look at “A National Strategic Narrative” by Capt. Wayne Porter of the U.S. Navy and Col. Mark Mykleby of the U.S. Marines. As reported by The New York Times, the report urges leaders to recognize that “security means more than defense…dominance, like fossil fuel, is not a sustainable form of energy.”

In its place, the report — published by the Woodrow Wilson International Center for Scholars — suggests that long-term success for a nation is ultimately about education, social policies, justice and diplomacy, rather than military might. From the Times: “The first priority, they write, should be, ‘intellectual capital and a sustainable infrastructure of education, health and social services to provide for the continuing development and growth of America’s youth.'”

Doesn’t sound a lot different from what it takes to be an NGM company, either.

Sustainability Key to a Healthier Bottom Line

On March 31, the price of oil hit its highest level since September 2008 – which was just about the time that the world realized it had been falling into what has since been dubbed the Great Recession.

The main culprit isn’t what you might think, according to some analysts. My mind immediately goes to regime disruptions in the Middle East – where any uncertainty seems to send oil prices upward.

But the bigger reason for the rising price of crude, apparently, is economic recovery in the United States and elsewhere. Factory orders are up, trucks are getting full, and the engines of commerce are using more oil – which is exactly what we’ve all been waiting for.

In the context of competitive manufacturing, this news makes current environmental debates irrelevant. Discussion of peak oil, global warming, and alternative energy policy all become mere academic exercises.

What’s important to know is that the cost of doing business will rise simply because people are doing exactly what they’re supposed to do – i.e., buying the stuff you make.

And yet, many executives still view the cost of oil and other basic commodities as a necessary expense that affects them and their competitors equally. By extension, they view sustainability investment as a touchy-feely do-gooder exercise that doesn’t help the bottom line.

They are wrong.

Businesses that are serious about sustainability simply recognize that when you use less stuff, the next price increase has less impact. Read it another way: The next price increase makes them more competitive.

The common complaint against green initiatives is that their cost exceeds the return. In the short run, that may be the case. But does anybody really believe that oil, chemicals, paper, basic metals, and landfill space – to name a few – are going to cost less in 2021 than they do today?

By Bob Rosenbaum, contributing editor, The MPI Group

U.S. Plants Show Less Enthusiasm for Sustainability

Although green initiatives are becoming increasingly common worldwide, U.S. manufacturers seem to show less enthusiasm for sustainability programs than their international counterparts, according to the recently released 2010/2011 MPI Manufacturing Study.

Among U.S. manufacturers, 31% consider green/sustainability to be important or highly important to their success during the next five years; 56% of internationally located sites responded the same way.

International manufacturers, as a group, outpace U.S. manufacturers in adopting programs for energy management, recycling/reuse and carbon footprinting. U.S. plants do appear to be ahead in the use of renewable energies, with 76% using such solutions compared to 62% of international plants.

Is sustainability the new competitive edge?

Early this year, Starbucks’ board of directors voted against an aggressive recycling policy pushed by a group of shareholders. But more recently, the company completed a pilot project with International Paper to recycle old coffee cups into new ones. By 2015 Starbucks hopes all of its cups will be either reusable or recyclable.

Six years ago, Subaru’s Indiana manufacturing plant became the first U.S. auto plant to eliminate all landfilling from its waste stream. Earlier this year, General Motors announced that 62% of its plants are now zero-landfill facilities – and now promotes that fact in its advertising.

Also this year, Wal-Mart began score-carding its supply chain for environmental sustainability. Within months, its top-volume supplier, Procter & Gamble, followed suit.

It’s true that consumer adoption of sustainable practices lacks the same momentum. For example, hybrid vehicles still represent only 3% of total vehicles sold; in an effort to increase hybrid sales, some auto makers are beginning to eliminate the price premium for hybrid versions of a nameplate.

But real sustainability is gaining ground. Industries have developed sustainability standards around sourcing, manufacturing, packaging, logistics and even accounting. And while some might suggest that executive interest is driven primarily by regulation, it’s instructive to look beyond the horizon. Across Europe, China and the Pacific Rim, sustainability is now a serious business strategy.

For some companies, focused sustainability efforts may come at additional short-term cost. But even these firms are likely to improve their competitiveness over time, often in unexpected ways. Consider the Indiana Subaru plant; when it stopped sending garbage to landfills, it also reduced consumption of certain raw materials; developed small revenue streams from the sale of certain waste materials; and reduced energy costs by converting other waste materials into power.

Sustainability is the new competitive advantage. And manufacturing leaders would do well to remember that just as previous recessions have thinned industries of organizations behind the curve on manufacturing processes or supply chain management, the next recession may also cull those firms without effective sustainability strategies.

How green — and competitive — will your firm be by then?

Stat of the Week: Working Toward Sustainability

The Next Generation Manufacturing study asked respondents to rate their companies on progress to reduce energy use and waste at a level that provides superior cost performance and recognizable customer value. Twenty percent responded that their company is at or near world-class (4 or 5 on a scale of 1-5) in this effort.

How did they get there? One clue is to look at the resources dedicated to related initiatives. For example, the NGM study asked: What percentage of your workforce is dedicated to reducing energy, material, or emissions in your operations?

• Half (51%) of those at or near world class in their green/sustainability strategy have more than 5% of the workforce dedicated to such efforts, compared to just 14% of those furthest from world class.

• And just 14% of those at or near world class have less than 1% of the workforce dedicated to such projects, compared to 53% of those furthest from world class.

Stat of the Week: Who’s Green?

What industries seem to place the highest value on a green/sustainability strategy?

The NGM Study defines world-class green/sustainability as design and implementation of waste and energy-use reductions at a level that provides superior cost performance and recognizable customer value. NGM Study respondents rated their organization’s progress toward green/sustainability:

Among industries with more 50 companies reporting, 34% of paper manufacturers and 34% of non-metallic mineral producers report their firms to be at or near world-class green/sustainability; 32% of printing and related activities were at world-class status. Industries that have much room for green improvements are machinery manufacturing (13% at or near world-class status), fabricated metal products (15%) and transportation equipment manufacturing (16%).

Wandering in the Dark About Green

Here are the key findings, according to A.T. Kearney, of a recent study by the Economist Intelligence Unit titled: Doing good: Business and the sustainability challenge. A.T. Kearney sponsored the study and makes it available for free download in PDF format.

• Businesses executives know they need to achieve higher levels of sustainability, but are often confused by such new and poorly defined demands.
• The conventional wisdom that North American firms lag on sustainability is partly deserved, but partly a matter of perception.
• Competitors are a key driver for change in North America; it's government regulation in the Pacific Rim; and in Europe sustainability is driven by consumers.
• Many companies lack clear leadership on sustainability.
• The supply chain is the weakest link.
• Sustainability reporting needs more work.
• Sustainability pays – and a correlation appears to exist between corporate action and strong share-price performance
• Gains can be expected from cost reductions, new markets and enhanced reputations, although there are still concerns whether the return is worth the initial cost.
• Increased investor attractiveness is not yet a key hook.
• Business leaders are open to more regulation on social and environmental issues.