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Lean Manufacturing: Addressing Climate Change Through Reductions In Waste

By Climate Guest Contributor on January 4, 2013 at 9:14 am

"Lean Manufacturing: Addressing Climate Change Through Reductions In Waste"

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by Rob Honeycutt

Climate scientists are in the unfortunate position of being the messengers of bad news. So in a way, climate change denial is a massive attempt to shoot the messenger.

There are so many existing technologies to address climate change that are positive messages that too often get lost in the noise.  I want to share what I see coming from my industry, which is manufacturing.

Specifically, I want to address how things are manufactured rather than technological solutions.

The Big Picture

As we all know, over the past 30 years vast portions of the world’s manufacturing base has moved to Asia, primarily China.  What you find there is a spider web network of small factories supplying parts to each other forming a distribution chain of goods.  Those goods are all being delivered by many tens of thousands of these little blue diesel trucks, each belching out heavy particulates, CO2 and any number of unhealthy substances.  None of the factories are located in any rational proximity to each other; it’s fairly random.  The surface streets they travel are generally choked with traffic.  Then each of those factories is running on the Chinese grid, fueled by a lot of dirty coal.  Most factories also keep back up diesel generators running since the Chinese grid is often unreliable.  I’ve even seen small, clearly unregulated, coal fired generators tucked away back in various coves and backstreets putting out very heavy smoke.

Then, of course, all the finished goods are trucked to port, loaded onto an unending train of container ships crossing the Pacific and heading out to all corners of the world.  Each of those is burning bunker fuel, which is something akin to asphalt.  And on top of that you have designers, engineers and execs flying back and forth to Asia numerous times each year to manage their projects.  I have one friend who does 8 to 10 trips a year to China as a product designer, and that’s pretty normal.

Taiichi Ohno and Toyota

Some 70 years ago a man named Taiichi Ohno pioneered Toyota’s incessant quest to ferret out waste from their production systems.  His work heralded in a new wave of manufacturing efficiency.  You may perhaps remember how the Japanese were crushing the U.S. auto industry in the 1970s and 80s.  This was primarily due to systems developed by Ohno.

Taiichi Ohno identified what he termed the “seven forms of waste” or “muda,” as it’s referred to in Japanese.  One of the primary forms of muda is “transportation waste.”  Moving product was always to be kept at its barest minimum since it adds no value to the end product.  There are reams of research on this, and yet, over the past 30 years transportation waste has exploded to epic proportions.  None of it adding value.  All of it putting vast quantities of CO2 into the atmosphere.

Not even thinking of CO2, and only being focused on efficiency, what Toyota did to minimize this was to work in Keiretsu’s.  They were “families” of suppliers who maintained their facilities in near proximity to the main Toyota assembly plants and they operated their supply chain on hourly delivery schedules.  Over half a century ago Toyota and Taiichi Ohno showed us that operations should always be located as close together as possible.  This got lost in the mad rush to move production to China.

Efficiency Improves Quality

The work of Taiichi Ohno and Toyota eventually lead to the “Lean manufacturing” movement.   Hand-in-hand with elimination of transportation waste came the reduction of in-process inventory levels.  One of the first thing a company learns, and often why companies will abandon Lean, is that reducing inventory exposes problems.  With high inventory levels and extensive transportation, problems get hidden and passed along down stream.  With Lean, problems can’t hide and have to be fixed or the entire factory shuts down.  What this promotes (demands, actually) is a process of continual improvement.

Practicing Lean manufacturing over long periods of time translates into ever improving quality of goods.  As manufacturing guru, W. Edwards Deming, was always quoted to say, “Quality always costs less.”  As counterintuitive as that sounds, it is a fact.  The implication is that by eliminating transportation waste and leaning out production, you create far more efficient systems, and produce far higher quality goods for less. In this you can vastly reduce CO2 emissions and create more profitable businesses.

The Present Opportunity

There is a new movement emerging to start bringing manufacturing back to the U.S., partially evidenced by Apple’s recent comments that they would be bringing some of their production back to the US.  But I see a much larger opportunity here.

My background is in manufacturing, with 23 years experience in both domestic and off-shore production across a wide range of products.  I am launching a new product on the Kickstarter website to set up a domestic factory in the SF bay area producing a simple consumer electronics product; a set of bluetooth earbuds.

Though initially I’ll be just looking to set to do final assembly, the long term plan with this business is to create a vertically integrated process where, in house, we run a large portion of the creation of the product.  We will look to bring in printed circuit board assembly, injection molding for the outer case and earbud parts, and the extrusion process for creating the earbud cords.  We will eventually even bring in the printing processes for creating the product packaging.  All this so that no process is anything more than a few yards from the next step in assembly.  Then the cherry on top will be to have a solar PV installation powering the whole thing.

In this, we would eliminate huge inefficiencies and remove nearly all the middle supply chain CO2 emissions related to the product by removing nearly all the transportation waste, and at the same time creating a more profitable domestic manufacturing business.

One of the goals of this business will be to show other businesses what the opportunity is.  Too often people get the idea that addressing climate change will involve higher priced goods.  I believe that’s wrong.  These methods can give people reason to want to give the messenger a great big hug because, yes, we can mitigate CO2 emissions and actually have a stronger economy for it.

If you’d like to support this project, click here.

Rob Honeycutt is the founder of the bag company, Timbuk2.  HHe was the first to implement an online “build-your-own” mass customization, which became the inspiration for the NIKE iD program. He also has extensive experience with off shore production, having worked with over 100 different factories in China.  Rob lives in Berkeley with his wife and two children, and is a contributing author at Skeptical Science.

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28 Responses to Lean Manufacturing: Addressing Climate Change Through Reductions In Waste

  1. fj says:

    Lean manufacturing and in fact being lean all around in most instances seems to make good economic and even life-style sense especially when whole systems are considered.

    • Niall says:

      Not when it is predicated on continued growth on a finite planet and not when we need to decarbonise whatever economy we have completely.

      • fj says:

        Growth has to be redefined probably much more closely aligned with human and environmental values.

        An increasingly healthy happy intelligent global population supported by all the requisite natural services constantly improving is probably a good place to start.

  2. Omega Centauri says:

    Interesting framing, make the problem more visible/alarming, and we will have to deal with it, thus gaining on net.

    I suspect “ear buds” are so small than transport volumes would have been minimal anyway.

    Another mode of attack, is that those local delivery trucks would be much more energy efficient if they were hybrids or electric.

  3. Stephen says:

    A thoughtful post and no doubt principles that could be advantageously applied to a lot, though clearly not all, existing production.

    The problem though goes much deeper really though. Do we even need any kind of new factory producing Bluetooth earbuds? In fact, of all the world’s manufacturing, how much could we lose overnight and be none the poorer for? Looking at the “Why” of production rather than “How” unlocks a bigger set of questions …

    • Rob Honeycutt says:

      But Stephan, you could apply that thinking to everything and never get anywhere. The “Why” is climate change. The “Why” is, if we don’t change then we ensure that we will not be able to decarbonize, and we will therefore surely leave our children and grandchildren an unlivable planet.

      The bluetooth device is merely a single product. It’s a proof of concept that it can be done. My thinking is, I can’t sit around complaining that no one is doing it. I have to just do it!

      • Renewable Guy says:

        When I see this kind of investment idea and what it entails, the thing that comes to mind is flexibility to change products, and a variety of products for some stability in uncertain markets. Any plans when the earbud thing is fired up?

        • Rob Honeycutt says:

          Absolutely. That’s all part and parcel with Lean manufacturing. You build to demand with the most minimal in-process inventory levels. That way, if markets do change (as they are 100% certain to do), then you’re not sitting on a huge about of inventory to blow out.

          All too often companies don’t want to pollute the market with their outdated product, so rather than try to discount that product they’ll destroy it instead. And that’s just unconscionable.

    • Omega Centauri says:

      Young people being attracted to Ipods, and earbuds instead of race cars and speedboats. I’d say thats an important change in the right direction.

  4. Leif says:

    Good points made by all. On a different tack, “Blue Tooth” tech ear buds could also function as hearing aids. Functioning as a much less expensive alternative to the overpriced products currently on the market. Electronics and rechargeable batteries could live on a medallion or in a pocket. Directly linking the user to theater, TV, phone etc.

  5. john c. wilson says:

    I own a Timbuk2 bag and it’s seen a lot of hard service and continues to be wonderful. I’ve every reason to be friendly to the author here.

    But I’ve worked in production control in a few plants where the Deming lean folderol was the fashion. It never works. It’s top-down big picture rubbish.

    As for Toyota, has anyone ever looked at their parts book? Ever changed a light bulb in a Lexus? The design process is so utterly irrational it is hard to believe the same team achieves wonders in production.

    The real problem is we have a culture that rewards big-deal, big-picture dick swinging. The personality that is good at minding details and taking care of daily business is shoved into a corner. Sociopaths do spectacularly well. Someone whose main virtue is doing actual work is purely doomed to be kicked around.

    Human capital is completely ignored in our system. Small shops like Timbuk2 are about the only place you’ll see efficiency. Small shops no matter how productive are being squeezed out of existence. That segment of the economy is on the ropes.

    Bucky Fuller was right when he said our economy operates at an overall efficiency of 1% or maybe 2% and he could only make such a statement because he was incurably an optimist.

    • Rob Honeycutt says:

      John… I would suggest there is nothing unique to a shop the size of Timbuk2 producing good, other than the fact we had our own Taiichi Ohno (if I could be so bold as to even begin to compare myself to him) making things happen.

      I think the failures occur when companies build divisions between production and management, and specifically when they believe that management knows it all. In fact, management tends to know far less than they believe they know. It’s a form of Dunning-Kruger effect. And I would use Bill McKibben’s book, The Age of Missing Information, as an illustration of the point. I believe these divisions are becoming more prevalent in Toyota today, and since the early 2000′s.

      I think we’re saying the same thing with regards to production only you’re saying that Lean is not a solution, and I’m saying it is, but it’s usually poorly implemented. And I believe it’s poorly implemented specifically because it’s implemented by people who don’t do the actual production work. And it’s also people who are unwilling to get their hands dirty getting the experience of doing the actual work.

  6. gingerbaker says:

    Waste is not the issue, contrary to the section heading called “The big picture”. The issue is CO2 going into the atmosphere.

    The fact of the matter is that we must, as a nation and as a world, move completely away from burning carbon fuels. Which means we must focus our energies on providing so much clean, carbon-free renewable energy at such a low price that we can have 100% electric transportation fleets and 100% renewable energy-driven industries and 100% renewable energy-driven buildings.

    As soon as all our energy needs are met without adding any more CO2 into the atmosphere – when the world is using 100% renewable energy – waste is not an issue.

    If our electric cars whizzed along on inductively-charged highways powered by sunlight, what does it matter if we take the long way home?

    Producing gigantic amounts of clean electricity is the issue – not clutching our pearls over “waste”. Any distraction from that mission is merely rearranging the deck chairs on the Titanic.

    And the way to produce gigantic amounts of clean energy that would be so cheap no one would even think of using an internal combustion engine again (they really should be outlawed asap) is not to wait for some market-based solution. We have NO TIME for that failed paradigm.

    The way to produce that much clean energy is to use the power of the Federal government to erect very large-scale solar and wind installations, to offer the resulting electricity for free to consumers, and to move us to a 100% renewable energy economy in the next five to ten years.

    Because if we fail to that, the cost to our economies will completely dwarf the substantial costs to accomplish our goal – which is maintaining our species.

    As Joe Romm has pointed out multiple times here, the cost of a 4C+ world is $1240 trillion dollars by 2100. I estimate the cost of retrofitting our U.S. economy to 100% renewables to be about $10 trillion. dollars

    We don’t need to spend another dime or another nano second bringing reform to the carbon energy sector. We need to ignore it completely, and focus on making it obsolete.

    • Rob Honeycutt says:

      I would say that waste is VERY much the issue because every bit of waste requires energy that produces CO2. Remove the waste and you remove the CO2.

    • Jan says:

      I agree that a renewable future is our goal, but, if “lean” eliminates emissions, go lean.

    • Omega Centauri says:

      We have to attack from all angles. Reducing “waste” reduces the cost of getting to your all renewable world. It also reduces the harm done during the transition. No single approach will be able to handle the whole issue. One reason we can’t get started on your solution, is that the perceived cost creates insurmountable opposition.

  7. Henry says:

    “There is a new movement emerging to start bringing manufacturing back to the U.S.”
    It’s clear that the reason for this ‘movement’ is the availability of cheap energy now in the U.S (read, natural gas). I don’t think it has much to do with Apple’s grandstanding on the matter.

    • Rob Honeycutt says:

      I don’t think Apple is grandstanding at all. In fact, they’re being incredibly timid about it, as far as I can tell. My suspicion is that they’re really tired of Foxconn being unable or unwilling to address the fundamental issues that have come up in their factories related to labor practices. It is a land mine for them that holds costly risk for their public image.

      I’m personally not confident that Apple can pull off domestic production because they aren’t going to do it themselves. They’re going to rely on contractors and that’s going to be too costly. They just don’t have manufacturing in their DNA.

    • Mulga Mumblebrain says:

      And US wages and conditions driven down to East Asian levels. Meanwhile, in China, wages are growing by 10% or so a year, and have been for some years. Plus Chinese infrastructure is increasingly first class, its education system one of the best on the planet, and it will soon overtake the US in scientific and technological innovation. The USA, unfortunately, is still groaning under the incubus of an insatiably greedy ruling elite, a crumbling infrastructure and education system, gargantuan student (and all other kinds of)debt, and one trillion plus per year in military spending to intimidate the rest of the planet. Methinks that the Chinese leadership may not necessarily be angels, but they are somewhat brighter than the competition.

  8. fj says:

    Setting off a manufacturing competition based on. increasing efficiency and waste reduction between domestic and offshore suppliers may have might further accentuate transport costs and the higher value of local human capital.

  9. fj says:

    We have designed civilization around the high fuel density of fossil fuels most of which would not be needed with proper designs.

    With proper designs a huge number mobility solutions would need at the very worst the bare minimum of electrical energy and the same for housing.

    • fj says:

      And, the extraordinary amount of environmental devastation humanity has caused this planet is the direct result of improper design around the high density of fossil fuels.

    • fj says:

      Plants and animals have survived on the distributed low energy densities supplied by the sun and food and we have evolved as mobile ecosystems comprised of trillions of things many of which are billions of years old constantly pushing the envelope of this stuff we call life and intelligence which is virtually the same.

  10. David K says:

    As an industrial engineer, I have worked with many companies on these very issues of lean manufacturing. Although lean manufacturing has mainly focused on the operational efficiencies and economics of manufacturing, an unintended result has been a reduction of carbon dioxide waste through less overproduction, less obsolescence, smaller factory size, and reduction of other wastes that the lean program targets. However, some sub-components of lean, just-in-time delivery being an example, have caused increases in Co2 by transferring parts delivery from low carbon intensity rail to high carbon intensity highway trailers. An example is the General Motors of Canada Assembly Oshawa plant which at its peak received 700 highway trailers per day to feed its 3 assembly plants. Previous to the just-in-time philosophy more deliveries were made by rail.

    Lean has to be reinvented not only to include the economy but the ecology of production. The late Ray Anderson an industrial engineer by training and founder and CEO of Interface a carpet manufacturer, having been influenced by Paul Hawken (The Ecology of Commerce), understood this.
    Here is Paul Hawken’s eulogy to Ray Anderson. Like Paul I am in awe of this man.

    http://grist.org/sustainable-business/2011-08-12-paul-hawken-pays-tribute-to-green-biz-visionary-ray-anderson/

    • Rob Honeycutt says:

      David…
      My take on that would be that GM is doing Lean completely wrong if there are 700 highway sized trailers delivering goods every day. (Also, really JIT and Lean are the same animal, though Lean gets applied to other business segments that are just inventory based.)

      If you look at Toyota plants in Japan, as I mentioned in the article, their Keiretsu of suppliers is keep very nearby. Toyota will take hourly shipments of literally the same sub-component. That supplier would only be 3 miles away, not 50 or 100 miles. Those repeat shipments are done via small delivery trucks whose sides slide up to open, thereby allowing the truck to be unloaded in maybe 2 mins.

      I would say that this is all unique to heavier industry, to even need to have those suppliers under different roofs. I believe that there are a wide number of industries who could benefit from bringing a large number of processes in-house. I believe this is especially true with consumer electronics.

      • David K says:

        What you are doing is commendable. We have a long way to go in North America; however, the politics and economics will have to change.

        Japan developed the lean concepts; their tight geography has helped facilitate this. I expect a majority of suppliers to Toyota are within the 5 mile radius; that’s why it’s called Toyota City, everything is within a municipality. In North America some suppliers like Magna International have been setting up small dedicated plants next door to assembly plants; these tend to be suppliers of large units such as interiors and seats. However much of the component industry, who supply a multitude of assembly plants, is still spread throughout the eastern and midwestern states and Ontario requiring lengthy shipping distances.

        The other advantage or disadvantage, depending how you look at it, is higher energy costs in Japan; shipping is a huge
        operating cost.

        Cheap energy in North America has lead to inefficiencies; as a result, we can use environmentally damaging (air pollution and the resulting health costs, green house gases etc.) practices. They are externalities to the manufacturing cost equation and don’t show up in the accounting. This has to change.

        There are other externalities that are big costs to taxpayers. For example there is an international project: the Detroit – Windsor crossing at a cost $CDN 3 – 5 billion to deal with the truck transport traffic at this crossing, which is a traffic and air pollution nightmare.

        In 2010, it was reported that 28,814 trucks crossed on a daily basis; many are automotive manufacturing related.

        Truck transportation is heavily subsidised; as shown in the example above, besides tolls road costs are subsidised by the taxpayer,and fossil fuel subsidies keep fuel, relative to other continents, cheap. As you pointed out lean systems have the potential to make reductions in air pollution, as an unintended benefit. We will go much further with CO2 reduction when the true ecological and other external costs have to be factored into the manufacturing cost equations. This will take the political will that this forum has been demanding.

  11. fj says:

    While automatic thinking allows us to function on the day-to-day more advanced individuals know when to slow down and think things through; usually the result of considerable experience most likely making bad mistakes; and probably the crux of the problem here.