Global Business, Society and Ecology MIM 511/BA 548 Winter 2010

1. Global Business, Society and EcologyMIM 511/BA 548Winter 2010 Scott Marshall School of Business Portland State University

2. Questions for Class Discussion • What are three key ideas/concepts that you learned in your readings for today? • Can you identify the economic and social benefits (and costs) to ecological design? What benefits and costs seem apparent in the Hypercar concept? • What are the key attributes of the design, manufacturing and supply chain operations of Maria Yee’s furniture? What are the opportunities and threats to this company? What recommendations do you have for the company?

3. Type III Closed Loop Value Chain Type II Linear Value Chain Overview of Concepts • Eco-Design • Eco-Effectiveness • Bio-Mimicry • Eco-Efficiency • LEAN Manufacturing • EH&S and EMS • ISO 14001 • Closed Loop Systems • Life Cycle Analysis Design Operations & Supply Chain Design & Operations/SCM Measure Impact of Design and Manufacturing

4. Type II Linear Value Chain Eco-Efficiency Product or service value Eco-efficiency = Environmental influence • Environmental impact is related to business factors • Improving eco-efficiency means increasing product value or reducing environmental impact • Units and measurement methods are suggested

5. Type II Linear Value Chain Eco-Efficiency 1. Reduce Material Intensity of Goods and Services • Johnson & Johnson: Targeted 25% reduction in packaging by 2005 2. Reduce Energy Intensity (to produce and consume) • Whirlpool: Low energy refrigerators (Energy Star) 3. Reduce Toxic Dispersion • Novartis (Swiss life sciences company) combined insecticide with pheromones

6. Type II Linear Value Chain Eco-Efficiency 4. Increase Recyclability • HP: printed circuit boards are refined to recover precious metals 5. Increase Durability (extending the useful life of products) • Ricoh: increase durability of copy machines (leased – so remain a revenue stream; not about products but about materials and energy)

7. Type II Linear Value Chain Eco-Efficiency • “Doing more with less” • Industry interested because eco-efficiency means greater economic benefit. • Companies quickly took up extensive programs promoting eco-efficiency. • Based on Reduce, Reuse, Recycle, and Regulate.

8. Type II Linear Value Chain LEAN Manufacturing • Origins • Toyota Production System (TPS) generally considered the source of the concepts of Lean Manufacturing. • The Usual Focus: • Set of TPS 'tools' that assist in the identification and steady elimination of waste (muda), the improvement of quality, and production time and cost reduction. • Muda has an intuitive and practical relation to Eco-Efficiency.

9. Type II Linear Value Chain LEAN Manufacturing • A second approach to Lean Manufacturing, as practiced by Toyota, focuses on improving the 'flow' or process variation (thereby steadily eliminating mura) throughout the system and not upon 'waste reduction' per se. • Maximizes contributions of people and materials… • Common Adaptation - Focus only on mura – tools approach. • Only temporary success without focus on BOTH mura and unevenness – a systems approach.

10. Type II Linear Value Chain • EH&S: Environmental, Health & Safety • Departments of Organizations • Derived from Compliance Perspective • Can be difficult to integrate into lines of business…as a business strategy. • EMS: Environmental Management System • Derived generally from continuous improvement standards of ISO 9001. EH&S and EMS

11. Type II Linear Value Chain EH&S and EMS Environmental Management Systems: Continuous cycle of planning, implementing, reviewing and improving the PROCESSES and ACTIONS that an organization undertakes to meet its business and environmental goals. • Major Components: • Policy • Planning • Implementation and Operation • Checking and Corrective Action • Management Review

12. Type II Linear Value Chain EH&S and EMS Environmental Management Systems This model leads to continual improvement based upon: • Planning, including identifying environmental aspects and establishing goals [plan]; • Implementing, including training and operational controls [do]; • Checking, including monitoring and corrective action [check]; and • Reviewing, including progress reviews and acting to make needed changes to the EMS [act].

13. Type III Closed Loop Value Chain • What is Design? • A discipline that explores the dialogue between products, people, and contexts. • A process that defines a solution to help people achieve their goals. • An artifact produced as the result of solution definition. Eco-Design

14. Type III Closed Loop Value Chain • What is Industrial Age Design? • “Form follows Function” • Optimize the function, value and appearance of products and systems for the mutual benefit of both user and manufacturer. • Mechanistic – Engineered. Eco-Design

15. Type III Closed Loop Value Chain • What is Eco-Design? • “Form co-determined with Function” • Optimize the function, value and appearance of products and systems for the benefit of the system and its constituents. • Whole Systems – Socio-Ecologically Engineered Eco-Design • (Shu-Yang, Freeman and Cote, 2004)

16. Type III Closed Loop Value Chain Eco-Effectiveness Central design principle of eco-effectiveness is: waste equals food (heard this before?) Instead of using only natural, biodegradable fibers like cotton for textile production (a pesticide-intensive agricultural process), why not use non-toxic synthetic fibers designed for perpetual recycling into new textile products? Instead of minimizing the consumption of energy generated from coal, oil, and nuclear plants, why not maximize energy availability using solar and wind sources? From ‘cradle-to-grave’ to ‘cradle-to-cradle’ – closed loop systems

17. Type III Closed Loop Value Chain Eco-Effectiveness • To assist companies in (re)designing eco-effective products, Cradle to Cradle Design Protocol assesses materials used in products and production processes. • The four categories are: • Green: Little or no risk. This chemical is acceptable for use in the desired application. • Yellow: Low to moderate risk. This chemical is acceptable for use in the desired application until a green alternative is found. • Orange: There is no indication that this is a high risk chemical for the desired application, but a complete assessment is not possible due to lack of information. • Red: High risk. 'Red' chemicals (also sometimes referred to as 'X-list' chemicals) should be phased out as soon as possible. 'Red' chemicals include all known or suspected carcinogens, endocrine disruptors, mutagens, reproductive toxins, and teratogens. In addition, chemicals that do not meet other human health or environmental relevance criteria are 'red' chemicals.

18. Type III Closed Loop Value Chain Eco-Effectiveness Human Health Criteria • Carcinogenicity • Teratogenicity • Reproductive Toxicity • Mutagenicity • Endocrine Disruption • Acute Toxicity • Chronic Toxicity • Irritation of Skin/Mucous Membranes • Sensitization • Carrier Function or Other Relevant Data Environmental Relevance Criteria • Algae Toxicity • Bioaccumulation (log Kow) • Climatic Relevance/Ozone Depletion Potential • Content of Halogenated Organic Compounds (AOX) • Daphnia Toxicity • Fish Toxicity • Heavy Metal Content • Persistence/Biodegradation • Toxicity to Soil Organisms (Bacteria and Worms)

19. Type III Closed Loop Value Chain • Cradle-to-Cradle • MBDC’s certification • gDiapers – Cradle-to-Cradle Certified Eco-Effectiveness

20. Type III Closed Loop Value Chain • “The conscious emulation of life's genius is a survival strategy for the human race, a path to a sustainable future. The more our world looks and functions like the natural world, the more likely we are to endure on this home that is ours, but not ours alone.” —Janine Benyus, author of Biomimicry Biomimicry

21. Type III Closed Loop Value Chain • Orb Weaver Spider Silk • The spider’s fiber is stronger and more resilient than anything on the market today. This new renewable material could be used in parachute wires, suspension bridge cables, sutures, protective clothing, etc. Biomimicry

22. Type III Closed Loop Value Chain Biomimicry • Blue Mussels • The blue mussel byssus is the material that attaches the mussel to a rock. This sealant eventually degrades after its mission is finished. This could inspire an alternative to plastics, e.g., a time-release coating for disposable biobased cups and cutlery which would eventually degrade, allowing the degradable material underneath to be composted. • Columbia Forest Product’s PureBond (Case Study Video)

23. Type III Closed Loop Value Chain Close Loop Systems From: Cleaner Production International LLC

24. Type III Closed Loop Value Chain Close Loop Systems Ricoh’s “Comet Circle”

25. Type III Closed Loop Value Chain Close Loop Systems From: Cleaner Production International LLC

26. Type III Closed Loop Value Chain Life Cycle Analysis • Takes a holistic view of and measures environmental and social impacts from raw material extraction to final use/disposal.

27. Type III Closed Loop Value Chain Life Cycle Analysis Stages of LCA • Definition of Goals and Scope • Life Cycle Inventory Analysis: measure materials and energy used and environmental releases that arise along entire continuum of the product or process life cycle • Life Cycle Impact Assessment: examine actual and potential environmental and human health effects associated with use of resources and materials and with the environmental releases that result. • Life Cycle Improvement Assessment: systematically evaluate and implement opportunities to make environmental improvements based on previous assessments.

28. Type III Closed Loop Value Chain Life Cycle Analysis From the Institute for Lifecycle Environmental Assessment

29. Type III Closed Loop Value Chain Life Cycle Analysis

30. Type III Closed Loop Value Chain Life Cycle Analysis

31. Type III Closed Loop Value Chain Life Cycle Analysis

32. Type III Closed Loop Value Chain Life Cycle Analysis Hypothetical example of LCA impacts of Shoes A leather) and B (synthetic)

33. Class Exercise: Maria Yee Inc. • What are the unique aspects of Maria Yee Inc.’s business model (sourcing, design, manufacturing, marketing and branding, distribution and sales)? • What are the advantages and disadvantages of this business model? • Given increasing competition and poor economic conditions what, if any, changes do you recommend to the business model?