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The Greening of Industrial Ecosystems The Greening of Industrial Ecosystems. 1994. Pp. 208-213. Washington, DC: National Academy Press. Design for Environment: An R&D Manager's Perspective ROBERT C. PFAHL, JR. The Design for Environment (DFE) concept and its implementation offer manufacturing companies the opportunity to achieve world-class economic performance by producing world-class products, which increasingly means products that are environmentally acceptable throughout their life cycles. Based on the principles of industrial ecology, DFE is a means to achieve environmentally conscious designs, which are a necessary step toward sustainable economic development. Even though the American electronics industry is a secondary sector—an industrial sector concerned with converting processed materials into manufactured products—and thus a relatively "clean" industry with minimal waste (Ayres, 1992), DFE can play a significant role in decisions related to manufacturing. With more than 2.4 million employees, electronics is the largest industrial sector in the United States. Some firms produce thousands of different products, each with hundreds of components, most of which are procured from other firms in the industry. Approximately 70 percent of all firms in the industry are small companies with fewer than 200 employees. Thus, the infrastructure is extremely complex, with many firms functioning as both suppliers and customers. The heart of electronics design is the electrical and mechanical interconnection of individual components and subassemblies by fastening them to a substrate that contains electrically conductive wiring. These designs are manufactured by using mass-production processes that accommodate the assembly of a broad range of components. Because of the rapid advances occurring continuously in electronic components—advances that reduce size and cost while increasing speed and functionality-periodically the performance of the component packaging or the intercon-
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The Greening of Industrial Ecosystems nection substrate is exceeded and new technology (including design, materials, and manufacturing technology) must be introduced (Pfahl, 1992). Thus, unlike many other manufacturing industries in the secondary sector, the American electronics industry periodically goes through fundamental shifts in manufacturing technology. At present, printed wiring board (PWB) technology is reaching its limits for certain applications, and many electronics companies are investigating multichip modules and other technology alternatives. These companies are motivated to practice DFE in this application, because about one-third of the cost of current PWB technology is associated with the waste that occurs in processing and manufacturing. However, they find technological solutions constrained by a myriad of local, state, and national regulations. In a command-and-control environment, regulations are designed for the existing industry and by-and-large assume static technology (indeed, by mandating certain control technologies, such regulations frequently freeze technological evolution). Unfortunately, however, in an industry that is changing rapidly and practicing DFE, regulations can serve to preclude major paradigm shifts in industrial ecology from a linear, Type I, system, which requires unlimited resources, to a recycling, Type II, system in which limited resources are used and limited wastes are produced (Allenby, 1992a; see also Richards et al., in this volume). The following three experiences, drawn from an R&D manager's perspective in the American electronics industry, illustrate environmental issues being addressed today. From these experiences, industrial ecologists can draw conclusions about (1) the feasibility and benefits of widespread implementation of DFE; (2) today's command-and-control regulatory system, which in too many instances is hindering the establishment of proactive industrial programs; and (3) the challenges to be faced in developing public policy and regulations that will enable secondary industries with complex processes and products to change the current industrial ecology to one that is environmentally more sustainable. THREE EXPERIENCES The Cost Reduction Experience Cost reduction is a major activity in most manufacturing firms. It is driven by establishing cost-reduction metrics for manufacturing engineers. Consider the case of a manufacturing engineer who sought to reduce the cost of painting sheet metal used in electronic equipment assemblies. He discovered that he could lower costs by having the sheet metal components chromated (plated with a chromium compound). Since many of the high-quality coating firms no longer provide chromate coatings, because of increased environmental regulation, the new chromate coatings were applied by a second-tier supplier. Potential quality failures were identified during accelerated reliability testing. The effort ended with the
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The Greening of Industrial Ecosystems manufacturing engineer being advised that the proposed change did not provide acceptable protection and that future use of chromate coatings should be considered as a last resort because of potential future environmental costs. In this experience the indirect impact of environmental legislation was to reduce the quality of chromate coatings to an unacceptable level, which in effect made this technology obsolete. While this may or may not be desirable, it is clear that no systems-based analysis preceded this regulatory restructuring of available technologies. There was no evaluation, for example, of the environmental impacts of the alternative technologies, or balancing of these impacts against those associated with the chromate process. Internally, in making his decision to change the coating, the engineer gave no consideration to environmental impact in terms of either product quality or environmental risk. This approach led to wasted time, effort, and resources and, if implemented, might have led to future liabilities for the firm. The failure of the firm to properly define costs for its engineering community, and to adopt a comprehensive approach. to cost definition, was the direct cause of this problem. Knowledge and application of DFE principles to this design problem would have broadened the factors the engineer considered in selecting an alternative coating to achieve his cost-reduction metrics and reduced the costs and risks of this technology decision for the firm. The CFC Elimination Experience In 1988 the Montreal Protocol established an international phaseout schedule for the use of chlorofluorocarbons (CFCs), which had been identified as causing a rapid depletion of ozone in the earth's stratosphere. Subsequently the 1990 Clean Air Act established even tighter regulation of CFCs in the United States. About 12 percent of the total domestic use of CFCs was as a solvent for the cleaning of electronic components and precision metal parts, using azeotropes of CFC 113. The U.S. electronics industry needed to implement a set of environmental regulations with significant technological repercussions. However, the situation differed from prior industrial experiences. In the past when a new requirement was established for air emissions or wastewater discharges, a company's environmental or facilities organization could contract with a supplier to design and build the necessary "end-of-pipe" equipment to make the facility compliant. The CFC elimination experience was different in three important aspects: There were no generic alternatives because the CFCs were used as solvents in a significant number of radically different manufacturing processes. Either alternative technologies to replace the CFCs did not exist, or their efficacy had not been demonstrated.
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The Greening of Industrial Ecosystems The necessary adjustments had to be made by manufacturing and design engineers, not by using additional end-of-pipe controls. Finding alternative solvents and processes required the technical expertise of the manufacturing process engineer. Thus, environmental issues had to be identified, studied, and resolved by the manufacturing organization rather than by an environmental staff organization. The environmental staff could serve as an effective facilitator, but the engineer responsible for production had to propose an alternative, and the reliability organization had to confirm its effectiveness. The impact on the organization was similar to that of introducing total quality management, in which quality is everyone's responsibility, particularly the line organization's, and not just the quality or staff organization's responsibility. The success of the resulting programs at a number of American electronics firms has been recognized by the U.S. Environmental Protection Agency (EPA) through presentation of Stratospheric Ozone Protection Awards. In this instance, implementing an "environmental" regulation required, for the first time on any significant basis, the involvement of "line" manufacturing and design organizations. Moreover, the success of the electronics industry was achieved partially as a result of the enlightened regulatory approach: establish a goal (stop the use of CFCs), but don't have nontechnical regulatory personnel try to micromanage the process. Moreover, an important concomitant benefit of the "goal-oriented" approach was the fostering of a more cooperative, consensual effort among regulators, industry, and some environmental groups, as opposed to the adversarial relationship implicit in the command-and-control approach. The Solder Dross Experience Lead-tin solder alloys are used by the electronics industry to attach components onto copper traces on printed wiring boards. One method for performing this attachment is to use a wave soldering machine, which produces a fountain of molten solder. During soldering, however, some of the hot, molten solder oxidizes, producing a dross that is unusable in the process and must be skimmed from the machine. For many years the electronics industry recycled this dross to secondary smelters, thereby reducing the net demand for mined lead (Allenby, 1992a). Unexpectedly in 1991, solder dross was declared to be a hazardous waste in a letter prepared by an EPA staffer without industry input. This had the effect of stopping the ecologically beneficial lead dross recycling program because most of the secondary smelters were not licensed to handle a material defined as hazardous waste under the Resource Conservation and Recovery Act (RCRA). (RCRA involves substantial paperwork and reporting burdens and imposes substantial potential liabilities on any facility handling material defined as hazardous waste.) Managers felt trapped between being environmentally responsible or obeying the regulations. After a series of meetings, the EPA backed off somewhat from its
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The Greening of Industrial Ecosystems regulatory reinterpretation, which in turn allowed some of this recycling activity to resume. It was apparent, however, that the agency personnel who had written the letter had little technological or industry background and had not considered the deleterious impact their reinterpretation would have on the environment. This case illustrates a major and growing cost associated with the adversarial, command-and-control system that characterizes environmental regulation in the United States. Environmental regulators in the United States seldom have any significant technological experience or education. This can, as in this case, lead to decisions that superficially appear to be environmentally sound—"treat all lead solder dross as hazardous waste"—but in the practical, complex, and highly technological world, are environmentally suboptimal. Incidentally, there are some indications that the more consensual environmental management systems in Europe and Japan result in more technologically sophisticated and efficient environmental regulations (Allenby, 1992b, 1992c), which may also give firms operating in those areas some competitive advantages as well. CONCLUSIONS FROM THE THREE EXPERIENCES The Cost Reduction Experience illustrates how a firm that fails to integrate environmental costs and considerations into its technology decisions can create higher economic costs for itself, even in the short term. Conversely, the CFC Elimination Experience suggests that DFE, an integrative approach to environmental issues, can be employed successfully in a manufacturing organization where the regulatory structure so permits, even when the technological and environmental concerns are quite significant and apparently intractable. Internalization of environmental considerations through DFE is, however, necessary for the firm to respond successfully. Modifying corporate culture is difficult, but fortunately the quality programs of the late 1980s have paved the way for introducing DFE. When the concept of DFE was introduced to engineers at Motorola, for example, they grasped it quickly and related it to their previous experience with Motorola's Six Sigma Quality program and CFC Elimination Program. Just as quality is the entire corporation's responsibility and the internal quality organization is responsible for facilitating and measuring the activity, environmental stewardship is the entire corporation's responsibility and the internal environmental organization is responsible for facilitating and measuring the activity. Motorola is taking advantage of the strong emphasis management has placed on quality as Motorola University develops a companywide training program on DFE. The Solder Dross Experience demonstrates how command-and-control regulatory tools can be counterproductive in enabling industry to develop proactive recycling initiatives. The ambiguous and shifting federal and state "hazardous waste" definitions and regulations are currently, for example, a significant detriment to ecologically beneficial recycling. Moreover, the lack of technological
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The Greening of Industrial Ecosystems and industry expertise on the part of environmental regulators is an increasing impediment to real environmental progress as environmental regulation moves beyond the ''end-of-pipe" approach. This is not to argue that command-and-control regulations are not necessary to establish high standards of industrial behavior to which all firms must be held. It is to say, though, that the United States is overbalanced toward command-and-control regulation and the adversarial attitudes it engenders, to the detriment of both the environment and the economy. We cannot get to sustainability by relying on command and control. As one considers developing policies that will stimulate shifts to environmentally preferable industrial ecosystems, one must be careful to create a structure that accommodates—indeed, takes advantage of—the major paradigm changes in product and process technology that occur in industries such as the electronics industry. Policymakers must recognize, as they evaluate alternative policies that encourage DFE practices, that industries experiencing periodic changes in their product and manufacturing technology provide a unique opportunity for implementing major changes with positive environmental impact. These changes in secondary sector industries such as the electronics, automotive, and aircraft industries can have a leveraged impact on primary-sector industries (those concerned with the extraction of raw materials [Ayres, 1992]) by reducing, changing, or eliminating the demand for raw materials (Allenby, 1992a). However, the risks from an unknown and fluctuating regulatory environment at present discourage corporations from considering major environmentally preferable changes in manufacturing processes and materials. REFERENCES Allenby, B. R. 1992a. Industrial ecology: The materials scientist in an environmentally constrained world. MRS Bulletin 17(3)(March):46-51. Allenby, B. R. 1992b. Trip Report—Europe, National Academy of Engineering, May. Allenby, B. R. 1992c. Trip Report—Japan, National Academy of Engineering, May. Ayres, R. U. 1992c. Toxic heavy metals: Materials cycle optimization. Proceedings of the National Academy of Sciences 89(February):815-820. Pfahl, R. C., Jr. 1992. Materials in electronic manufacturing: Electronic packaging. MRS Bulletin 17(4)(April):38-41.
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