Ian Hardy
Senior NPI Engineer

In Search of the Sustainable Factory

For hardware developers looking to improve the environmental sustainability of their products, executing a life cycle assessment (LCA) is the first step. LCA is a great analytical tool for comparing design tradeoffs, and providing a foundation for the developer to begin reducing their product’s impact. Some impact-reduction methods are well understood, such as decreasing power consumption, material quantity, or weight. But for many consumer products, the bulk of their carbon footprint occurs during manufacturing. What levers can developers pull to lessen impact during this phase? Is there a zero emissions factory that can build your product using only wind power? What does a sustainable factory look like, and what would it cost?

It turns out that the manufacturing industry as a whole has been systematically reducing its environmental footprint over the course of the past twenty years, simply because it saves money. In fact, many of the sustainability achievements touted in annual reports align perfectly with the roots of lean manufacturing that have been in place in factories for decades. Many operational efficiency projects pay for themselves in three years or less while also improving the facility’s market value and achieving a company’s broader environmental goals.

Operational efficiency projects can include things like:

  • Retrofitting production facilities with LED lighting and high efficiency heating and cooling systems to generate energy savings.
  • Limiting factory water consumption and increasing wastewater diversion and recirculation to reduce utilities bills.
  • Modernizing transport fleets to more fuel efficient vehicles and optimizing transport routes to save money on fuel.

These types of efficiency initiatives have led to real-world gains, as evidenced in annual sustainability reports from some of the largest manufacturers and logistics providers worldwide:

  • From 2013 to 2019, Flex installed over 115,000 LED light fixtures at their factories worldwide, leading to power savings of 89 GWh/year and avoiding the generation of 63,500 tonnes of CO2 annually. (Flex 2020 Sustainability Report)
  • Jabil reduced greenhouse gas (GHG) emissions by 31% since 2015 while the overall size of the business grew by over 40%, cutting their GHG intensity by half. (Jabil 2019 Sustainability Report)
  • Over the past decade, FedEx reduced CO2 emission intensity by 40% while doubling their package volume. FedEx operates the world’s largest cargo air fleet with over 650 aircraft. (FedEx)
  • Intel Corporation uses >71% green power for its operations worldwide, including 100% green power for its US facilities. Intel is also a leader in LEED building certification, with over 17.9M sq ft of certified floor space across 50 locations. (Intel 2020 Corporate Responsibility Report)
Solar Powered Industrial Buildings

These transformations are most common in large global manufacturing companies, where margins are thin, competition for market share is fierce, and investors are impatient. But what about smaller, local factories that may lack the resources or impetus to pursue such a project? 

In the US, where manufacturing accounts for 25% of energy consumption, the Environmental Protection Agency provides the E3 (Economy, Energy, Environment) framework to foster energy saving initiatives at manufacturers throughout the country. This framework includes methodology for a baseline assessment, industry and community support resources, and even potential avenues to secure funding for environmentally beneficial projects. Other countries have similar initiatives, using public policy incentives to drive companies toward the benefits of resource conservation.

The industry as a whole is marching forward, but at a pace unlikely to achieve even the most modest climate action goals. Although energy and material waste is decreasing, manufacturing emissions as a whole have continued to increase as a result of greater worldwide consumption. In order to sufficiently curtail CO2 emissions and stem global warming to the level specified by the Paris Accord, more effective methods are needed. Some manufacturers are going beyond basic energy and water conservation methods by purchasing carbon offsets or even generating a portion of their consumed energy onsite with solar panel installations, but these instances are generally limited in scope and require significant government partnership to get funded.

For product developers that seek more aggressively sustainable solutions, some manufacturers are expanding post-manufacturing logistics services options to include circular economy business models such as end-of-life (EOL) recycling, repair and remanufacturing, and product-as-a-service (PaaS). By having consumers return used products to the factory, it’s possible to divert many of the materials from landfills and remanufacture devices by disassembling, cleaning, and replacing components and subsystems. Xerox has perfected this circular model since 1987, when it started the practice at its Netherlands facility. In 1989, Xerox remanufactured only 5% of their scrapped products, but by 1997 that number had increased to 75%. By 2001 they had remanufacturing facilities located in 7 countries worldwide.

Disassembled Phone Parts
So what can a hardware developer do if they want to bring their product to market responsibly while also maintaining a viable business model? Fortunately there are a few concrete steps that can be taken:
  1. Make sure you’ve designed your product to be as enviro-friendly as possible. Read my colleague Steve Aykens’ design for environment tips here and then download our sustainable product ebook!
  1. Build where you sell. If you’re designing a medical device that will be sold exclusively in the EU, find a factory with appropriate capabilities in the region. Unless you’re designing a high quality consumer device that will be produced in millions of units, there’s not a major capability differentiator between many huge Tier 1 factories and smaller Tier 2s and Tier 3s, so it’s likely that a suitable factory is closer than you think.
  1. Map out your proposed supply chain and then shrink it as much as possible. This should be done as early on in the product transfer process as possible, and your selected CM should have tools available to make this painless. Since so many electronics component manufacturers are consolidated in China, there may not be a lot of great supply options close to your non-China based factory. Those options will also likely be incrementally more expensive, but every mile you can cut out of your supply chain path equates to real emissions reductions for your total manufacturing cycle.
  1. Take the time to understand your factory’s energy consumption practices and ask what they’re doing to actively reduce emissions. Some factories will have a choice of where they purchase power from, and it may be a mix of renewable and fossil fuel sources. The most environmentally responsible companies worldwide use power purchasing agreements (PPA) as a way to provide long term funding for wind and solar projects. As a hardware developer, you can use the opportunity of your new business to influence your factory’s decision. From STMicroelectronics’ 2020 Sustainability Report: "In 2019, ST joined a clean energy program initiated by a customer. In so doing, we confirmed our low carbon commitment and agreed to supply products 100% manufactured with renewable energy to this customer by 2021."  Request annual power and water consumption data for the factory and ensure they are making steady improvements to reduce their impact. If more clients requested this type of information, factories would be better incentivized to make sure they’re making the right choices for the environment.
  1. Ensure your selected manufacturer conforms to industry-wide accepted best practices, such as those championed by the Responsible Business Alliance (RBA). Ask whether they screen new suppliers for sustainable business practices and employee health and safety concerns, and whether they require it of their suppliers’ suppliers. Do their top vendors get audited on a regular basis to verify conformance with accepted standards? What happens when violations are found? By using economic leverage to push from the top, change can filter down throughout the supply chain.
  1. Make a plan for EOL logistics services and incentivize your customers to return old devices for recycling and responsible disposal. If it makes sense for your business model, remanufacture the returned devices to the extent that your design allows. Every reused part that is diverted from a landfill prevents the need for energy and material to be spent on a new part.

Factories are focused on efficiency to be competitive in the global marketplace, and efficient factories are better for the environment. But a product can’t be built without consuming resources, and manufacturers will only take steps that make economic sense for their business. If their customers won’t pay for a service, the factory won’t provide it. By selecting a responsible manufacturer and designing a smaller supply chain footprint, by asking about sustainability goals and requesting green energy sources, and by using commercial leverage to incentivize the industry to make sustainable decisions, the power to shape our sustainable manufacturing future lies in the hands of the hardware developers.

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