Lean Manufacturing: Addressing Climate Change Through Reductions In Waste

This post has also been published on Climate Progress, and the PR Newswire press release has been published by Yahoo Finance, The Sacramento Bee, and The Herald, along with articles in Core77 and VentureBeat.

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 things 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 up 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.  He 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.

Posted by Rob Honeycutt on Friday, 4 January, 2013

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