What can Eco-design do for me as SME in the Electronics Sector. Prof What can Eco-design do for me as SME in the Electronics Sector? Prof.Dr.Ir. Ab Stevels Applied EcoDesign, Design for sustainability Lab Delft University of Technology Sustainability Center Philips Consumer Electronics

Outline Why Environment and Business How to make money with green Defensive, Cost driven and Pro-active activities A growth model for EcoDesign Activities 6/15/2018 AR17-G05-5051-118

Why Environment and Business? IT IS BUSINESS not just technicalities. Upstream: suppliers, creativity Downstream: marketing and sales, image  IT IS BUSINESS not just design Vision, strategy, programme  IT IS BUSINESS Managing the green processes GREEN IS ABOUT MONEY! 6/15/2018 AR17-G05-5051-118

Environmental thinking as a new creative management approach “Look with fresh eyes at old problems.” Prevention (“do not make it happen”) Functionality thinking, paradigm shift (“why are things as they are”) Life cycle approach (“stakeholder benefits”) 6/15/2018 AR17-G05-5051-118

How to make money with green? (Supplier) Less use of utilities, auxiliaries Example: printed wiring boards (Lucent) Use of recycled material Example: TV cabinets (Philips) Contributions to Eco Design Example: IC, subassemblies 6/15/2018 AR17-G05-5051-118

How to make money with green? (Ecodesign) Less materials Example: bill of material of green flagships (Philips) Application of smart materials Example: self disassembly of phones Application of recycled material Example: 10% recycled cardboard = 3% less cost Less Packaging, weight, volume’ Example: Philips packaging reduction strategy Less environmentally relevant substances Example: TV cabinets Lower disassembly time lower assembly cost Example: Philips Monitors 6/15/2018 AR17-G05-5051-118

How to make money with green? (Customer) Lower cost of ownership Example: reduce energy consumption in use phase Easy, fun, convenience Unpack, packaging waste Feel good, examples: Philips is a caring company (image) This product is 100% recyclable No hazardous substances 6/15/2018 AR17-G05-5051-118

How to make money with green? (Quality) Increase quality, reduce reject level Reduction of design complexity Shifts in the Hinkley diagram 6/15/2018 AR17-G05-5051-118

How to make money with green? (Paradigm shift) Functionality instead of embodiment focus Life Cycle Optimisation (example smart IC) Different Physical Principles (example: LCD instead of CRT) Service capabilities without mechanics (example IT applications) 6/15/2018 AR17-G05-5051-118

Correlation 5 ways to make money and benefits way money immaterial/ emotion Ecodesign Resource depletion Lower life cycle impact, compliance Suppliers Supply costs Enable ecodesign Green Marketing Sell more Caring, fun, nice to and Sales have Quality Less reject Easy, simple Paradigm shift Higher margins Lower life cycle / Functionality Lower costs of impact ownership 6/15/2018 AR17-G05-5051-118

Three types of industry approaches Defensive legal compliance no negative publicity Cost driven resource reduction (materials, packaging) (dis)assembly Pro-active user focus enhance business 6/15/2018 AR17-G05-5051-118

Defensive environmental activities Driver Compliance with laws, regulations Penalties ISO 14001 (paperwork) Competition Environmental labeling Competition Environmentally relevant substances Bad press Take-back obligation Penalties 6/15/2018 AR17-G05-5051-118

Pay-back environmental activities Driver ISO 14001 Reduction of use (process part) of utilities Packaging reduction Volume & weight Application of recycled material Reduction of Env. load Ease of (dis)assembly Assembly, end-of-life cost Weight reduction Enclosures, wire/cable, miniaturization Take back/ disassembly End-of-life and assembly costs 6/15/2018 AR17-G05-5051-118

Pro-active environmental activities Company driver ISO 14001 (product part) Integration of green in the product creation process Green marketing flagship designs We do it! validation of designs Greener than competition Designs with lower cost for user Energy consumption Design with improved Be a “caring company” chemical content Designs with ‘green materials’ Resource reduction Durable designs Customer “feel good” 6/15/2018 AR17-G05-5051-118

Feedback /continuous improvement Generic model of integrating environmental aspects into the product development process Get facts, prioritize according to benefits and feasibility, align with company strategy, consider environmental aspects, life cycle thinking Brainstorming, life cycle screening, consolidate into specification Applying design approaches Evaluation of results against targets and specification Release, communication plans Consider environmental aspects and effects Stage 1: Planning Stage 2: Conceptual design Stage 3: Detailed design Stage 4: Testing/Prototype Stage 5: Market launch Stage 6: Product review Feedback /continuous improvement 6/15/2018 AR17-G05-5051-118

Developments at Royal Philips Electronics   6-9 years ago 3-6 years ago Now Management involvement + ++ +++ Programme Policy statement and its interpretation Environmental Opportunity EcoVision Orientation Defensive Cost oriented Pro-active Approach Procedures Technical Business Tools Mandatory rules Manual Management of processes 6/15/2018 AR17-G05-5051-118

Mandatory Rules (Philips 1993 – 1996) Banned substances (heavy metal, PBBE, PCB, PCT, CFC, etc.) Environmental information Packaging Marking and labelling Customer information Batteries 6/15/2018 AR17-G05-5051-118

What was good and what should be improved? To Be Improved Awareness created Perception as threat by organisation Action taken, first mover Benefits for company doubted Environmental managers in place This is special, technical Collection of information Philips, what is in it for me? Program further developed   6/15/2018 AR17-G05-5051-118

The environmental opportunity program (Philips 1996 – 2000) All factories EMS certified (ISO 14001 or EMAS) 25% energy reduction in all operations 15% packaging reduction in all operations Eco-Design according to business needs Supplier requirements Creation of internal, external network Active participation in legislation, regulation discussions 6/15/2018 AR17-G05-5051-118

What was good and what should be improved? To Be Improved - Business groups systematically confronted with environmental through EMS - Sometimes bad experience with 9001, why should ISO 14001 be better - Clear cost savings through energy saving - ‘ In the factories it works, why not for products’ - Clear cost savings through packaging reduction …………. - Eco-design taking off, manual in place - Eco-design manual too static, LCA turns out to be too difficult, need for more practical approaches - Suppliers requirements - Business rationale, resistance purchasing - Internal and external network built - …………… - Lobbying   - EU/government inflexibility backfires internally 6/15/2018 AR17-G05-5051-118

EcoVision of Philips Electronics (1998-2002) Manufacturing (reference 1994) 35 % waste reduction in 2002 25% water reduction in 2002 Hazardous substances reduction in 2002 Category I 98% Category II 50% Category III 20% 35% energy efficiency in 2002 ISO 14001 on all manufacturing sites in 2000 6/15/2018 AR17-G05-5051-118

EcoVision of Philips Electronics Products (per Business Creation Unit) Green focal areas in product communication Green flagships each year (1 per BCU) X% of products fully ecodesigned in 1999 Y% of products fully ecodesigned in 2001 15% packaging reduction in 2002 (ref. 1994) Y > x to be determined by each devision 6/15/2018 AR17-G05-5051-118