Observations on the iNemi Summit: OEMs Talk "Sustainability"


Reading time ( words)

I-Connect007 was invited to attend a star-studded event in Schaumberg, Illinois, before the IPC Midwest Expo in October, as Motorola, Intel, Alcatel-Lucent, Cisco and others met to talk about building products using materials and processes which lend themselves to be more sustainable and environmentally friendly.

Having been stung by RoHS and, in particular, lead-free, these leading companies have established efforts to get ahead of the curve by developing more environmentally friendly products, taking a “cradle-to-cradle” approach. They’ve decided it’s time to get ahead of the environmental regulations coming down the pike.

To gain a better insight into the programs and efforts, we brought our 007 cameras to the Galvin Center on the Motorola campus to try to convey much of the message from these major OEMs out to the rest of the supply base. You can watch the many interviews we conducted with these major OEMs, suppliers, along with other stakeholders, by visiting Real Time with IPC Midwest and clicking on the iNemi tab.

How Far We’ve Come

Lauren Heine of Clean Production Action, the sole NGO (non-governmental organization – environmental group) in attendance kind of summed up the general feeling of the summit when, after listening to several OEM presentations, she said “we all want the same thing.” The same thing? Wow, we have come full circle.

Having been fairly active in some of the environmental efforts in California with the PCB industry over the years, I have always sensed an “us and them” mentality. Environmental groups wanted all the PCB facilities closed down and the PCB shops wanted to do as little as possible to comply with the regulations, and they certainly saw the environmental groups as the enemy. There were some high-profile arrests, including Milan Mandarick, then CEO of Sanmina.

It’s the Market, Stupid!

These days most environmentalists realize using market-driven approaches to encourage companies to seek out better efficiencies and sustainability is a much more effective--and faster--method than regulations alone, which tend to push the problems from one part of the world to another. Getting an OEM to buy into an incentive program as opposed to a punitive one seems like the right way to go. Having said that, it’s the upcoming REACH regulations which have “inspired” companies to act.

Kumbaya

But, is it true?  Do we really want the same things? It would seem so. The level of commitment these companies expressed was beyond that of a marketing pitch. Really, the iNemi meeting was a summit with industry peers and other stakeholders. It wasn’t a press conference or a public event. You had to be invited. Most in attendance were the directors of these programs in their respective companies. And it seemed like most were espousing directives from the very top of their organizations. It will be interesting to see how many of these programs survive the current market turmoil.

Apple: Going it Alone?

Although not present at the summit, Apple’s recent announcement of their new line of laptops and their EPEAT Gold certification, is a sign of the times. EPEAT is a market-driven EPA program, based on IEEE standard 1680, which certifies companies designing and producing energy efficient products, which use fewer toxic materials and lends themselves to be reused or recycled. A portion of Steve Job’s product introduction was dedicated to the environmental aspects of the new line of MacBooks and MacBook Pros. This is the first time I’ve heard this much attention being paid to the “sustainability” of Apple products. I guess last year’s attack on Apple and its suppliers still stings enough to get Apple to dedicate a good chunk of their press conference to the topic.

For the iPhone, here’s their “Environmental Status Report.”

iPhone 3G embodies Apple’s continuing environmental progress. It is designed with the following features to reduce environmental impact:

  • PVC-free handset
  • PVC-free headphones
  • PVC-free USB cable
  • Bromine-free printed circuit boards
  • Mercury-free LCD display
  • Majority of packaging made from post-consumer recycled fiberboard and biobased materials
  • Power adapter outperforms strictest global energy efficiency standards.

To learn more about EPEAT, watch the interview with EPEAT’s Wayne Rifer. As Wayne points out in the interview, 95% of all government purchases must come through the EPEAT program. And, although developed by industry and a voluntary program, If you want to do business with the government and, most do, you need to be part of the EPEAT program. The nice thing is, if you’d rather not, that’s fine.

As we’ve seen, again with Apple, they are very upfront about what they’re doing. As we heard from most in the room, there are solutions coming down the pike for just about everything on the REACH list: lot’s of new materials, smarter ways to build electronics including the final packaging and shipping. They are looking at the entire supply chain and to the total impact of their products, which includes all the materials (their toxicity and recyclability), energy needed to make them and the energy they’ll use during their lifetimes.

 Recycle and reuse

We heard from Mandy Hale of Sims Recycling Solutions, a global electronics recycler, who talked the recycling of electronic products and the difficulties they face with myriad of materials as OEMs try to differentiate their products from those of their competitors. Hale did say this was the first time her company had been invited to an event like this so attitudes seem to be changing as recycling considerations becomes part of the product development process.

We also heard from materials suppliers about the alternatives they’ve developed that seamlessly replace some of the more “toxic” ones on the market today. The biggest issue seems to be the cost, since a lot of the new alternatives carry a hefty price tag, initially, because of low volumes. Over time, as demand increases, then economies of scale will kick in. The problem is, to build sustainability into their products OEMs are going to either have to raise the price of their products or sacrifice profit for a while as they transition to these new materials. 

Surprising Absence

What was interesting was not who was in attendance, but who wasn’t. No major fabricators or EMS companies were there. I guess at this point, they don’t feel the pain of having to build the sustainable products their customers are talking about. Or, maybe, they’re resigned to the fact that they have no choice in the matter having been run over by the lead-free train. I can see their point. Let the OEMs figure out how and what they want to do, and then it will be time for the supply chain to get involved. Seems like the wrong way to go about things, but maybe it’s a bit of resignation.

Another Perspective on Sustainability

Brad Allenby provided another perspective on “sustainability” as the Summit Keynote.  Allenby, professor at Arizona State, and long-time environmental thinker for the electronics industry, took a very high-altitude approach to the subject by first looking at what really matters. What’s more important: Finding a solution to 1% or 2% of the waste generated by the planet (much of which is or can be recycled with current technology), or the proliferation of weapons of mass destruction?  

If you look at the big picture to gain some perspective on the problem of waste electronic products, you quickly realize that the issues surrounding “sustainability” of electronics is a minor issue at best, and mostly being driven by hype and marketing, not science and proper perspective. It’s too bad. Allenby talks about the disproportionate attention be paid to the electronics industry by environmental groups as opposed to some other industries more deserving of attention. He suggests that something else is going on, possibly an attack on consumerism or some other societal “evil” and electronics is an easy target.

Click here to watch this fascinating interview.

 Electronics Do Good Quotient

I talked with Allenby about the good electronic products do in the world. I wonder if there is some type of “do good” quotient where the “bad” attributes of products are offset by the good they do. My guess is that, when all things are considered, there’s a ration of at least a 10:1 good over bad. This might help us focus on the right priorities as a society. That way the organizations working to better society can focus their energy on those things that provide the greatest benefit. 

Electronics certainly can produce environmental harm, but most of the real dangerous issues have been addressed. Spending time and resources to remove the last few percent of the issues seems a bit wasteful to me. Forcing electronic product developers to spend billions of unnecessary dollars drives up the cost of those products that enhance the lives of millions of people around the globe. The desires of the developed world to squeeze out a bit more “good” has a huge effect on those in the developing world, keeping many of the new, enabling technologies of out the hands of those who need them most.

Although I believe most people pushing these programs are well-meaning, most do not understand the kind of effects developed world policies have on the developing world. If we took the time to ask them, I believe the policy-makers would be shocked at how those regulations impact the billions of desperately poor people in the world. Adding $5 to the price of a cell phone in the developed world is insignificant. But that $5 closes the door on tens or hundreds of thousands of potential users of, in many cases, this life-saving technology.

Millions of people around the world are just starting to get access to the some of the basic technologies that are beginning to change their lives. We ought to have a couple of sets of standards when we look at creating new rules. We ought to see how it affects the developed as well as the developing world. We should consider their well-being to be as important as ours.

Six Sigma, TQM

From my perspective, most of the issues with sustainability revolve around process improvement. If we continuously drive out waste from the entire supply chain, we achieve much of what is desired as a result. We remove waste and lower costs. Instead of driving up costs to develop “sustainable” products, which negate the benefit of these products to millions of poor in the developing world, we should drive out waste in our processes. A reinvigorated global quality program may be money better spent.

We recently published a book on lean processes, written by Steve Williams of Plexus. Click here and take a look. It’s a free download.

Let the Market do the Driving

If you really want to push change in the industry and drive markets toward the alternatives, don’t penalize, incentivize! Government should create regulations but also offer companies carrots. If that’s not enough, then tax those dangerous materials. There’s no better or faster way to move the industry. Hell, think of lead-free. In the time it took government and industry to “study” and then implement the RoHS Directives, the right incentives would have accomplished much more in half the time. No need to exempt this product or that industry. If the market was allowed to decide this (with some incentives from the government) then the products that needed lead would have it and those that really didn’t need it anyway would not. My guess is that if we had let the market decide which was the best way to go, we would have moved more towards an Occam-like technology instead of lead-free which is just an extension of the “same ‘ol same’ol,” with many of the inherent problems.

 

Bad PR, Or Why So Many OEMs Are Going Green

60 Minutes ran a report on a Southern Chinese city, Guiya, located in Guangdong Province, the center for electronic product recycling in southern China. The town would probably be considered a Superfund site if it were located in the United States. The program showed very poor people heating up stuffed PCBs to get at the lead. Others were working with barrels of acid to extract gold. All the extra materials were being burned in open fire pits. It was most certainly the ugly side of our business. 

60 Minutes did point out that all that was going on, from the secret shipments of e-waste and the unregulated recycling, was against the laws of the U.S. (the point of origin), the laws of Hong Kong (the port of destination) and of the laws in China, where the work was being done. And, although more and more e-waste is being handled properly each year, the report failed to provide some perspective on the problem. Keep in mind that the program was focused on illegal recycling. But, that matters not if 60 Minutes focuses in on your company’s logo on an old PC in the burn pile, or in the hands of eight-year-old child trying to melt the lead out of PCB while struggling to avoid the toxic fumes bellowing from the fire. No major OEM wants to get that call from reporter Scott Pelley asking for an interview on 60 Minutes.

For most OEMs, their public image isn’t a huge issue since a lot of them are building products that reside well under the radar of most environmental groups and consumers. It’s the companies like Motorola, Apple, Dell, HP, Sony and the like, producing consumer products in large volumes, that seem to be the target of most of these groups. 

The Japanese

I used to get really frustrated with all the hype Japanese companies were making around their lead-free or halogen-free efforts. I figured that they were part of the problem as U.S. companies tried to push back against the EU regulations, the Japanese were embracing them, almost providing tacit approval. I wanted the Japanese to stand up against these unfair regulations with their U.S. brothers.

Looking back, the consumer-heavy Japanese electronics industry was ahead of the curve. They got it well before the rest of us, even before most of the Europeans. They knew industry didn’t stand a chance. So, instead of investing energy in the fight, they poured research into alternatives. Interesting.

The Pop Bottle Model

Today, OEMs have to be certain that their products are being recycled properly. For years, it’s been a “fire and forget” mentality, but no longer.

I like idea of the old pop bottle recycling, which was in use when I was growing up. Unless a bottle broke, it got recycled, because each bottle had a 5 or 10 cent value based on a deposit paid when you bought the pop. I’m sure something like that would work for electronic products. On Saturdays, the Boy Scouts could be driving around the neighborhoods or setting up collection centers for all your used electronics. If something ends up in the trash, someone will dig it out. Again, the market could drive this. 

The more toxic and difficult it is to recycle a product, the higher the recycling deposit will be. Again, the market will push OEMs to continually reduce the number of undesirable materials in their products. The cheapest products will be those which can easily be reused or recycled.

The problem with mandating across-the-board restrictions on certain “toxic” or “dangerous” products is that you take the market out of the equation. In the case of solder, it’s one of the easiest materials to recycle yet we have been forced to eliminate it. The alternative has driven up the cost of products and the cost of recycling. When you look at Apple’s list of “toxic” materials mentioned earlier in this article, you may find that PVC, from a recycling standpoint, may be the better alternative than the “green” substitute it is being replaced with. The European Commision (EC) did a study on the recycling of PVC. Take a look. 

If the OEMs have to pay to have their products recycled, they will be looking for evermore-efficient ways to accomplish this. 

Green Shoved Down Our Throats at Any Price

Now, I’m not against doing what’s right for the environment. I just don’t think we should build green products at any cost. There are just too many good things electronic products provide, and limiting access to them, although it might seem like a good thing from a developed world perspective, can have dire effects in the developing world. Access to technology and the Internet is spreading ideas and information to all corners of the globe, giving people hope for a better future.

Get out a map of the world and color in all the countries where electronic products are prevalent. Then, color those that are up-and-coming. Next color in those without access to communications and the Internet. The first group is well integrated into the global economy--mostly democracies with good standards of living. The second group is made of up-and-coming economies, with a growing middle class where each day people are being pulled out of poverty because of their access, in part, to technology. The last group is mired in war, poverty and despair. 

Technology isn’t the only answer, but it is a fundamental tool, which helps people move slowly out of their condition. Despite all the negative hype, I am proud to be associated with an industry like ours. We have certainly changed the world.

A Foregone Conclusion

In any case, it would seem, hype or no hype, that “sustainability” will be at the forefront of much of the OEMs’ efforts in product development for the foreseeable future. We are stuck with their need to present a “green” image to customers. And it looks like they’re going to be willing to do this at any price. So brace yourselves!

The good news is that Cisco actually expressed concern that care had to be taken to ensure suppliers were nurtured through the “greening” process. I look forward to hearing how this eventually works out. Over the years, no matter what OEMs say, the focus has pretty much always been around their well-being and not that of their suppliers. I doubt this effort will be any different.

 

Send your comments to ray@iconnect007.com

 

Share

Print



Copyright © 2019 I-Connect007. All rights reserved.