Design for sustainability: turning waste into profit

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Second year presentation. Sustainable Manufacturing Research. University of Liverpool

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Design for sustainability:Turning waste into profit

Do not waste your cash, cash your waste!

CO-PRODUCT

WASTE

Samuel Bautista Lazosabala@liv.ac.uk

Supervisors: Dr. Tim Short and Prof. KKB Hon.

Manufacturing and Laser EngineeringSCHOOL OF ENGINEERING

SECOND YEAR PRESENTATION

1. Ph.D., Strategic Planning 2. Literature Review 3. Contributions to the body of

knowledge 4. Plans for Methodology Validation

through industry case studies.

Presentation Layout

Ph.D., Strategic Planning

Vision: To finish my Ph.D., project in 36 months

producing a thesis that requires no significant corrections and passing the viva with no significant headaches.

Ph.D., Strategic Planning

Mission: To develop and validate new academic

knowledge and a methodology that contributes to the body of knowledge for sustainable manufacturing; producing a doctoral thesis within a three year time frame.

Ph.D., Strategic Planning

Objectives: Read and gain a deep understanding of

the literature in the area of sustainable engineering during the first year.

Develop the theory and methodology by the end of the second year.

Test and validate the theory and methodology during the third year.

Ph.D., Strategic Planning

Ph.D., Goals. Have at least one Journal paper accepted

for publication before my viva. Submit thesis no later than 01 September

2011 Pass viva with no significant corrections Submit corrections before October 2011

Ph.D., Strategic Planning

Ph.D., Strategic Planning: SWOT ANALYSIS of the Project.

HELPFUL HARMFUL

INTERNAL ORIGIN

STRENGTHS Original approach suggesting the use of

existing company’s resources to transform waste into value adding products.

Original approach from a product designer’s perspective.

Marketable ideas keen to be adopted by industry.

Creative tools and methodology to analyze and transform industrial waste.

WEAKNESSES Lack of contact with industry One year left to validate the

methodology through case studies

EXTERNAL ORIGIN

OPPORTUNITIES Opportunity to get industry contact and test

ideas in conjunction with the recycling and waste team from Envirolink Northwest. http://www.envirolinknorthwest.co.uk/Envirolink/Remade-sig.nsf?OpenDatabase

THREATS the timing to conclude industrial

cases is crucial to finish writing the thesis on time.

Ph.D., Strategic Planning: Gantt Chart  Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11

THEORETICAL                                                      

Literature review                                                   

                                                     

Develop theory                                                     

                                                     

Integrate theory                                                     

                                                     

PLAN                                                     

Design Experiments                                                     

                                                     

Validate experiements                                                     

                                                     

Contact companies                                                     

                                                     

DO                                                     

Approach companies                                                     

                                                     

Gather Inf, Data.                                                     

                                                     

Execute experiemts                                                     

                                                     

CHECK                                                     

Review results                                                     

                                                     

ACT                                                     

Corrective measures                                                     

                                                     

Generate report                                                     

                                                     

Review theory                                                     

                                                     

Improve theory                                                     

                                                     

Write thesis                                                      

                                                     

Submit Thesis                                                     

                                                     

Prepare for Viva                                                     

                                                     

Viva                                                     

                                                     

Make & Submit corrections                                                     

                                                     

SustainabilityThe waste challenge Theory of waste in industryExisting solutionsThe need to turn waste into

profit

Literature Review

Sustainable development: is development that meets the needs of the present without compromising the ability of future generations to meet their own needs [1].

The simple definition of sustainability is improving the quality of human life while living within the carrying capacity of supporting eco-systems [2].

Literature Review: Sustainability

In enterprise environments the term Triple Bottom Line (TBL) is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters of sustainability [3].

Literature Review: Sustainability

Waste generation creates environmental concerns about resource depletion and ecosystem degradation, economical issues of resource productivity, and social concerns about landfills and toxic wastes.

Literature Review: The waste challenge

Figure. 1. Estimated waste arising by sector in the United Kingdom: 2004 [4]

Literature Review: The waste challenge

Figure. 2. Remaining Landfill capacity by region showing type of site and life expectancy at the end of 2007. [5]

At the end of 2007:

• 18 per cent of capacity was in inert sites.

•72 per cent of capacity was found in non hazardous sites.

•three per cent of capacity was found in hazardous merchant sites.

•seven per cent of capacity was found in restricted user sites (non hazardous and hazardous)

Previous research in the field has shown that the early stages of a product’s life cycle have the most environmental impact whilst adding the least economic value, therefore the need for resource efficiency and circular economies [6]

Literature Review: The waste challenge

Figure 3. Accumulation of economic value and environmental impact along the supply chain [6]

The material purchase cost of wasted materials is the most important environmental cost factor for manufacturing companies, accounting for 40–70% of total environmental costs, depending on the value of raw materials and the labour intensity of the sector

Literature Review: The waste challenge

Figure 4. Material and money flows in a paint shop. [7]

In 1988 Taiichi Ohno defined the following equation: Present capacity = Work + Waste

Based on this observations Ohno defined the seven types of waste: [8]

OverproductionWaste of time on hand (waiting)Waste in transportationWaste of processing itselfWaste of stock on hand (inventory)Waste of movementWaste of making defective products

Literature Review: Theory of waste in industry

Ohno’s concepts were further developed by academics to create the‘lean thinking’ philosophy to reduce waste in industry. Womack and Jones [9] rewrote the equation as:

Process output = Value + Muda type I + Muda type II

Value: Work which creates value as perceived by the customer.Muda type I: Work which creates no value but is currently

required by the process in order to function so cannot be eliminated just jet.

Muda type II: Work which creates no value as perceived by the customer and so can be eliminated immediately.

Waste: Any activity that does not add value as perceived by the customer.

Literature Review: Theory of waste in industry

Literature Review: Theory of waste in industry

In the field of Material Flow Cost Accounting, Jasch defines the following equation [x]:

Outputs = product output + non product outputPO = Products + By-products + packaging

Figure 4. Material and money flows in a paint shop. [7]

Industrial Symbiosis.

it “engages traditionally separate industries in a collective approach to competitive advantage involving physical exchange of materials, energy, water, and or by-products” [10]

NISP outputs in the UK for the year 2005/2006 attribute cost savings to business for (£) 31, 585,723 and 393,670 tons of materials diverted from landfills, for the complete report including persistence estimations and environmental benefits see [11]

Literature Review: Existing solutions

The project Transformation of waste into products culminated in 2006 with the publication of the paper: “A novel assessment tool for reusability of wastes” [12].

The methodology used relies on brain storming sessions to generate ideas for the reusability of wastes

Literature Review: Existing solutions

Literature Review: Existing solutions

Integrated waste management From triangles to cycles proposed by Cossu [13]

Figure 5. Graphical representation of the waste management hierarchy as adopted in the European Union [13]

Figure 6. Material and energy cycle, from production to waste management [13]

In spite of national industrial symbiosis efforts the reported quantity of materials diverted from landfills is small (393,670 tons) compared with the annual waste generation in industry of 43.5 Million tons.

Abhishek et al. Calculated adjustments for persistence (the time scale over which the benefits of a project are expected to last) the total diversion accounts for only 1.36 million tones [14].

Literature Review: The gap in the literature and the need for solutions.

Research in policy making has shown the potential benefits to change the discourse from waste prevention to material efficiency [15]

New methodologies should be market driven and not based on government stimulation.

The current economic situation is forcing governments to cut spending threatening current programs that support business reduce waste in industry.

Literature Review: The gap in the literature and the need for solutions.

Industrial symbiosis doesn’t emphasize the potential to upgrade waste and generate profit from it, it’s focus is to reduce operating costs.

Certain manufacturing processes can not achieve near zero waste targets, e.g. When Trims, cut and cut offs are inherent to the process, therefore the upgrading of wastes is needed.

Literature Review: The gap in the literature and the need for solutions.

Contribution to the body of knowledge: A proposed definition for waste

Previous research in the field of waste management has provided a new definition and taxonomy of waste based upon an object oriented modelling language that describes objects by defining the four universal properties or attributes that objects can have: Purpose, Structure, State and Performance (PSSP) [16]. Describing the nature of waste and explaining why things become waste provides a base ground for waste management theory [17].  Further synthesis of the concepts explains the existence of two major classes of waste:

Physical waste: change in an artefact’s state or structure that prevents obtaining a desired purpose and performance.

Non physical waste: an activity’s purpose or performance that does not provide a desired state and structure in an artefact.

Contribution to the body of knowledge

Figure 7. Analysis of a company’s outputs

Contribution to the body of knowledge : Mapping Outputs and profits

Product Waste

Loss

SALEABLE (PO)

(NPO)

+

UNSALABLE (PO)

Profit

Figure 8. Product output and non product output quadrants.

Contribution to the body of knowledge : Profitability analysis of the company’s outputs

Figure 9. Cumulative profitability “Whale Curve” source: [18]

Figure 10. Kano Diagram. Source: Berger et al. [19]

Contribution to the body of knowledge : Profitability analysis of the company’s outputs

Maximizers

Enablers

Satisficers

Product QWaste Q

- £

£

Figure 11. Product Output analysis

Maximizers are exciting products that add exponential levels of profit with a minimum amount of product output, a lack of maximizers will not harm the competitiveness of the product mix.  Satisficers are desired products that have linear contributions of profit in relation to product output and product mix strength. Enablers are expected products that have a minimal impact on profit but a lack of them will severely weaken the strength of the product mix.

Contribution to the body of knowledge : Profitability analysis of the company’s outputs

Critical Leader

Strategic Product QWaste Q

- £

£

Fig. 12 Loss in product output

The turkey in a supermarket is a Strategic and fixed loss which aims to attract customers. Free Gillette razors are Loss Leader outputs that vary proportionally to the Quantity being produced and sold. Critical loss outputs have high margins of loss per unit of product as in the case of the Xbox video game that is trying to enter the highly profitable video game market.

Unavoidable: Inherent to the process at a fixed cost.

Inefficiency: Variable and proportional to the waste output.

Error Caused by accident or error low frequency but high margin loss.

Contribution to the body of knowledge : Profitability analysis of the company’s outputs

Product QWaste Q

- £

£

Unavoidable

Error

Inefficiency

Figure 13. Losses in the non product output quadrant

Compliance: Transforming a waste into a low margin co-product without adding any significant value to the customer.

Upgrader: Transforming waste into a value adding co-product that increases profits.

Alchemy: Transmute waste into a highly profitable co-product.

Contribution to the body of knowledge : Profitability analysis of the company’s outputs

Product QWaste Q

- £

£

Alchemy

Compliance

Upgrader

Figure 14. Turning waste into profit

ATM OF WASTE (Analyze-Transform-Market): A tool for concept product design based on waste.

Contribution to the body of knowledge : The ATM Methodology

A

T

M

IMPROVEMENT

INVEST?

Figure 15. The ATM wheel

Contribution to the body of knowledge : The ATM Methodology

ANALYZE.

Identify the waste generated in each step of the process and visually represent it on a waste map parallel to the value adding process map.

It is crucial to identify the critical waste, using the Pareto principle (80/20 rule) we could determine which type of waste affects profit the most.

Characterize and measure the wastes to create a waste inventory.

A

T

M

IMPROVEMENT

INVEST?

TRANSFORM

Design a product concept that could be manufactured using wasted capabilities and other wasted resources in the system.

Identify the value adding possibilities that the wasted resources in the system could add.

What function can the waste provide given its characteristics? What value can it add to the customer? Is there a market need for the function? What are the customer requirements, needs and expectations? What are the manufacturing requirements? Can we produce it?

Contribution to the body of knowledge : The ATM Methodology

A

T

M

IMPROVEMENT

INVEST?

MARKET Who will buy the product? How much potential profit could this

product generate?  Answering each of the questions will

determine whether the product concept can move forward. This cycle could be iterated for improvement and to optimize the transformation of the overall waste into profit

Contribution to the body of knowledge : The ATM Methodology

A

T

M

IMPROVEMENT

INVEST?

Contribution to the body of knowledge : Fundamental uses of waste

Reincorporate

Store

ExtractReplace

Perform

Incorporate

Purpose

Structure

State

Performance

Figure 16. The inspiring wheel for potential uses of waste

Take advantage of Waste properties when they are more functional than conventional products.

Activated oyster shell produced by pyrolysis at 750º C exhibits promising performance as a suitable substance for phosphorus removal [20].

Contribution to the body of knowledge : Fundamental uses of waste

Methodology validation through industry case studies

First Choice - skip hire.

Large quantities of construction and demolition soil have the potential to be upgraded into top soil for agricultural use.

REFERENCES:

1. Beeton, I.M., The book of household management. 1863, S. O. Beeton: London.2. Hawken, P., L.H. Lovins, and A.B. Lovins, Natural capitalism : the next industrial revolution. 1999, London: Earthscan396.3. Ohno, T., Toyota Production System - Beyond Large Scale Production. 1988, Portland, Oregon: Productivity Press.4. Womack, J. and D. Jones, eds. Lean Thinking: Banish waste and create wealth in your corporation. 2003 ed. 2003, Simon & Schuster UK Ltd: Bath, UK. 396.5. Bicheno, J., The lean toolbox: A quick and dirty guide for cost, quality, delivery, design and management. 1998, Buckingham, England: PICSIE Books. 166.6. systems2win. Muda - The 7 Types of Muda %U http://www.systems2win.com/lk/lean/7wastes.htm. [cited 2009 14th December].7. Friend, G., EcoMetrics: Integrating direct and indirect environmental costs and benefits into management information systems. Environmental Quality Management, 1998. 7(3): p. 19-30.8. Schmidtbleek, F., Toward Universal Ecology Disturbance Measures : Basis and Outline of a Universal Measure. Regulatory Toxicology and Pharmacology, 1993. 18(3): p. 456-462.9. Ritthoff, M., H. Rohn, and C. Liedtke, Calculationg MIPS: Reseource productivity of products and services. 2002: Wuppertal Institute for Climate, Environment and Energy at the Science Centre North Rhine-Westphalia.10. Brundtland, H., et al., Report of the World Commission on Environment and Development: Our Common Future. 1987, UNITED NATIONS: Oslow, Norway.11. Pohjola, V., Formalizing Waste Management. 2006. p. 47-82.12. Pongrácz, E., Re-Defining the Concepts of Waste and Waste Management: Evolving the Theory of waste managemet. 2002, University of Oulu: Oulu, Finland.13. Jasch, C., Environmental and Material Flow Cost Accounting - Principles and Procedures. Eco-Efficiency in Industry and Science, ed. A. Tukker. Vol. 25. 2009, Delft, The Netherlands: Springer Netherlands.14. Hess, J.D. and E. Gerstner, Loss Leader Pricing and Rain Check Policy. Marketing Science, 1987. 6(4): p. 358-374.15. DeGraba, P., The loss leader is a turkey: Targeted discounts from multi-product competitors. International Journal of Industrial Organization, 2006. 24(3): p. 613-628.16. Overfelt, M., GILLETTE. FSB: Fortune Small Business, 2003. 13(3): p. 44.17. Investopedia. Loss leader strategy. 2010 [cited 2010 January 15]; Available from: http://www.investopedia.com/terms/l/lossleader.asp.18. BusinessWeek. Microsoft's red ink game. 2005 [cited 2010 January 15]; Available from: http://www.businessweek.com/technology/content/nov2005/tc20051122_410710.htm.19. Erkman, S., Industrial ecology: An historical view. Journal of Cleaner Production, 1997. 5(1-2): p. 1-10.20. Chertow, M.R., Industrial symbiosys: Literature and taxonomy, in Annual Review of Energy and Environment. 2000. p. 313-337.21. Jacobsen, N.B., Industrial Symbiosis in Kalundborg, Denmark: A Quantitative Assessment of Economic and Environmental Aspects. Journal of Industrial Ecology, 2006. 10(1-2): p. 239-255.22. Laybourn, P., NISP: Origins and Overview, in Industrial Symbiosis in action: Report on the Third International Symbiosis Research Symposium, J. Coppock, R. Lombardi, and P. Laybourn, Editors. 2007, Yale University: New Haven, Connecticut. USA. p. 13-18.23. Agarwal, A. and P. Strachan, NISP: Towards Developing a New and Integrative Methodology to Evaluate Industrial Symbiosis Networks, in Industrial Symbiosis in Action: Report on the Third International Industrial Symbiosis Research Symposium, J. Coppock, R. Lombardi, and P. Laybourn, Editors. 2007, Yale University: New Haven, Connecticut. USA. p. 21-24.24. Gadiesh, O. and J.L. Gilbert, How to map your industry's profit pool. Harvard business review, 1998. 76(3): p. 149-162.25. Gadiesh, O. and J.L. Gilbert, Profit pools: a fresh look at strategy. Harvard business review, 1998. 76(3): p. 139-147.26. Doyle, P. and P. Stern, Marketing management and strategy. 4th ed. 2006, Harlow, England: Pearson Education. 446.27. Porter, M.E., Competitive strategy: techniques for analyzing industries and competitors. 2nd ed. 1980, New York, NY. USA: The free press. 396.28. South, J.B. and J.E. Oliver, What Is a Profitable Product? Industrial Marketing Management, 1998. 27(3): p. 187-195.29. Boyd, W.H. and C.W. Orville, Marketing management: a strategic approach 1990, Homewood, IL. USA.: Irwin. 899.30. Kotler, P., Marketing management. 11th ed. 2003, New Jersey, USA: Prentice Hall. 130.31. Hague, D.C., Pricing in business by D.C. Hague, ed. U.O.M.C.f.B. Research. 1971, London: Allen & Unwin. 332.32. Schwartz, B., et al., Maximizing versus satisficing: Happiness is a matter of choice. Journal of Personality and Social Psychology, 2002. 83(5): p. 1178-1197.33. Kaplan, R.S. and A.A. Atkinson, Advanced management accounting / Robert S. Kaplan, Anthony A. Atkinson. 3rd ed. ed. 1998, Upper Saddle River, NJ :: Prentice-Hall International 34. Kaplan, R.S. and R. Cooper, Cost & effect : using integrated cost systems to drive profitability and performance. 1998, Boston: Harvard Business School Press. 357.35. Berger, C., et al., Kano's Methods for Understanding Customer-defined Quality. Center for Quality Management Journal 1993. 2(4): p. 36.36. Sauerwein, E., et al., The kano model: how to delight your customers, in in: Preprints Volume I of the IX. International Working Seminar on Production Economics. 1996: Innsbruck/Igls/Austria. p. 313-327.37. Keiningham, T.L., et al., Does customer satisfaction lead to profitability? The mediating role of share-of-wallet. Managing Service Quality, 2005. 15(2).38. Simbanegavi, W., Loss leader or low margin leader? Advertising and the degree of product differentiation. 2008, University Library of Munich, Germany. 

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