Sustainable Manufacturing in the Automobile Industry - Assignment Example

 Outline Outline 1 References 26 Introduction The UK Automobile Industry is indeed one of the largest industries yet there has been a constant effort within the industry to adopt sustainable measures to manufacture products that are more environment friendly .The industry is concentrating to minimize harmful noxious gases from the motor vehicles. The concern for adopting sustainable measures in manufacturing process is pursued aggressively by UK, more than any other country. The proposed methodology will seek the possibility of acquiring sustainable manufacturing within the automobile industry, three element of sustainability (environment, economy, social) and the challenges attributed with the term. To fulfill the purpose of this methodology, the research is divided in six sections, where it is initiated by the introduction of the automobile industry specially the UK industry and the study moves further to investigate the sustainable manufacturing within the industry, highlighting the three elements and why sustainability is so important in the 21st century. The challenges in producing the Clean Energy vehicle and the findings within the industry are also mentioned and supported by various prominent books, journal and reliable websites. The study will be concluded on upon the observation of the study. The Automobile Industry According to 'Automobile Industry Analysis’, the UK automotive sector consists of both big companies owned by multinational manufacturers as well as small firms focusing and working exclusively to produce innovative designs blending with latest technology. The industry is undoubtedly vast and hence it also faces numerous challenges frequently. The industry has to cater with the ever increasing demands of the consumers with high quality vehicles as well as it also has to properly finance the R & D. The manufacturers and the engineers have to consider several safety measures and efficiency of the vehicle before launching a new model in the market. Since the last decade, the focus has also been shifted to manufacture sustainable products, considering the impact these motors have on the environment. The pressure is quite evident when the automotive industry has to constantly make efforts in meeting the needs of both overseas and domestic market, satisfying customers belonging to both higher income groups to lower income standards (“Automobile Industry Analysis”). Importance: The industry is one of the largest contributors in the growth of the economy. Professor Cooke highlights the importance of the automotive industry in UK in his report for SMMT, he mentions that more than 175,000 professionals are earning their living in this sector; almost 675,000 people are engaged in services related to this industry. It generates an approximately £ 50 billion revenue which is a huge contribution, as for the revenues from tax it is nearly around £ 45 billion. It also has a strong presence in the international trade market, its exports counts as £ 37.5 billion. The industry holds great importance in the growth of the economic and social welfare of UK (Cooke, 2012). Fig-1.1- A data from SMMT features the annual totals of the UK car manufacturing output, the figures of the year 2011 shows positive growth and as it is mentioned in the report analysis that it is a record breaking share (“SMMT”). Fig 1.2- It clearly project the geniuses of UK car manufacturers and how phenomenally their products are appreciated in home and around the world as well. This also adds up to great responsibility of constantly striving ahead to provide world class services and products to their customer in and around the world. Fig 1.3- It displays the position acquired by the UK automotive industry globally and around Europe. The Challenges in the Industry- Since the Industry is vast and is also contributing to the revenue of the nation, it also has several issues and challenges that may not be ignored; companies in UK automotive industries are surrounded by many such challenges like- The grueling competition- According to David, many nations with low cost labor are providing a stiff competition to UK automotive industry when it comes to manufacturing sector specially while assembling the vehicle. Countries like India and China get their most critical jobs done at lower cost which gives most of the suppliers a huge price pressure and they have no other way then to survive by minimizing their cost so as to remain in the competition (“Industry Issues”). Trade Buyers The trade buyers have become very selective and demanding because of the strong competitive pressure in the UK automobile industry. On the other hand private equity groups are the only option left for disposal in the corporate sector. The amount of cash flow can be easily predicted as the industry struggles to breath through the competition, the private equity groups smartly raises the prices up. The Supply Chain With globalization, the supply chain is an on going process which needs to be monitored thoroughly in order to match the speed at which the opportunities, demands and supply affects the very nature of any business. Cost effective and excellent logistic functions are the only keys to keep the supply chain of an industry function effectively. Block Exemption Regulations In the year 2003, this regulation effectively managed to promote the message of putting the customers in the driving seat. The dealers were benefitted with this regulation, by allowing them more independence from the manufacturers. These dealers were involved in competition of inter-brand, while actively being involved in price harmonization, liberalization of the market globally. This resulted in sales dropping in the retail outlets of Western European market , they became more concerned on how to improve retail performance and how to take measures in training their staff engaged in field work. Sustainability There has been a growing concern for adopting sustainable measures in manufacturing sector. Public is also responsible for pressurizing the manufacturers to embrace new methods in the production of vehicles like the materials used in assembling the motor or the engine type , the ELV that is the end of vehicle life. The impression is hugely on the company's choice of supplier as well as the life-cycle of the product considering its production, usage and the ELV. There is a pressure on the manufacturers to constantly inform about their growth, information about the environment to Non Government Organization (“Industry Issues”). Sustainable Manufacturing According to SMMT, sustainability can be referred to an attempt in achieving the right balance between the environmental care, social responsibility and economic growth of the company (“SMMT”). Where as according to author Markus in the book 'Sustainability in Automobile Production’- Sustainability is a form of development allowing the present generation to meet their needs without impairing future generations to do the same adequately. It is an order to satisfy all dimensions of sustainability equally (economic, ecologic and social aspects) (Markus et al, 2012). According to a report by Professor Cooke; ‘sustainability’ is more than just minimizing harmful gases emitted through engines. It is a responsibility to take control of the scarce resources and also consider recycling. A realistic approach is what needed to be adopted and applied effectively, this should mean a rapid evolution which is sustainable, easily achievable and is also cost effective (Cooke, 2012). According to David the definition of sustainable manufacturing can be termed as the creation of products or services that satisfies the needs of the customer as well as respects the environment and the well being of the communities (David, 2012). He further elaborates - “It aims to integrate sustainability in to manufacturing activities, seeking a balance between financial, social and environmental factors through the optimization of resource use, social value and environmentally responsible practices”. Why is Sustainable manufacturing necessary? It is indeed a triggering question as to why a sustainable manufacturing is necessary in the automotive industry, and how it can be achieved. Professor Cooke highlights in his report that the UK automotive industry has a reputation of utilizing resources which is unjustifiable, and therefore it is utmost necessary on the industry part to utilize its scarce resources effectively and make efforts in recycling the products to the maximum(Cooke, 2012). David in his book Lecture Notes in Applied and Computational Mechanics mentions that not just the philanthropic concept, it is the concern for the future generation, responsibility for the environment and other species, provides more reasons why sustainable manufacturing is important in the 21st century. If considering the more tangible aspect of this term, it offers more benefits to the business and more importantly to the manufacturer. He also highlights that pursuing sustainable strategies could possibly help a firm to improve its resilience to external pressures for example using fuels of different variations and the prices of raw materials or equipments used in the initial stages of manufacturing. Enabling Manufacturing Competitiveness and Economic Sustainability is a book written by Hoda A ElMaraghy where he has projected a clearer vision as to why it is a global concern to be responsible towards the environment and manufacture products which are more responsible towards environment. He points out that the developing nations has an increased number of vehicles with gasoline engines (GVs) that will eventually increase the global temperature through global warming and it will prove to be dangerous while misbalancing the social sustainability. Such major concerns for our future generation and greener planet have motivated manufacturers to design clean energy vehicles (CEVs). There are many cleaner options considering the responsibility towards planet earth, such as - electric vehicles (EVs), plug in hybrid vehicles, hybrid electric vehicles, fuel cell vehicles and bio diesel engine vehicles (BEVs) (Hoda, 2012). The Three Elements of Sustainability Sustainability refers to an attempt to ensure the quality of life to present generation and for the future generation as well, the quality of life being recognized as to be living in a healthy surrounding (element- environment) ensuring an apt standard of living (element- economic) and a life that represents a perfect physical, intellectual and morally satisfying (element- social).These three elements are considered when sustainability strategies are adopted by any sector (“Sustainable Development”). The decisions and actions of communities have an impact on the environment, economy and social aspects of the society; therefore it is a huge responsibility on people to take adequate measures to maintain a good balance between these three elements of sustainability. It is how ever very important to anticipate the result or consequences of actions in order to maximize the effects that are positive where as reduce the effects that are negative. (“Sustainable Development”). Fig 1.3- The three elements of sustainability (Nicolas, et al 2012) How can it be Achieved Professor Cooke in his report has very well outlined some suggestions that need to be considering while manufacturing motor engines (Cooke, 2012). Adopting energy resources that are efficient and renewable like combined heat , wind lower or power operations like CHP, decreasing the heat distribution loss and making efforts to aware the public with the environmental and social responsibility and the commitment to utilize energy to the maximum. To establish strategies and action plan for efficiently using water facilities, to reuse rain water and ensure clean outflow. To adopt paint technologies that is water based and low solvent emission. To ensure a good follow up with the supply chain in the industry and minimize the use of hazardous and dangerous substances. ISO 14001 is an environmental management system; manufacturers should make continuous efforts efficiently utilizing waste and energy. Smart Logistics is the answer to cost efficiency and saving environment. Long distance movement of finished products should be minimized. It is also the duty within the staff members to be responsible in their work and create awareness with the customers, contractors and team members. There should be an intelligent engineering involved in minimizing the weight of the materials, considering the overall dimension as well as the weight of unit. The concept of aerodynamics should be considered and efforts should be made to enhance it so that the car slips through the air and the resistance is minimized. Energy required to use the system should be minimized weather it is for heating or for cooling. The technologies should be enhanced such as in the case of hybrid, dual fuel system, and electric and bio fuel compatibility. Engine should be downsized and such tyre should be introduced that have low rolling resistance quality. There should be smart navigation systems for support Safety measures should be added not only for the driver and other passengers but also for the pedestrians Awareness among the public is extremely important. In order to achieve the desired balance in the three elements of sustainability in the automotive manufacturing sector, the answer is ‘Clean Energy Vehicles’. Challenges in Achieving Clean Energy Vehicles There are many challenges in order to manufacture such vehicles, as Hoda discuss in his book that the main concern is to enhance clean energy vehicles in order to minimize the causes of global warming. It should be kept in mind that this does not mean that it would dramatically minimize economic activities, considering metal resource limitations (Hoda, 2012). The challenges are formulated with the following possible controls 1. Material- The Metal supply (Base) - among the metals like steel, aluminum and copper; it is 'copper' which is considered to be the most important metal in CEVs. The price of copper has increased phenomenally since 1998; it is nearly five times as confirmed by the London Metal Exchange. Metal that are rare-To make the bodies of a vehicle thinner, many metals are used as catalysts. Considering EVs- lithium is required while neodymium and dysprosium is required in electric motors. Sourcing these metals is also a challenge because the nations supplying such metals have an unstable economy. Replacement- Substitution of materials is another challenge to minimize the risk of high prices and minimize the supply. To Recycle- It is important for the manufacturers to ensure secrecy while recycling. Advanced technology is needed to recycle the used and efficient products at low cost. 2. The issue of global warming- Factories with energy efficiency- At the manufacturing stage of GVs, almost 20% of CO2 emission has already taken place while the ratio is close to 40% in HEVs, considering CEVs; the percentage is even more in the manufacturing phase, energy efficiency is a major concern in CEVs where as electricity derived from wastages and solar wind is still reliable with communities using CEVs. Production - It is an established fact that every country has a unique atmospheric gear and they have their own energy balance which is unique. Vehicles or the vehicles equipments are manufactured in a nation where coal is the main source of energy production then it is definitely harmful for global warming. Emission trade and carbon tariffs need to be put in to consideration. 3. Information and Communication Technology and the Ageing groups Vehicles Robots- It must be an eye opening fact to consider the speed at which citizens of an advanced country like Japan are ageing rapidly. Almost 23% of the people in Japan were found to be more than 65 years in the year 2010. For such nations EVEs are a good option. Technology- Today many of the professionals are working within the confinement of their homes due to advanced technological system. There could be a promising concept of vehicle sharing system in the future and the automobile industry can choose to manufacture products only for a service oriented sector. 4. Industrial Arrangement Competition- The conventional auto suppliers have a higher risk of being eliminated from the market if the popularity of EVs grows up, where as battery suppliers and software developers are definitely on safer side. Here is the question that weather the present automobile manufactures will be able to breathe through the competition? Is there a possibility that the firms selling batteries and software will occupy the market in the future? Flexibility in designs- Proportioning or allotment of parts is trouble free in EVs as compared to HEVs or GVs. It also provides the liberty to the designers to use advanced processing technologies to create new shapes and designs effectively (Hoda, 2012). Investigating the Sustainable Manufacturing Process of the UK Automobile Companies with Facts and Figures Author David in his investigation and survey of UK manufacturing companies has highlighted many facts and interesting information through various figures which explains the various choices, decisions and practices within the UK automobile industry. The survey was focused on eco design and sustainable manufacturing by Warwick Manufacturing Group at the University of Warwick's International Manufacturing centre. This survey has also been published along with various questionnaire, the presented key findings were conducted in the year 2011.It is how ever interesting to note that the companies manufacturing machinery and equipments were among the maximum participants – 38% , while those who are engaged in metal manufacturing accounted for about 10% only (David, 2012). The key findings- Fig – 1.4- Focusing on eco design and sustainable manufacturing. Derivation- what drives the companies to adopt sustainability measures in manufacturing is clear through this figure as 75% is the reason for being compatible with the legislation that is preferred by most of the firms. Financial benefits take the second position while 39% believes that it is the reputation of the firm that drives them to adopt such measures. Market opportunities occupy 44%. Fig – 1.5: Projects the obstructions on the way for eco designs and sustainable manufacturing in companies. Derivation- This interesting finding shows that 82% of the respondents believe that high implementation costs and long payback time are the most important obstruction to adopt such measures. Lack of awareness among the stakeholders takes the second most important reason and the shortage of in house expert as the least important obstruction as being rated as only 29% or simple 9% as most important. Fig – 1.6: Strategies adopted by firms for sustainable manufacturing Derivation- The above figure shows the strategy which is the most popular method to reduce the use of resources which accounts to 76% of the participants. Methods of reusing and recycling are the second most preferred strategy gaining 65% votes. Minimizing pollution and hazardous gas emission comes further in the race as occupying 59% responses while designs for higher life cycle of the product grabs 56% votes. Strangely 3% of the firms have not yet decided on any strategy while 9% of the respondents prefer to use other strategies of designs. Fig – 1.7: What are the golas of the companies when it comes to sustainable manufacturing- Derivation-This is also a very interesting figure, it presents that 74% of the participants consider their sustainability goals to meassure the environmental footprints of their product and the processes involved while the second most popular reason is to train the employees , suppliers and their supply chain members on sustainability that takes 66% votes. Third is to verify the performance of the supply chain as being 32%, while 25% goes toward a service business model. Merely 6% of participants have chosen no goals at all. Fig – 1.7: Sustainable strategies used by manufacturing sector Derivation- This figure projects about the various strategies preferred by UK manufacturing companies in order to adopt sustainability in their organization. Interestingly 81% of the manufacturers use fewer resources like water, raw material and energy while 79% of the firms have adopted the product stewardship strategy, reversing the logistics and almost 53% of participants have not adopted any strategy. Fig – 1.8: Derivation- The Supplier selection criteria will show how much importance the participant gives by selecting number 1 to 4 projecting their strategy for sustainability. Here, as a result cost came as being the highest regarded criteria by a 3.47/4 score. Being flexible in creating new plans or ideas occupies the second position 3.08/4. Where as 2.46/4 is a score granted to building long term relationship by the supplier (David, 2012). Sustainability Indicators According to the website 'sustainable measures’; an indicator helps in understand the current position of a sector, its movement and efforts to reach its goal. An ideal indicator will guide and sets an alarm to a problem before it gets out of control and cannot be fixed. Indicator of a sustainable community is quick to present a point where the three elements of sustainability are linking and getting weaker. It allows showcasing the problem areas as well as identifying a problem timely in order to fix it accordingly (“Sustainable measures”). The indicators of sustainability offers a relatively clear picture as the three different dimensions are very well connected as reflected through this figure below- Fig- 1.9: It is a web of interactions, communications between communities (“Sustainable measures”). Why are indicators needed? Simplification, Quantification and communication are three main functions offered by the indicators. They are meant to simplify complex phenomena, which are quantifiable and can be easily communicated and understood (“Sustainability Indicators”). Measuring Sustainability Sustainability can be measured by various indicators. To get better understanding, one may consider an example of asthma hospitalization rate. These rates are a clear indication of a community's respiratory health system. It can also help in indicating the quality of air pollution in the environment of a particular region. Like wise the measure of peak ozone concentration will highlight the possible health hazards to people or which may also result in to asthma attacks. Sustainability indicators will project a clear picture of sustainability considering any specific category of the wellbeing of that community or region. It is how ever important to note that sustainability can be measured through characterization of the community as a whole (“Measuring Sustainability”). Applying 10 Indicators to Automobile Industry Following are the 10 selected indicators which are being applied to the automotive industry to generate key findings from the respective sector. INDICATORS KEY FINDINGS WITHIN THE UK AUTOMOTIVE INDUSTRY 1 Water Quality Total combined water used in 2010 – 5,468 ( in 000m3) (AS) Total combined water used in 2011 – 4,875 Percentage change from 2010 – 2011 is - 10.8 (“2012 Report SMMT”) 2 Air Quality Total combined CO2 equivalent in 2010- 1,442,896 (tonnes) (AS) Total combined CO2 equivalent in 2011- 1,395,233 Percentage change from 2010 – 2011 is - 3.3 (“2012 Report SMMT”) 3 Natural resources An example of Range Rover Evoque UK , in November 2011 it was reported that the vehicle is manufactured by recycled materials which demands 66% lower energy and minimizes the carbon footprint by 54% in production. Each vehicle of this brand has substituted man made material with recycled plastic weighing 16kg and natural material weighs 21kg. The trim is 100% recycled polyester and the materials are sourced from consumers waste. Each car has used an equivalent of 42 liters bottles gaining lower carbon footprint of around 77% through these components (“Range Rover Evoque”). 4 Stockholder Profits The combined Turnover in 2010- 42.3 ( GBP Billion) The combined Turnover in 2011 – 45.3 Percentage change from 2010 – 2011 is 7.0 (“2012 Report SMMT”) 5 Production Materials Total Production in 2010- 1.39 ( Million) (UK) Total Production in 2011 – 1.46 Percentage change from 2010 – 2011 is 5.1 (“2012 Report SMMT”) 6 Jobs Total number of employees in 2010- 67,791 The combined Turnover in 2011 – 74,155 Percentage change from 2010 – 2011 is 9.4 (“2012 Report SMMT”) 7 Education Number of training days/ employee in 2010- 2.93 Number of training days/ employee in 2011- 2.94 Percentage change from 2010 – 2011 is 0.3 (“2012 Report SMMT”) 8 Health /safety The British safety Council awarded Perkins engines Peterborough facility in the 2012 international safety awards. It clearly shows that how safety and health measures are taken in to consideration by manufacturing companies and these efforts are recognized by government. Almost 570 applications were sent out of which 125 companies were awarded. In 2009, Department for Transport’s (DfT) policy document clearly indicated that the government aims at constructing British roads as the world’s safest (“2012 Report SMMT”). 9 Energy Combined energy used in 2010- 4,659 (Gwh) Combined energy used in 2010- 4,381 Percentage change from 2010 – 2011 is - 6.0 (“2012 Report SMMT”) 10 Crime Vehicle crimes came down by 26% since 1997 and it continue to fall down. in the 21st century , it is reported that the vehicle theft has fallen by 14 % (“2012 Report SMMT”). However one such fact cannot be ignored that Car crime are over £1 billion/year in UK (“NEDCAB Youth Advice”) and according to a report one car is stolen every minute in UK (“Car theft”). Conclussion The proposed methodology has been useful in understanding the automobile industry of UK. It has a strong presence in the international market and it particularly rules its domestic market. The growing concern to adopt sustainability measures has been seriously practiced by the manufacturers and as compared to other market, UK still leads in responsibility towards a greener environment and maintaining the economic standards of the companies. The concept of CEVs is not new to the world but constant research and technological advancement is needed to manufacture new products that are safer for the community and for the future generation. The use of natural resources should be minimized and new methods of recycling of the wastes should be adopted rapidly. The support of government is essential and it should make several programs to appreciate and recognize the contribution of manufacturers and engineers who are constantly engaged in adopting sustainability. Special NGO's efforts should not be ignored who are spreading awareness among the public to be more environment responsible. The future of the automotive industry thus looks brighter provided that the effort is on going and does not pause. References K Hn, M. and Tebbe, L. (2012) Sustainability in Automobile Production. Germany: GRIN Verlag, p.1-5. A Elmaraghy, H. (2012) Enabling Manufacturing Competitiveness and Economic Sustainability. London: Springer, p.434-437. A. Dornfeld, D. (2012) Lecture Notes in Applied and Computational Mechanics. London: Springer, p.12-15. Autolok.co.uk (n.d.) Car theft: The facts. [online] Available at: http://www.autolok.co.uk/Pages/car%20theft.htm [Accessed: 14 Feb 2013]. Automobileindustryanalysis.co.uk (n.d.) Automobile Industry Analysis, UK Market Sector Report. [online] Available at: http://www.automobileindustryanalysis.co.uk/ [Accessed: 12 Feb 2013]. Cooke, P. (2012) United Kingdom Automotive Industries. [e-book] London: University of Buckinghum. 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