Eco-innovation
The next industrial revolution Astrid Severin, Greenovate! Europe’s managing director, examines innovative resource and material efficiency Since the first industrial revolution in 1760, industry has based its productivity on a seemingly abundant nature, and focused on increasing labour efficiency. This situation is now shifting as it becomes clear that natural resources are scarce and the world will soon run out of some of its most valuable resources whilst at the same time labour has become abundant. For companies to stay competitive, the next industrial revolution has to focus on resource and material productivity. In the manufacturing industry, recycling and resource efficiency can unlock large potential for innovation, growth and higher profitability. In a medium-sized manufacturing company, on average, material consumption accounts for over 40% of operating costs. When adding electricity, waste and waste water treatment to the bill, material costs account for nearly 50% of all costs compared to an average of 20% for personnel costs. With this in mind, resource efficiency makes common economic sense: manufacturing companies can be more profitable by simply using less resources. It is for these reasons that resource efficiency is among the few topics SME managers are currently ready to invest in. Clearly, resource efficiency is a priority for future competitiveness. There are three main levels of innovation on which it makes sense to address recycling and resource efficiency in manufacturing, as shown in the following table: Principle level of innovation
Innovation measures to increase recycling and resource efficiency Improved product design inc resource selection, product dimensions, etc
Product
Increased product use properties, in particular product life-time and recyclability at end-of life Integrated eco-efficient product/ process design Advanced manufacturing and recycling processes Optimised operating parameters Reduction of cuttings and rejects
Process
Reduction of the use of operating fluids and supplies, including water Improvement of cleaning and conditioning processes Recycling of production wastes Use of advanced resources Transport processes Storage
Production environment / supply chain
Packaging resources and recyclability of packaging wastes Integrated supply chain optimisation (eg based on life-cycle analysis)
I N N O VAT I O N
At product design level, a medium-sized French manufacturer of electric ovens, Bourgeois, has ventured into a complete redesign of their product following key economic and environmental parameters. During the design phase, the functional parameters of the product have been systematically analysed against a newly defined set of environmental benchmark indicators. The impact is clear. The systematic design process has resulted in impressive reductions of the number of components (-36%), weight (-10%), external volume (-25%), effluents (-44%), water (-18%) and energy (-35%) use. The ovens are now also three times less noisy. Resource efficiency in SMEs can be approached at two levels, and in two time frames:
Short-term efficiency gains at single firm level At single firm level, investing in resource efficiency yields an average savings of 2.5% of the turnover or 5%-6% of material costs. As a rule of thumb, these savings can be obtained with no or very low investment, and they can bring a Return on Investment in less than a year. But these savings do not happen by themselves. Manufacturing SMEs need know-how and individual advice on how to go about it. This can be effectively tackled through resource efficiency audits and individual consultancy. While in-depth efficiency audits can become quite costly, a first rather simple audit is mostly enough to yield first savings at relatively moderate costs. Some Member States have already started widely rolling out such support schemes.
Mid-term efficiency gains at supply chain level The largest savings can be made when the entire supply or value chain of a product is optimised from a resource efficiency point of view. Usually, a number of different companies are involved in the production of a final product such as an airplane. The various components are manufactured by different suppliers – often in different locations – before being assembled. The output of one company is the input of another’s processes. However, very often, the output specifications do not correspond to the input needs. To make them match, many resources are wasted. On the other hand, co-operation between the different layers in the supply chain could bring about important efficiency gains, realistically assuming a savings potential of 20% of material costs within a 15-year horizon. Achieving 20% savings in an SME will require continuous efforts, and action not only at single firm level, but at supply chain level. Tapping that 20% would lift the entire sector to a higher level of competitiveness compared to other world regions. No programme deals today with the supply chain level/system level. If the EU devised support for supply chain change, it would bring unprecedented added value. But most SMEs cannot switch to more resourceefficient processes on their own. They need knowledge, consulting (individually or via professional associations), and incentives.
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Eco-innovation
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