SME Sustainability Roadmap

Product Development

Background

There is an opportunity to integrate sustainability into all aspects of the product development cycle—from concept and design to the manufacture, packaging, delivery and possible return of the product. Critical to the process of greening product development is the concept of examining a product’s lifecycle. A lifecycle assessment (LCA) examines the “cradle to grave” aspects of a product—from the extraction of raw materials, through manufacturing, distribution, retailing and use to final recycling or disposal. This critical thinking at the product design and development stages offers an opportunity to reduce a product’s negative impact on society and the environment in the many aspects of its life—something that would be of great value to your stakeholders, particularly your customers.

You might even wish to take the product development cycle further by thinking through how your product is best disposed of at the end of its life.  Is it possible, for example, to have a product-take-back program where you set up the facilities to recycle and possibly reuse the materials from the original product sold to your customer base?  Is there another company with whom you can joint venture who can use the returned materials for another product? Teck Cominco, for example, has an e-waste process where they shred and smelt electronic waste such as TVs, monitors, computers and printers, and recover germanium, zinc, indium and lead as powder for use in their metal products. Other e-waste materials (silica and iron) are incorporated into a product which is then sold for use in Portland cement manufacturing.

As distinct from cradle to grave, “cradle to cradle” product design and development eliminates the disposal phase of a product’s lifecycle by incorporating plans for reuse or recycling into product development. It eliminates product’s “end of life” by ensuring that materials formerly considered waste will either have the potential to biodegrade naturally and restore the soil, or to be fully recycled into high-quality materials to create other products.Note 1

Sustainable Product Design

Product design offers the opportunity to incorporate green and socially responsible attributes into a product. Referred to as Design for Sustainability (D4S), it is a process that addresses environmental and social considerations in the earliest stages of the product development process to minimize negative environmental and social impacts throughout the product's life cycle and to comply with the principles of economic, social and ecological sustainability.

Sustainable product design can encompass the selection of materials, use of resources, production requirements and planning for the final disposition (recycling, reuse, remanufacturing, or disposal) of a product. It takes into account the socio-economic circumstances of the company and the opportunity for the firm to address social problems associated with poverty, safety, inequity, health and the working environment. It is not a stand-alone methodology but one that must be integrated with a company's existing product design so that environmental and social parameters can be integrated with traditional product attributes such as quality, cost, and functionality.

When large corporations make commitments to sustainability (e.g. Walmart or GE), delivery on these commitments plays out in their supply chain, and small- and medium-sized companies must respond to their customer’s needs. Since 50-75% of costs are locked-in at the design stage, smaller companies who are at the front end of other company’s product cycles need to consider sustainable product redesign. For more information, see Going for the Green in the Resources section.

Green Production

Leaner, Cleaner Production

Leaner—or “green”—production aims to address wasted resources in production to increase productivity and drive down costs. It is one aspect of the green design process. It is focused on continuous improvement, recognizing that reducing environmental impact is a circular process that begins and ends and begins again with the inquiry into how to make products of better quality, using fewer resources, and creating less or no waste in the process. According to international consulting firm Deloitte, there are six sources of waste a business should address:

  1. Over-production: Producing more products than you can sell leads to waste from the raw materials, energy and water used to make the products, and recycling or landfill waste when those products spoil or become obsolete before they can be sold.
  2. Inventory: Look for the excess packaging used for stored products, the potential for damage when products are being stored, the replacement of products in process, and the wasted energy required to heat/cool inventory space.
  3. Transportation and motion: Look for opportunities to reduce energy, emissions, and spills during product transport.
  4. Defects: Look to reduce defects as they are a waste of raw materials, energy and water used in their manufacture. Defects also require the extra effort of recycling or landfilling to dispose of them, and additional energy, water and labour to rework materials into new products.
  5. Over-processing: Look to reduce over-processing of products, where more raw materials, energy, water, and waste are used and emissions created per product than necessary.
  6. Waiting: Look for spoilage or component damage when products are waiting to be finished, and the energy consumed during downtime.

For more on these six sources of waste, see Green, Lean Six Sigma in the Resources section.

Socially Responsible Production or Service Delivery

Increasingly, the social factors of production are coming under scrutiny. The health and safety of the workplace, the protection of basic human rights of employees, including the absence of discrimination, shared benefits of economic growth, community development and stakeholder engagement are some of the key social issues over which businesses are stepping up their responsibilities. In any product development process, there are a number of social considerations to take into account, including the opportunity of using the production process to generate a positive social impact. Involving local suppliers, incorporating a cultural indigenous feature, integrating health-supporting or other social value aspects can all be means to creating a product that is sustainable across all bottom lines: social, environmental and economic.

Action

With these concepts in mind, the opportunity for SMEs is to redesign products in ways that improve upon existing products; create a new product line altogether; or consider moving into the “services” sector, where you lease or reconfigure your product so you are selling a service or a function  (such as heating ) rather than a product (such as heaters). 

Sustainabile design and production allows your business to incorporate environmental and social attributes into your product’s design while meeting the growing environmental requirements of your customer base and reducing your costs.

Greening Product Design

Think about your customer’s requirements. If you are a supplier to another business, review what their concerns might be, or ask them directly. Ignoring toxics and other problematic materials may keep your product’s price low in the short-term, but dealing with these materials proactively creates value for your customers. Assess the following aspects of your product for redesign opportunities:

  • Product lifespan: Increase a product’s lifespan by improving its durability or designing it for easy upgrades.  This will increase its value and longevity while reducing waste.
  • Material choices: Investigate the availability of green materials to substitute for traditional materials. This may include creating a remanufactured product out of high quality used parts, sourcing materials with higher recycled content, or substituting a greener or non-toxic material. It might also include sourcing from organizations that generate social value through their contributions to the community or through hiring people with employment barriers.
  • Recyclability: Taking the end of a product’s life into account makes products easier and safer to disassemble and recycle into component parts. For example, eliminating lead solder and glued joints in consumer electronics and redesigning them to include modular parts and snap-fittings makes disassembly for recycling cheaper, easier and safer.
Sustainability Oriented Product Line

Some firms redesign and reconfigure one product at a time, launching each as they are market-ready. Other firms might launch a suite of sustainability oriented products on the market, constituting their “green product line”. You might consider if you prefer to remodel your entire product line or have both legacy products and socially / environmentally preferred products available to your diverse customer base. The Marketing section reviews the pros and cons of green branding for those at this stage of their business.

You might want to consider having your product or service third-party certified for its environmental and social qualities. Ecologo is the Canadian environmental product certifier, and you can find other product certification programs at Ecolabel Index and general information from the Canada’s Office of Consumer Affairs (OCA) Guide to Understanding Green Claims and Labels in Canada. See Services for more information on ecolabels for service providers.

A BC courier company, Novex Couriers, has been building its “environmental offering” by purchasing hybrids for its fleet of courier vehicles. They added to their green product line by launching a second green product: a “digital” courier service that reduces the negative environmental impacts of vehicle emissions and saves clients and themselves costs by providing clients the option of sending legal documents with legal signatures via the internet.

Servicizing: From Product to Value-Added Services:

Green design offers businesses the opportunity to rethink their focus on products and examine the potential for providing customers with high value services instead of, or in addition to, their products. Rather than selling customers products to receive the services they want from the product, provide the service directly. Typically customers want what a product does, not what it is. This is referred to as “servicizing” your products. This works best when companies leverage their existing strengths, building on the existing knowledge of on-site customer service staff and strong, direct customer service of existing products to create a new value-added service. Note 2

Not every product lends itself well to the service model. Electronics, office equipment, chemicals, cleaning supplies, and equipment are all good candidates due to limited lifespans and upfront costs which make them more expensive to purchase outright.

For example, Xerox has shifted to providing value-added services to manage equipment configuration, and energy and paper use, in addition to its traditional suite of office products (copiers, printers and multifunction devices). Note 3 The University of British Columbia is working with Xerox to reduce the number of copiers and printers in each department, and monitor and reduce paper usage. The services help customers reduce the number of machines in use, reduce unnecessary printing, and reduce paper use. Note 4 For other examples of “servicizing”, see Sustainability Through Servicizing in the Resources section. For more information on substituting services for products, see Services That Substitute for Products in the Services section.

Benefits

The many benefits of sustainability management are found in the Business Case. Implementing sustainable product design can provide numerous specific benefits to a company. Focusing on resource efficiencies can reduce costs and often shorten production time. Because designing sustainable products sometimes requires bringing diverse functional groups to the design table for the first time, sustainable product design efforts can also drive other product and process innovations.

Meeting Customer Expectations for Greener Products

Whether you are in someone’s supply chain or providing products directly to retail customers, the market is shifting to demand greener and socially beneficial products. Sustainable product development ensures that you retain your market share and remain competitive.

Innovation in Product Line

Product innovation creates a diversified product line, opening up new lines of business and expanding your customer base. This creates competitive advantage for your business. Your business may even move into a service line of business, further diversifying your revenue sources.  All of these changes make your firm more resilient and able to adapt and respond to the changing market and growing costs of material inputs.

Resources


Footnotes

  1. McDonough, William. No date. Cradle to Cradle. (return to reference 1)
  2. MIT Sloan Management Review. 2007. Sustainability Through Servicizing. (PDF - 392.46 MB - 10 pages)(return to reference 2)
  3. Xerox. No Date. Document Outsourcing. (return to reference 3)
  4. Personal communication with UBC representative (return to reference 4)
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