If Not in China, then Where?

Global electronics companies are still outsourcing more manufacturing to China than to any another single country. Though early adopters are starting to shift to regional manufacturing, China is on top now. And China is arguably the world’s largest time bomb when it comes to environmental catastrophes (see “The River Runs Black: The Environmental Challenge to China’s Future” (Cornell University Press, 2004) — notwithstanding the 2008 Summer Olympics’ beautiful gardens and renewable-energy sports arenas. So, if the electronics industry does not focus Lean and Green efforts in China, then where?

You see, focusing solely on your own company’s footprint–albeit vital for competitiveness and cost-savings these days–is a farce in the world’s theatre. Consider that HP’s–like other electronics companies–own company’s energy usage is an estimated one-twentieth of its supply chain’s energy usage (according to Jay Celorie, a manager of HP’s social and environmental responsibility efforts). HP is focusing on reducing its supply-chain energy usage, as well as optimizing logistics networks, joining the Carbon Disclosure Project, and taking other steps to, as Celorie puts it, “prepare for a carbon-constrained society.” More companies, like HP, can reduce costs and risks by addressing their supply chains’ environmental efficiencies.

But try to apply the same approach to environmental training and strategy in China as you do in Western nations, and you may receive blank stares. The Chinese people have been converting used objects into new applications for millennia–so much so that there was no necessity for having a separate word for recycling with the same connotation as in the English language. Encouraging workers to generate grass-roots ideas for reducing waste can lead to a deafening silence; workers are accustomed to following their supervisors’ instructions only. (Solectron Shanghai (now part of Flextronics) experienced this initial reticence when training workers in Lean several years ago.)

We believe that the winning combination is teaming up an experienced global electronics-industry consultancy specializing in the environment (TFI Environment) with an energy and environmental consultancy with deep technical strength in China (WSP Environment and Energy, with offices in Beijing, Shanghai and Hong Kong). This team will be able to leverage proven methodologies for sweeping Lean and Green organizational changes and successful access to and influence with Chinese management at the OEMs and contract manufacturers companies there. That’s why my colleague Chris Hazen (Director of WSP Environment and Energy’s Asia-Pacific operations) and I have teamed up to provide strategic, results-oriented multifunction environmental consulting in China. Let me know (PGordon@TFIenvironment.com) if you’d like to know more.

What do you think is the winning combination to address the Lean and Green necessity in China?

Posted by Pamela Gordon, July 17th, 2008

Filed to Environment, Outsourcing, Supply chain management
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2 Responses to “If Not in China, then Where?”

  1. From: Christian Verstraete
      on July 18th, 2008

    I can only agree with you that companies need to look at two dimensions, first their product lifecycle, from manufacturing through to recycling, not forgetting useage, and secondly throughout the end-to-end supply chain. However, although carbon is important, it is not, and by far, the only substance that requires attention. Having gone to Asia several times this year already, I have found the local companies very interested and eager to learn about what to do to improve their environmental approach. Actually I have found them more willing than many european and american companies. So, not sure China should be the only target.

  2. From: Glenn Lefkof
      on July 18th, 2008

    It’s not the U.S. companies that need to implement environmental regulations in China, but the Chinese Government. We follow the laws of the land. It’s true, that China/HK is a disaster when dealing with pollution. However, if they implemented all the regulations we have here in the U.S., Asia might lose their competitive price advantage. On the other hand, pollution from Asia can end up in the U.S. so it will be a world problem eventually. It may also be self correcting. If enough people in Asia get sick from pollution (and I was in China and HK and I couldn’t wait to leave because of the pollution), then the Chinese Gov’t will need to do what is best for the people! And that means going “green”.

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