The title above is a statement my colleague Mike Kirschner (DCA president) made during a day-long Design-for-Environment Workshop we co-led. He’s right that when the industry long-ago migrated from vertical integration to an outsourced model, no one anticipated the breadth and depth of global environmental requirements to come, or how stringing together long supply chains with dozens of links in far-flung geographies and diverse business cultures would make cost-effective compliance nearly insurmountable.
Think about IBM’s vertical-integration model through the 1980s — designing and making semiconductors (IBM still designs), fabricating bare printed-circuit boards and component packaging (now Endicott Interconnect Technologies), assembling the components (for example in Toronto, which became (Celestica), and building personal computers (Lenovo). IBM and many other electronics companies at the time controlled product-concept design through decisions about raw materials, and product manufacturing through end of life. Today it’s hard to find vertically integrated hardware companies. Recent capital-venture-funded tech companies have outsourced manufacturing (or even much of product design!) from the beginning. Nokia has been one of the few companies hanging onto manufacturing — sometimes more and sometimes less (announcing “more,” this week).
Raw materials are sourced so far up their supply chains that supply-chain managers can’t begin to control substances’ composition, origins, and working conditions during extraction. It’s too much to ask of especially mid-sized and smaller companies to staff the number of product stewards needed to continually track global requirements for substance-restriction, energy consumption, and reuse/recycling and align their own product roadmaps accordingly.
It’s ironic, but meeting today’s environmental requirements for products would have been easier back in the vertically-integrated past than in today’s outsourced, long-supply-chain reality. Nonetheless, here are ways to meet and stay ahead of environmental requirements, cost effectively.
First, because decisions about design, manufacturing, and compliance are spread out across company departments, gain top-level executive support to make lasting and successful Design-for-Environment (DfE) processes and sustainability programs. Next, plot on a 5-year DfE roadmap the likely environmental regulations from customers, regulators, and standards committees that will affect your individual company’s product lines. Finally, proactively design to those requirements to avoid costly and iterative emergency reactions and having products blocked from an increasing number of markets.
Easy, right? Frankly, today’s changing nature and expanding scopes of global environmental-protection requirements can be overwhelming to designers and supply-chain managers.
So, after that DfE Workshop, Mike and I developed a customized service that applies TFI’s success rate at training engineers in DfE and getting buy-in from corporate executives, along with DCA’s continual tracking and influence of global regulations and standards, to individual clients’ product roadmaps. We realized that we are well positioned to customize 5-year DfE roadmaps for individual companies’ product lines, and to recommend how to systemically and cost-effectively execute the plan. Our DfE Process Integration Roadmap aligns those long supply chains with holistic product-compliance plans, avoiding costly and arduous sequential changes in reaction to new requirements.
Mike likes to use the image of a tsunami to describe the overwhelming number of environmental requirements rushing in — sometimes with little warning and from distant shores. I like to think of the challenge facing all of us to strategically prepare for environmental requirements as yet another fiercely competitive element of excellent supply-chain management. It’s not as much surfing treacherous waves as building a strong infrastructure with insights into the future and with unwavering executive support.
If you’re curious about building supply-chain processes that indeed align with current and upcoming environmental requirements, grab your surfboard and reply below.
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It is even hard to find vertically integrated component suppliers. Most of the semi guys have moved to a fabless model and distributed design centers, Sales and fullfillment have increasingly been outsourced to 3rd party providers (mostly distribution) as has applications engineering and other technical support. When you truly look at the supply chain from raw materials to the actual consumer, the complexity is mind boggling- espcially considering most everything is multi-sourced so the fan-out of possibilities becomes almost infinite. We can barely track POs and material movements through this maize let alone environmental attributes. The distributors and the EMS providers pool their raw material requirements for all customers for leverage thereby making end to end traceability virtually impossible except in a very general manner. These pose huge challenges to increasing demands for absolute values and accuracy in environmental data.
Interesting topic, Pam. I heartily agree that today’s far-flung enterprises are difficult to manage, and not just from an environmental perspective.
Supply Chains are far more complex than ever before, and the challenges are felt in inventory management, planning and forecasting, and in transport management too.