Manufacturers can benefit from cradle-to-cradle design. It’s all about turning "responsibility" into "opportunity."
By Dr. Kevin Dooley
“Dematerialization” may sound pretty nerdy, but it’s a powerful strategy that many manufacturers are now pursuing to improve their triple-bottom line. Through product and process design and innovation, manufacturers and their suppliers are figuring out how to do more with less, using strategies such as de-weighting, use of recycled material, and design for durability, re-use and recycling.
The Sustainability Consortium® (TSC®) is an organization of diverse global participants that work collaboratively to build a scientific foundation that drives innovation to improve consumer product sustainability. TSC has recently completed work covering a number of manufactured good categories, or “General Merchandise” products, including bicycles, hand tools, small batteries, small appliances and items such as storage products, furniture and home, lawn and garden products made of plastics or metals.
Identifying ESG Opportunities
TSC’s approach identifies the environmental and social issues and opportunities that exist across a consumer product’s whole life cycle, from mining or farming to disposal or recycling. In the life cycle of manufactured durable goods, we find that one improvement opportunity is common – companies should design products and processes that use less material, and use less energy-intensive material.
The United Nations Environmental Program (UNEP, 2011) defines dematerialization as “…decreasing the material requirements of whole economies. It requires (a) reducing the material intensity of products and services, i.e. by increasing material efficiency, and (b) especially reducing the use of primary material resources (such as ores, coal, minerals, metals, etc.) by improving recycling and re-use of secondary materials (i.e. shifting to a circular economy).”
The reason why dematerialization is such a strong lever for sustainability improvement is because it affects many different environmental impacts. If we use less material to make products or packaging, then we are extracting fewer non-renewable resources from the earth. According to the United Nations, we will need “two earths” worth of resources to sustain the world population by 2030. Companies have already experienced how material shortages can impacts product availability, and many use material availability forecasts as part of their strategic planning.
Creating a “Waste Not, Want Not” Mentality through Recycling
Recycling is another way in which we can use less material. By making products that have recycled content in their materials, we need less virgin raw material, which preserves non-renewable resources. By making products recyclable, we create a supply of material than can displace the need for virgin raw material. The “cradle to cradle” strategy advocates for a closed loop economy in which materials are extracted from products at the end of their life and used as raw material for new products. As a variation on this idea, companies and experts have begun to look at how to recycle already-disposed products, mining useful materials from garbage landfills.
The energy required to extract, process and assemble the materials and components that make up the product leads to greenhouse gas emissions, and typically depletion of non-renewable resources. By using less material, less extraction and processing is required—thus reducing emissions. It is also sometimes feasible to exchange one material for a less energy-intensive alternative that provides similar functionality.
Often the strategy that can lead to the greatest reduction of negative impacts is to extend the life of a product. If, for example, the useful life of a product can be extended from two to four years, then impacts associated with making the product are cut in half. While many premium products promote their durability, it’s usually the case that a product is disposed of before its actual functional life is over, so we must create technological and market mechanisms for upgrading, refurbishing and re-using products.
Moving from Product-based to Service-based… and from Responsibility to Opportunity
Dematerialization can take place at a much larger scale as we move from a product-based to a service-based economy. If instead of a consumer owning a product they lease it, a manufacturer is incentivized to design products that are durable, maintainable, upgradeable and re-usable. We already see leasing-based systems take hold in products such as automobiles and office equipment, and as resource availability becomes more acute and infrastructure matures, it will become more economical for manufacturers to lease than to sell product.
To make strides on a closed-loop economy, we’ll need change on several fronts. First, product designers and engineers need to be trained and educated to consider end-of-life and re-use issues. Designers focus their creativity on what their stakeholders deem is important at the time. The main reason we don’t have more sustainable products, or products that have better end-of-life attributes, is because these considerations are all relatively new to designers and their profession. As concepts, methods and tools for designing for material efficiency become standardized and part of the discipline’s vocational training, designers will naturally consider these issues in their creative process.
Second, we need the infrastructure, investments and incentives to create the market drivers and systems for development of scale and efficiency. The idea of a dematerialized society is great on paper, but without viable business models and competent operations, it doesn’t happen. As evidence as to where we now are, the term used to refer to a manufacturer’s role in their product’s end of life is called “extended producer responsibility.” Leading companies recognize that in the long-term, this needs to change to “extended producer opportunity.”
Third, we need collaboration across industry sectors, supply chain actors, and governments and NGOs to develop necessary standards and guidelines. If we just look at recycling, individual municipalities, counties, states, countries, and regions create their own laws, causing a manufacturer with a global supply chain and consumer lost cost, time, and confusion—and missed opportunities. For example, the current plastic recycling codes are difficult for consumers to understand because what is and is not recyclable changes by region. If all regions had the same capabilities, then communication to consumers about recyclability could be simpler and more direct.
In any given instance, dematerialization cannot be considered in a vacuum. For example, material used for packaging adds to product safety and reduces product waste, so dematerialization objectives always have to be balanced with other environmental, social, and economic considerations. The general approach though—use less material, extend the useful life of material, and use less energy-intensive material—is a powerful sustainability principle for any manufacturing organization.
About the Author:
Chief Research Officer. Dr. Kevin Dooley is a Professor of Supply Chain Management and a Dean's Council of 100 Distinguished Scholars in the WP Carey School of Business at Arizona State University. He is Academic Director of The Sustainability Consortium, developing science and tools to improve the sustainability of consumer goods. Dr. Dooley is a world-known expert in the application of complexity science to help organizations improve. He has published over 100 research articles and co-authored an award-winning book, “Organizational Change and Innovation Processes”. He is on several journal editorial boards including Journal of Supply Chain Management and Journal of Business Logistics. He has been awarded two patents on Centering Resonance Analysis, a novel form of network text analysis, and is co-founder and CEO of Crawdad Technologies, LLC, a provider of text analysis software for academics of Business at Arizona State University.
About The Sustainability Consortium:
The Sustainability Consortium (TSC) is an organization of diverse global participants that work collaboratively to build a scientific foundation that drives innovation to improve consumer product sustainability. TSC develops transparent methodologies, tools, and strategies to drive a new generation of products and supply networks that address environmental, social, and economic imperatives.
The Sustainability Consortium advocates for a credible, scalable, and transparent process and system. The organization boasts over 90 members from all corners of business employing over 57 million people and whose combined revenues total over $1.5 trillion. The Sustainability Consortium is jointly administered by Arizona State University and University of Arkansas with additional operations at Wageningen University in The Netherlands and Nanjing University in China.
Learn more at www.sustainabilityconsortium.org.