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Prevention: key to pollution control.

Pollution control is becoming increasingly important to society in general and to the business community in particular. The traditional approach to pollution control is to clean up at the end of the process, but prevention may be a better answer because of the amount of pollutants produced and the cost of removal. Just as firms have begun to recognize the importance of designing products and processes to ensure quality, they could also design products and processes to reduce or eliminate their negative impact on the environment.

American corporations are becoming more aware of the economic cost of waste. At the same time, the U.S. public is growing increasingly frustrated with taxpayer-paid cleanup programs. American society is expressing that frustration by supporting legal action against polluters. The Resource Conservation and Recovery Act of 1976 was expanded in 1984 by the Hazardous and Solid Waste Amendments. These laws limit the use of landfills, control the disposal of liquid waste, and impose permanent responsibility on firms that originate hazardous material.(1) The Clean Air Act of 1990 limits the amount of pollutants companies may disperse into the air.(2)

Penalties for violating toxic waste disposal regulations are increasingly being aimed at individual managers rather than abstract corporations. Twenty-one years of prison time and more than $18 million in fines were levied against corporate managers convicted of hazardous waste disposal in the first eight months of 1991.(3) Between 1982 and 1989, approximately 250 years of jail time and $23 million in fines were imposed in the United States for environmental violations.(4)

Along with the direct costs of governmental action, the increasing price of litigation has an effect on share values. The Alaska oil spill resulted in a $400 million settlement. A pharmaceuticals company that had to recall products at the cost of $100 million dollars watched the value of its shares drop by $3 billion.(5) Insurance companies are understandably reluctant to offer sufficient or comprehensive protection when the risks are high - or at least to offer it at a price companies can afford.

In the past, pollution management was limited to recycling or cleaning up wastes that resulted from the manufacturing process. Enlightened companies installed pollution control devices to eliminate or reduce further contamination of the environment. They introduced integrated systems that incorporated waste as a primary ingredient in another product or process. Some firms even diversified into reclamation activities that provided services to other companies similar to those used inhouse.(6) These techniques are useful, but they all treat the waste after it has been made.

Product Quality Control

In another area of operations management, the high cost of low quality prompted companies to investigate ways of preventing, rather than disposing of or suffering from, defective products. The classic approach to quality control is to monitor the production process to ensure that quality is maintained. This process, which typically uses acceptance sampling or statistical process control procedures, is known as "on-line" quality control.

Although maintaining good quality in the manufacturing process is important, other approaches also can be considered. One such approach, which involves the improvement of product quality throughout the design process, is referred to as "off-line" quality control.(7) By designing a product that is less sensitive to variations in the manufacturing process, firms can produce a higher quality product at a lower cost. For example, AT&T redesigned a voice signal amplification circuit to reduce its sensitivity to manufacturing variations and achieved a 40 percent improvement in quality without incurring any additional cost.(8)

Product design can dictate the selection of machines and procedures in the production process. It may be possible to abandon quality control production processes that are expensive or difficult to control in favor of others that produce higher quality at lower cost.

In addition, designers can develop products that are robust to the environmental conditions to which they will be exposed. For example, redesigning a product to reduce its sensitivity to temperature changes, rough handling by the user, or wear from use ensures a higher quality product.

Environmental Pollution Control

Similar opportunities exist for environmental pollution control. Most companies consider reducing pollution by improving the efficiency of production process controls and after-the-fact pollution devices.

Legislation has encouraged the use of technologies that treat the symptoms of manufacturing pollution rather than address its underlying causes. Million-dollar scrubbers that treat power companies' toxic emissions and catalytic converters are required to clean automobile exhaust systems.(9) Batelle Pacific Northwest Laboratories has assisted companies to recycle wood into synthetic gases to provide energy(10) and to transform cow manure to cattle feed.(11) The U.S. Bureau of Mines has developed a method to recover cobalt from copper ore wastes,(12) and Westinghouse has reclaimed gold.

The intent of these control measures is to use, reuse, or minimize the effects of existing manufacturing processes and designs. Costs for material that will eventually evolve into waste have been committed at the onset of the process. Those costs include raw materials, labor, energy, equipment depreciation, and capital. Added to that are the costs of cleanup after the manufacturing process is completed such as equipment, labor hours, capital investment, and technical training. The value of any recycled material can be deducted from the cost as a benefit to the company, but that value is rarely sufficient to offset the actual expenditure.

Instead of these currently more popular, legislatively-supported waste and emission treatments, companies could adopt an approach similar to "off-line" quality control for pollution abatement. Products and processes should be designed to prevent pollution, rather than clean it up after production.

Pollution Prevention

Improved product design, better process selection, and easy disposal of products when their useful life ends can result in measurable cost savings and improved marketability. Three basic strategies are available to accomplish pollution prevention. One strategy is to design the product to eliminate - or reduce the use of - production processes that are environmentally undesirable. A second strategy is to eliminate environmentally undesirable materials from both the product and the production process. Eliminating these materials from the product makes it easier to either recycle or dispose of the product when its useful life is over. In the production process, it may be possible to use environmentally preferable products, e.g., nontoxic coolants that are discarded after use and, thus, reduce the amount of toxic waste. The third strategy is to make it easy to recycle or dispose of the product when its useful life ends. One procedure, known as "design for disassembly," makes it easier to separate the different types of materials in a product so that they can be effectively recycled or otherwise thrown out.

Guidelines For Pollution Prevention

The following guidelines can be used to implement prevention strategies. Their use should reduce the amount of pollutants produced. Executives who are interested in pollution prevention should ask themselves the following questions:

1. Can manufacturing processes that are difficult to control because of anti-pollution devices be eliminated through product design?

In some cases, it may be possible to redesign the product to utilize different manufacturing processes, thereby achieving pollution abatement by eliminating undesirable processes in favor of environmentally suitable processes. In addition, this practice can reduce manufacturing costs by eliminating pollution control equipment and its associated expense.

One company that has followed this approach is Carrier Corporation which redesigned its air conditioner parts and changed its metal-cutting process at a cost of $500,000. The firm eliminated toxic solvents, saved $1.2 million in production costs, and improved the overall quality of the product.(13)

2. If these processes cannot be eliminated, can their use be reduced through a better design?

This is a variation on the first guideline. The best approach is to eliminate environmentally unsound processes, which is not always possible. Even if total elimination is impossible, compromises can sometimes be made to reduce the use of these undesirable processes and lessen the amount of pollution that results.

For example, Whyco Chromium developed an organic compound for coating nuts and bolts that cut the number of coats required in half. Not only was the amount of waste reduced, manufacturing costs were cut by 25 percent.(14)

3. Can environmentally undesirable materials (e.g., toxic waste) be eliminated from the product design?

It may be possible to use different materials in a design with existing processes. If the new materials are more environmentally acceptable, the outcome is an improved manufacturing process because of anti-pollution gains. In many cases, these materials already exist.

An example of this approach is demonstrated by Reynolds Metals. The company replaced a solvent-based ink with a comparable water-based ink in packaging plants and cut emissions by 65 percent, which saved $30 million in pollution equipment.(15)

4. Can environmentally undesirable materials (e.g., toxic waste) be eliminated from the production process?

Firms should examine the materials they use in the processes. For example, it may be possible to change the type of coolant used in a milling process. Must they use an environmentally unsafe coolant, or can they substitute one that is environmentally safe?

3M Corporation, long an advocate of pollution prevention, estimates that it has saved $482 million through reduced wastes since it introduced its "3 Ps" (Pollution Prevention Pays) program in 1975. The company's goals are to eliminate the use of solvents within their coating process and to reduce all emissions 90 percent by the year 2000.(16)

Another example is AT&T which redesigned a circuit board cleaning process. The effort resulted in the elimination of ozone-depleting chemicals and a $3 million annual saving in cleaning costs.(17)

The Bayer organization has utilized the process many times over the years. A recent example is a reformulation of a dye intermediate referred to as H acid. By changing the catalyst system and redesigning the process, Bayer reduced starting material by 20 percent, eliminated by-product iron oxide slurry and sodium chloride, and cut wastewater by 70 percent.(18)

5. Can the product be designed to increase the interest in recycling it after its useful life is over?

Growing restrictions on the types of materials that can be deposited in landfills will increase the need to consider the disposability or recyclability of products after their useful life is over. A variety of factors should be considered here.

One method of increasing disposability is to eliminate hazardous waste from the product which makes it more acceptable to landfills and recycling centers. Another consideration is the ability to separate the various materials in a product so they may be more easily and effectively disposed of or recycled. One approach to separation of materials is to design for disassembly. The basic concept is to make products that can easily be separated or disassembled by their components, thereby reducing the expense of recycling because little effort is spent separating materials. The process also converts the nonrecyclable hazardous waste to a form that requires less space in the landfill. Therefore, disposal costs are reduced.

In addition, the impact on the environment of products that are not recycled or disposed of in an acceptable fashion, such as litter along roadsides, should be considered. Many plastics used in bags are photodegradable so they will "disappear" in a reasonable period of time when improperly discarded. This action reduces the impact of the product on the environment. The actions of the Polaroid company offer a good example of a successful effort to eliminate toxic materials from a product. Polaroid eliminated mercury from its battery products and, thus, created recyclable batteries.(19)

A tea kettle introduced by Polymer Solutions, Inc. - a joint venture company of GE Plastics and the consulting firm of Fitch Richardson Smith - is an example of the design-for-disassembly technique. This product can be taken apart easily, and the metal and plastic parts can be separated for recycling purposes?

Rewards for Efforts

Waste and pollution are expensive. They affect the U.S. public adversely in many ways such as increased health costs, growing commitment of tax dollars to cleanup and removal operations, and the loss of already scarce resources. Tax dollars that are diverted to pollution cleanup cannot be used for infrastructure improvement or business support services.

For U.S. business, wasted material, pollution control devices, and regulatory frees generate no income and have a direct negative impact on the profits of a company.

American firms produce five times more waste per dollar of product sold than Japanese firms and more than twice that of German companies. Reducing the waste they produce and minimizing their need for pollution control devices would provide profit margin relief and improve international competitiveness for many firms.

In addition, preventing pollution would help convince insurance companies and governmental regulatory agencies about the seriousness of business and industry's commitment to minimizing environmental risks. These improvements could reduce reliance on constrictive federal mandates and lower financially debilitating insurance premium rates.

Prevention methodology is available to all industries. As demonstrated by the guideline for pollution prevention that focuses on design and process selection, many of the approaches are relatively straightforward. In many cases, not only can the amount of pollution be reduced; manufacturing costs can be cut, as well. By making prudent business decisions, companies can prevent unnecessary pollution from ever being produced, thus saving themselves and the government the expense of cleaning up after the fact.

1 Dougherty, Elizabeth, "Waste Minimization: Reduce Wastes and Reap the Benefits," R&D Magazine (1990): 32 (4), 62-68.

2 Nulty, Peter, "Finding a Payoff in Environmentalism," FORTUNE (1991): 124 (10), 79-84.

3 "Crackdown on Polluters," FORTUNE (1991): 124 (9), 18.

4 Sushil, D., "Waste Management: A Systems Perspective," Industrial Management and Data Systems (1990): 90 (5), 2-60.

5 Ibid.

6 Royston, Michael, "Making Pollution Prevention Pay," Harvard Business Review (1980): 58 (6), 6-21.

7 Kacker, Raghu, "Off-Line Quality Control, Parameter Design, and the Taguchi Method," Journal of Quality Technology (1985): 17 (4), 176-188.

8 Mayo, John, "Process Design as Important as Product Design," THE WALL STREET JOURNAL (Oct. 29, 1984): 32.

9 Naj, Amal Kumar, "Some Companies Cut Pollution by Altering Production Methods," THE WALL STREET JOURNAL (Dec. 24, 1990): 1, 28.

10 Dougherty, loc. cit.

11 Royston, loc. cit.

12 Dougherty, loc. cit.

13 Naj, loc cit.

14 Ibid.

15 Ibid.

16 Dougherty, loc. cit.

17 Naj, loc. cit.

18 O'Sullivan, Dermot, "Bayer Targets Process Modification as Approach to Pollution Prevention," Chemical and Engineering News (Oct. 21, 1991): 69 (42), 21-27.

19 Naj, loc. cit.

20 "Leading-Edge Engineers Design for Recycling," Machine Design (Jan. 24, 1991): 63, 12-14.

PATRICIA FELTES, Ph.D., is an associate professor of management at Southwest Missouri State University, Springfield, MO. Her research interests are corporate performance and organizational structure. She has published in BUSINESS FORUM, Business Horizons, Business Case Journal, Industrial Management, and the Journal of Business Strategies.

ROSS L. FINK, Ph.D., is an assistant professor of operations management in the School of Business Management and Administration at Bradley University, Peoria, IL. A frequent contributor to management and production journals, his recent articles have appeared in Decision Sciences, Industrial Management, Business Horizons, Labor Law Journal, Hospital and Health Services Administration, Journal of Cost Management, and Production Planning and Control.
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Author:Feltes, Patricia; Fink, Ross L.
Publication:Business Forum
Date:Jan 1, 1996
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