Product design

Week 4
Product Design
The operations manager’s greatest opportunity to make substantial contributions to the company’s
environmental objectives occurs during product life cycle assessment. Life cycle assessment
evaluates the environmental impact of a product, from raw material and energy inputs all the way to
the disposal of the product at its end of life. The goal is to make decisions that help reduce the
environmental impact of a product throughout its entire life.

This brings us to the idea of the circular economy. The circular economy is an alternative to the
traditional linear economy of make–use–dispose. In the circular economy, we keep and use resources
for as long as possible and then recover and regenerate to the maximum possible value at the end
of service life. We now address how managers can implement the circular economy by looking at
product design, production processes, logistics, and end of life.
Product Design
An excellent place for operations managers to begin the sustainability challenge is with good
product design. Here Tom Malone, CEO, of MicroGreen Polymers, discusses the company’s new ultra-
light cup with production personnel (left). The cup can be recycled over and over and never go to a
landfill. Another new design is the “winglet” (right). These wing tip extensions increase climb speed,
reduce noise by 6.5%, cut carbon dioxide emissions by 5%, and save 6% in fuel costs. Alaska Air has
retrofitted its entire 737 fleet with winglets, saving $20 million annually.
Product Design
The circular economy

Product design is the most critical phase in product life cycle assessment. The decisions that
are made during this phase greatly affect materials, quality, cost, processes, related
packaging and logistics, and ultimately how the product will be processed when discarded.
During design, one of the goals is to incorporate a systems view in the product or service
design that lowers the environmental impact. Such an approach reduces waste and energy
costs at the supplier, in the logistics system, and for the end user. For instance, by taking a
systems view, Procter & Gamble developed Tide Coldwater, a detergent that gets clothes
clean with cold water, saving the consumer about three-fourths of the energy used in a
typical wash.
Product Design
Other successful design efforts include:

● Boston Park Plaza Hotel eliminated bars of soap and bottles of shampoo by installing
pump dispensers in its bathrooms, saving the need for 1 million plastic containers a
year.
● UPS reduced the amount of materials it needs for its envelopes by developing its
reusable express envelopes, which are made from 100% recycled fiber. These
envelopes are designed to be used twice, and after the second use, the envelope can
be recycled.
● Coca-Cola’s redesigned Dasani bottle reduced the amount of plastic needed and is now
30% lighter than when it was introduced.

Product design teams also look for alternative materials from which to make their products.

Product designers often must decide between two or more environmentally friendly design
alternatives. Example S1 deals with a design for disassembly cost–benefit analysis. The
design team analyzes the amount of revenue that might be reclaimed against the cost of
Product Design
Design for Disassembly
Sound Barrier, Inc., needs to decide which of two speaker designs is better environmentally.

APPROACH

The design team collected the following information for two audio speaker designs, the
Harmonizer and the Rocker:

1. Resale value of the components minus the cost of transportation to the disassembly facility
2. Revenue collected from recycling
3. Processing costs, which include disassembly, sorting, cleaning, and packaging
4. Disposal costs, including transportation, fees, taxes, and processing time

SOLUTION

The design team developed the following revenue and cost information for the two speaker design
alternatives:
Product Design
Harmonizer
Using the Equation (S5-1), the design team can compare the two design alternatives:

After analyzing both environmental revenue and cost components of each speaker design, the
design team finds that the Harmonizer is the better environmental design alternative because it
achieves a higher revenue retrieval opportunity. Note that the team is assuming that both products
have the same market acceptance, profitability, and environmental impact.

What would happen if there was a change in the supply chain that caused the processing and
disposal costs to triple for the laminate back part of the Harmonizer? [Answer: The revenue
retrieval from the Harmonizer is This is less than the Rocker’s revenue retrieval of $11.41, so the
Rocker becomes the better environmental design alternative, as it achieves a higher revenue
retrieval opportunity.
Product Design
Calculate design for disassembly
Manufacturers look for ways to reduce the amount of resources in the production process.
Opportunities to reduce environmental impact during production typically revolve around the themes
of energy, water, and environmental contamination. Conservation of energy and improving energy
efficiency come from the use of alternative energy and more energy-efficient machinery. For example:
● S.C. Johnson built its own power plant that runs on natural gas and methane piped in from a
nearby landfill, cutting back its reliance on coal-fired power.
● PepsiCo developed Resource Conservation (ReCon), a diagnostic tool for understanding and
reducing in-plant water and energy usage. In its first 2 years, ReCon helped sites across the world
identify 2.2 billion liters of water savings, with a corresponding cost savings of nearly $2.7 million.
● Frito-Lay decided to extract water from potatoes, which are 80% water. Each year, a single
factory processes 350,000 tons of potatoes, and as those potatoes are processed, the company
reuses the extracted water for that factory’s daily production.
Product Design
End-of-Life Phase

We noted earlier that during product design, managers need to consider what happens to a product
or its materials after the product reaches its end-of-life stage. Products with less material, with
recycled material, or with recyclable materials all contribute to sustainability efforts, reducing the
need for the “burn or bury” decision and conserving scarce natural resources.

Innovative and sustainability-conscious companies are now designing closed-loop supply chains, also
called reverse logistics. Firms can no longer sell a product and then forget about it. They need to
design and implement end-of-life systems for the physical return of products that facilitate recycling
or reuse.

Caterpillar, through its expertise in remanufacturing technology and processes, has devised Cat
Reman, a remanufacturing initiative, in an effort to show its commitment to sustainability. Caterpillar
remanufactured parts and components that provide same-as-new performance and reliability at a
fraction of new cost, while reducing the impact on the environment. The remanufacturing program is
based on an exchange system where customers return a used component in exchange for a
remanufactured product. The result is lower operating costs for the customer, reduced material
waste, and less need for raw material to make new products. In a 1-year period, Caterpillar took
back 2.1 million end-of-life units and remanufactured more than 130 million pounds of material from
recycled iron.