Seminar highlights how it is essential companies start looking at green practices to enhance their global competitiveness and bottom-line

Some 120 participants from 70 organisations attended the Green Manufacturing Seminar organised by International Enterprise (IE) Singapore, together with the Singapore High Technology Association (SHTA) and the Singapore Institute of Manufacturing Technology (SIMTech). The seminar aims to help Singapore electronics and precision engineering (EPE) companies understand the growing focus on green manufacturing, the global opportunities and how Singapore companies can go green.

In his opening address, Mr Yew Sung Pei, the Assistant Chief Executive Officer, IE Singapore touched on how many countries have introduced environmental regulations so that to be globally compliant, MNCs like HP, IBM and Panasonic are developing baseline standards for their suppliers and are increasingly demanding green compliance from them. The seminar he said will give a holistic view on the ‘What’, ‘Why’ and ‘How’ of green manufacturing.

 
Picture: Speakers panel during Q&A. From L to R:  Mr Satish Lele, Ms Grace Lam, Mr Yew Sung Pei (moderator),
Dr Howard Lightfoot, Dr Lee Hui Mien and Mr Clarence Tan

A wide range of topics were presented by the five seminar speakers:

• Dr Howard Lightfoot, Senior Research Fellow from Cranefield University, UK presented the case for Product Service Systems an “ecologically conscious” business model.
• Dr Lee Hui Mien, SIMTech Research Scientist, updated everyone on SIMTech’s initiatives Towards Sustainable Manufacturing.
• Mr Satish Lele, Vice President Industrial Technologies (Asia Pacific) of Frost & Sullivan, elaborated on the Market Potential of Sustainable Manufacturing.
• Ms Grace Lam, Lead Auditor for Hewlett-Packard Global Procurement Services shared HP’s Supply Chain Social and Environmental Responsibility under its CSR programme.
• Mr Clarence Tan, home-grown entrepreneur and Managing Director of Green Car Company provided some insights into the philosophy and approach of Green Automotive technology.

In recent years, many countries have introduced regulations to minimise exposure of toxic substances from waste electronic and electrical equipment. EU implemented its Restriction on the use of certain Hazardous Substances Directive, or the RoHS, in 2003. Other countries such as Japan, Korea, China and the United States have also introduced similar regulations, though they vary in their approach and scope of products. To be globally compliant, multinational companies such as HP, IBM, and Panasonic, are developing baseline standards for their suppliers and increasingly demanding green compliance from them.

Mr Yew also cited as an example how RoHS-like regulations will have an effect on the entire electrical and electronics supply chain. He said, “Our electrical and electronics industry is one of the main pillars of Singapore’s economy with exports reaching S$119 billion last year, about 25 per cent of the country’s total exports. With so much of exported globally, it is therefore important for Singapore companies to keep abreast of these developments and regulations, and know how to meet these “Green” requirements.

Participants’ Feedback
On the whole, most of the seminar attendees felt that the presentations were helpful and a few gave some specific feedback. Mr Low Yeng Teck, the Operations Manager of AGRO ONE Pte Ltd said, “I found the seminar very useful as it offers a wider perspective as far as sustainable manufacturing was concerned. But at the same time there was a lot more questions that are left unanswered which I hope IE would help with. For example, there could be more research into what is the market impact to being green itself, what is the customer’s reaction. If you go green how much does the consumer take that into consideration? It’s part of the whole process.”

Mr Abdul Rahim, Director of ECO Leadership Training found the seminar very informative. He said, “I have been to many sustainability seminars in Singapore but this is the first one where they have attempted to define it clearly and properly. A lot of people talk about sustainability without understanding what it is fundamentally about. It starts with the definition and it goes on what are the principles of sustainability to make it a success in a ‘Green’ world. That’s one of the good things about this seminar.”

Mr Samuel Tan, Senior Manager at Sei Woo Polymer Technologies Pte Ltd noted how green manufacturing has become very important to many of his customers. He said “We produce rubber parts as first or second tier supplier for many industries like automotive, medical and consumer appliances. Many of these industries have green and eco-friendly standards so it is important for us to understand their priorities; then we can take steps and measures to improve our manufacturing processes to meet their requirements.” He feels the seminar has helped in raising the level of awareness for green issues in manufacturing.

At the end of the day, what Ms Lim Hee Joo, Business Development Manager of Wah Son Engineering Pte Ltd, wants to see is, “I seriously want the Government to make a more concerted effort such that any company whether large or small, can go to one source to seek not only advisory help but maybe also some financial support to go Green. I personally think that this is a long overdue effort. It should be a government-driven initiative like what most of the other countries are doing. So hopefully we get to a point where this really becomes a way of life for all manufacturers in Singapore.” About the seminar itself, Ms Lim said, “It has been quite inspiring. After this, it should go on and make some actualisation of what we have been talking about. Otherwise it would be just all talk.”

Green Manufacturing & the SME

Following the seminar, SHTA asked some of the speakers to share their thoughts on green manufacturing in the context of Small Medium Enterprises. For example, is sustainable manufacturing primarily the purview of large companies and MNCs? What are the barriers to SMEs if they want to take part in the game?

Niches & Cost Barriers

Mr Satish Lele of Frost & Sullivan gave his view on this subject by stating, “It really depends on which area you want to focus on. For example, system integrators can play a great part in green manufacturing in areas like energy efficiency. MNCs require cutting down on energy consumption on a year-by-year basis. Small companies of system integrators can support this process, they can go in and they can consult and show ways and means where to cut costs and in this way, get business for themselves in the process. There are many opportunities in the whole value chain from design to end product where smaller companies can take part in the sustainable manu-
facturing process. You need to break it up into smaller parts. For example, in the area of design it is made up of so many different aspects like the software or specialist designers for specific environmental conditions… so there many layers at which SMEs can contribute to the process.”

On the question of barriers to entry like costs for SMEs, Mr Satish said, “Typically for medium to large sized projects the payback is between 3 to 5 years. A lot of companies would invest in a Green project within that kind of time frame because they know sooner or later they will have to do it as part of their overall strategy to achieve sustainable manufacturing. They will look at the ROI but they would be more flexible about ROI for Green projects compared to their normal projects.”

Legislation Timeline

In terms of a timeline for developments in new environmental standards and regulation, Dr Lee Hui Mien of SIMTech said, “I think by early next year we will get a clearer picture after Copenhagen 15 (or COP-15 the United Nations Climate Change Conference to be held at the end of 2009). By then different countries and MNCs would have decided on their own targets and requirements. Meanwhile, a lot of things are currently speculative and everyone is also waiting to see what is the future of the Kyoto Protocol that ends in 2012. A new protocol might succeed it so that is another date to take note of. But if you ask me for any timeline, I would say a.s.a.p. from right now you have to start looking at sustainable manufacturing.”

PSS Model Suitable for SMEs?

Dr Howard Lighfoot spoke earlier on Product Service Systems at the seminar and when asked whether this environmental-friendly business model was just as applicable to SMEs he said, “I think big organisations have become uncompetitive in pure manufacturing terms (e.g. producing it in China is cheaper) and the cost of developing new products is also very high so they have to move to other solutions. So they offer complete turnkey solutions to their customers. They offer solutions that are also made up of services, offering their own products (that might already be made offshore) and other people’s products. What they have got is the expertise in managing the whole process. ”

Dr Lightfood contrasted this with what SMEs are facing today, “In some respects, the competition is even greater for smaller companies. You can have a product or idea to promote but it does not take long before someone else comes along and copies it or takes your customers. The only way they are surviving is by being closer to their customers. The SMEs are doing it by offering this higher level of service. There are many SME start ups that have good, high technology but in business terms they run out of growth capability because there is only so many products they can sell or there is a new entrant in the market. So you can’t perform on product or price alone you have to offer a solution.” He said the challenge for SME manufacturers is how well they can organise their resources so that they are not stretched offering solutions that include services.

How HP Helping

Ms Grace Lam of Hewlett Packard talked about the major areas that the company found wanting in SMEs and how it has helped them achieve their benchmarks. She said, “We work with our first tier suppliers and from there the information and requirements are supposed to be passed down from them to the subsequent suppliers. While we do have direct suppliers who are SMEs what we found were that the problems are not usually related to environmental issues (as most of them are involved in light manufacturing) but more labour, health and safety concerns in the factory.”

“For HP when we have suppliers who are not able to comply with our requirements, we need to understand from them what their reasons are. We also have capability-building programmes that are organised for the supply chain so they will know what are our requirements and what are their weaknesses so that they can work on them. These training programmes can last from 2 to 3 days right up to one year. The programme topics are based on the results of the factory audit we’ve done. Of course, we also require them to participate actively with their time and resources as well.”