Activities on Tools and Indicators for Sustainable Manufacturing in Japanese Electronics Industry

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1 International Conference on Sustainable Manufacturing Activities on Tools and Indicators for Sustainable Manufacturing in Japanese Electronics Industry Panasonic Group's 'eco ideas' Strategy Activities of Japanese Industry on Environmental Indicators for Products 24 September, 2008 Narito Shibaike Matsushita Electric Industrial Co., Ltd.

2 'eco ideas' Strategy

3 Accelerate Environmental Sustainability Management Becoming a Challenger to Achieve Global Excellence Global Excellence Matsushita in 2009 Steady Growth with Profitability Matsushita in 2007 GP3 Plan Reduce environmental impact in all business Key activities issues Rapidly implement measures to prevent global warming. Globally promote environmental sustainability management. Deconstruction and Creation

4 Reduce CO 2 Emission in Production Activities Reduce total emission while increasing production Reduce global CO 2 emission by 300,000 tons in three years FY2010 Target Achieving the level for FY2000 (approx. 3.6 million tons)

5 Three Key Initiatives of 'eco ideas' 'eco ideas' for Products - Pursue energy-efficient product development - Promote the use of environmentallyconscious materials and product recycling 'eco ideas' for Manufacturing - Reduce CO 2 emission by improving productivity - Enhance resource conservation and waste reduction 'eco ideas' for Everybody, Everywhere - Expand ecology with the international community - Strengthen activities across national borders

6 Energy-saving Performance Label Expanded around the World (typical examples) EU China Korea Canada U.S. India Hong Kong Japan Brazil Australia

7 Japan Standard: Top Runner Program (since 1999) The concept of the program is: Standards are set exactly the same as or higher than the best performance value of each product item currently on sale in the market. Fuel Efficiency (km/l) 16 At the time of standard setting Standard setting of Top Runner Program 15km/L 14km/L 13km/L 12km/L 19km/L 18km/L 17km/L 15km/L Weighted average per product category is used to judge achievement of the standard Target Fiscal Year Target products 21 products Passenger vehicles Space heaters Freight vehicles Gas cooking appliances Air-conditioners Gas water heaters TV sets Oil water heaters Video-cassette recorders Electric toilet seats Fluorescent lights Vending machines Copiers Transformers Computers Electric rice cookers Magnetic disc units Microwaves Electric refrigerators DVD recorders Electric freezers 1: Heavy vehicles weighing over 3.5ton (buses, trucks) were added for the target products in April : LCDs and plasma display TVs were added for the target products in April 2006.

8 Thorough Pursuit of Energy-efficient Products 'eco ideas' for Products Increase the number of products featuring the No.1 energy-efficient performance and phase out low energy-efficient products 100% Distribution of energyefficient models No. 1 16% High-ranked 36% Mid-ranked 35% Low-ranked 13% 2007 Double Fade out No. 1 30% High-ranked 40% Mid-ranked 30% 2009

9 Reduce CO 2 emission by Improving Productivity 'eco ideas' for Manufacturing Recycling Energy conservation at offices IT innovations 3R design Recycling Product planning Design e-work Factory integration Service Manufacturing Process Procurement Inventory reduction Green logistics Sales Logistics Manufacturing Energy-conserving equipment Modal shifts Quality improvement Electronic component mounting machines

10 Reduce CO 2 emission to FY2000 Level 'eco ideas' for Manufacturing CO 2 emission (10,000 t-co 2 ) Reduce global CO 2 emission to 3,680,000 tons in FY manufacturing sites ,000 tons GP3 Plan ,000 tons 360 To FY'00 level 0 '00 '03 '04 '05 '06 '07 '08 09 '10 FY

11 CO 2 Emission Serve as Key Management Indicators Report monthly global CO 2 emission figures to management Environmental performance system Manufacturing business units 294 sites around 294 the world Submit data via the Web CO 2 emission with 23 items Environmental performance data Head Office Feedback of analysis results Key management indicators Sales Operating profit Inventory CCM Monthly reporting of tatement of Environmental Various data analyses, etc. CO 2 + emission

12 Reducing CO 2 Emissions by Increasing Productivity in Direct Manufacturing Introduction of energy-conserving production equipment Electronic component mounting machines Manufacturing technology innovations Increased the number of PDP panels produced from a single substrate One panel Six panels Energy saving Rotary type Space saving Molding machines Modular type CO 2 : -50%/unit Energy saving CO 2 : -50%/PDP Finer semiconductor processing on larger diameter wafers Molding Hydraulic type Motorized type Line width: 130 nm (Diameter: 203 mm) Line width: 45 nm (Diameter: 300 mm) Energy saving Space saving CO 2 : -60%/unit Energy saving CO 2 : -80%/chip

13 Reducing CO 2 Emissions by Increasing Productivity in Entire Process Green logistics Direct transportation near to the market Shanghai Transportation distances reduced Osaka Tokyo Shanghai Modal shifts (railroad transportation) Tokyo Direct transportation CO 2 : -50% Mikuni Fujisawa Site integration Site integration (Matsushita Home Appliances Group) Kusatsu Space saving Nara Kofu Factory integration (PanaHome's main factory) Factory Integration "eco-idea" into Factory Kusatsu Biwako Site CO 2 : -20% Factory Shipping site Shipping site CO 2 : -80% Four factories and one shipping site Transportation volume reduced Space saving Reduce the number of sites to three CO 2 : -15%

14 Reducing CO 2 Emissions by Increasing Productivity in Every Operation Energy Conserving at Offices Energy-conserving lighting equipment Conventional fluorescent lamps (Starter type) 3 lamps 2 lamps Hf fluorescent lamps (High frequency type) IT utilization Web conferences (EPOCH System) Business trips become unnecessary Paperless conferences become possible Energy saving CO 2 : -30% Energy-conserving air conditioning systems CO 2 : -400 kg per capita CO 2 : -30 kg per capita Telecommuting (e-work) (Osaka-Beijing round trip) (Osaka-Tokyo round trip) Optimum control of compressor operations Commuting became unnecessary Energy saving CO 2 : -15% CO 2 : -300 kg per capita/year

15 Expand Eco-conscious Activities with the Collective Wisdom 'eco ideas' for Everybody, Everywhere From communities to the world Love the Earth (LE Campaign) Global promotion Establishment of factories that achieve living in harmony with local communities 'eco ideas' Factory Acceleration of environmental contributions in China China Eco Project

16 'eco ideas' Declaration as the Tool of Panasonic Panasonic will Lead the Way for the World with 'eco ideas' We will 3 produce energy-efficient products. Enhance energyconserving performance 2. We will reduce CO 2 emission across all our manufacturing sites. Reduce CO2 emission to FY2000 level Spread energy-conserving products 3. We will encourage the spread of environmental activities throughout the world. Globally expand the LE activities Incorporate into the core management system Promote the China Eco Project Publicly announced on October 5, 2007

17 Activities of Japanese Industry on Environmental Indicators for Products

18 Requirements to Transform Market Policies must be developed by considering two aspects; Government Manufacturer Retailer Technolog y Push Consumer - Energy Efficiency Standard - Labeling System - National Campaign - Consumers Education - Information Delivery to Consumers - Incentives and Subsidies - Government Procurement Market Transformation Market Pull

19 Pulling the market by indicators To inform consumers on the importance of considering eco-efficiency of products in purchasing is very important. If consumers can know the progress of products by the indicator, they will buy better ones. Pushing the technology by indicators Consumers are increasingly demanding information on the products that they are using. If manufacturers can measure the position of products with the indicator, they will develop better ones.

20 Indicators for Environmentally Conscious Products A product strategy must be responding to market needs such as higher quality and environmental friendliness. For standardization, it is desirable to be simple, easy to understand and clearly transparent. As the environmental impact, GHG (Greenhouse Gas) emissions or energy consumption of a product in its entire life is most familiar, scientifically established and important to all the consumers.

21 Candidate Indicators Eco-Efficiency Eco-Efficiency = Product or Environmental Impact Factor-X Factor-X = Eco-Efficiency of the Evaluated Product or Service Eco-Efficiency of Reference Product or Service

22 Movement on Indicators in Japanese Industry 8 electronics companies in Japan have agreed to - efficiency evaluation to provide meaningful indicators to the markets, with creating new relationships between manufacturers and consumers. Why? Eco-Efficiency can consider two important aspects of products; their functional performance and environmental impact. Factor-X is a specialized indicator which can show the environmental friendliness at the same time. Compatibility of economics and ecology Flexible and diverse approaches Raise of effectiveness towards the sustainable development Therefore, Eco-Efficiency and the Factor-X may be ideal candidates for world-wide indicators.

23 - Assessed Products 1st Step: Air-Conditioners Refrigerators Lamps (Bulbs, CFLs, etc.) Lighting Apparatus (Incl. Lamps) 60% of Electricity Consumption 2nd Step: TVs Personal Computers Washing Machines

24 - Definition of Indicators for First Four Products - Next products will be with the same definition Eco-Efficiency of Product = Environmental Impact through Entire Life Cycle of Product Eco-Efficiency of 4 Products = Fundamental Function Utility Duration Sum of GHG Emissions through Entire Life Cycle of Product Common Factor-X = Eco-Efficiency of Assessed Product Eco-Efficiency of the Same and Past Product (in 2000 FY)

25 Fundamental Function Utility Duration Air-Conditioners Sum of Heat Quantity of Cooling and Heating per Year [kwh] 10 years Refrigerators Adjusted Internal Volume [l (Liter)] 10 years Lamps (Bulbs, CFLs, etc.) All Luminous Flux [lm (Lumen)] Product Lifetime Lighting Apparatus (Incl. Lamps) All Luminous Flux [lm (Lumen)] 10 years

26 Standardization of Indicators for Eco-Efficiency The most important characteristic in this approach is having a voluntary framework by private companies, not a compulsory by the government. An evaluating methodology about 4 products such as air conditioners, refrigerators, lamps, and lighting apparatus was made with designating the GHG emissions as their environmental impact. A couple of candidate products such as TVs, personal computers, washing machines, etc. are being discussed in the same companies. The demands imposed on the development of environmentally conscious products are to maximize the product value and to minimize the impact of the product on the global environment. Eco-Efficiency is an indicator that specifies this concept. Factor-X will therefore reach its full potential after advances are made in Eco-Efficiency.

27 Expectations of National Tools for Eco-Innovation & Market Transformation CO2 Emission for years Old Product Subsidies and incentives have effects in two aspects; Change New Product Consumers CO2 Reduction Certification Policy Government or Municipalities Policy Policy Retailers Manufactures ex) Subsidy, tax incentive, award, etc. to buy a new energy efficient product

28 Thank you very much! The Panasonic Group proposes one-step-ahead eco ideas in every activity.