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Bottom-line Thinking, by Gary Mintchell

This month, we are covering two issues very important for the profitability of manufacturing companies—and that have potentially far-reaching consequences.

The major focus of the issue is “green,” regarding both environmental concern and corporate profitability. The second important issue is the role standards play in developing machines that make manufacturing responsive to both customer demand and corporate competitiveness. The common thread, of course, is a weave of automation and operational excellence.

Some people feel political vibrations when they hear the word green. For some, the vibrations are positive, and for others, it's more akin to a few volts of 60-cycle power running up the arm. Forget the politics. There are many values to being green. Many managers value being good corporate citizens of their cities and try to run facilities that don't draw undue negative publicity. Of the various manufacturing companies covered in this issue, the reason that each pursued energy efficient and green projects varied in some detail, but in every case, it just made good business sense. You can be conservative, profitable and green—all at once.

A group from the corporate engineering staff at Procter & Gamble Co. invited me down the road for a talk about how they use standards as part of their machine specifications. You can read the interview starting on page 48.

It's important not to miss the fact that P&G does not invest the people resources required to develop and promote standards out of some altruistic sense that standards are good. It invests because it makes business sense... Read more

» Pinto's Prose: Green is Good for Business, by Jim Pinto
In the past, corporate environmental plans were mostly cost burdens relating to regulatory compliance, with perhaps a touch of the public relations image of being socially responsible. In the past few years, this has changed dramatically—“green” is becoming a business profit opportunity.

Most plants, factories and industrial systems were designed decades ago when the consequences of pollution and waste were not really considered. Now, companies are working to reduce their “environmental footprint,” and not just for long-term humanitarian reasons. Irrespective of whether or not man-made pollution is only a contributing factor to natural global warming, “green” is gaining more attention because of the real profit opportunities. Further, many businesses are starting to recognize the competitive dangers of lagging behind.

The increasing attention to the causes of global climate change is happening concurrently with rising energy prices. Oil at $100-a-barrel brings new opportunities. Products that use less fuel and decrease emissions generate growth and profits. General Electric is generating new growth and profits with super-efficient gas turbines that provide more electricity and less carbon dioxide emissions than older models. Boeing's 787 jets use 20 percent less fuel than comparable models, and orders quadrupled as oil prices soared.

Hybrid cars are perhaps the best-known recent success story. Instead of innovating, U.S. automakers were lobbying against tougher emission standards, and kept introducing gas-guzzling trucks and sport utility vehicles (SUVs). Meanwhile, Toyota and Honda started investing a decade ago to compete with less fuel usage and fewer emissions. Now they are benefiting by environmental regulations as well as the jump in oil prices... Read more

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