Manufacturing Sustainability Inside and Out

By | General, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

This guest blog post is authored by Rob Zimmerman, director of marketing, projects, specifications & sustainability for Kohler Company. 

Since 2008, Kohler has worked to reduce greenhouse gas (GHG) emissions and waste to landfill with a goal of reaching “net zero” (with offsets) by 2035. This has become a springboard for innovation throughout the company.

We use Life Cycle Inventory (LCI), a product modeling tool, to evaluate a product’s lifetime environmental impact. LCIs look at supplier operations, Kohler operations, consumer use and end-of-life.

kohler-highline-1-0Because up to 80 percent of a product’s lifetime environmental impact is locked in during early stage development, we incorporate Design for Environment (DfE) principles in each phase of new product development.

These principles help us take a step back and evaluate the environmental impact of a product from raw material extraction through manufacturing, packaging, use and to its ultimate end via recycling, repurposing or disposal. Our recently released Highline 1.0 is the result of 10 years of performance evaluations, design tweaks and discovery. Kohler engineers discovered a way to more precisely target the flow of water into the bowl so that only one gallon of water is needed per flush. Relatively small design adjustments to the tank, bowl and trapway have reduced water use by 38 percent compared to a traditional 1.6 gallon per flush toilet. We’ve also found opportunities to improve manufacturing sustainability in unexpected places.

In an LCI evaluation at our Reynosa, Mexico, facility, we discovered a way to reduce GHG emissions. In Reynosa, it’s common for daytime temperatures to reach 100 degrees Fahrenheit during the four-month warm season. When the facility’s electric cooling units were due for replacement, associates explored more sustainable options and learned the area has the world’s largest reservoir of natural gas.

The team seized the opportunity to replace electric air conditioners with natural gas cooling units. As a result, the Reynosa facility increased energy efficiency and is saving millions of pounds in GHG emissions annually, while also making the facility more comfortable for employees.

In another example, Kohler cast-iron engineers saved 6,200 tons of pouring-molten-ironiron from being melted each year. In production of one of our most popular bath tubs, molten iron is poured through “sprues” into the mold. Excess iron remains in the sprues, cools and solidifies. This excess iron is punched out to release the finished bathtub from the line. Our equipment required large sprues and, therefore, a large amount of extra iron, to function properly. The unused iron was eventually reused, but substantial energy was used in re-melting it.

Cast-iron engineers upgraded to new equipment that could function with sprues 20 pounds smaller than the original. This saves 80 pounds of iron per bathtub. Overall, the upgrade reduced iron-melting requirements by more than 13 percent, energy use for the transfer of molten iron by 20 percent and losses due to cracked bathtubs by nearly 50 percent.

These are just a few examples of how we’re making manufacturing changes that reduce our company’s environmental impact from product design to the end of the product’s useful life.

TPP in Real Life: Subaru’s Indiana Business Booms in an Interconnected Global Economy

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

Subaru of Indiana Automotive, Inc. (SIA) first broke ground in Lafayette, Indiana more than 29 years ago and is the home of Subaru’s North American production. Models built at SIA’s Lafayette, Ind., plant include the Subaru Legacy and Outback. Later this year, production of the Impreza will be moved to the Lafayette facility from Japan, where SIA’s parent company, Fuji Heavy Industries Ltd. (FHI), is headquartered. Even more exciting, an as-yet-unnamed three-row crossover vehicle will be added at SIA in 2018.

Subaru of Indiana Automotive Facility in Lafayette, Indiana. Photo Courtesy: SIA

Subaru of Indiana automotive facility in Lafayette, Ind. Photo Courtesy: SIA

SIA has seen rapid growth in its Indiana vehicle manufacturing in recent years, with production expected to exceed 340,000 vehicles in 2016, an increase of nearly 40,000 vehicles compared to the prior year. To meet and accelerate this rapid growth, SIA has invested more than $1.3 billion over the past four years to prepare for Impreza production and expand its Lafayette facility, including expanding capacity in its engine and body shops and building a second paint shop.

Subaru Impreza Manufactured in Lafayette, Indiana Starting in November. Photo Courtesy: SIA

Subaru Impreza will be manufactured in Lafayette, Ind., starting in November. Photo Courtesy: SIA

SIA’s Lafayette facility employs more than 5,400 associates, and the company has added more than 1,300 associates in the past year to support the production of new models and growth. These job increases in turn support the broader Lafayette and Indiana economy. New jobs created by SIA have a multiplier of 11.4, meaning that for every job created by SIA, more than 11 other jobs are created in other Indiana businesses, according to 2010 estimates by the Center for Automotive Research.

As an automaker operating in the global economy, free and fair trade is essential to SIA’s operations. In the past, SIA has exported vehicles to more than 52 countries in a single year. During the past five years, nearly 62,000 vehicles built at SIA have been exported to other countries, including more than 53,000 vehicles shipped to Canada. Due to the high demand for the Legacy and Outback in the United States, SIA currently only exports to two other countriesMexico and Colombiaplus Puerto Rico. However, with expansion and new models, SIA exports are expected to grow.

According to SIA Senior Executive Vice President Tom Easterday, “SIA strongly supports efforts to establish free and fair trade between the United States and its most significant trading partners, including through agreements such as the TPP. As our track record demonstrates, SIA’s exportation of vehicles to global markets clearly supports the creation of manufacturing jobs in Indiana, and we’re excited about the further job growth SIA and our suppliers have experienced due to the upcoming start of production of the new Impreza here in the United States.”

Read more from the “TPP in Real Life” series here.


Supreme Court Preview: Hundreds of NLRB Complaints Are at Risk

By | Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main | No Comments

An unusual statutory restraint on the appointment process for the general counsel of the National Labor Relations Board (NLRB) is at the heart of a significant case about to be heard by the Supreme Court of the United States. The provision is part of the Federal Vacancies Reform Act of 1998. The court will decide whether Lafe Solomon, a long-serving NLRB official and former acting general counsel of the board for several years, could actually serve as acting general counsel in the face of statutory language prohibiting such service if he was nominated to be general counsel but had not served long enough as first assistant general counsel.

It’s a technical provision with a “notwithstanding” clause that has caused all the confusion. That clause only refers to one subsection of the law, but the rest of the statutory language refers to the entire section. A federal appeals court ruled that Solomon was prohibited from serving as acting general counsel after his nomination and that the unfair labor practice complaint that was issued on his authority was invalid.

The NLRB issues more than 1,200 complaints each year, so thousands of decisions were made by the general counsel or those to whom he delegated decision-making authority from January 5, 2011, to November 4, 2013. This challenge could allow many of those cases to be revisited.

But the case will have an impact on many other federal agencies, arguably going back to 1998. In April, the administration warned the Supreme Court that “Decisions of many former acting officers, including senior officers in the HHS Centers for Medicare and Medicaid Services, DOJ, DOT, Department of Defense, the Export-Import Bank and General Services Administration could be open to question under the court of appeals’ reasoning. Moreover, the decision below casts a cloud over the service of about half a dozen current acting high-level officers, including in the DOT, HHS, EPA and OPM.”

The Manufacturers’ Center for Legal Action is on the front lines challenging a variety of NLRB actions that skew policy and law against manufacturers in the United States. We look forward to oral arguments at the court on November 7 and a decision thereafter.


September Manufacturing Job Market Numbers Disappointed Again

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For the second straight month, manufacturing employment fell, which was disappointing. Given the rebound in sentiment and activity seen in other measures, there was some hope that job growth might stabilize in this report. Instead, manufacturers lost 13,000 workers on net in September, extending the loss of 16,000 employees in August. More importantly, manufacturing employment has decreased by 58,000 year-to-date, suggesting continuing cautiousness among manufacturing business leaders to add workers in light of lingering weaknesses in the global economy.

On this Manufacturing Day, that message is a bittersweet one. We were encouraged by the rebound in demand and production seen in Monday’s ISM figures, and there is some expectation that activity will pick up in the coming months. Yet, these figures suggest a degree of nervousness in the economic outlook, with job growth in manufacturing continuing to lag behind.

With that in mind – and especially with the election just weeks away – manufacturers will continue to stress pro-growth policies that will enable faster economic growth and enhance the sector’s overall global competitiveness. Read More

TPP in Real Life: Nebraska-Based Manufacturer Exports Equipment That Helps Feed the World

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Behlen Mfg. Co. is a diversified company with three major business units run by 950 employees that manufacture livestock equipment and grain bins, buildings and many other products.

Behlen’s world headquarters is in Columbus, Neb., where the company has an 850,000-square-foot manufacturing facility. Behlen also has manufacturing facilities in Omaha, Neb., Baker City, Ore., and McGregor, Texas, and sales and engineering offices in Boise, Idaho, and Loveland, Colo.

Behlen Headquarters in Columbus, Nebraska. Photo courtesy: Behlen

Behlen headquarters in Columbus, Neb. Photo courtesy: Behlen

Behlen was purchased in 1984 through a leveraged management buyout led by Tony Raimondo, the company’s current chairman. According to Raimondo, “Behlen had been a failed company that was losing $7 million per year on $30 million in annual sales. As we returned the company to profitability, we emphasized to our employees that our collective job security will be tied to the global competitiveness of the company, and that we will share in profits together.”

Behlen’s global strategy has proven to be a big success. In 2015, Behlen exported $20 million worth of products to markets around the world, primarily from its Columbus, Neb., facility.

Behlen exports include large commercial grain storage systems, which are installed at ports around the world, as well as a number of other products.

Behlen Commercial Grain Storage System in Kaliningrad, Russia. Photo courtesy: Behlen

Behlen commercial grain storage system in Kaliningrad, Russia. Photo courtesy: Behlen

Behlen exports constitute about 10 percent of the company’s total annual sales, and the jobs of an estimated 50100 employees are tied directly to exports. Behlen’s export markets include Trans-Pacific Partnership (TPP) countries like Australia and Mexico, as well as scores of other countries, including China, India, Russia and Ukraine. These products not only support jobs and communities in America, but they also help ensure safer and longer storage of food products, including tons of grain produced on U.S. farms that help feed the world.

Raimondo adds, “Behlen supports the TPP, as its ratification is critical to the continued success of manufacturing in the United States. Our company faces protectionist threats in markets around the world, including high tariffs and nontariff barriers. To push back against these measures, we need more agreements like the TPP that will support manufacturing in the United States and continue to improve our global competitiveness.”

Read more from the TPP in Real Life series here.

Delivering the Future: How UPS Is Pursuing the Possibility of Sustainable E-Commerce

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This guest blog post is authored by Jim Bruce, senior vice president, corporate public affairs at UPS.


David Abney, UPS chairman and chief executive officer

For years, UPS has been famous for its “no left turns” policy, which cuts emissions, reduces delivery time, conserves fuel use and generally improves our sustainability. But there’s so much more to sustainability than which way you turn. More important of course is your destination. At UPS, ours is anticipating the direction of e-commerce and staying ahead of it, because we believe that e-commerce will profoundly impact the development of our cities, lifestyles and business.

The question is whether e-commerce will improve or diminish global sustainability. We think it can go either way but are optimistic about the possibility of real improvement. Which way it goes depends on a number of factors: 1) Can we create a sustainable global delivery network? 2) Will people rely on that network enough to lessen reliance on personal vehicles and to increasingly live in decongested, pedestrian-friendly cities? And 3) Will cities begin to view e-commerce as essential to their sustainable future? Truly, a “yes” to these three questions would be transformative to our cities and global carbon-reduction efforts.

Everyone knows that UPS is a trucking company, but the reality is that we’re a network optimization company. UPS has a laser focus on creating the most efficient network possible, not only because it’s good for our business, but good for our planet, too. That means we use multi-modal shipping, including the most efficient modes like rail, which we’ve used for the past 50 years. It means we use trucks, filled to capacity whenever possible, and we resort to aircraft when necessary to meet our customers desired delivery date. The efficiency of our network is paramount, and we use tools like our ORION delivery route optimization software, an enormous bank of telematics data and our newly acquired Coyote subsidiary to expand those efficiencies even further. The business case for “big data” has never been more persuasive, helping to reduce miles traveled and to refine every aspect of our business.

natural-gas-pumping-w-upser In addition to employing the most efficient delivery modes, we seek to reduce the carbon footprint of those modes.  Our “rolling laboratory” of alternative fuel vehicles plays a huge part of these overall sustainability efforts. In fact, UPS set out to drive 1 billion miles in our alternative fuel fleet by the end of 2017, and this fleet of alternative fuel and alternative technology vehicles enabled UPS to surpass our goal a full year early! In fact, this fleet of 7,200 vehicles is now moving a million miles each business day.

We are also buying synthetic diesel fuel made from renewable sources and bio-sourced natural gas. The result is that nearly 14 percent of the fuel our trucks use is now from renewable sources, not petroleum or natural gas.

alternative-fuel-truck-pumping-close-upSuch steps are essential for a more sustainable delivery network, but the bigger question is, will e-commerce transform our cities? There is ample evidence that young urban dwellers here and abroad want more walkable, bike-able, “smart,” environmentally friendly neighborhoods. For cities, achieving that vision will attract talented millennial workers who want those living conditions, where they can easily get around without a personal car and live in vibrant urban neighborhoods and cities. E-commerce and its requisite delivery systems would seem essential to that lifestyle.

Yet, many cities today see e-commerce and business facilitating delivery vehicles as a double-parking, traffic-congesting nuisance and a rich revenue source for traffic ticket writers. But crucially, instead of more restrictions on companies like UPS, we need to collaborate on new partnerships to reduce urban congestion and pollution. Working hand-in-hand with cities to achieve their goals, while meeting our customers’ delivery demands in an e-commerce world, is what we’re all about. In fact, UPS is already developing such solutions, including a small fleet of electric tricycles to deliver and pick up packages in Hamburg, Germany, from a centrally located stationary trailer. We are seeking similar partnerships in other cities, including Dublin and London.

Ultimately, it’s our notion of serving communities that guides UPS’s sustainability efforts. Every day, we’re working in neighborhoods around the world and come face to face with issues like congestion, air quality and the safety of our roads and sidewalks.

Meanwhile, demand for delivery services is only going to increase. Helping metro regions to facilitate sustainable e-commerce vis-à-vis new delivery methods and exciting cross-functional partnerships is the next step. Working together, we can reduce urban congestion, expedite freight flows, promote walkable cities and cut costs, all the while positively impacting the environment. The future of sustainable e-commerce has never been brighter!


ISM: Manufacturing Activity Rebounded in September

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The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) rebounded in September after unexpectedly contracting in August. The composite index rose from 49.4 in August to 51.5 in September, expanding for the sixth time in the past seven months. This was encouraging news, and a sign that the August reading were a bit of an outlier. Indeed, new orders (up from 49.1 to 55.1) recovered strongly, with modest growth in production (up from 49.6 to 52.8) and exports (down from 52.5 to 52.0). Despite the easing in exports, international demand has expanded for seven consecutive months. The sample comments also tended to echo the better data in September, even as respondents continued to cite ongoing challenges. Read More


Real GDP Revised Up to 1.4 Percent in the Second Quarter

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The U.S. economy grew 1.4 percent at the annual rate in the second quarter, up from 1.1 percent in the prior estimate, according to the latest revision from the Bureau of Economic Analysis. The revision stemmed largely from better data for nonresidential fixed investment, up an annualized 1.0 percent for the quarter instead of a decline of 0.9 percent as noted in the previous release. With that said, there were still challenges related to nonresidential fixed investment, with businesses spending less for both structures (down 2.1 percent) and equipment (down 2.9 percent). In addition, there were large drags on headline growth from private inventories and residential activity, with the latter softer-than-desired after being a bright spot over much of the past two years. Gross private fixed investment alone subtracted 1.34 percentage points from real GDP growth in the second quarter. Read More

Treasury Proposal Threatens Family-Owned Businesses

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tax-study-infographic-03The Treasury Department this summer blindsided small manufacturers with a proposal that could derail plans by many business owners to pass their companies down to future generations. The proposed regulations—which incorporate some of the most sweeping changes to estate tax policies in the past 25 years—could increase estate and gift taxes on family-owned businesses by an estimated 30 percent or more. Read More

Litigation Over the Clean Power Plan: The Big Picture

By | Energy, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main | No Comments

The entire bench of the federal appeals court in the District of Columbia is hearing nearly four hours of arguments tomorrow in 39 lawsuits challenging the Obama administration’s Clean Power Plan regulation. The challengers represent a broad swath of industries, including mining, transportation, electric utilities, manufacturers and consumers of energy, as well as 27 states.

The Manufacturers’ Center for Legal Action, joined by a manufacturing coalition of more than a dozen other national trade groups, is involved in this case because we are very concerned that the Environmental Protection Agency (EPA) has imposed a set of regulations on electric utility companies that is not authorized by, and contradicts specific provisions of, the Clean Air Act. The rule’s goal is to restructure the power sector by imposing emissions limits that are unachievable without switching fuel inputs. This could undermine the reliability of the electric grid and cause higher energy rates for consumers, including manufacturers in the United States. A ruling in favor of the rule would set the EPA up to impose greenhouse gas regulations on many other sectors of manufacturing.

This case has all the earmarks of a major case that will wind up in the Supreme Court, probably in the fall of 2017. Normally only three judges would hear this first round of arguments, but the appellate court decided to go straight to the full panel of 10 (not counting Chief Judge Garland, who is not participating). This unusual step signals that the judges consider this case extraordinary, and the court has set aside its largest courtroom and two overflow rooms for the large anticipated attendance from litigants and the public.

This regulation is of existential importance for certain sectors and will put substantial upward pressure on energy costs for many manufacturers and other consumers. But beyond raising legal issues of statutory construction, administrative procedure and constitutional compliance, the Clean Power Plan is a prototype for the kind of regulation that tests the limits of the executive branch. Whoever wins the upcoming election, the next administration will have to live within the contours of decisions like the one in this case. The power to regulate comes from the Constitution and the laws enacted in compliance with it, and the courts stand as the final judge on how far that authority goes.