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The Dawn of the Machines: Automation in East Asia

Industry Insights / / , , , , ,

automation in east asia

 

When the word “automation” is mentioned, what comes to mind? Is it self-driving cars that allow you to catch some extra sleep on the way to your job? Or is it some futuristic notion of a robot butler who is able to clean your house, walk the dog, and maybe even do the laundry? Well, the concept of robots doing our work for us is not as far off as it may seem. According to the Brookings Institute, 25% of American jobs are already at “high risk” for being overtaken by automation. And that number has been expanding from factory line jobs to more white-collar professions like accountants, data analysts, and even HR directors.

What is automation?

Automation is defined as “the technique of making an apparatus, a process, or a system operate automatically.” In other words, it’s creating a machine or utilizing artificial intelligence (“AI”) to do the job that person or team of people would normally do. Today, jobs centering around food prep, production, and office administration are among the highest risk for automation, with AI being sufficient to cover 70% or more of the occupation’s responsibilities. While workers in the United States and Europe may be nervous for the rise of AI, many countries in East Asia are already experiencing mass automation.

Robotics & AI in Asia

In 2017, Asia led the world with the highest population of robots. With over 1 million robots within the region, Asia has already started to experience the economic and social benefits and risks associated with massive-scale AI and automation. To capture the sheer scale of these advancements, the IMF has estimated the world’s robot population in all continents. Here, Asia far outnumbers all other regions by claiming 65% of the world’s robots, 50% of which are located in China.

Robotics in Asia, reflecting automation
Asia (more specifically, China) claims a majority of the world’s Robotics population. Source IMF, 2018

As far as robot density is concerned, Korea and Singapore are global leaders, followed closely by Germany and Japan (IMF Blog, 2018).

Within Asia, China is automating its manufacturing capability whilst the rest of its Asia neighbours are slow to follow. This is aligned to Beijing’s 2025 initiative of “Made in China”, which focuses on Smart manufacturing. This should lead to additional productivity gains and ultimately reduce the competitiveness of some of the smaller emerging exporting countries.

Smart manufacturing is a broad term that describes manufacturing processes that use technology such as robotics, AI, digitisation to drive efficiencies and increase the levels of agility within the production cycle. Importantly, in line with the ever-evolving consumer, this will enable mass customisation and enable Brands to create more personalised experiences for their customers.

Robotics: Here to Stay

When viewing some of this data, some skeptics may wish to point out that automation is simply a niche market or fad. They believe that human labour, with all of its flaws and risks, will prevail in the long term. Yet, world-recognized authorities on economic trends, such as the IMF and WEF, seem to forecast otherwise. The World Economic Forum stated in an article published in September that “More robots than humans doing technical work may bring down the cost of business, including labour costs, significantly.” Using conventional economic knowledge that firms will try to maximize profit and reduce costs, it seems extremely likely that many businesses could adopt automation into their manufacturing processes. This is especially the case if the cost of robots continues to fall and the opportunity cost for not adopting automated processes increases.

Robotics and Manufacturing as part of automation
Will the usage of Robotics become more and more common in Manufacturing?

Hi-tech Manufacturing: less variability in production

Manufacturing also stands to gain from increased automation. Most companies using robotics justify their decision to make the switch with increased productivity and producing more outputs. Automated systems are usually able to produce with less variability than human beings, which often results in greater control and consistency in quality (Groover, 2019). It’s clear that robotics and automation offer many advantages to a firm. Yet, there are still some costs associated with phasing out human labour.

Brands themselves are also investing in hi-tech manufacturing. Nike, Adidas and Under Armour are investing millions of dollars in new technologies that will revolutionise how and where they make their products. It is estimated that by Nike using ‘Flex manufacturing’ to manufacture Nike Air shoes, they will be able to reduce the cost of labour by 50%.

advantages of Manufacturing and thus advancing automation
Manufacturing also stands to gain from increased automation, greater control and quality consistency for example offer many advantages.

Clearly the level of automation in a manufacturing plant is highly dependent on the products being made. The Garment sector, for example, still to a large extent relies upon low-value added manual labour. This has enabled the industry to globalise to many different emerging manufacturing countries around the world. As a result, it is likely that the clothes that you are currently wearing are made in multiple different export markets. The cost advantages of broad automation within the Garment industry is not therefore immediately obvious versus the capex required. In stark contrast, automated production lines for car manufacturing are now common place.

Summary

There is no doubt that Robotics and AI will continue to develop and become more common at manufacturing plants across Asia. China is leading this evolution, supported by Central Government. Therefore, expect to see levels of automation broadly increase in factories to drive productivity gains and more agile production. The rise of the machines is a reality, but do not expect to hear the phrase ‘I’ll be back’ quite yet!

We are constantly speaking with our factories to understand what automation means to them and what the future holds. To learn more, contact us.

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It’s Not Just a Phase: Why the difference between Greenwashing and Sustainability is Important

Industry Insights / / , , ,

greenwashing and sustainability

 

Hip… tubular… fly… slammin’… At one point, these words were a mark of being one with the times; status symbols displaying social aptitude. However, over the years and through thousands of uses, these worn words are more likely to prompt an eye-roll than a positive response. Today, Could the same be said for the word “sustainable?” How about “green?” Perhaps even “environmentally-friendly?”

If you have ever felt overwhelmed or exhausted walking through any grocery store as labels and signs proudly boast the words “all natural ingredients” accompanied by pictures of bucolic landscapes with welcoming farmers smiling with their products in the foreground, you may be experiencing what is known as Green Fatigue.

Green fatigue, as defined by the website EcoWho, “becoming tired with some of the constant messages of corporate green credentials and tales of impending global doom” (EcoWho, 2018). In today’s world, it’s easy to feel a bit of green fatigue. Nobody likes being told the world may be ending or that the food they’ve been eating all their lives comes from some nightmare-inducing industrial plant. This may cause some to look away from the promises of sustainable practices. The word gets used so often, how is the average consumer supposed to know what it means or if the company is really helping the environment?

difference between greenwashing and sustainability
Pictures like this are common in outlets that support sustainability. But what does it mean?

What Happened to the Word “Sustainable?”

A lot of things happened to the word “sustainable”. While environmental friendliness picked up steam as a widespread social movement in the 1960s counterculture era, words like sustainability didn’t start popping up so much in business rhetoric until the 1970s. In the 70s, various companies capitalized on the fresh environmental policies in the US at the time, such as the National Environmental Policy Act of 1970, the Clean Water Act, and the Endangered Species Act, in order to gain favor in the eyes of the public and government.

 

Sustainability in Politics

However, it wasn’t long till the word sustainable began to become politicized. Politicization of science is nothing new in the United States, so once green policies became popular among democratic politicians, the opposite side of the political spectrum became skeptical about the legitimacy of the evidence used to back up these policies. A report by political scientist, David Karol, states that:

“Endorsements and campaign contributions from environmental groups now overwhelmingly go to Democratic candidates, while economic sectors frequently at odds with environmentalists, including fossil fuel producers and much of agribusiness, increasingly support Republicans. Divisions between Republican and Democratic voters on the environment, while not as great as among political elites, have grown as well” (Karol, 2018).

The result of this growing divide has seen more eye-rolling at the word “Sustainable” by those who fall on the conservative side of American politics. Right-wing news sources are often quick to decry companies promising more sustainable practices or environmentalist policies passed by the government as part of an agenda to weaken other businesses or increase taxes. Hence, these sentiments have radiated out from this community, influencing the minds of many to doubt the credibility of the word “sustainable.”

 

Sustainability Becoming Greenwashing in Marketing

Most people in business are familiar with the term whitewashing, which is used in reference to an entity covering up certain vices by utilizing biased investigation techniques or data. However, not as many are familiar with the term greenwashing, but they definitely have experienced it in one way or another.

So what exactly is this…Greenwashing? Business News Daily defines greenwashing as, “when a company or organization spends more time and money claiming to be “green” through advertising and marketing than actually implementing business practices that minimize environmental impact.” The article continues to mention that this is rarely caused by evil intentions but usually occurs by overexcited marketers who desperately want to sell to the rising number of environmentally conscious consumers (Edwards, 2018). And the numbers provide a good reason for enthusiasm:

environmental impact and sustainability
Shoppers in the US are becoming more environmental conscious. And so are marketers (Walker, 2013).

However, there are also good reasons for nervousness when it comes to buying products that claim to be sustainable, even if one does support the concept. For instance, in 1991, DuPont, a chemical company, used an ad portraying animals rejoicing as the company showed off its new sustainable double-hulled oil tankers. Consumers who viewed the ad had their visions of a green DuPont dashed in front of them when it was discovered that the company was the largest polluter in the US that year.

So does this mean we should give up on companies that promise to be eco-friendly? Not at all. Like in most things, the bad minority of news tends to reach us before the good majority. For the most part, businesses that promise sustainability are making a difference.

 

A cliché, but a Good Cliché

Still, the word sustainable draws a lot of confusion. Are there any requirements for a company to call itself sustainable? What are the motivations to actually become sustainable? Is it all just a bunch of corporate jargon or are there results to back up these claims? These are all valid questions that any consumer doing their due diligence should be asking themselves. Nonetheless, most of these smart shoppers would be happy to report that, for the most part, there are hopeful answers.

Guidelines Exist for Responsible Marketing

For starters, there are many strategies companies can follow when becoming sustainable. One of these procedures was released by the U.S. Federal Trade Commission, which offers voluntary guidelines for green marketing claims including processes like “qualifications and disclosures should be clear, prominent and understandable,” “not [to] overstate, directly or by implication, an environmental attribute or benefit, “ and “to avoid consumer confusion about the comparisons” (Investopedia, 2018).

While these tips are voluntary, following these guidelines is great for risk management when marketing sustainability. Marketing responsibly, a company can avoid lawsuits, community outrage, or a multitude of other problems that could arise from greenwashing.

Interestingly, there is growing evidence that for a company to market ‘sustainability’, it needs to be an integral, innate part of the company’s strategy. It needs to resonate with the organization to the extent that all the stakeholders engage within the initiatives. The modern consumer has to believe that it is a genuinely held and executed mantra within the organization for it to have an impact on the brand/product resonance.

Sustainability Helps Companies Grow

The data-collection company GlobeScan points out that, “continuing the trend of the last few years, most high-ranked companies are consumer-facing brands” This means that more now than ever before, companies really do care what their consumers think about them.

The increased transparency of markets and increased access to information has boosted the practice of sustainable standards. Realizing this is companies such as Unilever, Ikea, and Patagonia, that follow through on their sustainable values which retain and capture audiences through their reputation as global leaders of sustainability (GlobeScan, 2018). This should send a clear message to marketers that the best way of selling the idea of sustainability is through actual implementation. This correlates with GlobeScan’s survey data which displays a majority of marketing experts agreeing that “Integrated sustainability values are the best way for a company to become known as a sustainable leader” (GlobeScan, 2018).

values for sustainability
Data from GlobeScan’s survey shows a majority of experts agree that integrated values are the best way for a company to become a leader in sustainability

Even so, the benefits of sustainability can help companies in more departments than just marketing. An article from McKinsley and Company presents executives of various and diverse industries sharing the benefits sustainable practices have offered to them, such as risk management, systematic management of value chains, and returns on capital through decreasing operational costs through better resource management (Bonini, 2011). So whether companies are trying to market to certain demographics or not, walking the walk for sustainability still offers many benefits for both big and small enterprises. Philip Kotler recently suggested, at Sustainable Brands 2018 – Madrid, that companies that ‘do good’ do better financially, even if there is an initial cost’. It can actually make the company more profitable.

 

Walking the Walk in Sustainability

So, has sustainability become a buzzword? Unfortunately, there is no denying that it has. Politicians and marketers have sucked a lot of the meaning out of the standalone expression. However, this could be for the better. It is displaying to companies that they need to go the extra mile to win over the increasing number of environmentally-conscious consumers.

Consumers are getting more detail-oriented when it comes to buying “green products,” which may come off as a chore for companies to cater towards. Evidence shows otherwise though. For instance, Walmart, number one on the Fortune 500, has saved $12 billion in global supply chain savings in 2011 through a packaging “scorecard” that lowered packaging costs throughout the company’s global supply chain by 5 percent from 2006 levels (Bonini, 2011). Walmart displays what walking the walk in sustainability can do for your company, especially in the way of supply chains.

AT ET2C, we’re serious about sustainability and it’s benefit to our existence as well as the ultimate commercial benefits for purpose driven companies. We are therefore looking into different aspects of sustainability within the supply chain and what it may mean to some of our clients. If you want to talk to us about your own sustainability objectives and how to implement them, contact us.

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A Local Presence is a MUST for Companies Sourcing from Asia

Industry Insights / / , , ,

local presence is a must for companies sourcing from asia

 

Asia has been an export powerhouse over the past decade. Although the manufacturing base is increasingly fluid across country borders (labour costs, tariffs etc), this will continue for some time yet. In 2017, East Asia exported 5.2 trillion dollars of products to locations like the European Union, the United States, and other East Asian nations like Japan and South Korea.

It remains that sourcing and manufacturing products in Asia can be advantageous and a benefit to your company. However, there are considerable risks of buying from overseas markets; the internet and platforms such as Alibaba have created a massive market (a positive) that can often ‘brush over’ the risks inherent with distance, new cultures, languages and foreign laws and regulations (a negative).

 

Develop relationships

Anybody who has conducted business in Asia will stress the importance of meeting the manufacturer face to face. Companies operating in overseas markets do not always have this luxury. This is where some form of presence is an integral part of benefiting from your Asian supply chain. The ability to develop relationships, monitor production and relay information to the decision makers should not be underplayed.

Depending on product category, volumes, markets and product value, a company has a variety of options to establish a presence. Setting up one’s own office and operation in Asia is at one end of the spectrum. This requires a considerable amount of capital investment and understanding of the local laws and regulations. It is also relatively inflexible and in a fluid market entrenched with global uncertainty there is an argument that now is not the time to be establishing entities in Asia.

 

Work with local partners

Alternatively, one can look to work with local partners, such as sourcing companies and trading houses. Of course, there is a cost to this, but there is also a service being provided where often the communication piece is managed in your local market. With the right partner, it is possible to alleviate the risk, leverage product and operational expertise and provide the visibility that you require to manage your suppliers.

sourcing from Asia
A Buying Office is an Integral Part of Any Business Looking to Source from Asia

Some of the key points to consider when looking at strategic options to have some form of presence in Asia are as follows:

On the Ground

There is no point visiting a factory today, for you to drop down their list of priorities once you have left and are on the plane back home. To develop a relationship that is meaningful, there needs to be some form of constant presence that can be actively engaged with the supplier. We have seen factories in the past change the names on the side of the building for the arrival of their customer!

You need to be able to deal with your key suppliers in their language and in their time zone to ensure clarity and efficiencies (applies particularly for US companies given they are between 11-15 hours behind Asia). It will also help with the development of medium term relationships that are that much more meaningful than arm’s length interactions.

 

Visibility Across Production

If your company was manufacturing products ‘up the road’, you would constantly be visiting the factory to understand how production was going, whether the raw materials were received on time, spot checking in-line quality, and likely doing a final inspection before shipping the goods. It should be no different when buying from Asian suppliers. Having this level of visibility across your production is primarily possible through some form or presence be it an office or a partner in the region.

The ability to identify issues early means that you can put in place solutions. That can be something as simple as the raw material being late and therefore the critical path being extended. Understanding this at the outset means that different parties from logistics, to the ultimate client can be engaged with and expectations managed.

sourcing from asia
Visibility on suppliers at home is usually taken for granted, but visibility from suppliers abroad is just as important.

Risk mitigation

Clearly ensuring that you are getting your products on time and to the requisite quality ultimately enables companies to drive profitable sales. There is nothing worse than receiving goods in your local market that are not compliant and therefore not salable (particularly when you have paid the factory and they are no longer responding to your calls!). Addressing this risk upstream means that there is greater leverage in any discussions required with suppliers given the goods are still on site.

Another part of risk mitigation relates more to establishing an entity in the region and the potential risks that this can come with. Particularly, in China and India, the bureaucracy and regulations and complexity inevitably result in incremental costs building up and time lines being pushed out. These often become a significant distraction to the business when the primary function will be to source and manage the Asian supplier base. Scale of business and expertise will clearly be a factor when establishing your own entity in Asia, but in a lot of instances the costs and other implications can be prohibitive to a business. Just make sure that this is the right solution for you before you move forward.

 

Cost Effective

We are stating the obvious that any option needs to be cost effective. We have seen numerous companies go down a chosen route without a clear understanding of what the final costs will look like and have ended up tripping up down the line as a result. This is applicable whether you a setting up your own office or working with a trading house.

Look at dollar spend on a granular basis rather than get stuck discussing the difference between ‘capex’ and ‘opex’ budgets as a justification for the $100,000 being spent setting up a new office. Understand the full cost implications of establishing an entity before setting it up. For example, there are considerable costs associated with closing a WFOE in China that not many companies are fully aware of at the time of establishing a local buying office. Lastly, leverage solutions that allow a mix of fixed costs versus variable costs (potentially buying some products through sourcing houses).

 

Speed to Market

As the well-known adage says: “Time is money.” When setting up a buying office, a quick set-up is essential to maximizing profitability while minimizing risks in the production process. Given the bureaucracy, establishing an entity in Asia can take longer than anticipated. Build in time to make sure everything is taken into account and you know when the entity is fully operational.

 

Our Solutions

At ET2C, we recognize every client has different needs and we therefore look to tailor our solutions to your individual requirements. Whether it is creating a dedicated team in Shenzhen or working on a sourcing basis, we are here to help you source from Asia in the most cost effective and transparent way. Having operated in Asia for almost 20 years, we understand the complexities of doing business in this part of the world. We know the pitfalls, we know the ‘real’ costs of operating an office in China, Vietnam and India.
Still have more questions or want to learn more about our offerings? Take a look at our website , or contact us at any of our many offices across the world . Our supply-chain professionals are standing by, ready to take your call!

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3-D Printing: Fad or Future?

Industry Insights / / , , ,

3-d printing as the future of manufacturing

 

When 3-D Printing is brought up, I generally tend to think back to the tiny plastic wrench I received during my father’s “bring your kid to work” day. Almost too short to see into the machine, I watched with amazement as the engineer effortlessly programmed it to produce a small bolt. I believe part of me expected the machine to pop out the object in a matter of seconds, but the huge contraption whirred for a while, only to slowly get to work printing the small plastic component. The tour guide then handed us all a small plastic wrench which he claimed came from the machine and we continued onward.

That “bring your kid to work” day was most likely around 2004 or 2005, and while it was amazing to me then, 3-D Printing has come a long way since. Before examining the present, the fact that 3-D Printing is not a new technology is rather noteworthy. The first 3-D printing attempts were made in 1980 by Japan’s Dr. Hideo Kodama, whose rapid prototyping machine pioneered the field of Fused Deposition Modeling (FDM). The technology continued throughout the eighties, with the following decade seeing the first use of 3-D printing in the medical field and the gradual adoption of 3-D printing by other industries.

However, progress for 3-D Printing really picked up in the last decade due to FDM patents becoming public domain. This allowed many companies to pick up the technology which increased the visibility of 3-D printing. Soon 3-D printing was brought up in almost every headline, from Cornell University’s 3-D food printer, the technology being mentioned in Barack Obama’s 2013 State of the Union Address, and the ability to 3-d print bone.

Even so, the hype has begun to die down a bit. Concerns over health and expenses, in addition to bigger trepidations grabbing our attention away from the technology, have caused the tech to shy away from the spotlight of news media. However, the technology itself has not gone away. 3-D printing is still being utilized on a massive scale by numerous companies for a multitude of uses.

3-d printing
In recent years, 3D Printers have made their way from big corporations to personal use. But is large scale production using this innovative tool viable?

3-D Printing in 2018

While 3-D printing may not be making headlines as much as it used to, many companies are still utilizing the technology as an innovative and effective tool. Here’s how some of the top companies of 2018 are utilizing 3-D Printing in their processes.

Hershey’s

As a Pennsylvanian, there is a special place in my heart (and my stomach) reserved for Hershey’s chocolate. Even though Hershey’s candy products have been a staple dessert food for generations, the company has set their eyes on the future. The company 3-D Systems has partnered with the famed candy producer to create a 3-D printer that can be used for chocolate and other edible products.
At the same time, the technology Hershey’s hopes to incorporate into their production process is nothing new. 3-D System’s “SugarLab” projects have produced other sugary treats using 3-D printing methods, including icing and hard candy products. Still, it remains to be seen whether or not Hershey’s will use this technology in mass production or, as most companies do, a prototyping tool (Gilpin, 2014).

3-d printing to expand product offering
Hershey’s is now utilizing 3-D Printing technology in order to expand their product offering

Nike

In the tremendously competitive footwear industry, shoe manufacturers must hunt for any comparative edge they can find. When American football players began to demand a faster shoe, Nike jumped into action and developed 3-D printing techniques to assemble a custom-made plate for the cleats that enhanced the players’ form and speed. Nike quickly realized the potential of 3-D printing since this breakthrough and has customized shoes through 3-D printing for Olympic runner Allyson Felix and for a specific drill used in American football called “shuttling” (Hannon, 2018).
Nike has displayed the immense arena of customization for the world to see, encouraging other companies to gain visibility either by customizing shoes for their customers or for professional athletes. However, Nike has continued to show off their own customized shoes’ power as well, with one recent flex of power being the Breaking2 event. This event saw marathon runner Euclid Kipchoge just miss the barrier two-hour marathon barrier by twenty-six seconds while wearing a specially-designed shoe made using 3-D printing. While Kipchoge couldn’t accomplish the feat, he still ran two and a half minutes faster than the previous record, exhibiting the amazing power of 3-D printed customization. Notably, Adidas has also 3D printed a trainer as well as well although the commercialization piece has yet to be fully resolved.
While 3-D printing has helped these companies develop new products and enhance their offerings , there are still some widespread concerns revolving around the adoption of 3-D printing in the production process.

 

The Hazards of 3-D Printing

When any new technology becomes adopted in manufacturing, it is almost immediately thrown under the scrutiny of both producers and consumers. 3-D Printing is no exception, for the new technology has caused many to be concerned over the high cost of the products, as well as some health concerns that come along with the input materials used by the printers.

Health Concerns of 3-D Printing

In spite of some safety regulations, long-term exposure to the materials used by 3-D printers and the printers’ byproducts has been suggested to be dangerous for one’s health. Recent studies have shown that hazardous vapors and gases are released during the printing process. Specifically, two of the most dangerous byproducts of 3-D printers are UFPs and VOCs, which are acronyms for ultrafine particles and volatile organic compounds.

Cost Concerns of 3-D Printing

Another factor driving hesitation among manufacturers are the costs of 3-D printing. While many are familiar with the high mark-ups surrounding 2-D printer ink, the mark-ups for 3-D printer ink are generally quite high. Standard 3-D printer “ink” will range from $25 to $45, even while the plastic pellets used in the filament only cost around $2/kilogram. Such high mark-ups drive many companies to not even give a second glance to 3-D printers once seeing the price tag of their materials, opting for cheaper methods of production instead.
However, it should be mentioned that the cost of this printer “ink” is decreasing as more companies enter into the 3-D printing market. Competition has lowered the price of this ink in some instances, with companies like BeeCreative, 3D Systems, and MakerBot all attempting to gain customers through lower “ink” prices. Printer “ink” may be able to lower its price in the future as more companies enter the market, but as it stands now, the materials used in 3-D printing need to see a price drop before being considered for large-scale production (Covert, 2014).

 

The Benefits of 3-D Printing

While some of the concerns over 3-D printing may portray the product as having a lot of rough edges that need to be smoothed out, there still are many benefits 3-D printing can bring to a company. From effective prototyping to increased offering potential, 3-D printers have become a valuable asset in the world of manufacturing.

3-d printing to save time and money
Many companies are choosing 3-D printing due to its ability to save both time and money

A Time and Money Saver
“Time is money” is a familiar saying to any businessperson or media consumer. Likewise, spending lots of time on the development process could be seen as a waste of valuable resources. Fortunately, 3-D printing can address some of these concerns. Instead of undertaking a process like mold making, which can cost thousands of dollars, take up to a week, and is generally a sunk cost; 3-D printing can print directly onto a surface without any need for a mold. This allows companies to save money, be more receptive to customer responses to new products, and allocate the saved time to more important tasks.

Easily Customizable
Like stated above, the process of 3-D printing lets companies to more easily respond to customer demands. Yet, 3-D printing could even eliminate the need for a company to guess the desires of a customer all together. Now, 3-D printing can allow consumers to customize their products however they would like them. This could easily be done through a web-platform interface or application where the user could input their choices and a 3-D printer develops a product customized to their exact parameters.
Furthermore, 3-D printing can also make it easier for companies to develop a limited-edition or one-off products easily. With reduced upfront costs in addition to minimal reliance on factory labor, 3-D printing is a decent answer for small batches of customized products.

 

Concluding Remarks

3-D Printing is by no means new. Nearly a decade after the technology became public domain, the market has exploded with start-ups offering a variety of products related to the new technology. Even so, like any new invention, 3-D printing still has some way to go to be truly mainstream and part of the actual bulk production line. Nevertheless, the tech has been able to find its way into some companies like Nike and Hershey’s due to its ability to save resources and speedy customization capabilities. Certainly, 3-D printing will need to address the concerns over health and costs in order to scale up its use in production, but the tool is still great for companies looking to produce small batches of customizable products or quickly design prototypes.

At ET2C we have utilized 3D printing for prototypes and sampling where our clients we may need moulding to be opened for bulk production. This has enabled approval of fit, function and form prior to any CAPEX being incurred and has streamlined the development process. Although this is not a mainstream manufacturing process (too expensive) at this time, it’s current use in the prototyping phase of product development has been invaluable as a proof of concept.
However, with more technological advances, there is no doubt that in the future 3D Printing will have a broader application enabling customization and personalization to be possible on a large scale.

For all enquiries, please contact us via our website.

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Running into First: Ethiopia!

Industry Insights / / , , ,

 

running into first: ethiopia

 

Does the name Abebe Bikila mean anything to you? Unless you’re a running fanatic or Olympics expert, probably not. Abebe was the first African to win the Olympic marathon, which he completed in Rome in 1960. That’s pretty impressive, especially considering that the US and Russia were vigorously training their athletes as a propaganda move, but it gets better. Not only did Abebe win the marathon by running at a 5:10 minute per mile pace (roughly 18.4kph), but he also did it barefoot.

ethiopia marathon
Abebe Bikila Winning the 1960 Olympic Marathon displays the Ethiopian spirit to quickly adapt and overcome.

It’s no surprise that his home country of Ethiopia is the oldest independent state in Africa while also boasting the title of the second fastest growing economy in Africa and the world. This fast growth and political stability have flagged the developing nation as a potential site for international businesses to cultivate their business in this possibly-bountiful economic environment.

The global outsource manufacturing sector is increasingly fluid, particularly with soft goods (the lowest value add manufacturing process) and businesses are always keen to identify the latest low cost manufacturing base. Asia’s demographic, even with India included, is aging.

Labor is still an important component of manufacturing even in an era of automation and technological advances. The only other continent that can compete with Asia on labor is Africa.

One of the countries being looked into includes Ethiopia. While all sub-Saharan nations in Africa seem to be experiencing economic growth at an average rate of 3.2%, with its 10% growth as of 2018, Ethiopia stands out as one of the fastest. Can this fast growth be sustained, however? Or is Ethiopia just booming before its bust? A look into the profile of this ancient and resilient nation displays hope for prospective businesses but is not without its red flags.

 

Ethiopia

One of the characteristics that has caused the most publicity for Ethiopia is the country’s economy. Ethiopia’s exports have all the characteristics of an emerging economy, complete with a dominant agriculture sector with a rapidly growing manufacturing sector. At the time this article was written, Ethiopia exports a total of 3.13 Billion US dollars of products every year, with its main exports being vegetable products like coffee, which constitutes 24% of the total $1.81 billion made from vegetable exports. Manufactured products are still small in comparison, with only 232 million US dollars being coming from this emerging industry. The economy over the past decade has grown at 10% a year making it one of the fastest growing economies in Africa.

Although Ethiopia still ranks as one of the continents poorest countries, it has resource and labor to make it an attractive destination of export manufacturing. With a population of some 100 million people, 70% of whom are under 30, it has a demographic that props up the manufacturing sector, particularly given the unemployment rate is around the 17% mark.

ethiopia manufacturing agriculture
Ethiopia, while developing its manufacturing industries, still relies primarily on agriculture as its main source of exports.

In addition, it has a developing infrastructure, in part thanks to Chinese FDI. Some of the successes in this space include the development of Ethiopia Airlines, upgrading its network of trunk roads, and expanding access to water and sanitation services, all signaling progress for a more connected Ethiopia – the Addis Ababa-Djibouti rail line cut the journey time for taking goods from land locked Ethiopia to the sea from days along roads to 12 hours. However, one of Ethiopia’s largest problems lays in its power access, where, according to a World Bank journal article, a further 8,700 megawatts of power are needed in the next decade, which requires the doubling of the current power capacity (Morella & Foster, 2011).

Nonetheless, Ethiopia is also improving the conditions and sprawl of its road networks, with a US $43m road designing and construction agreement dedicated to infrastructure. Yet, this large investment along with the need to upgrade its power capacity combined with the large trade deficit could see large amounts of debt in Ethiopia’s near future.

 

Industrial Parks

Similar to the special economic zones that transformed Shenzhen into a manufacturing powerhouse decades ago, Ethiopia now has close to 30 industrial parks demarcated as ‘Special Economic Zones’. There are also incentives for foreign companies to open up manufacturing plants within these zones such as duty free exports, 10 year company tax breaks and no tax for foreign workers and duty free exports.

The majority of these companies are Chinese built and managed but are in the main focused on utilizing the local labor pool contrary to many reports of widespread Chinese labor being imported. Their scale is significant; the Huajin International Light Industrial City is a 1.5 million square-meter park that will eventually have a capacity of 100,000 workers and provide the amenities (such as housing, healthcare etc) – a larger population than the average UK town.

It is not only the Chinese that are investing in ‘Made in Ethiopia’. In Hawassa, some 270km south of Addis Ababa, built at a cost of $250 million by the Chinese Civil Engineering Construction Corporation, there are 140 hectares (part of the first phase) with 52 factory sites which house 20 different apparel firms from 11 different countries. Notably, American clothing giant PVH, whose brands include the likes of Tommy Hilfiger and Calvin Klein, and H&M take up some of the available space.

 

A Marathon, not a Sprint

That’s not to say that there are not challenges that Ethiopia needs to address. It will take time and it will not happen overnight. Unlike 90% of International Labor Organization member states, Ethiopia has no minimum wage. Even though $57 per month is the international poverty line, there are workers being paid less than $50 per month even with overtime. This is something that needs to be addressed and foreign firms will be giving particular focus to this as part of their ethical code of conducts, and there has also been a ground swell of discontent among workers on pay with an increasing number of strikes being held.

The productivity is currently estimated to be a third of that in China. This will develop over time and is a sign of the immature nature of the manufacturing sector (whereas China has to continue squeezing out any productivity gains to remain competitive) and the development and continued investment that will be required going forward.

 

Summary

There is a vast demographic dividend on the African continent, and with the Asian average age increasing, the labor pool of the East is beginning to diminish. That is even including countries like India, Bangladesh and Indonesia. Low value add manufacturing is already present within Ethiopian industrial parks, namely footwear and apparel/textiles, and with continued development and investment ‘Made in Ethiopia’ is likely a label that will become increasingly common in Western retail stores. There are challenges, but these are not dissimilar from the Asian manufacturing base some 20 years ago and arguably Western retailers/brands are now better equipped to deal with the management and implementation of ethical standards at overseas manufacturing plants with the visibility now required across their supply chains. It will take time, but Ethiopia is well positioned to be crowned the ‘Winner’ when it comes to mass manufacturing compared with its African neighbors.

Internally, at ET2C, we are making it our business to understand how the Ethiopian manufacturing sector is developing and its current relevance to our clients. We are constantly looking for new opportunities across Asia and beyond to help our clients source from the most suitable suppliers.
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A Brave New World of Materials

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a brave new world of materials

 

Spiders. Simply the name of these eight-legged arthropods may be enough to cause some to stop reading here. Their terrifying fangs, pitch-black eyes, and intricate webs have earned them a spot as a quintessential horror troupe. However, what if instead of putting up fake spider webs to scare trick-or-treaters during Halloween, we wear them instead? That’s right. Bio-engineers at multiple apparel companies, including the popular The North Face, are now using synthetic spider silk in their manufacturing process. But why would anyone in their right mind, let alone engineers at one of the top clothing companies in the world, encourage people to wear what essentially is a bunch of spider webs?

As it turns out, the synthetic spider silk is “light, supple, stretchy, and stronger than steel,” according to an article appearing in Popular Science (Grushkin, 2015). These strengths have justified its use in all sorts of fields, including bulletproof vests, wound dressings, and car materials. The utilization of spider webs is just one example of new and innovative materials that have started to make their way into everyday products such as clothes, building materials food, and more.

Will the next generation of clothes be made of spider webs?

Innovative materials, raw ingredients used in production that deviate from the norm, are now more popular than ever. The Industrial Technologies division of the European Commission’s Research and Innovation branch estimates that 70% of all new product innovation is based on materials with new or improved properties (Sheppard, 2012).

But why are companies so eager to adopt these unfamiliar materials? As a matter of fact, there are many explanations as to why companies utilize these innovative materials. For starters, the use of most innovative materials often decreases energy-related costs, which is a prime concern for many manufacturers. Subsequently, there are also many tax incentives for pursuing these more sustainable production methods, on both and state levels in the US and through local governments in other regions (Lagas, 2015).

The macroeconomic benefits of using these materials offer an explanation as to why governments are encouraging these new practices. According to the American Chemical Association, advanced and innovative materials can “support more efficient and sustainable manufacturing practices… reduce dependence on imported oil… lower the burden of CO2 management and improve energy supply security, sustainability, and competitiveness” (American Chemical Society, 2015). These are just some of the many reasons for companies to jump into the new world of innovative materials.

 

How Companies are Using Innovative Materials

Innovative materials offer a vast variety of benefits, but what exactly are companies doing to integrate these exciting new materials into their supply chains? What new products are being developed with the newfangled materials? The answer is broad and covers a vast ranges of industries and sectors. Here are some more exciting examples of these new materials in action.

Ministry of Supply
Most people are familiar with the range of products for running. However, you may be surprised to hear of someone running a half-marathon in an hour and seventeen minutes wearing a full suit. Josh Whitehead did exactly that while wearing one of the Ministry of Supply’s three-piece Aviator II suits.
While still an impressive feat, the material of the suit may have provided some assistance to Whitehead. The suit is made from warp-knitted breathable poly, which allows the suit to be “breathable, waterproof, moisture wicking, and odor controlling.” In the words of the CEO of the Ministry of Supply, “This suit isn’t designed for running in, but the fact that it can be done is great” (Ducharme, 2016).

Adidas X Parley
There is a lot of plastic in the sea. Unfortunately, the amount keeps rising by an estimated eight million metric tons every year. By 2050, it is estimated that there will be more plastic in the ocean than fish, giving a sense of urgency to this problem (EarthDay Network, 2018). However, this has also caused some companies, like Adidas, to realize an opportunity for incorporating new resources into their supply chain while also doing their part to protect our oceans.

Adidas and Parley have partnered up to manufacture shoes out of sea plastic. Parley, an ocean conservation movement, collects plastic from beaches to send to Adidas to be manufactured into stylish and well-fitting shoes. Not only is Adidas able to save money by having their raw materials donated by Parley, but they’re also able to use the material of the shoes to target the rising segment population of environmentally-concerned customers. Adidas have also recently committed to using only recycled polyester in all of its shoes and clothing with the next six years to increase the sustainability of its supply chain.

Maybe this polluted beach is the resource of your new shoes!

Other Examples of Innovative Materials
While these two examples of companies using innovative materials are inspiring, it is also important to keep in mind the vast number of advanced materials making their way into supply chains are doing so a bit more silently. Even though these materials are not as publicized, they still have a huge impact on the companies that utilize them and the customers who buy the products.

Ultra-Strength Concrete
From 2012 to 2015, China used more cement than the US has in the entire 20th century (Swanson, 2015). This rapid growth has led to concerns about the oftentimes inversely-correlated relationship between quality and quantity, leading to many construction entities looking for alternative materials. Enter the new Ultra-strength concrete. This new kind of concrete changes the contents of cement using mathematical modeling procedures, allowing for a 40% reduction in the density of the water film and a more durable and sustainable form of concrete.

Neptune Balls
Neptune Balls, or Sea Balls, are made of the foliage of a sea-grass species called Posidonia Oceanica. The waste of these plants tends to roll up into small, sphere-shaped objects, oftentimes washing up on shores across the world. The material, however, has been recognized by some manufacturers as an innovative and renewable resource for textiles. It can also be used in its raw form as an insulating material with natural fire prevention properties. The Neptune Balls are a bit of a miracle product of nature as well, since they do not rot, contain no salts or proteins, and are not harmful in any way to humans.

Fungus-Based Materials
While most people are at least familiar with fungus on an appearance level, the study of Mycology (the study of fungi) is still being pioneered in many regards. Because Mycology is relatively immature, new discoveries about the uses of these strange organisms are being made every day. One of these new uses is to produce hard foams naturally through the same processes the thread-shaped mycelium of fungi use to colonize wood, soil and other materials found nature. Essentially, the fungi create a system of very small threads that bind to various organic waste materials. These threads could be used as a reinforcing material in both construction and textile production, providing a cost-effective and natural way to develop products (Sheppard, 2012).

new materials
Mycelium of a Common Fungi Species on Wood

Integrating Innovative Materials into Supply Chains

Even while innovative materials are extremely beneficial for both the planet and the manufacturer, they don’t simply appear out of thin air. There are processes that companies undertake in order to enter into the brave new world of innovative materials.

Some of these processes include employing “green” or sustainable initiatives to keep the company on the cutting edge of technology while also showing respect for Mother Nature. Some common processes companies adopt include upgrading facilities to rid of energy-wasting processes of production, streamlining their supply chains and employee networks, and hiring “green” professionals, such as environmental economists and engineers, to help them eliminate some of the externalities that had to their total cost (Ryan, 2018).

new materials aid innovation
Massive Supply chains come with massive costs, causing many companies to look into how innovation can help them save valuable resources.

These initiatives led to a global movement of sustainable sourcing. One of the massive corporations participating in this movement is Unilever. Unilever states that its sustainable sourcing techniques have allowed them to “secure our supplies and reduce risk and volatility in our raw material supply chains,” while also “open[ing] up opportunities for innovation” (Unilever, 2018).

Companies are not always making the leap alone. Some NGOs, like the WWF, are helping companies trace products along the supply and distribution networks, measuring the impacts along the way. The information the WWF provides allows for companies to realize areas in their products that may be creating unnecessary expenses, allowing for them to explore potentially groundbreaking solutions.

In the words of the founder of Magnifeco, an online source that covers eco-fashion, “Buying isn’t the problem. Making isn’t the problem. Innovation is our way out [of wasting materials].” Eco-friendly and innovative materials not only adds value to a product but oftentimes it also saves the company from wasting valuable resources in the production process. As more and more of these new materials are incorporated into supply chains across industries around the world, industry and trade can become an asset to environmental protection efforts rather than a detriment.

 

Summary

Companies are opening up to using innovative materials in different ways. They bring a new range of characteristics and applications that will only go on to enhance the product experience. Whether it is textiles with enhanced properties, or materials that aid sustainability or the re-thinking of building materials like concrete, which the Romans had invented some 2,000 years ago, these are all good developments. Humans continue to evolve and with that evolution comes advances in the materials we use. Sometimes though, it is no bad thing to look at some of what Mother Nature has created and to take note, even if it may be hard for those arachnophobes.

At ET2C, we are dedicated to making a difference and understanding the development and commerciality of new materials is key to this. We have already utilized blended fibres (bamboo and Milk) in some of our babywear ranges and recycled plastic on sneakers (part of a sustainability drive). There is a lot of new materials being developed from resins, polymers, activated carbon, the use of recycled materials through to textiles. Our focus is understanding these attributes and, importantly, the application in mass production ensuring that there is the required level of commerciality. Sustainability also forms part of this piece of work, and utilizing materials in a way that can aide this initiative can only have a positive impact.
If you have any questions on any of the above, or ideas, please do not hesitate to contact us.

 

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Making Green Waves: 10 Companies that Are Leading the Way in Sustainability

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companies in sustainability

 

Ever since the release of Rachel Carson’s 1962 book “Silent Spring,” the idea of sustainability has always at least been in the periphery of many companies. Things progressed in the 1970s, as pressure for environmental protection was turned up by NGOs such as GreenPeace (1971), Friends of the Earth (1971), and the earlier-formed WWF (1961). In the 1980s and 1990s, catastrophic events such as the Exxon-Valdez oil spill and the Chernobyl Nuclear Disaster caused the call for global responsibility to become more compelling. Recently, with many governments and multilateral organizations pushing for sustainable development, many companies have adapted to the relatively-new emphasis on environmental through a multitude of devices.

There’s good reason for jumping on the sustainability bandwagon too. The business & Sustainable Development Commission recently revealed statistics on the value of sustainable business models and how it could “open economic opportunities worth up to US$12 trillion and increase employment by up to 380 million jobs by 2030.” With many nonrenewable resources running out and governments across the world giving subsidies to eco-friendly businesses, many firms have heeded the call for environmental protection.

However, even though many companies are acting to protect the environment, there are some whose massive-scale efforts and innovative ideas serve as an inspiration to others. Here are ten companies that are making a difference for a greener and more sustainable planet.

companies in sustainability
Here’s 10 Companies that are working together for a healthier and Greener Planet

10. Walmart

What They’re Doing: The number one company on the fortune 500 list, Walmart is also doing its part for the environment. Walmart has set some pretty ambitious goals for itself when it comes to sustainability. Walmart’s website states that its sustainability goals consist of “creating zero waste, operate with 100% renewable energy and sell products that sustain our resources and the environment.” While ambitious, Walmart has already made significant strides towards these objectives, boasting statistics such as “78 percent of global waste diverted from landfill” in 2017 and investing $25 million over five years on food safety projects in China (Walmart, 2018).
Big Project:
Project Gigaton– avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030.
How it works: suppliers can take their sustainability efforts to the next level through goal-setting, and get credit from Walmart for the progress they make (Walmart, 2018).

9. Google

What They’re Doing: With a motto like “Don’t be evil,” it’s no surprise that Google, one of the centerpieces of silicon valley, has already progressed in making their company more sustainable. Since starting their sustainability efforts, Google has touted some impressive numbers surrounding sustainability. Some of their remarkable accomplishments include Google data centers using 50% less energy than the average data center, diverting 91% of waste from their global data center operations away from landfills, and empowering their suppliers to use renewable resources. (Google, 2018).
Big Project:
Global Fishing Watch – “provides a transparent view of commercial fishing activities across the globe, in hopes of protecting critical marine habitats and providing new tools for sustainable fisheries management for the long term.”
How it Works: offers near real-time tracking of fishing activity through their public map, enables scientific research, and improving fishing management (Global Fishing Watch, 2018).

8. Nestlé

What They’re Doing: With an image of a bird feeding her offspring as their logo, it’s perhaps not much of a surprise to uncover that this food and beverage company has worked hard to protect nature. Nestle boasts an impressive eco-friendly resume, with actions like systematically reducing the weight of their packaging since 1991 (with a reduction of over 500 million kg to date), and utilizing a team of over a thousand agronomists to provide training to their farmers to minimize their environmental impact. (Nestle, 2018)
Big Project:
Water Stewardship – “aims to be responsible stewards of water, ensuring it is available and managed sustainably, protecting it through high-profile collaborations, treating the water we use as effectively as possible, supporting our supply chain in the use of water, educating communities on how to use water efficiently, and improving access to water and sanitation”
How it Works: Reducing water consumption, protecting and preserving water resources through research with NGOs like the WWF, and Zero Water technology (Recycled water). (Nestle, 2018)

7. Cisco Systems

What They’re Doing: Cisco systems, a hardware producer out of San Francisco and one of the key firms in Silicon Valley, has also stepped up to the plate to work for a greener planet. The company has implemented some inspiring environmental-protection measures as well, including having sustainable energy accounted for 80% of their worldwide electricity use.
Big Project:
Rhino Conservation – Cisco and Dimension Data partnered to track poachers at a game reserve in South Africa, successfully reducing rhino poaching in southern Africa by 96%.
How it Works: Cisco develops seismic sensors, drone cameras, thermal imaging, and biometric scanning technology to be used in anti-poaching efforts.

Cisco has implemented some inspiring environmental-protection measures, including having sustainable energy accounted for 80% of their worldwide electricity use

6. Apple

What They’re Doing: Perhaps one of the more well-known brands on this list, Apple has always set itself from the pack through innovation and creativity. Apple has carried these sentiments into its efforts in sustainability, achieving a fall in total transportation emissions fell by 3 percent in the fiscal year 2017 while their corporate employee headcount grew by 9 percent. In April 2018, Apple had 23 partners committed to 100 percent renewable energy for Apple production and to lower emissions by focusing on aluminum production, which “reduced emissions associated with every gram of aluminum in iPhone by 83 percent” (Apple, 2018).
Big Project:
Closed-Loop Supply Chain – This project will see Apple products made using recycled or renewable materials only and will return an equivalent amount of material back to the market to be used by Apple or other entities.
How it Works: Encouraging customers to return their iPhones during upgrades, recycled materials from outside recycling sources, and disassembly sections in factories.

Apple has always set itself from the pack through innovation and creativity and has carried these sentiments into its efforts in sustainability

5. Honda

A slogan like “You meet the nicest people on a Honda” seems to be a bit of a stretch, but it hasn’t stopped Honda from working tirelessly for a brighter and healthier future for the planet. Honda has taken sustainability measures such as aiming to reduce the CO2 emissions intensity of motorcycles, automobiles and power products by 30% compared with 2000 levels by 2020. Honda also has bragging rights as it became the world’s first mobility company to disclose estimates of all GHG emissions from its entire value chain in August of 2012 (Honda, 2018).
Big Project:
Triple Zero – Three goals relating to the number zero: Zeroing CO2 emissions using renewable energy, Zeroing energy risks, and Zeroing resource and disposal risks.
How it Works: Management of resources and working with disposal partners to ensure safe and effective transfer of waste materials, working with renewable energy companies to integrate technology into automobiles, and encouraging customers to pursue environmentally-friendly lifestyles (Honda, 2018).

4. Interface

When a company is known more for its sustainability efforts than the actual product it sells, then it’s clear that the company is serious about environmental protection. The company dropped jaws back in the nineties when it announced that it would eliminate any negative impact its company has on the environment by 2020. So far the company has done well in keeping its word, they’ve replaced latex in their precoat with recycled PVB, recycle used fishing nets for materials, and their factories all use 95% green energy, allowing them to run more efficiently (Interface, 2018).
Big Project:
Mission Zero – Eliminates any negative environmental impact the company has by 2020. So far they have reduced their carbon footprint per square metre of produced carpet by 98%, water usage by 93%, and factories use 95% renewable energy and send zero waste to landfill across Europe.
How it Works: Radically redesigned the company their products and the way they do business.

3. Ikea

Known for their DIY and oftentimes less-expensive furniture, IKEA is now aiming to get recognition for its environmental sustainability efforts. Ikea has introduced new products to aid people in cutting their energy and water use, such as a tap nozzle that reduces water usage by 90 percent, and air-cleaning textiles. The company has also introduced new and more sustainable materials into their production process, with 100% cotton 77% wood in IKEA products coming from sustainable sources, citing that it will ultimately help lower costs while also doing the right thing.
Big Project:
IKEA Group Sustainability Strategy for 2020 – Will see 91% of waste from their stores recycled or incinerated for energy recovery, increase in the use of sustainable materials in production, and selling LED light bulbs to save energy (so far they have sold 85 million).
How it works: Marketing campaigns encouraging the buying of LED bulbs, working with sustainable suppliers for materials, tracking the production of products to identify wastes of energy and materials. (IKEA, 2017)

companies in sustainability
Ikea has introduced new products to aid people in cutting their energy and water use

2. Unilever

Unilever has a lot of products under its control, including Dove, Lipton, Axe, Popsicle (yes, it’s a brand), and Marmite. With great power comes great responsibility and Unilever has famously demonstrated itself as responsible. Unilever has set three main goals for its sustainability efforts which are to help more than a billion people take action to improve their health and well-being by 2020, halve the environmental footprint of the making and use of their products as they grow their business by 2030, and enhancing the livelihoods of millions by promoting fairness in the workplace, opportunities for women and inclusive business by 2020.
Big Project:
Unilever Sustainable Living Plan – Aims to create sustainable growth through brands with purpose, cutting business costs, reducing risks and building trust with consumers
How it Works: Unilever will follow the UN Sustainable Development Goals. Since the company is so gigantic and covers so many different products, the actions it is taking to be more sustainable range from the extraction of raw materials to manufacturing chemicals, causing the comprehensive UN Sustainable Development Goals to serve as a reliable tool for the company’s entire supply chain (Unilever, 2018).

1. Patagonia

Dubbing itself as an “Activist company,” Patagonia has put environmental protection as the company’s main priority. Patagonia has already claimed recognition as one of the largest funders of environmentalist causes. The company gives 1% of its sales (not its profit, its revenue), to environmental grants and organizations, funding everything from local nature perseveres to massive NGOs like the WWF. The company has donated 89 million dollars to environmental causes since 1985 in addition to giving 954 grants in 2017 alone. The company also encourages the buying and selling of worn wear, encouraging its customers to send back in their used gear so it can be repaired and sold again. The site also offers tips and guides on how to repair your own clothing, encouraging their customers to reduce clothing waste and learn a new skill.
Big Project:
Tin Shed Venture – Patagonia’s corporate venture capital fund partners with businesses focused on building renewable energy infrastructure, practicing regenerative organic agriculture, conserving water, diverting waste, and creating sustainable materials
How it works: Funds small businesses that apply for funding. The businesses must be working for a better environment and prove how they are doing so in their application. A full list of companies can be viewed here.

Summary

The UN has set their Sustainable Development Goals (SDGs 2015) and there are a range of different elements from health to equality to environment that need addressing. Consumerism has been rampant for the past 30 years spurred on by the rise of technology (the likes of Amazon etc) and low cost products from the East. The consumer is now evolving and a Brand’s stance or position on sustainability and the broader horizon will become increasingly important as part of capturing a sale.

The above projects and the companies that founded them are part of the inspiration for us at ET2C to engage with the Sustainability discussion and to start the implementation of our own ideas within our business and across our supply chain in 2019. With operations in China, Vietnam and India, we have an opportunity to make an impact, however small, in emerging economies as well as through collaborating with our clients in their own respective markets. #dogood, #sustainability taskforce.
For queries related to Sustainability, why not email us at sustainability@et2cint.com .

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Sustainability in Manufacturing: Made in China 2025 and the BRI

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sustainability in manufacturing

 

Sustainable manufacturing is becoming one of the key criteria for consumers when deciding what product to use. The process of sustainable manufacturing includes the creation of products through economically sound practices that limit the negative impacts on the environment. Consumer opinions, regulatory policies, and changing environmental conditions are all factors that have led to the emergence of sustainable manufacturing as a popular, profitable, and viable option for manufacturers that are seeking to capitalize on the green economy, minimize their impact on the environment, and reduce their consumption of energy and resources.

Made in China 2025 and Sustainability

Chinese manufacturers find themselves in a transitional period. The country is no longer the best location for cheap, low cost manufacturing, but it has not fully evolved into a high-tech, developed industrial economy. China is making great developments in its industry with new additions of automation and robotics in the factories, but there is still a lot of ground to cover. China is feeling pressures from both more developed industrial bases as well as more labour intensive export manufacturing regions. In order to overcome these challenges, China has launched the Made in China 2025 initiative to bring the Chinese economy to the cutting edge and make a high-tech, sustainable manufacturing base.

In the process of developing their manufacturing into a high-tech, automated industry, China is also investing in the creation of sustainable manufacturing. By relying on and using AI, and the digital economy, China is transitioning their manufacturing base to a modern, developed economy. This also reduces the use of heavy industry and relies more on mass customization consumption and makes use of Industry 4.0 practices, thus making this method of manufacturing more sustainable.

This reduces the use of heavy industry and relies more on mass customization consumption, hence increasing overall market sustainability.

Can the Digital Economy Keep the Belt and Road Initiative Sustainable?

One of the key areas where China is experiencing conflict between development and sustainability is with the “Belt and Road” initiative (BRI). Globally, the BRI has received criticism and has been questioned about its sustainability and the long-term impact that it will have on the environment. However, in 2017, President Xi Jinping addressed some of these concerns by announcing that cutting-edge technologies and business practices from the 4th Industrial Revolution are being brought to the BRI.

President Xi Jinping said, “We should pursue innovation-driven development and intensify cooperation in frontier areas such as digital economy, artificial intelligence, nanotechnology and quantum computing, and advance the development of big data, cloud computing and smart cities so as to turn them into a digital silk road of the 21st century.” The “Digital Silk Road” could bring new green technologies and sustainable manufacturing practices to emerging markets. This would help lay the ground work for the development of a more sustainable, and environmentally-conscious global market in the future.

The BRI/Digital Silk Road and the Made in China 2025 initiatives are efforts working towards creating a sustainable digital economy that can bring new opportunities to small and medium global actors, incorporate new markets into the global economy, develop high-tech manufacturing bases, and employ sustainable economic practices.

Green Manufacturing in China

Green manufacturing is a key development and a central trend in China’s transitioning manufacturing sector. Moving forward with the Made in China 2025 initiative and the BRI, along with the global environmental and economic forces, manufacturing in China will make a significant shift to become a potential leader in green manufacturing and sustainable industry.

The 4th Industrial Revolution, Made in China 2025, and sustainable manufacturing all pair well together. The digital aspects of the 4th Industrial Revolution and the automation of manufacturing in Made in China 2025 can reduce the waste, energy consumption, and environmental cost of production. Xin Guobin, vice-minister of the Ministry of Industry and Information Technology said that “Green Manufacturing Association of China will also explore a new development mode by connecting green manufacturing and the internet and establish a green manufacturing system and ecosystem for the country’s green and sustainable development.” By using the Internet of Things and modern software to connect the manufacturing process at all stages waste can be cut down and the production process will be more sustainable in the long term.

sustainability in manufacturing
Quote from Xin Guobin, vice-minister of the Ministry of Industry and Information Technology

Sustainable manufacturing is not only a trend in China, but also globally. For example, there has been an emergence of innovative sustainable manufacturers outside of China in countries like Vietnam and Indonesia (industries such as apparel). In order to remain competitive within the global economy, China needs to continue this evolution to maintain its value proposition to Global retailers and Brands. The initiatives set out by the Government only go to build on the environmental inspections carried out in 2017 and also accelerate investment in sustainability on a broader scale. China therefore has one of the fastest growing sustainable manufacturing sectors and it is a great location for foreign businesses seeking to outsource their production to ethical and sustainable manufacturers.

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