Recycling the Circular Economy

Recycling is at the heart of the Circular Economy. Embracing the Circular Economy, a post from 21 March 2016 discuses the concept of a Circular Economy, especially as it applies to smaller manufacturers. Embracing the Circular Economy is worth recycling — so here it is:

Embracing the Circular Economy

The Circular Economy

In an industrial sense, the term circular economy refers to a systemic view of resources utilization. It replaces the linear one pass take (from the natural world) … make (something incompatible with the natural world) … and dispose of (that is, burden the natural world with) production wastes along with the product itself at the end of its useful life. Instead, the circular economy envisions closed loop production which minimizes impacts on the natural world. Circular economy begins with products designed with multiple cycles of reuse and recycling in mind. Corresponding industrial processes are designed to minimize interactions which degrade the natural world, including interactions which occur anywhere along the product’s value chain.

Cutting to the Chase

It is readily apparent that a circular economy mindset might lead to lower costs, as well as a better world. The question becomes how to improve on what you are already doing to improve resource utilization. Here are some comments and examples to stimulate your thinking:

BMW i3 Press Kit Photo

BMW i3 Electric Vehicle

>> BMW i3 – The BMW i3 all-electric city car is an example of a circular economy product. Attention to sustainability is obvious in just about everything about the design and construction of the BMW i3. Recycled materials are used extensively.  Plans are in place for disposal of each component of the i3 at the end of its useful product life. For more on the i3, see BMW – A Case Study in Sustainability. [1]

>> Waste Management Corporation – Waste Management makes more than half of its money on recycling and upcycling refuse that people like you and me pay them to take from us. Sustainability – especially the circular economy aspect – Is integral to Waste Management’s business model. For more on how this works, see Waste Management Corp – A Case Study in Sustainability [2] and Waste Management’s 2015 Sustainability Report Update (which is entitled “The Circular Economy Revs Up”!) [3]

>> USBCSD – The United States Business Council on Sustainable Development is a not for profit business association that, among other projects, seeks to match bi-product streams with firms – often in other industries — that can use those bi-products as raw materials. In other words, one firm’s waste becomes another firm’s feedstock, to the benefit of both. See USBCSD’s website [4] for more on their work.

Scrap Tires 350pxh>> Tires – Where Waste Management Corporation seeks to find uses with the broad range of wastes it collects from residences, commercial facilities and industry, the tire industry focuses on new uses for its hard to dispose of product. Tire Recycling: An Industry Success Story was one of the first posts to this blog, almost five years ago. This lightly edited version still provides a useful example today: 

Tire Recycling: An Industry Success Story

(From 29 June 2011) 

American motorists discard a lot of tires; roughly one tire per capita or around 310 million used tires annually. On the average, tire carcasses weigh about 37 pounds, so that’s something like 11 billion pounds of waste rubber and metal every year. In the past, most of these used tires went to dumps, where they were ugly, mosquito – breeding fire hazards. Today, the recycle rate is sufficient to handle this year’s carcasses, while also significantly drawing down inventories at tire dumps nationwide.

Tire dealers add a state–mandated “tipping fee”, usually around $4.00, to each new tire sold. The “tipping fee” is passed on to the tire reclaim firm when the tire reclaimer collects carcasses from the tire dealer. The tire reclaimer converts the scrap tires into some useful form, usually by shredding the scrap tires and separating the rubber from the steel tire cords. The rubber scrap may be processed further, depending on the intended application. 

More than half of the recovered scrap rubber is used as tire–derived fuel, burned as an alternate to coal, primarily to fuel cement kilns. Ground rubber has a multitude of uses, ranging from landscaping mulch, to athletic fields, to molded rubber products, and on to de-vulcanized rubber, which can be used to produce new tires. Those who are interested can download a free report chock full of information on scrap tire products and markets at 

One take-away for all manufacturers is that the conversion of billions of pounds of scrap from dangerous eye-sore to useful products came to be through the efforts of a trade association. Trade associations offer a particularly useful vehicle for addressing many of the industry-wide problems and opportunities that Sustainability presents. 

>> Learning from Nature – Proponents of the Circular Economy point out that there are no wastes in biological processes. Everything eventually becomes food for something else. Actually, it is better than that. Biological processes operate at or near ambient pressures and temperatures, as opposed to the energy intensive demands of many industrial processes. I was surprised to learn that the Department of Chemical Engineering where I studied is now the Department of Chemical and Biomolecular Engineering – a strong indication of the growing importance of bio – based products and processes.

>> Books – Consider the entire value chain for books and other printed matter. Start with cutting forests, then the environmental concerns with paper making, ink chemistry, collecting end of useful life products, transportation costs across the value chain, and recycling or disposal costs. Compare all of that that with a Kindle. Replacing a tangible product – or a component of a tangible product, such as the operating instructions – with a virtual (digital) product changes everything!

For Smaller Manufacturers

The ideas behind the Circular Economy are quite powerful and potentially disruptive. Every manufacturer needs to consider how to modify its business model to embrace those ideas. As you can see, there are a lot of ways to approach this – new product development / new manufacturing processes / teaming with somebody like Waste Management or USBCSD / through a trade association / even virtualization – are just for starters, there are many more possibilities.

Chuck - FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington


This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.



[3] Download for free at



Radical Uncertainty

Sustainability and Uncertainty

A Sustainable business, says Adam Werbach, is one that is able to thrive in perpetuity. [1] The same definition also applies nations, civilizations and even humanity as an entirety. The term “perpetuity”, however, involves anticipation of the future, so that appropriate actions can be taken in the present.

“Prediction is very difficult, especially about the future” – attributed to Niels Bohr, (or maybe Yogi Berra).

In some circumstances, prediction is not so difficult. For example, it is easy to predict that a roll of two dice will result in an outcome between 2 and 12, and the probability of each outcome (from 2 to 12) is readily calculated. Insurance companies prosper because probabilities of morbidity, mortality and other risks within suitably defined groups can be reliably estimated.

However, prediction becomes increasingly difficult as situations become increasingly complex and the set of possible outcomes becomes less well defined, as they do in the real world. Uncertainty prevails. And it gets worse:

“Radical uncertainty refers to uncertainty so profound that it is impossible to represent the future of a knowable and exhaustive list of possibilities to which we can attach probabilities… when businesses invest, there are no dice with known and finite outcomes on the faces; rather they face a future in which the possibilities are limitless and impossible to imagine.” [2]

The concept of “radical uncertainty” originated in macroeconomics. [3] Macroeconomics, of course, deals with the aggregate economic behaviors of large groups of people, their enterprises and their governments. Aggregated economic behaviors can be viewed as systems that can, at least in principle, be modeled mathematically. Such systems are usually complex, with components that interact, time dependences and feedback loops. When complex systems are perturbed, outcomes can be quite surprising. This applies to macroeconomic systems and to other complex system, especially those where human behaviors are involved.

Here are several examples where complex systems might well threaten a firm’s, a nation’s, or even humanity’s ability to thrive in perpetuity in today’s globalized world:

>> Climate Change – As a recent post to this blog explained, the term “Climate Change” refers to a set of negative effects expected from warming of the Earth’s atmosphere due to human – induced increases in the concentration of greenhouse gases — especially carbon dioxide – in the atmosphere. The atmosphere and its behavior as expressed in weather patterns is a complex system indeed. The nature, magnitude and timing of effects (changes in weather patterns) due to increases in greenhouse gas concentrations remain to be seen.

>> World Financial System: Over the last half century or so, the American economy has experienced recession about once a decade. Over that time, the financial systems that support national economies have globalized and changed in very significant ways. In 2007 – 2008, a major disturbance occurred that, we are told, very nearly resulted in total collapse of those financial systems. Instead, we experienced about seven years of pernicious recession.

However, very little has been done to make those financial systems more robust to future disturbances. The periodic occurrence of recessions suggests that the financial system is not stable. If the episode of 2007 – 2008 very nearly resulted in total collapse of the world’s financial system, worse may well be in store in the future.

>> Global Epidemic: The 20th century witnessed a dramatic reduction in epidemic outbreaks of communicable disease. In the aftermath of World War I, an outbreak of “Spanish” influenza resulted in more deaths than the war itself. “Childhood diseases” including mumps, chicken pox and measles (along with many other once common diseases) have all but disappeared.

However, a recent outbreak of Ebola fever in Africa emphasized the ease with which today’s global transportation system can change a local outbreak into a global catastrophe. Further, science has learned that pathogens can evolve rapidly into new forms that require new vaccines or new treatment techniques – which may require considerable time to find, prove, and distribute.  

>> Black Swans: Nassim Taleb teaches us of the ubiquity of Black Swans:

“A Black Swan is an event, positive or negative, that is deemed improbable, yet causes massive consequences”

“… the world is far, far more complicated than we think, which is not a problem, except when most of us don’t know it. We tend to ‘tunnel’ while looking into the future, making it business as usual, Black Swan free, when in fact there is nothing usual about the future.” [4]

What to Do?

The world, then, may well be “far, far more complicated than we think”. Radical uncertainty may be considerably closer to the norm than we appreciate. If so, how does an individual, a firm, a nation, or humanity as a whole best approach the future? Look for some thoughts on that in the next post to this blog.

Chuck - SedonaThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

[1] Adam Werback, Strategy for Sustainability (2009), Harvard University Press, page 9

[2] Mervyn King was Governor of the Bank of England during the financial crisis of 2007 – 2008. This quotation is from his 2016 book The End of Alchemy – Money, Banking and the Future of the Global Economy.  This book includes a full chapter entitled Radical Uncertainty: The Purpose of Financial Markets.

[3] Dr. Frank Knight, often referred to as the “father of macroeconomics”, introduced the concept of radical uncertainty in a 1921 academic paper, Risk, Uncertainty and Profit, University of Chicago.

M. Keynes, likely the most influential economist of the 20th century, devoted Chapter 12 of his best known work, General Theory of Employment, Interest and Money (1936) to the concept of radical uncertainty. (Keynes, incidentally, did not hold a degree in economics, doctorate or otherwise. He studied mathematics, emphasizing probability, at Cambridge.)

[4] These quotations are from Nassim Talib’s New York Times bestseller The Black Swan (2016) Talib and his book are both engaging, as well as perceptive.

Carbon, America and the World

Climate Change

For a business to be Sustainable – that is, able to thrive in perpetuity [1] – requires that the world remain a viable place in which to thrive, in perpetuity. The world faces a number of substantial threats to its continuing viability to support a prosperous humanity. Climate Change is arguably the most discussed of these just now. Unfortunately, Climate Change is highly politicized and not generally well understood.

To clarify:

Climate Change refers to significant changes in the world’s climate that diminish the natural world’s ability to adequately support humanity and its civilizations.

Climate Change, in the sense intended here, refers to an increase in the global mean temperature.

Climate Change, then, is a set of negative effects caused by Global Warming.

Global Warming, again in the sense intended here, results from a “greenhouse effect” – a change in the composition of the earth’s atmosphere that results in retaining a greater portion of the energy from sunlight.

Carbon Dioxide (CO2) is a rapidly increasing “greenhouse gas” component of the earth’s atmosphere.

Energy generation from combustion of fossil fuels contributes most of the approximately 34 billion metric tons of CO2 that are currently being added to the earth’s atmosphere annually.

Most of the world’s nations, through the United Nations Framework Convention on Climate Change (UNFCCC), have reached agreement on the necessity to reduce global CO2 emissions quickly and significantly.

The American Situation

At a meeting of the UNFCCC in December 2015, President Obama expressed an intention for the U.S. to reduce its greenhouse gas (essentially CO2) by 26% to 28% below 2005 levels, and to do so by 2025 (that is, 8 years from now).

This graph, from U.S. Department of Energy’s Annual Energy Outlook 2017, projects America’s energy related CO2 emissions to 2040 in a number of cases (sets of assumptions). As you can see, none of those cases provide substantial reductions in CO2 emissions, compared to present levels.

CO@ Emissions Projections

The Global Situation

Global CO2 EmissionsThe graph labeled Figure 9-1 [2] plots global CO2 emissions, broken out as emissions from OECD [3] countries (which include the USA) and non-OECD countries. Add the two together to get total global emissions (for 2016, approximately 13 billion metric tons from OECD countries + 21 million metric tons from non-OECD countries approximates 34 billion metric tons). Annual emissions from the OECD countries are projected to be approximately constant over the period through 2040. Annual emissions from the non-OECD countries are projected to increase substantially.[4]

Two points here: (1) Annual global CO2 emissions are projected to increase, not decrease. (2) Even if the USA could drive its CO2 emissions to zero, that reduction, of itself, would not prevent total annual CO2 emissions from continuing to increase, not decrease.

So, in order to contain Global Warming and it’s predicted negative effects (meaning Climate Change), annual global CO2 emissions need be reduced substantially, pronto. However, the Department of Energy’s figures, based on existing policies along with world demographic and economic projections, indicate that emissions will continue to rise, at least through 2040.

What to Do?

The USA can institute policies that directly affect its own emissions. It can only influence, not control, the emissions of other countries. Here are three possible approaches that the USA might choose to take. None of them can promise to radically reduce annual global CO2 emissions within the next decade or so.

Whatever it Takes: This approach posits that the USA forgets about costs and domestic economic growth, shuts down existing U.S. emissions sites on a crash schedule, and uses moral suasion, political pressure and an open checkbook to persuade other countries to follow suit.

Lead by Example: The approach starts by embracing, then building on President Obama’s expression of intention to reduce emissions. From there, the USA would lead by further reducing its emissions, while using diplomacy, economic incentives and coalition building to encourage others.

Pragmatics: The USA could continue to encourage the development and implementation of economically viable technologies, continue to research new emissions control and decarbonization approaches, and work with other nations to encourage them to do likewise on a mutually beneficial basis.

Considering present and your expectation of future political and economic realities in the USA and elsewhere, what do you think the USA should do? What approach should your business or organization take?

My House with Solar Panels

Google Map View of Chez Chuck, with Solar Panels

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

[1] Adam Werbach, Strategy for Sustainability, Harvard Business Press (2009), page 9

[2] The graph labeled Figure 9-1 is from the U.S. Department of Energy’s International Energy Outlook 2016 (IEO 2016). The Annual Energy Outlook and the International Energy Outlook are available fro free download at

[3] OECD, the Organization for Economic Co-operation and Development, is a group of 34 relatively developed countries. The USA is a member.

[4] The non-OECD countries are growing significantly faster than the OECD countries, both demographically and economically. People in less economically developed countries understandably want to catch up with those in OECD countries on a GDP per capita GDP basis.


Knowledge Workers and Tomorrow’s Jobs

President Obama, in his 2015 State of the Union address, proposed that America’s community colleges be made tuition free.[1]  With advancing technology, including on-line instruction, that seems to me to be a sensible step. But only a step. America’s education system needs a comprehensive overhaul in order to educate enough people rapidly enough to meet the rapidly changing demands of the 21st century, rather than those of the 20th.

Peter Drucker discussed this need for what he termed “knowledge workers” and provides his usual profound insight to the matter. Here is a post from a year ago that discusses Drucker’s ideas. It is well worth repeating.    — C.H.

Peter Drucker and the Knowledge Worker (from 10 January 2016)

Peter Drucker is arguably the most widely respected of the 20th century management consultants. Drucker wrote over 30 books on management, which are largely focused on human behavior. His 1999 book, Management Challenges for the 21st Century, offers a forward looking assessment of what demographics suggested would be the key problems facing manager in the early decades of the 21st century. Drucker’s concept of a knowledge worker – those whose work is focused on knowledge and its applications – is central to this book. He contrasts knowledge workers with manual workers – those whose work is essentially focused on things and the manipulation of things.

The Knowledge Worker

With his characteristic bluntness and surety, Drucker states:

“Knowledge-worker productivity is the biggest of the 21st century management challenges. In the developed countries it is their first survival requirement. In no other way can the developed countries can the developed countries hope to maintain themselves, let alone to maintain their leadership and their standards of living.”

Drucker credits Fredrick Taylor’s “scientific management” for the awesome improvements in manual worker productivity that characterizes 19th and 20th century industry and agriculture in the developed countries. According to Drucker, those increases in productivity have been the primary source of incremental wealth in the developed world.

The industrial engineering concepts that constitute “scientific management” are quite portable, so they can be quickly applied anywhere, using workers with little education or training. Developing countries have lots of people, many with rudimentary educations at best, who are willing to work for close to pre-industrial wages. Developed countries have aging populations and declining birthrates, hence much higher wage expectations.  

The bottom line is that labor intensive, repetitive manufacturing in the developed countries simply isn’t competitive in this globalized world, a few special cases excepted (at least for a while). Developed countries need sophisticated work based in knowledge, rather than in method. Economies in developed countries need knowledge workers. As Drucker puts it:

“The only possible advantage developed countries can hope to have is in the supply of people prepared, educated and trained for knowledge work. There, for another fifty years, the developed countries can expect to have substantial advantages, both in quality and quantity”.

What To Do?

There have always been knowledge workers, so much is known about knowledge work. Much can be learned about knowledge worker productivity from professional firms such as surgical practices, legal firms, architectural firms and accountancy firms. Today’s medical practices, for example, have several types of knowledge workers – specialized nurses, radiological technicians, physician’s assistants and such – that enhance the productivity of physicians, the practices’ key resource..

For manufacturing firms that intend to become and remain Sustainable, significant changes in organizational practices and organizational structure will be needed. This means new and innovative business models. Obviously, doing all of this will require study, careful thought and even more careful implementation. There isn’t any real alternative to embracing the change. Start by reading (or re-reading) Peter Drucker’s Management Challenges for the 21st Century !

Chuck - Austrian AlpsThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are always welcome.

[1] For more on my thoughts on President Obama’s proposal, see:


Idiocy Squared?

15 January 2017

Yesterday (14 January 2017), I watched SpaceX launch a cluster of ten communications satellites into precise orbits, while returning the launch vehicle to an autonomous barge in the Pacific Ocean. I’ve been following rocket launches since I saw the first Vanguard rocket self destruct on its launch pad in December, 1957, to the chagrin of the entire nation.[1] Yep, I’m a technology buff. Technology fascinates, amazes and delights me. Maybe that’s why I became an engineer.  — C.H.

Elon Musk and the Vision Thing

Elon Musk is an interesting man. He envisions the future. Then he acts on that vision in a systematic (and courageous) manner. Actually, he goes beyond “systematic” – he insists on thinking from first principles,[2] rather than on starting with the present art. At the same time, he remains focused on his vision, to the consternation of many.

This post focuses on two of Musk’s businesses – SpaceX and Tesla — and examines the visions they embody, with examples of initiatives in place to realize those visions.

SpaceX’s Vision:

SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.

That’s right – Musk’s vision for SpaceX is nothing less than colonizing Mars.[3] The purpose of SpaceX’s commercial launch program is to fund the development of the technology necessary to do so. That technology is complex and its development will be enormously expensive. Keep in mind that SpaceX is already doing things that only governments have done before (and some that nobody has done before). Also remember that the Apollo program that sent astronauts to visit moon – but not live on the moon – was, at its peak, consuming about 4% of the entire federal budget!

Here is some of the technology currently under development:

>> Advanced rockets and spacecraft: The Falcon rocket and the Dragon spacecraft are both original designs, developed from first principles as steps on the way to Mars.[4]

>> Reusable launch vehicles: Yesterday’s SpaceX launch vehicle was safely landed, joining launch vehicles from about a half dozen earlier SpaceX launches. The objective is to reuse them. Reusable launch vehicles are the key to sharply reduced costs. Imagine the cost of an airline ticket if the airplane could only be used once. Look for a SpaceX launch using a previously used rocket within this year.

>> The Falcon Heavy: With three times the lift capacity of the current Falcon 9, the Falcon Heavy is scheduled to test launch this year. Trips to Mars will require massive lifts into orbit.

>> The Raptor engine: SpaceX has test – fired a new rocket engine that will burn liquid methane instead of kerosene. Liquid methane will provide considerably more thrust per unit of mass than does kerosene. Methane is also available on Mars, so methane refueling on Mars could facilitate return trips!

Tesla’s Vision:[5]

The point of all this was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good. That’s what “sustainable” means. It’s not some silly, hippy thing — it matters for everyone.

So, Tesla is about accelerating the advent of sustainable energy. Wind energy, solar energy and hydroelectric energy are all potentially Sustainable, but none of these are directly applicable to vehicles. However, if the vehicle is powered by electricity, all of them are applicable. So, Tesla makes electric vehicles. Tesla also recognizes that it cannot, of itself, make enough electric vehicles to make electric vehicles the world’s standard. There are many constraints to doing that.

Here are a few of them:

>> Vehicle performance: Drivers expect electric vehicles to perform at least as well as petroleum fueled vehicles. Hence Tesla’s emphasis on acceleration, comfort, handling, safety and related matters.

>> Style: Drivers like cool, classy, functional cars. Tesla vehicles turn heads.

>> Range: Drivers expect electric cars not to strand them. That requires that vehicles have a range between fueling that compares their current vehicles, and that refueling be available almost anyplace. That’s why Tesla cars have 250 – 300 mile range between recharging, and why Tesla is so intent on building recharging facilities worldwide. Tesla is not waiting for somebody else to do it for them.

>> Batteries: Over 15 million new cars were sold in the U.S. in 2016, and several times that many worldwide. For electric vehicles to become a substantial portion of those numbers, a ready, reliable source for suitable batteries is necessary. That’s why Tesla is building a giga-factory – the largest factory in the world – to produce the batteries. Again, Tesla isn’t waiting for somebody else to do it for them.

>> Update 1/19/2017 : Tesla just announced that it will increase its investment in the giga-factory by $350 million in order to manufacture electric motors and drive trains for Tesla automobiles. Yet again, it appears that Tesla sees a need to produces hundreds of thousands of 200 – 400 horsepower motors that meet their requirements, rather than wait for somebody else to do it for them.

>> Price: In order to sell enough vehicles to even begin to make a difference, Tesla has to produce vehicles that sell at mass market price points. Hence the coming Tesla Model 3.

>> Production Technology: In order to meet drivers’ expectations at a mass market price while generating a reasonable profit, Tesla is re-inventing vehicle production technology from first principles. It will be interesting to see just how the Model 3 is produced.

>> Marketing and sales: Tesla regards the existing authorized dealer model of vehicle sales as inefficient. Instead, Tesla wants to use Amazon – style sales methods. Not surprisingly, existing dealerships are resisting fiercely.

>> Self-driving vehicles: In 2015, there were 35,092 people killed in traffic accidents in the U.S. alone.[6] Tesla believes that self driving technology can reduce that figure by at least a factor of ten. Accordingly, all Tesla vehicles produced right now come equipped with the necessary equipment to do this. As self driving technology becomes more commonplace (and traffic regulations change), insurance costs most drop sharply, not to mention the reduction in human suffering. This technology addresses the human side of triple bottom line Sustainability, as electric power addresses the environmental side.

>> Critical mass of vehicles: To make a real difference, electric vehicles have to become a significant fraction of the world’s fleet of vehicles. Tesla cannot even hope to produce anything close to the number of vehicles needed to do that. That’s why Tesla made its large body of patents available without charge to all manufacturers that want to produce electric vehicles.

Elon Musk says that starting an automobile company in the U.S. is “idiotic”, and that starting an electric vehicle company is “idiocy squared”. Chuck says that if Tesla is idiocy squared, then SpaceX is exponentially so. But I like the way Elon Musk thinks. He reminds me of Henry Ford. The world needs people like them — people whose vision and actions transcend accepted bounds. Musk may be idiotic, but I do own some Tesla stock.

Chuck - Red RocksThoughtful comments and experience reports are invited and appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

[1] For those who were not around in 1957, the U.S. and the U.S.S.R. were heavily engaged in the Cold War. The U.S.S.R. shocked the U.S. by launching the Sputnik 1 satellite in October 1957. The clear implication was that the U.S.S.R. was ahead of the U.S. in rocket technology, hence had an important military advantage. Catching up with the Soviets was so important that the Vanguard launch attempt was televised live.

[2] Nobel Prize winner Daniel Kahneman explains thinking from first principles and why it is so uncommon in his bestselling book, Thinking, Fast and Slow, Farriar, Straus and Giroux, New York (2011)

[3] For more and SpaceX and for a presentation on the Mars project, see SpaceX’s website at

[4] In contrast, the Atlas V launch vehicle, which is used to compete with SpaceX for commercial launch business, is the latest in a series of Atlas rockets that began in 1957. The original Atlas was, in turn, a descendent of the German V-2 rocket from World War Two.

[5] For more on Tesla and on Elon Musk’s vision for Tesla, see:

[6] Traffic fatalities figure from:

The UN Sustainable Development Goals

One year ago, “The Age of Sustainable Development”, a series of three posts to this blog, sought an operational definition of “Sustainable Development” as that term applies to smaller manufacturers. That is, a definition that answers the question: “what characteristics and actions can be expected to enable smaller manufacturing firms to grow and prosper indefinitely, within context of a sustainable world?” (A sustainable world does not self-destruct ecologically, socially or economically.)

UN FlagThe third of those posts explores the United Nations’ 17 Sustainable Development Goals. The United Nations’ Goals serve to remind us of just how broad the scope of doing business is today. Finding a way to keep in meaningful contact with the multitude of changes occurring in globalized commerce is a major management challenge for smaller manufacturers. The following is extracted from that post:

U.N. Sustainable Development Goals

Earlier posts in this series of posts looked at two routes to an actionable definition of “Sustainable Development”. The first was the original (1987) Bruntland Commission single sentence definition: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” The second approach was to take the entire contents of Dr. Jeffrey Sachs’ “The Age of Sustainable Development” – the on-line university level course (a “MOOC”), along with the 500+ page textbook – as an operational definition.

Clearly, a single sentence definition isn’t specific enough, while a book plus a MOOC is a bit much. A third route involves the United Nations’ Sustainable Development Goals. By examining these global goals, smaller manufacturers can identify specific, actionable areas that fit with their business and those it serves. From those specifics, each firm can construct their own operational definition – a definition that reflects and contributes to global initiatives.

The U.N. adopted an Official Agenda for Sustainable Development in September of this year (2015). The Official Agenda includes 17 Sustainable Development Goals, to be achieved by 2030. The Goals are sweeping, general statements, each reinforced by a number of more specific Targets. Sustainable Development Goal #1, along with its associated Targets provides an example:

Goal #1: End poverty in all of its forms everywhere

Target 1.1: By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day

Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions

Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable

Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters

 Target 1a: Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions

Target 1b: Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

Before you throw up your hands and blow this off, consider that Goal #1 and its targets affect about 2 billion people. Any real global effort toward achieving this will involve huge opportunities in agricultural products, distribution methods, irrigation and other water related products, along with a multitude of other areas. Somebody will supply each piece of all that is required. Some will participate directly, others as suppliers to other manufacturers. So, many firms will do some business and help make the world a better place by doing so.

The remaining 16 Goals and the 162 Targets associated with them are just as ambitious as Goal #1. Rather than list them here, you can visit original list on the United Nations’ Sustainable Development website:

For Smaller Manufacturers

>> Each of these Goals and Targets deserve careful thought as to how they fit with your firm’s business model and web of relationships. The 17 Goals, taken together, are so broad that there has to be opportunities for just about anybody who can make anything. Personally, I don’t believe that world poverty will be eliminated within the coming 15 years. But there may well be significant action toward that end. China’s progress over the last few decades demonstrates that major improvement is possible. Helping even a fraction of 2 billion people out of abject poverty is a very good thing.

>> The U.N. Goals signify that the U.N. has decided to combine its (human) economic development efforts with Sustainable Development. That means the U.N.’s current idea of Sustainable Development has a much different focus from the original Bruntland Commission definition. Bruntland emphasized the longer term (inter-generational) relationship between economic development (meaning industrial development) and environmental impact. The new U.N. focus is shorter term and emphasizes human and fairness matters. The U.N. hasn’t forgotten the environment – just much more emphasis on people issues.

Chuck - VancouverThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

U.N. Flag image licensed via

Links to the three posts comprising the “Age of Sustainable Development” series:


The Triple Bottom Line in Context

The Triple Bottom Line

Sustainability guru John Elkington’s concept of a Triple Bottom Line provides the most used framework for discussing Sustainability. Elkington proposed that businesses should measure and report Return on Assets Deployed information for natural (ecological) assets deployed and for social assets deployed, as well as the usual financial assets (capital) deployed figures. The three “bottom lines” represent the business’s net effects on planet, people and profit. This is obviously a more comprehensive view. Perhaps more significant is the implication that the business should show positive results which indicate enhancement to the environment and society, beyond doing no harm.

Triple Bottom LineAndrew Savitz and Karl Weber’s book, The Triple Bottom Line, extends Elkington’s idea by representing the three “bottom lines” as intersecting circles. The areas of intersection are termed “sweet spots”, meaning synergistic opportunities. For example, when power utilization efficiency is improved, profits are improved due to lower power cost, while the environment and humanity benefit through reduced carbon dioxide emissions. So, improvements in the planet and people “bottom lines” are not necessarily at the expense of the profit “bottom line”. [1]

A Systematic Approach

Approaching the Triple Bottom Line through systematic business planning appears to me to be a clearer, more pragmatic approach. By “systematic business planning” I mean integrating all three aspects of the Triple Bottom Line: in definition of the business (mission statement, vision statement, values statement), in formulating goals and objectives, and in establishing and executing the business processes necessary to successfully pursue those goals and objectives. The sequence is clear enough:

Values to Results

In this sense, Triple Bottom Line involves an increased scope of management awareness that includes attention to the natural world and humanity, in lock step with attention to financial realities.

The rub lies in setting (and achieving) sufficiently aggressive goals and objectives that express timely progress toward achievement of the mission, vision and values that define your business. Those goals and objectives are unique to each organization, in context of the organization and the business climate that exists as they are set and pursued. Accordingly, there is no ready package of goals and objectives – you have to figure them out for yourself. However, you can look at the efforts of others to help you find your own way.

Here are a few starting places:

Fetzer Winery – Fetzer is a medium sized California winery that has Triple Bottom Line Sustainability in its DNA. Start with Fetzer’s website.[2]

Ben & Jerry’s – Yep. The Vermont – based premium ice cream company founded by two hippies. Try Ben & Jerry’s website [3], especially the tabs on values.  Also, Ben & Jerry’s – A Case Study in Sustainability [4],an earlier post to this blog, may be useful.

Hershey Company – The maker of Hershey Bars began as a fair example of an early 20th century mill town, and then morphed into an extraordinary example of what a successful business can do for its employees and their neighbors. Today, more than 70 years after the death of Hershey’s extraordinary founder, Hershey’s continues as a successful multi-billion dollar company that still focuses on its roots. Start with the Wikipedia wiki on The Hershey Company.

Interface Corporation – Interface makes carpets, primarily for commercial buildings. Interface provides an example of what can happen when a manufacturing company thoroughly embraces Sustainability, from its expressed mission and vision all the way through business results. Start with Whither Sustainability? [5], a recent post to this blog.

Waste Management – Waste Management changed its business model from a business based on collecting refuse and carrying it to landfill, to one based on profiting from the refuse it collects. Both Waste Management and Interface are examples of firms that fundamentally changed the basis of their business to embrace Sustainability. See Waste Management Corporation – A Case Study in Sustainability,[6] this blog.

The United Nations Sustainable Development Goals – The UN recently established a set of 17 goals for the world to achieve by 2030. The UN’s set of goals provides insight as to just how broad Sustainability is. Aligning your Triple Bottom Line goals and objectives with the UN goals may be a good idea. Start with The Age of Sustainable Development – Part 3 [7] this blog . Alternatively, just google “UN Sustainable Development Goals”.

Again, your goals and objectives are unique to your business and the business context within which it exists. The examples cited above are extreme cases which may be useful to stimulate your thinking.

Chuck in FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

Triple Bottom Line graphic credit – creative commons via Wikipedia

[1] The preceding two paragraphs are borrowed from Double Take on the Triple Bottom Line, an earlier post to this blog.








Energy Utilization Efficiency and LEDs

Energy Utilization Efficiency

AEO 2015 Figure 19The graph labeled “Figure 19” [1] projects energy use in the U.S. per person (blue line) and per dollar of GDP (green line). The right hand portion of the graph (2013 – 2040) projects that annual energy consumption per American will remain rather constant, although well below consumption in 2005. Annual energy consumption per dollar of GDP, on the other hand, is projected to continue to decline. If this projection holds, only half as many watts of energy will be required to produce a constant dollar’s worth of GDP in 2040, as compared to 2005. Said another way, American energy utilization efficiency is projected to double over the period 2005 – 2040!

This improvement is a global phenomenon. The International Energy Agency (IEA) states its importance this way: [2]

“Energy efficiency in IEA member countries improved, on the average, by 14% between 2000 and 2015. This generated energy savings of 450 million metric tons of oil in 2015, enough to power Japan for a full year. These savings also reduced total energy expenditure by 540 billion United States Dollars in 2015, mostly in buildings and industry.”

$540 billion in efficiency savings sounds pretty good to me. But that’s for the whole world. Here is a more up close and personal example of what energy utilization efficiency can mean:

Lighting Industry Disruption

I have recessed lighting in the kitchen of my home. There are three ~ 5” diameter (BR-30) recessed fixtures and ten ~ 2.5” diameter (GU-10) recessed fixtures. I replaced the three 75 watt halogen bulbs from the larger fixtures and the ten 50 watt halogen bulbs from the smaller fixtures with size – equivalent LED bulbs. The larger LED bulbs each draw 9 watts, while the smaller bulbs each draw 5 watts. Right: a total of 77 watts of power draw replaces a total of 775 watts – nearly a 10 to 1 improvement.

LED Lighting DisplayActually, there is a lot more to LEDs beyond reducing your electric bill, welcome as that is. The LED value proposition offers at least these features:

  • Bulb prices are now competitive with older technology. [3]
  • Bulb service life expectancy is several times longer than older technology.
  • Significantly lower power requirements.
  • Much less heat generation.
  • Bulbs are readily available in many form factors.
  • Available in several color spectra.
  • Available with an increasing number of intelligent control alternatives – bulbs and fixtures.

The case for LEDs is so strong that Greentech Media, [4] referencing a report from Goldman Sachs, says:

“The financial institution calls LEDs one of the fastest technology shifts in human history. While wind and solar are challenging the traditional electric generation sector, they have not upended it yet the way LEDs have overtaken the lighting industry. By 2020, LEDs will make up 69% of (lighting) sales and close to 100% by 2025, up from nearly nothing in 2010.”

Best of all, LEDs are an emerging technology, which will continue to evolve. Expect continuing improvements in energy utilization efficiency (it can, and will, get considerably better than the 10 to 1 improvement in my kitchen lighting). Even more importantly, expect completely new ideas as LEDs evolve from replacements in existing sizes and forms to become the creative media of the lighting industry.

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

[1] “Figure 19” is from the 2015 Annual Energy Outlook, published by the Energy Information Agency, a service of the U.S. Government.

[2] Energy Efficiency Market Report 2016, International Energy Agency, page13.

[3] As the snapshot of an LED retail display at my local Home Depot indicates, common residential replacement bulbs are readily available for a few dollars.

[4] See , which refers to a Goldman Sachs report at

Energy Notes from the EIA

The Energy Information Administration (EIA)

The EIA, part of the U.S. Government, compiles and projects statistical data on energy production and consumption. Among the EIA’s many regular publications, the Annual Energy Outlook (AEO) and the International Energy Outlook (IEO) are probably the most comprehensive. The 2016 editions of both publications have recently become available (for free). This post draws on both.

Both publications project data out to 2040. The basic set of projections is labeled the “reference case”. The reference case is a “business as usual” case that projects current trends in view of government demographic projections (like population projections), financial projections (like GDP and inflation rates) and laws / regulations already in place. The reference case does not anticipate technical break-throughs, other than those necessary to meet established laws or regulations. For example, the reference case projects that new automobiles will meet the fuel consumption levels required by the existing C.A.F.E. regulations in the years to 2025, never mind how, technically, that is accomplished.

Fueling Our Past – and Future

Energy Consumption in the US

The graph labeled “Energy Consumption in the United States (1776-2040)” is from the home page of the EIA’s website (  Comments:

>> Energy consumption is measured in quadrillion BTUs (“Quads”). One quad is a heck of a lot of energy. As the graph indicates, all of the hydroelectric dams in the U.S., taken together, produce only about 3 Quads annually. Over recent years, the total energy consumption in the U.S. has been around 100 Quads per year.

>> As you can see, the AEO 2016 reference case projects that, over the next 25 years, about 12 Quads of energy from coal will be replaced with an almost equal amount of energy from natural gas. This would cut the use of coal as fuel in this country by about half between now and 2040.

>> Energy production from petroleum is projected to remain almost constant through 2040.

>> Renewable energy (“other renewables”), especially solar energy, is projected to increase rapidly, to almost 10 Quads by 2040. Still, 10 Quads are projected to be less than 10% of the U.S. total energy consumption in 2040.

Energy Consumption Trends

The green line on the graph labeled “Total Energy” projects that total energy consumption in the U.S. will increase slowly between now and 2040. Total energy production (blue line), however, is projected to increase somewhat faster. That means that the U.S. will swing from being a net importer of energy to becoming a net exporter of energy about ten years from now. This, if it happens, will be great news.

US Energy Balance

In my view, the America’s chronic international trade deficit in petroleum has been a huge burden on the U.S. economy. The improvement in U.S. petroleum production rates over the last few years has dramatically lowered world petroleum prices. Those lower prices have resulted in many fewer U.S. dollars going abroad to pay for fuel, and in a nice chunk of change for everybody with every tank full. Moreover, I regard these improvements as the major causal factor in the recovery (such as it is) in the U.S. economy over the last two years.

But wait, there’s more. America’s international relations and foreign policies over the last several decades have been excessively influenced by the need to assure safe access to imported energy, especially petroleum.

So, better global and domestic economics, plus considerably more latitude in foreign relations (including military affairs) – would be great news indeed for America!

Carbon Dioxide Emissions

Carbon Dioxide Emissions Projections

Concerns about global warming / climate change / carbon dioxide (CO2) emissions have been at the forefront of Sustainability issues in recent years. This graph uses figures from the IEO to project reference case annual carbon dioxide emissions through 2040. As you can see, carbon dioxide emissions are projected to rise over the coming years.

 This is in sharp contradiction to almost everything we hear from the media and elsewhere. To be clear: given the “business as usual” conditions upon which the reference case is constructed, carbon dioxide emissions are not going to decline in the coming years. Net reductions in CO2 emissions will require significant changes in policies and / or technologies, in the U.S. and in the rest of the world.

Chuck at the Pacific



Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington


This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


Manufacturing in 21st Century America

The global economy, which includes the U.S. and its manufacturers, is in a whirlwind of transformational change. The scope and dimensions of this is difficult to grasp. We’re Not in the 20th Century Anymore, Toto, a post to this blog from a year ago, offers some thoughts on where to start. … C.H.

We’re Not in the 20th Century Anymore, Toto – from 1 May 2015

An Emerging View of Manufacturing in the 21st Century

Dreamstime - Crystal BallThe Industrial Age in America – a time in which the mass production of goods provided the economic focus of the country – declined during the final decades of the 20th century and swooned as the 21st century began. This isn’t a cyclic matter: 20th century manufacturing isn’t going to come back. Instead, the end of the Industrial Age in America is part of a transformation that is as sweeping as the Industrial Revolution was, when industry replaced agriculture as this nation’s economic focus.

Keep in mind that, in 1870, 70% – 80% of America’s working population was employed in agriculture. As of 2008, less than 2% was directly employed in agriculture. [1] Never the less, America’s farms today produce much more than ever before. America will continue to manufacture tangible products – lots of them. The way that America manufactures those products will change as dramatically as farming has changed.

“… right now we are going through a once-in-a-century transformation in business that is throwing out all of the existing rules.” [2]

This transformation is powered by a confluence of potent change agents, which might be loosely grouped as Globalization, Sustainability, Technology and Demographics & Trends. Globalization, Sustainability and Demographics & Trends provide insights as to the rapidly expanding context within which even quite small manufacturers must operate. Technology provides the means for transformation.

A few thoughts on the globalized context within 21st century manufacturers must operate:

>> Competition – Competitors and potential competitors exist worldwide, with more coming every day. So do suppliers and potential suppliers. Likewise, customers and potential customers. And these competitors / suppliers / customers are quickly becoming increasingly sophisticated in all aspects of globalized business.

>> Population – Since the advent of truly viable birth control, birth rates have dropped significantly, especially in economically developed nations. As a result, populations are aging. At the same time, the participation on women in all aspects of commerce has increased dramatically. Per capita GDP is increasing, notably in developing countries, resulting in more global middle class buying power.

>> Commerce is global / Politics are local – While competition is global, governments everywhere have incentive to favor their own. Issues including jobs, access to resources, taxation, entitlements and property rights continue to be contentious.

>> Financial System – The global financial system, as it exists today, is a hodge-podge of remnants from the Bretton Woods accords, socialist notions from the soviet era as well as from western nations, fiat (rather than hard) currencies, instantaneous globalized trading in currencies and financial derivatives, not to mention a diverse array of banking institutions. All of this is hardly a recipe for international financial stability.

Some thoughts on 21st century manufacturing operations:

Atomic physicist Niels Bohr once said that “prediction is very difficult, especially about the future”.  Actually, it’s the being correct part that is difficult. The following are extrapolations from American manufacturing’s current situation. We’ll all see what actually happens as the 21st century unfolds.

>> Products: To beg the obvious, labor related costs in economically developed countries are much higher than in less developed countries. To be globally competitive, products manufactured in developed countries will require significantly greater intangible aspects, as opposed to the simply tangible. Above all, products need be clearly differentiable.

>> Emphasis on Return on Capital Employed (RoCE): Manufacturing is capital intensive, especially concerning fixed assets, when compared to other modes of enterprise. Accordingly, financial viability depends on sustainable RoCE, taken across the business cycle, rather than on profits per se. This change in point of view fosters longer term thinking in many respects. Organizational structure and financing are not least of these.

>> The Electro-Mechanical Spectrum: A recent essay [3] discussed a trend in machinery from the mechanical to the electronic. The Tesla automobile serves as a familiar example. Unmanned space vehicles offer another. The more electronic machines offer obvious advantages, including reliability and Moore’s Law initial costs. Perhaps the most important advantage is that electronic machines have a significant software component. For this reason, machines can be improved, or even retasked, through software changes. Such machines can actually improve over time, rather than just depreciate.

>> Innovation: There is nothing static about the future. 21st century manufacturers must consistently offer differentiable products that please customers while generating satisfactory returns. This requires continuous and systematic innovation in products, operating processes and, especially, business models. A prior essay looks at all three of these modes of innovation. [4]

There is a lot more to manufacturing in the 21st century than a single essay can even hint at. The changes involved in this “once-in-a-century transformation” are of almost seismic magnitude. And change will beget more change, even more rapidly. Stand by.

Chuck ReadingThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington


This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

Photo Credit: © Shutter999 | Dreamstime.comCrystal Ball With A Bar Chart Photo

[1] Figures from Wikipedia,

[2] Tien Tzuo, CEO of Zuora, quoted in Fortune magazine. Zuora is a start-up business that is pioneering subscription based business models. For more on Zuora, see