United States
Environmental Protection
Agency
Pollution Prevention
and Toxics
(7406)
EPA742-R-97-008
December 1997
vvEPA
Pathway to Product
Stewardship: Life-Cycle
Design as a Business
Decision-Support Tool
Printed on paper that contains at least 20 percent
postconsumer fiber.
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ACKNOWLEDGMENTS
The information in this document has been funded wholly or in part by the United States
Environmental Protection Agency under Cooperative Agreement # X 821580-01-0 to Tellus
Institute. It has been subjected to the Agency's publications review process and has been approved
for publication as an EPA document. Mention of trade names or commercial products does not
constitute endorsement or recommendation for use.
The authors gratefully acknowledge Eun-Sook Goidel, EPA Project Manager, in the
Pollution Prevention Division, Office of Pollution Prevention and Toxics, for her continuous and
substantive contributions during all phases of this study. Her critique of earlier drafts of the case
studies challenged us to revisit their content in ways that resulted hi more incisive and more useful
products. In every sense, she was as much a research collaborator as a project manager. We also
extend our gratitude to Mary Ann Curran at EPA's Systems Analysis Branch, Office of Research
and Development, for her insightful comments on the final draft document.
Our case research would not have been possible without the generous donation of time and
insights of our industry colleagues, including site visits and innumerable follow-up data requests
and conference calls. These colleagues include: Wayne Bonsell, Bill Freeman, Jack Kaufman,
Steve Piguet, and Jim Tshudy at Armstrong World Industries, Inc.; Mary Beth Koza and Jerry
Schinnaman at Bristol-Myers Squibb Corporation; and Anne Brinkley, Barbara Hill, J. Ray Kirby,
Tim Mann, and Inder Wadehra at IBM.
Any remaining errors of fact or interpretation, of course, are the sole responsibility of the
authors.
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TABLE OF CONTENTS
1. Introduction 1-1
1.1 A Tool for the Design Transition 1-2
1.2 Organization of the Report 1-3
1.3 Endnotes.. 1-4
2. Overview Of LCD Practices And Approaches * , .........2-1
2.1 Tufts Survey 2-1
2.2 The European Commission Study 2-3
2.3 Tellus Interviews 2-5
2.4 Conclusions ...2-8
2.5 Endnotes ., 2-8
3. Case Study - IBM Corporation „ 3-1
3.1 Company Profile 3-1
3.2 Environmental Management and Policy 3-1
3.3 Product Stewardship 3-5
Operationalizing Product Stewardship 3-8
Role of Life-Cycle Design in ECP 3-11
3.4 Observations b , 3-17
3.5 Endnotes 3-18
4. Case Study — Bristol-Myers Squibb Company 4-1
4.1 Company Profile 4-1
4.2 Environmental Management and Policy 4-1
4.3 Life-Cycle Design: A Corporate Environmental Framework 4-4
4.4 Operationalizing Life-Cycle Design at Bristol-Myers Squibb Company 4-7
4.5 The PLC Process 4-10
4.6 Observations 4-19
4.7 Endnotes 4-20
5. Case Study — Armstrong World Industries 5-1
5.1 Company Profile .....5-1
5.2 Environmental Management and Policy 5-1
5.3 Product Environmental Performance 5-4
Total Environmental Assessment 5-6
New Product Development Process 5-9
5.4 Observations 5-10
5.5 Endnotes 5-11
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LIST OF TABLES
Table 3-1:ECP Attributes „ 3-10
Table 3-2: Paint Finishing subsystem 3-13
Table 3-3: Inventory Results for Three End-of-Life Options 3-15
Table 4-1: PLC Reviews Initiated/Completed for BMS Product Lines 4-5
Table 4-2: Evaluating an Illustrative EHS Impact for Manufacturing 4-14
Table 4-3: Evaluating an Illustrative EHS Impact for Packaging 4-14
Table 4-4: Potential Costs and Benefits of Product Reformulation 4-16
LIST OF FIGURES
Figure 4-1. Environment 2000 - Product Life Cycle 4-4
Figure 4-2: PLC Boundaries 4-8
Figure 4-3: PLC Process 4-11
Figure 5-1: Generic Production Process 5-5
Figure 5-2: Corlon Info. Sheet 5-8
Figure 6-1: Elements of Life-Cycle Design 6-1
LIST OF TEXT BOXES
Text Box 3-1: Corporate Policy on Environmental Affairs 3-2
Text Box 4-1: BMS Environmental, Health, and Safety Policy 4-2
Text Box 4-2: Keri Product Line 4-12
Text Box 5-1: Corporate Policy on the Environment 5-2
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EXECUTIVE SUMMARY
Corporate competitiveness traditionally has been achieved through new product
development, quality performance, and cost control. Competitiveness in the 1990's and beyond
will require extending these traditional elements to include the life-cycle environmental impacts
of materials and final products. Three forces are driving this evolution. First, government
regulations gradually are moving in the direction of life-cycle accountability whereby firms
increasingly will face cradle-tq-grave responsibility for their products and component parts.
Second, emerging international standards with life-cycle requirements will affect access to, and
competitiveness in, the global marketplace. Third, environmental "preferability" has emerged as
a key criterion in both consumer markets and government procurement guidelines. Collectively,
these developments have fostered a burgeoning corporate interest hi the concepts of life-cycle
design (LCD) - the application of life-cycle assessment (LCA) concepts to determine what a
product contains, how it was produced, how it will perform, and what will be left after its useful
life is expired.
Numerous firms have begun incorporating environmental effects as a criterion in
product/process design. Because LCD is used as an internal decision-making tool, its strengths,
successes, and limitations remain largely undocumented. Companies practicing, or inclined to
adopt, LCD methods do not benefit from methodological advancements achieved by others and,
with few exceptions, opportunities for cross-fertilization across firms has been limited.
With funding from the U.S. Environmental Protection Agency's Pollution Prevention
Division, Tellus Institute has collaborated with 3 companies - (1) IBM, (2) Bristol-Myers
Squibb (BMS), and (3) Armstrong World Industries - to understand why and how LCD is finding
its way into business decision processes. Documenting, advancing and disseminating LCD
practices is the central objective of this project.
Case Study Findings
Armstrong, BMS, and IBM demonstrate a range of LCD practices, indicating the reality
that there is no one-size-fits-all approach hi transforming LCA approaches into a working decision-
support tool. While all three LCD programs continue to evolve, our study suggests a number of
themes that serve as valuable lessons both for other firms and for government initiatives aimed at
advancing LCD practices.
Motives. LCD initiatives are likely to be driven by linked environmental and economic
pressures. Moving beyond compliance to stay ahead of regulatory trends, improving customer
service and product quality, and creating green market opportunities, typically provide the impetus
to building and sustaining an LCD program.
Pragmatism. Non-prescriptive, customized, and flexible describe the approaches to LCD
adopted by the three companies. For these firms, rigid protocols simply do not mesh with business
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reality. For example, while BMS has developed a generic framework for PLC reviews, the
framework is tailored to the varying needs of BMS1 different business units to account for the
differing regulatory frameworks under which each unit operates. Electronics firms, such as IBM,
facing an average 18 month time horizon in translating product concepts to market cannot afford
LCD methods which may delay a product cycle. Product cycle time and trade-offs with other
design criteria (e.g., performance, reliability, safety, cost) necessitate an adaptive approach to LCD.
Buy-in An effective environmental management structure, coupled with a solid corporate
commitment to continuous environmental improvement, is key to a successful LCD program.
Armstrong, IBM, and BMS have each established corporate environmental policies emanating from
high levels within each company. Translating these polices into actions requires educating and
achieving buy-in from employees across many levels of the company.
Streamlining. Complex, resource-intensive LCD systems may contain the seeds of their
own undoing. They are tougher to market internally and more vulnerable to orphaning during
business downturns and restructuring. Reducing the stages and impacts is one way of making
LCD affordable and relevant to internal decision-making. All three companies practice such
streamlining in some form, especially in the upstream extraction, transport, and intermediate
manufacture stages of the product cycle.
Suppliers. Supplier relations as a component of LCD programs are uneven and slow to
evolve. Our collaborating firms generally show an arms-length relationship with suppliers when it
comes to implementing their LCD programs. Liability and proprietary concerns, and a reluctance
to impose costly data development requests, are some of the impediments to more aggressively
bringing suppliers into the LCD fold. Nonetheless, without supplier involvement ~ including
information exchange between customer and supplier essential to support final design decisions ~
the absence of upstream inventory data will continue to impair a comprehensive life-cycle
perspective on product design.
Teamwork The most effective LCD programs are those that recognize the cross-functional
nature of LCD, and integrate multiple business functions into the LCD process including product
designers, materials engineering, process engineers, operations, marketing, and accounting/finance.
These themes point to a future in which LCD gradually continues to make inroads into
corporate product development, but in diverse and often diffuse ways throughout the product life
cycle. In the mid-term, realizing the benefits of LCD will require its integration in standard business
functions such that each such function sees its benefits. This kind of seamless integration will help
LCD avoid the risk of being another "environmental" program which costs, rather than saves, and
constrains, rather than strengthens, the market position of the firm and its products.
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Introduction
1.
INTRODUCTION
Product design lies at the core of business competitiveness. How a product looks,
functions, performs, lasts, and costs all directly depend on design decisions. These decisions, in
turn, represent complex trade-offs which, through a gradual and iterative process, transform a
product idea into a final design ready for commercial scale manufacturing. Whether the product is
a computer, an automobile, refrigerator, or shaving cream, the product designer stands on the front-
line of translating an idea into a commercial success that meets customers' expectations at an
affordable cost.
The decisions facing product designers require information of multiple kinds. What
materials are required for manufacturing the product? How must the product function to meet
customer needs? How can such materials and function best be packaged in terms of weight, size,
and shape for each market and submarket? And, how can all these design considerations be
meshed to yield a product which meets durability and cost constraints which will ensure
marketplace competitiveness? All these design criteria - functionality, performance, durability,
cost — combine to challenge the product design at each step of the design process, from
conceptual/preliminary design, to detailed design, engineering review, and final specification.
While these traditional criteria has guided product designers for decades, a confluence of
several forces have raised yet another criterion that increasingly commands the designer's attention.
This criterion is the environmental performance of the product, or product stewardship. The
driving forces behind this trend are several and varied. First, as government regulations and
voluntary standards move toward life-cycle accountability, firms will face cradle-to-grave
responsibility for their products and component parts. In the post-use (e.g., reuse and recycling)
and disposal stage, extended product responsibility means that manufacturers increasingly will own
a product well beyond the point of sale. Product stewardship in the form of take-back programs ~
initiated either by regulation to reduce waste streams or by business acting in its self-interest to
reclaim valuable material assets — portend a future in which durable goods will find their way back
to manufacturers in their entirety or in their component parts. With this responsibility, product
designers will face the additional challenge of designing materials and structures which are
disassemblable and recyclable.
Second, the global economy, fueled by the free trade movement, has exposed manufacturers
to the rigors of international competition. From products as diverse as automobiles, electronics,
electric power equipment, and chemicals, global competition means that firms must continually
seek ways to more effectively compete on both cost and product differentiation. Since a large
fraction of a product's life-cycle costs are fixed at the point of design, product design has never been
more integral to establishing and sustaining market share and profitability. Additionally, emerging
international standards such as ISO 14000, with includes life-cycle guidelines, will affect access to,
and competitiveness in, the global marketplace.
1-1
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Introduction
Third, environmental "preferability" has emerged as a key criterion in both consumer
markets and government procurement guidelines. As these expand, product designers will feel
increasing pressure to deliver designs which minimize use of hazardous materials used in process
and embodied in the product itself. In the product use stage, for example, products which minimize
energy and water use and pollutant emissions will reap market advantages through eco-labeling
schemes and through appeal to increasingly sophisticated customers sensitive to longer term, not
just point-of-purchase, costs of products.
1.1 A Tool for the Design Transition
For all these reasons — both external to the firm and driven by global competition or
government regulation, or internal to the firm and tied to a new vision of materials value and
management — environmental objectives place mounting demands on designers to integrate
environmental criteria into their activities. Meeting this challenge will require adjustments to
traditional design practices and tools which in the past marginalized or entirely omitted
environmental criteria. To correct this situation, adjustments are necessary along two dimensions:
(1) integration of environmental considerations within the stage of the product life-cycle on which
designers are traditionally focused, namely the production stage; and (2) expanding the purview of
the designer's thinking to encompass other stages traditionally outside the purview of designers but
where design decisions generate environmental impacts, namely upstream in the supplier chain and
downstream in the use, post-use, and disposal stages.
One such tool capable of playing a pivotal role in this transition is life-cycle design (LCD).
We define LCD as simply the application of life-cycle concepts to the design phase of product
development. Thus, following the two dimensions noted above, LCD equips designers to build
environmental considerations into both their current, production-focused decision-making while, at
the same time, expand the designer's horizon to encompass stages upstream and downstream of the
production stage. In this sense, LCD may be viewed as a translation and adaptation of the broader
concept of life-cycle assessment (LCA) to the specific activities of the product designer. The two
are closely coupled of course, but still may be differentiated.
Major methodological advances in LCA during the 1990s, spearheaded by the Society for
Environmental Toxicology and Chemistry (SETAC) and US Environmental Protection Agency
(US EPA), have yielded the widely accepted four part approach:1
• Goal definition and scoping: identifying the LCA's purpose, boundaries,
assumptions and expected products;
• Life-cycle inventory: quantifying the energy and raw material inputs and
environmental releases associated with each stage of production;
• Impact analysis: assessing the impacts on human health and the
environment associated with energy and raw material inputs and
environmental releases quantified by the inventory;
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Introduction
• Improvement analysis: evaluating opportunities to reduce energy, material
inputs, or environmental impacts at each stage of the product life-cycle.
The "life-cycle" or "cradle-to-grave" impacts encompassed by LCA include the extraction
of raw materials; the processing, manufacturing, and fabrication of the product; the transportation
or distribution of the product to the consumer; the use of the product by the consumer; and the
disposal or recovery of the product after its useful life. Thus, LCA examines the product and its
manufacturing processes in a holistic fashion, examining environmental trade-offs and
opportunities within and between the various production stages.
Whereas LCA is a broader concept with value to a host of different business functions
which interact with product designers (e.g., materials engineers, production engineers, marketing,
environmental), LCD targets the specific role designers play in shaping the environmental attributes
of a product over its entire life-cycle. Thus, the scope of LCD tends to be more narrowly defined
than LCA, limiting or eliminating upstream or downstream life-cycle stages (e.g., raw material
mining, product disposal) or impact categories (e.g., focusing on human health impacts only).
Numerous LCA applications to specific products have produced results which have both
informed further LCA methodology advances but, at the same time, produced substantial
skepticism in the business community. This skepticism is spawned by a number of conditions that
characterize LCA studies: product studies whose results seem to depend as much on who performs
the analysis as on the inherent environmental attributes of a product; use of generic information (to
protect proprietary data) in LCA inventory studies when such information varies widely from real-
world, firm-, facility-, and/or technology-specific inventory information; concerns that the decision-
relevant information generated by in-depth LCA inventory studies are less than the resource
requirements necessary to conduct such studies; potential impediments to product cycle time,
especially in sectors such as electronics where time-to-market pressures disallow any type of delay
which life-cycle studies may create; and, finally, the lack of broad-based consensus on LCA impact
assessment methodologies.
All these perceived shortcomings are a matter of continuing debate in the business,
scientific, environmental, and government communities with respect to their seriousness and
resolution. What is clear, however, is that many in the business community have selectively
embraced LCA concepts, and that application to design decisions via LCD is one concrete form in
which LCA concepts are permeating the ranks of manufacturers in industrial countries.
1.2 Organization of the Report
Because LCD is used as an internal decision-making tool, its strengths, successes, and
limitations remain large undocumented. Thus, understanding why and how LCD is finding its way
into business decision processes is the central objective of this study. What are the preconditions
for effecting a sustained LCD program with the corporation? What stages of the life-cycle are
included in corporate LCD practices? How do designers in practice make trade-offs between
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Introduction
competing design criteria? What types of protocols and data are they using to make LCD a
working tool? And how do designers relate to materials engineers, production engineers and other
participants in the production process? Such an assessment will serve multiple purposes: to
document LCD practices, enabling interested firms to benchmark their LCD initiatives; to identify
gaps in methodology and data to guide both private and private-public initiatives to correct such
deficiencies; and to advance our understanding of the dynamics of organizational Innovation in
corporate environmental management and product stewardship.
LCD is an evolving tool that continues to change. Through a series of case studies
conducted in 1995 and 1996, this report presents a current-day snapshot of LCD. The remaining
chapters of this report are organized as follows. Chapter 2 briefly reviews current LCD approaches
in North American and Europe based on recent survey studies and secondary literature. Chapters 3,
4, and 5 present in-depth case studies of LCD in our three collaborating companies: IBM, Bristol-
Myers Squibb, and Armstrong World Industries. Each of these chapters describes the corporate
environmental management structure, history of LCD programs, specific methodologies, future
directions, and our interpretation of the accomplishments, strengths and lessons from each of these
companies. We conclude hi Chapter 6 with a synthesis of our findings and a prognosis as to where
LCD is headed in the next few years.
1.3 Endnotes
1. Society of Environmental Toxicology and Chemistry, Guidelines for Life-Cycle Assessment:
A "Code of Practice", 1993; U.S. Environmental Protection Agency, Office of Research and
Development, Life-Cycle Assessment: Inventory Guidelines and Principles, EPA/600/R-
92/245, Feb. 1993.
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Overview of LCD Practices and Approaches
2. OVERVIEW OF LCD PRACTICES AND APPROACHES
To provide a broader context on the state of LCD practices in industry, and to provide a
benchmark for our three collaborating case study firms, this chapter presents an overview of the
range of LCA/LCD approaches and applications. This overview is informed by a recent survey
conducted by Tufts Institute, a report co-sponsored by the European Commission (EC) and
OECD, and supplemented by Tellus interviews with four firms.
2.1 Tufts Survey1
In 1994, a group of four graduate students in the Tufts University Department of Civil and
Environmental Engineering Program undertook a Master's Degree project examining the current
state of the science of LCA. Funded by the U.S. Department of Energy (DOE), this study
evaluates trends and issues driving LCA at the international level, describes and compares current
LCA methods, and surveys corporate perspectives and uses of LCA.
As part of their study, they performed a telephone survey of 34 "Fortune 500" companies
that were known to be (or who intended to be) actively involved in using LCA. Of the 34
companies, fourteen were classified as belonging to the chemicals/plastics/paper sector, eight to the
electronics/computers sector, five to consumer products, two to food and beverage, and two to
"other." While the study recognizes its own limitations (e.g., respondent bias, small sample size), it
attempts to generate initial information on the current uses of LCA, identify the common themes
and differences, and possibly identify potential areas for improvement as described below.
Which divisions integrate LCAs
In the electronic/computer sector, both the Health, Safety, and Environment (HS&E)
department and the Product Design and Development department are highly involved in integrating
LCAs. Because of the innovative and fast-paced conditions of the field, LCAs need to be
integrated into the design process (for example, as part of an LCD program). The
chemical/plastic/paper sector, on the other hand, typically integrate LCA strictly from within the
HS&E department. Few companies use strategy teams or research and development departments to
develop LCA or LCD programs.
Company motivations
The survey found that primary motivations for integrating LCA are product and process
improvements and cost savings, achieved primarily by improving the efficiency of raw material use
and by reducing emissions. Also motivating companies is a desire to be environmentally proactive.
The report notes that "although altruism appeared to be the feeling that these companies wanted to
get across, it also appeared this motivation was linked to other reasons such as costs, regulatory
considerations, and public image." Finally, meeting customer requirements and ISO standards
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Overview of LCD Practices and Approaches
appear increasingly important, primarily from companies' efforts to remain competitive in
international markets.
Methodologies
While many different methodologies exist throughout industry, the most common is the
Society for Environmental Toxicology and Chemistry (SETAC) model, consisting of four
interrelated components (goal definition and scoping, life-cycle inventory, impact analysis, and
improvement analysis). However, companies frequently streamline the SETAC model in an effort
to save time and costs, and to tailor the model to suit a particular company's individual needs. The
streamlining generally occurs hi three ways: the scope of the LCA is minimized (e.g., by not
including ancillary operations); data are omitted where appropriate (e.g., by excluding the
collection of data on recycling of a product whose constituents, when expended, are not hazardous);
and the boundaries of the LCA are contracted, often eliminating the raw materials acquisition stage.
Companies do not regularly incorporate the impact assessment stage into the LCAs performed,
primarily because this stage is not standardized for consistency. Impact assessments, when
performed, are generally qualitative, and typically include human health risks. Many companies
are taking a "wait-and-see" approach, while others are simply avoiding the stage entirely. Thus,
while most companies use the term LCA to describe their practices, none appear to be conforming
to the SETAC-defined practice.
Uses and benefits
The primary use of LCA is to make a product or process change, particularly by uncovering
previously overlooked areas for improvement. In addition, LCAs are used as a marketing tool, and
as a means to justify the costs for an environmental improvement. According to industry, LCA
benefits their business most by providing a prioritization and decision-making tool, and by
broadening the company's perspective. LCAs also provide a tool for reaching Total Quality
Management (TQM) goals of reducing waste, thereby reducing costs.
Impediments and areas of improvement needed
Survey responses indicate that poor data quality, costly and time-consuming procedures,
and overly subjective impact analyses are the primary impediments, or limitations, of LCA. Many
respondents expressed a distrust in the accuracy and completeness of data available either internally
or through outside sources. In addition, the storage, management, and retrieval of such voluminous
amounts of data are viewed as costly and impractical. Again, the impact analysis stage is a cause of
concern: one respondent notes, "One can spin a roulette wheel and get just as good a number." The
time required to complete an LCA also causes concern, particularly in the fast-paced
electronics/computers sector, where LCA results may be obsolete by the time the LCA is complete.
Most companies agree that LCA would be improved by: better data gathering and access to
databases; streamlining the methodology; and making the impact assessment more quantitative and
standardized.
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Overview of LCD Practices and Approaches
2.2 The European Commission Study2
The European Commission (DG III — Industry) in association with the Environment
Directorate of OECD sponsored a report published in 1996 called European Commission:
Adoption by Industry of Life Cycle Approaches (LCA): Its Implications for Industry
Competitiveness and Trade. The study, designed to assist the Commission in developing its
policies on industrial adoption of LCA, investigates how European industry is using LCA and
whether European companies are influenced by policy instruments based on LCA. The study
uses this research to discuss the utility of European Commission policies and programs on
industrial LCA and the design of future relevant programs.
The report was based on case studies of six industrial sectors and on discussions with
industrialists, policy-makers, and LCA practitioners. The six industry sectors were: aluminum,
chemicals (plastics and surfactants), building materials, personal products, electronic goods, and
automobiles. Approximately 80 interviews were conducted with firms from the EU, Asia, and
the United States.
Drivers of LCA activity
Firms adopt LCA practices for external and internal purposes. Externally, LCA uses
include responding to environmental pressure from regulators and the marketplace. Firms
typically respond to regulatory pressure by using LCA to influence the direction of future
policies, often via sector-wide collaboration. Firms generally respond to market pressure for
environmentally sound goods by using LCA to make or refute competitive claims. If the
competition is inter-sectoral, firms frequently collaborate on LCA; but if the competition is intra-
sectoral, the LCA is company-specific. Whether in response to regulatory or marketplace
pressure, externally-oriented LCAs are generally initiated by top management to mitigate
particular threats.
Some firms use LCA internally to respond to longer-term, less direct market competition.
Internal LCAs often emerge from particular divisions where engineers are using it as a problem-
solving framework for new product design. The information and analysis can facilitate product
development and investment decisions. Internal studies are generally conducted in-house and
range from formal to smaller, less-standardized assessments. LCA can help firms address their
environmental impact both at global and local levels, and it can help satisfy public demand for
similar information (e.g., through eco-labelling schemes).
Study results indicate that the position of a firm in the product chain is the most important
factor in determining its approach to, and use of, LCA. Commodity producers most frequently
take an external, "top-down" approach (to produce collaborative inventory data), while complex
final goods producers most frequently take an internal, "bottom-up" approach (for product
development). Commodity producers focus on the upstream portion of the product chain, while
the complex final goods producers take a much larger segment of the chain into account.
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Overview of LCD Practices and Approaches
Methodology
LCA varies widely in scope and purpose; LCA methodologies therefore differ as well.
Standardization has emerged within the scientific, official, and industrial communities through
SETAC and the International Organization for Standardization (ISO), but this has by no means
eliminated the diversity of methodologies being used. France and Canada have developed
national standards, and Germany is finalizing its own set. None of these country-specific
standards have yet had any real impact in Europe. Sectoral standardization has been the most
useful as it addresses industry-specific concerns. Although firms generally support standard-
setting, they recognize that the standards often have to be tailored to meet the needs of individual
companies.
The study firms used LCA in very different ways due to their different competitive
environments and different locations along the supply chain. All of the firms were
knowledgeable about LCA, most had performed LCAs (either internally or via the use of
contractors), and many had developed in-house expertise. Collaborative LCA activities included
sectoral inventory studies, sectoral methodological projects, vertical cross-sectoral process
studies, and end of life studies. Independent LCA activities included streamlined studies (to
produce quick results) and larger studies (to produce answers over a longer period).
Barriers /Hurdles
The study identified five main barriers to adopting LCA. The first was cost - LCA
requires many hours of data collection and analysis. Small firms frequently consider LCA
prohibitively expensive, and even big firms need to be convinced of its utility before spending
the time and money. Industry sectors that collaborated on data collection and methodology
found the cost less prohibitive.
Second, the lack of a standardized methodology creates problems for interpreting and
comparing study results. Third, access to data is usually limited. Not only does internal data take
time to collect, but external data necessary from firms upstream and downstream along the
supply chain may not be available due to its commercial sensitivity. Firms are typically reluctant
to reveal confidential information.
Fourth, the range of environmental impacts that can be evaluated through LCA
determines how useful LCA is as a business tool. The energy implications of products and
processes have long been evaluated using LCA, but both producers and consumers alike are
seeking additional information (e.g., on human health and ecotoxicity) that can be very
challenging to generate.
Finally, it is virtually impossible for non-experts to interpret and evaluate the competing
claims resulting from LCAs because of their complexity, technical uncertainty inherent in much
of the analysis, and the diversity of methodologies.
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Overview of LCD Practices and Approaches
2.3 N Tellus Interviews
In July and August of 1995, Tellus Institute conducted a series of informal interviews
with four selected companies in differing industry sectors (including Monsanto Co., Chesapeake
Paper Products Co., Safety Kleen, and a fourth company which preferred to remain anonymous)
based on their history of LCA/LCD involvement. The purpose of the discussions was to gain a
qualitative overview of the current state-of-the-art of corporate LCD, as well as some of the
trends and patterns that may exist. While the small sample size limits our ability to generalize
results, the conversations provide a potential basis for comparison, and contain insights on
current LCD practices. The following topics were discussed with each company.
Definition of LCD
While all companies describe their programs as incorporating life-cycle thinking or life-
cycle design, they each define LCD in slightly different ways. In general, the definitions relate to
the EPA and SETAC models, and include life-cycle inventory, impact assessment, and
improvement assessment. However, not every company uses each stage hi their analysis. The
reasons for straying from the EPA and SETAC methods vary. One company is consciously not
using any specific life-cycle methodology, hi part because they feel that the inventory method is
poorly developed. Another company omits the impact analysis stage for projects with "low
hanging fruit" to avoid unnecessary costs and time delays, going straight from inventory to
improvement. A third company encourages a program that expands the designers' traditional focus
to include end-of-life issues, as well as increasing the focus on the customer-use phase.for their
products. Subtle differences between two products or process alternatives, both generating
pollution of different kinds, are not assessed from a life-cycle perspective, but rather from a legal
and regulatory liability and pollution prevention hierarchy standpoint (preferring source reduction).
Program initiation
Our questions focused on when and at what level each company's LCD program was
initiated. Three of the four programs were initiated in the mid-80's to early 90's. One company
initiated its program at least 20 years ago at their facility level, but only started calling it "LCA"
since the early 1990's. Two programs initiated LCD activity within business units, one of these at
the Senior Engineer/Manager level, and one at the Product Development function level.
How LCD is integrated in the company
LCD spread to other levels within each company hi part due to the efforts of one or a few
key individuals championing the possibilities and benefits of LCD as a business management tool.
Efforts included writings, technical papers, seminars, and the formation of committees. One
company introduced outside speakers and experts to contribute to the education process. The
ideology spread as a result of generating curiosity about the importance of LCDs in relation to
market position, business opportunities, and the future of business. Another company formed a
"green team," the genesis of further ideas for internal improvement. At several companies, LCD
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Overview of LCD Practices and Approaches
activity has spread from the business level to the corporate level, incorporating several business
units. A Vice President of Manufacturing noted that while he was the primary lead on LCD work,
for specific projects he pulls together a team of individuals from across a variety of business levels,
depending on the specific project.
Resources devoted to LCD development
None of the companies we talked to have specific budgets for conducting LCD. Typically,
several staff members (approximately 5 people) will devote a relatively small percentage of their
time to LCD projects. At several companies, LCD activities are performed on an as-needed basis;
the amount of time devoted fluctuates depending on the project. One company has a pilot program
dedicating 5 people at 10-15% of their tune for approximately 3 years.
Product/process lines encompassed by program
None of the companies we talked to perform LCDs for a specific product. One uses LCD
for virtually every process line, with an internally-created spreadsheet model that looks at the
effects on pollution from incrementally changing any part of the manufacturing process. Another
uses life cycle concepts as a means to begin to understand and improve internally many of their
manufacturing systems. At a third, LCD is not limited to products or processes; LCAs can be
performed across the corporation as a whole.
Primary reasons for applying LCD methods
Companies apply LCD methods both for internal guidance arid for strategic marketing
advantage. Two companies specifically mentioned that their interest stems from an attempt to
include a "holistic perspective" in their self-analysis; LCD enables them to expand analysis
boundaries. With this perspective, the companies can use the results to guide internal decision-
making. In addition, companies recognize the existing or potential market advantages of including
LCA/LCD thinking in their decision-making processes. For example, one company stated that the
information resulting from performing LCDs was potentially useful to sales and marketing,
particularly when working with government customers. Another mentioned that the company's
future may lie in redefining their business type, changing people's perception of them from a waste
management business to a resource management business. They noted that adopting LCD
techniques provides their customers with an indication of the general direction the business is
taking.
Boundaries
How companies define the boundaries of LCD can vary dramatically, and no one method
has been universally agreed upon. We asked companies to describe the boundaries they established
for evaluating the life cycle impacts of products or processes. Three use a "gate to grave" approach,
in which the upstream side of the life cycle begins with the manufacturing process within the
company "gates," and the downstream side continues through customer use and disposal or
recovery. Companies cite both technical (e.g., lack of reliable upstream data) and monetary (e.g.,
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Overview of LCD Practices and Approaches
the high cost of obtaining or calculating data for upstream activity) constraints as reasons why the
evaluation does not extend back to raw material extraction. One company, however, uses a "cradle-
to-grave" approach, typically including the impacts of raw material extraction, and incorporating
recycling/disposal and post-consumer transportation impacts as well.
Quantitative vs. qualitative assessment
At all the companies we talked to, both quantitative and qualitative information is used for
assessing life-cycle impacts. Assessment methodologies typically are internally developed, and use
a combination of qualitative and quantitative data as indicators for the decision-making process.
For example, one company establishes a unit of measurement (such as pounds of pollutant emitted),
and judges the value of an alternative product or process design based on the potential for reducing
adverse effects on human health, ecological health, and resource depletion. However, there is very
little collection and interpretation of data. Whether the analysis includes qualitative or quantitative
data will depend, in some cases, on the specific project being analyzed. One company noted that
larger, more inclusive studies are typically performed by an outside consultant, and involve a far
greater use of quantitative data. Another company focuses on the elements of a product's life-cycle
that are the primary contributors to pollution and health risk, and then isolates these areas for
quantitative analysis. The primary drivers for decision-making are minimizing risks (particularly
choosing those options that have the most control in minimizing risks) and extent of resource use
(e.g., choosing the option that reduces resource use and saves money).
How LCD results are used
How LCD results are used relates closely to what the primary reasons are for adopting LCD
techniques. Companies mention a variety of internal uses for their results, including influencing
internal decision-making. At one company, LCD results have led to changes in certain processes.
Another company uses the results to influence product design, expanding designers' perspective to
include end-of-life issues. A third also uses LCD to aid internal decision-making, although they
note that developments are evolutionary, not revolutionary. The economics of a project are
significant; if an alternative makes economic sense, and enables the company to reduce their
environmental impact, the alternative will be implemented. At the same time, as one company
pointed out, "Doing the right thing" has a fair amount of clout.
Hurdlesfaced
There is no single, universal hurdle that companies cite as a barrier to further
implementation of LCD methods, but several patterns emerged from our interviews that resemble
the types of hurdles identified in other industry studies. Two companies mentioned problems with
the inventory stage: database consistency, quality, and uniformity remain problem areas.
Companies also cited the lack of consensus on approaches to impact assessment as a hurdle.
Financial hurdles are another theme. One company mentioned that benefits from
performing LCD are not easily measured, and therefore are not easily recognized by upper
management. Another company also indicated the difficulty of defending the cost of LCD,
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Overview of LCD Practices and Approaches
particularly when the practitioners needed to show a return on investment to senior management.
In addition, LCD may indicate that an alternative product or process should be initiated, but
traditional financial indicators do not provide a long enough time horizon to enable the alternative
to be economically viable.
2.4 Conclusions
Results of the Tufts survey, EC study, as well as Tellus discussions with firms, indicate that
there remains a variety of interpretations for defining LCA/LCD. Most companies use the term
LCA, rather than LCD, regardless of conformance with the EPA/SETAC LCA model. Some
companies believe that an LCA can only be conducted once the inventory, impact, and
improvement components have been quantified entirely. Other companies have less strict
definitions, and define LCA as an inventory quantification only, along with a qualitative
improvement process. Companies often refer to such alternative approaches as "using LCA
concepts" or "life-cycle thinking," or conducting "streamlined LCAs."
Data constraints, including lack of data or cost for obtaining data, are the most frequently
cited reasons for streamlining LCAs. Streamlining methods include narrowing the LCA's scope
and boundaries, such as eliminating ancillary operations that the company is responsible for, but
which it considers as minor to its processes or products, or eliminating life-cycle stages that occur
outside the company's "gates."
Achieving product and/or process improvements and cutting production costs are the two
main motivators for undertaking an LCA or applying LCA concepts. European companies also cite
external purposes for undertaking LCAs. These include using LCA as a basis for influencing
environmental policies as well as responding to market pressures for "green" products. In the U.S.,
marketing advantages were cited to a lesser degree, perhaps due to the complexity of
communicating LCA results to consumers. Finally, many companies find LCAs useful for
prioritizing process improvements and for supporting requests for funds for implementing those
improvements.
2.5 Endnotes
1. Breville, M., et at, Life-Cycle Assessment, Trends, Methodologies and Current
Implementation, prepared for U.S. Dept. of Energy, Aug. 5, 1994.
2. Ernst & Young, SPRU, and Atlantic Consulting, European Commission: Adoption by
Industry of Life Cycle Approaches (LCA): Its Implications for Industry Competitiveness and
Trade, prepared for European Commission, Oct. 1996.
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Case Study - IBM
3. CASE STUDY ~ IBM CORPORATION
3.1 Company Profile
IBM Corporation develops, manufactures and sells information technology products and
services worldwide. Products include computers and microelectronic technology, software,
networking, and related services. The company is divided in four geographic units (Asia Pacific,
North America, Europe/Middle East/Africa, and Latin America) and approximately 18 business
units, including both divisions and companies. In 1994, IBM manufacturing, hardware
development and research facilities were located at 35 sites, including 17 in the U.S., 3 in Latin
America, 12 in Europe, 4 in Japan and one in Australia. Company revenues in 1995 totaled $70
billion and employees numbered 220,000, making the company the largest electronics firm in the
world.
3.2 Environmental Management and Policy
At IBM, corporate environmental, health and safety (EHS) policies are issued by the Chief
Executive Officer (CEO). Early policies on safety (1967), environmental protection (1971) and
conservation (1974) provide the underpinnings of the company's EHS programs. The driving force
behind these early policies was IBM's commitment to employees, shareholders, and the
communities hi which the company operates, as well as foresight enabling the company to keep
ahead of environmental legislation.
Over the years, these have been updated and, hi 1990, the Corporate Policy on
Environmental Affairs was issued, incorporating and expanding upon key elements hi the three
earlier policies. In 1995, this integrated policy was updated and issued as IBM's Corporate Policy
on Environmental Affairs, providing additional focus to earlier policies. This statement (see Text
Box 3-1 for the full text) encompasses commitments to:1
• workplace health and safety
• accountability to host communities
• conservation of natural resources
• product stewardship
• environmentally conscious production methods
• energy efficiency and renewables
• environmental technology information sharing
• using company products and services to solve environmental problems
• meeting or exceeding compliance hi all operations, and adhering to stringent,
internally-defined standards where none exist
• rigorous audits and assessments
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Case Study - IBM
Text Box 3-1. IBM's Corporate Policy on Environmental Affairs
IBM is committed to environmental affairs leadership in all of its business activities. IBM has
longstanding corporate policies of providing a safe and healthful workplace, protecting the
environment, and conserving energy and natural resources, which were initiated in 1967, 1971, and
1974, respectively. They have served the environment and our business well over the years and
provide the foundation for the following corporate policy objectives:
Provide a safe and healthful workplace, including avoiding or correcting hazards and ensuring that
personnel are properly trained and have appropriate safety and emergency equipment.
Be an environmentally responsible neighbor in the communities where we operate, and act promptly
and responsibly to correct incidents or conditions that endanger health, safety, or the environment;
report them to authorities promptly, and inform everyone who may be affected by them.
Maintain respect for natural resources by practicing conservation and striving to recycle materials,
purchase recycled materials, and use recyclable packaging and other materials.
Develop, manufacture, and market products that are safe for their intended use, efficient in their use
of energy, protective of the environment, and that can be recycled or disposed of safely.
Use development and manufacturing processes that do not adversely affect the environment,
including developing and improving operations and technologies to minimize waste, prevent air,
water, and other pollution, minimize health and safety risks, and dispose of waste safely and
responsibly.
Ensure the responsible use of energy throughout our business, including conserving energy,
improving energy efficiency, looking for safer energy sources, and giving preference to renewable
over non-renewable energy sources when feasible.
Participate in efforts to improve environmental protection and understanding around the world and
share appropriate pollution prevention technology, knowledge, and methods.
Utilize IBM products, services and expertise around the world to assist in the development of
solutions to environmental problems.
Meet or exceed all applicable government requirements. Where none exist, set and adhere to
stringent standards of our own and continually improve these standards in light of technological
advances and new environmental data.
Conduct rigorous audits and self-assessments of IBM's compliance with this policy, measure
progress of IBM's environmental affairs performance, and report periodically to the Board of
Directors.
Every employee and every contractor on IBM premises is expected to follow the company's policies
and to report any environmental, health, or safety concern. Managers are expected to take prompt
action.
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Case Study - IBM
Environmental responsibility extends to IBM suppliers and hazardous waste vendors.
Although there are no formal written guidelines, every effort is made to ensure that only those
suppliers employing environmentally responsible operations are considered as providers of goods,
processes, or services. In general, the level of evaluation and the criteria used is dependent upon
the service or product being supplied. These efforts may intentionally or unintentionally affect a
supplier's environmental performance. For example, for suppliers manufacturing chemical-
intensive products, IBM may use environmental performance as a criteria for supplier selection,
shielding itself from potential liability. Perhaps the greatest exposure to potential liability stems
from hazardous waste management. Therefore, vendors supplying hazardous waste management
services are subjected to an in-depth review and assessment of qualifications, including a financial
review by IBM's corporate environmental affairs staff.
In special circumstances, (e.g., when a process is patented by IBM), the company consigns
equipment or chemicals to a supplier, also ensuring environmentally responsible conduct from the
supplier. A chip manufacturer using photoresist (a required chemical in chip manufacturing)
developed by IBM will undergo a review of environmental policies and practices, and a site review,
for example. When IBM committed to manufacturing CFC-free products, suppliers were required
to provide parts and subassemblies that were manufactured without using CFCs. While not
explicitly covered by its Corporate Policy, on a project-specific level, IBM is at times able to use its
considerable buying power to influence suppliers' environmental performance by choosing to work
with environmentally responsible suppliers.
Worldwide environmental strategy and performance measurement is overseen by the
corporate environmental affairs staff. This staff provides strategic direction, advice, and counsel,
and covers five areas: Environmentally Conscious Products (ECP), Product Safety, Chemical
Management, Employee Health and Safety, and Environmental Programs (encompassing
environmental engineering activities). Staff located in facilities worldwide implement IBM's
environmental programs.
Extensive communication with staff is necessary for achieving support for environmental
policies and instructions at all levels of the company. IBM uses both a top-down and bottom-up
approach, involving staff from affected divisions of the company when setting or revising policies.
For example, all IBM hardware divisions were involved with drafting a new corporate instruction
on ECP. The draft instruction was then forwarded to the division presidents for formal review and
concurrence. Environmental policies and instructions are then circulated to senior management,
accompanied by a memo from a Vice President reminding staff of their responsibilities and
obligations for overseeing policy compliance. Employees can access all instructions via IBM's on-
line computer system.
IBM's environmental policies and goals, and progress towards meeting those goals, are
described in the company's annual environmental report, Environment — A Progress Report. This
report is circulated to various stakeholders including key shareholders and customers, regulatory
officials, non-governmental environmental organizations, and to many, but not all, employees. A
notice of the report's availability is posted for all employees and its full text is also available on the
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Case Study - IBM
company's Internet site. IBM's marketing departments may also include the report in bid
packages.
The 1994 report, issued October 1995, is IBM's sixth environmental report and uses the
Public Environmental Reporting Initiative (PERI) Guidelines for report contents.' PERI Guidelines
offer report content recommendations in 10 areas including:
i
• Company profile, e.g., size, number of locations, major activities, and the nature of the
company's environmental impacts
• Information on the company's environmental policy(ies)
• Environmental management structure, objectives, targets, and goals
• Guidance on reporting and benchmarking environmental releases
• Resource conservation efforts, e.g., materials, energy, and water conservation
• Environmental risk management programs, e.g., environmental audits, emergency
response programs
• Environmental compliance reporting such as fines and penalties
• Product stewardship commitments including programs, research, and design decisions
affecting the environmental attributes of product production and end-of-life issues
• Employee recognition and reward programs encouraging environmental excellence
• Stakeholder (e.g., universities, industry associations, non-governmental organizations)
involvement in environmental initiatives
* Founded in 1992, PERI is a voluntary private sector effort whose goal is to expand and improve corporate
environmental reporting to the public. PERI affiliates include IBM, Dow Chemical, Amoco, aid other corporations.
Through its Guidelines, PERI aims to identify the types of information needed to provide a balanced perspective on a
company's environmental policies, performance, and practices.
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Case Study — IBM
3.3 Product Stewardship
In 1989 and 1990, the company reassessed its environmental strategies with a view towards
developing new strategies for the 1990s. Convening an international task force, various working
groups were established to examine technology and legislative issues. The group recommended
establishing a program focusing on product environmental improvements as a means of staying
ahead of technology and legislative trends. In November 1990, the Corporation released a policy
letter, followed by a directive in January 1991, encouraging product managers to develop pioducts
which are safe for their intended use and protective of the environment. Toward this end, IBM
established its Integrated Environmental Design program in 1991.
IBM's approach to product stewardship, incorporated in its Integrated Environmental
Design Program, is founded on four goals for product design.2 These goals, based upon
recommendations of the international task force, include:
• To design products that have reusable components and that use materials with
recycled content
To reduce the energy consumption of products
• To design products for easy disassembly
• To make product contents capable of being recycled or reused at the end of product
life
These goals emphasize the use and post-use phases of the product life cycle, consistent with the
company's position as provider of final products to the business and consumer markets.
Stewardship is practiced in several forms over the course of product development. Within
product development business units, product managers are responsible for overseeing new product
development from design through manufacturing. As new or existing products are designed or
redesigned, the responsible business unit performs a Product Environmental Profile (PEP). The
PEP is a checklist of environmental attributes comprising such items as energy consumption, the
disposal requirements of individual parts, battery requirements, coating, hazardous materials used
in manufacture, and qualifications for any type of country-specific environmental certification (e.g.
Germany's Blue Angel or Nordic White Swan).* Ultimate responsibility for ensuring completion
of PEPs rests with the project manager who may receive guidance from a PEP coordinator,
typically an EHS staff person, in each product development business unit. Coordinators consult
* Germany's Blue Angel and Eco Labeling requirements, for example, require no polybrominated biphenyls (PBBs)
or polybrominated biphenyl ethers (PBBEs), no short chain chloride or paraffins, limitation on chlorine content, and
virtual elimination of the use of unfilled/unmodified poly vinyl chloride (PVC) and polyvinylidene chloride (PVDC).
Austria's bidding system requires disclosure of information if product or packaging materials offered contain PVC
and other halogenated plastics or halogenated hydrocarbons, and the reasons for use of such materials. Sweden, as
of 1995, had drafted a regulation prohibiting the use of all halogenated flame retardants. All these are examples of
constraints which Environmentally Conscious Products (ECP) continually brings to the attention of product
designers, materials engineers, and production engineers.
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Case Study — IBM
with relevant technical experts in preparing a PEP including, for example, staff in industrial
hygiene, chemical control/management, environmental engineering, manufacturing technical
services, medical/health, product safety, and legal.
Specifically, a PEP comprises six sections with the following minimum data requirements:3
1. Product Description - a description of the product, including its intended use and
applications
2. Product Operational Data ~ includes energy consumption, and compliance with
IBM Standards for noise, radiation, and chemical emissions
3. Product Composition Data — includes a listing of hazardous parts and assemblies
contained in the product, a listing of reusable parts identified for recovery,- and an
assessment of the product's compliance with IBM standards for banned or restricted
chemicals*
4. Product Consumables Data — includes chemicals used in the operation of the
product, chemicals shipped with the product or recommended for use with the
product, special requirements for storing, packaging, and transporting the product,
and wastes produced during product operation and maintenance
5. Environmentally Conscious Attribute Data -- ECP attributes (described below)
designed into the product and environmental certifications or eco-labels planned for
the product
6. Summary — includes a list of "deviations" from IBM Environmental/Safety
Standards and supporting background information on any Environmental/Health
impacts requiring a risk acceptance. This provides a safety net ensuring that such
deviations only .occur when product or process options do not exist. Acceptance of
such deviations, a rare occurrence, requires approval of upper management.
For components and simple parts, a streamlined PEP is available, requiring the following
information:
• product description, including its application, weight, and energy consumption
• a list of ECP attributes designed into the product
• identification of a product's hazardous characteristics arising during handling, use, or
disposal
• a list of any deviations from IBM Environmental/Safety Standards
* IBM's list of banned or restricted chemicals is based upon world-wide legislation and regulations and is applicable
to IBM's facilities world-wide. This list may extend up the supplier chain as exemplified by IBM's requirement
that parts and subassemblies are to be manufactured without using CFCs.
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Case Study — IBM
• supporting background information on any Environmental/Health impacts requiring a
risk acceptance
Besides manufacturing IBM Products, the company also manufactures products without the
IBM logo for other vendors and purchases products from other vendors to which an IBM logo is
attached. Guidelines instituted in 1995 specify that IBM Product Managers for non-IBM logo
products shipped in "significant numbers"..."should consider" preparing a PEP or, where a supplier
is providing the product, have the relevant vendor do so, although preparing a PEP for such
products is not mandatory.4 While, to date, no PEPs have been completed for non-logo products,
the guideline is too recent to assess future trends.
In its best form, a PEP is prepared early in the design phase and updated and revised as the
design moves toward its final stages. This type of iterative process allows for continuous
improvement of the environmental performance of the product from a manufacture, use, and post-
use perspective. In a six month product development cycle, environmental staff may interact twice
with product managers; in an 18 month cycle, an average of three iterations typically occur.
The volume of PEPs is formidable: several hundred may be prepared each year, including
both original documents and those prepared as revisions to a product move from early
conceptualization through various design and redesign stages. Not surprisingly, a major challenge
to managing the Product Environmental Profiles is information management. Because product
cycles are short and products often are not named until near or at completion of final design,
custody of the design documents often changes hands. Moreover, product profiles historically are
product-based rather than component-based, sometimes obscuring information on the attributes of a
particular component. This, in turn, may lead to future information gaps to support decisions
around optimal recycling or disposal methods for product components. To rectify this situation,
IBM is working toward a component-specific system to improve its product environmental profile
archive systems by establishing databases to track this information. The database will include PEP
information completed for components. Thus, if a component is used in multiple products, the
information required for completing a component PEP will be collected once, and will then be
readily accessible for evaluating the environmental profile of a product utilizing the same
component. This will allow more reliable and easier access to environmental information in future
years.
At IBM, product development is conducted separately from process development and
guided by two separate corporate instructions. The processes used by IBM in manufacturing their
products ~ e.g., IBM semi-conductors and printed circuit cards — are examined under a companion
procedure, Environmental Impact Assessment, under the umbrella of the company's product
stewardship program. Under the framework of IBM's Integrated Environmental Design Program,
Environmental Impact Assessments (EIAs) are prepared for every IBM process. Similar to PEPs,
the goals of EIAs are to ensure early identification of potential adverse environmental effects,
provide a mass balance for materials used, ensure that safer materials and processes have been
considered, and disposal plans provided.
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Case Study - IBM
Environmentally Conscious Products — Operationalizing Product Stewardship
While PEP provides a tool for advancing product stewardship and LCD, integral to
achieving IBM's stewardship goals is the Engineering Center for Environmentally Conscious
Products (ECECP). Created hi 1991 and located at the company's Research Triangle Park (North
Carolina) site, ECECP houses the principal technical support staff who provide guidance to
manufacturing, hardware development, and research sites such that stewardship goals are
embedded in design and manufacturing decisions. ECECP is charged with translating the broad
stewardship goals of developing environmentally conscious products (ECPs) into concrete
materials and process guidance to all business operations. While product environmental
performance is the central function of ECECP, product designers must attend to other, first order
performance goals which cannot be sacrificed in the interests of environmental performance. These
include: performance in terms of delivering the service for which a machine is designed, long term
reliability, user safety, and cost.
Each IBM product division has an ECP "strategy owner," a high level manager responsible
for overseeing the division's overall ECP strategy and explaining the strategy to the division's
product managers. The strategy owner is also charged with setting ECP goals and performance
metrics. At the discretion of the product manager or strategy owner, ECP teams may be assembled
to review products. (These reviews supplement, but are not in lieu of, the requirement of
completing PEPs.) These ad hoc teams may be comprised of staff from product safety,
environmental engineering, industrial hygiene, and materials engineering, with team composition
varying depending upon the expertise required for examining a specific product. While IBM
requires product managers to complete PEPs, no similar requirements are placed upon ECP teams.
This allows freedom for teams to operate in a fashion most suitable to the team and at a level of
effort required for meeting product design needs and company goals. No formal metrics are used
for measuring the effectiveness of ECP teams, although the company believes these teams
effectively carry out ECP goals. At the corporate level, IBM is considering an ECP progress
measurement system that would encompass ECP goal setting and metrics to measure progress
towards those goals. Such a system would indirectly measure the success of the ECP team process.
ECP goals are also executed in the company's Research Division. For example, the
Division's ECP strategy owner has initiated reviews of alternatives to lead solder used in
connecting chips to circuit boards, using supercritical fluids as cleaning solvent alternatives, and
eliminating methylene chloride from manufacturing.
The staff from ECECP support ECP teams affiliated with each IBM product division. Each
ECECP staff member is assigned to multiple product divisions which may also correspond to
multiple production sites. ECECP staff interact with ECP teams on an as-needed basis. Designers
may confer with ECECP staff on materials selection. For example, ECECP staff work with the
company's technical experts to evaluate new battery technologies across environmental criteria,
disseminating their findings to the IBM design community. To further assist materials selection,
guidelines to assist design engineers hi developing ECPs are currently under development by
ECECP. These guidelines will include ECP "attributes" for evaluating products across fifteen
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Case Study — IBM
attribute categories displayed in Table 3-1. These guidelines are informed by recommendations
from the international task force convened in 1990 to develop new environmental strategies and
refined by ECECP.
Communicating ECP goals, progress, and trends is achieved through a quarterly newsletter,
ECP News. Issued by ECECP, the newsletter is circulated to ECP strategy owners and IBM's
design community and includes articles on ECP marketing, activities and accomplishments
achieved by the company's divisions, ECECP, relevant industry activities, and ECP technology
(environmental attributes of battery systems, for example). Supplementing ECP News is IBM's
computer network linking ECP strategy owners and teams to keep staff apprised of recent news.
The network includes an on-line interactive forum for posing questions as well as on-line reference
materials. Information is also disseminated at a yearly symposium attended by ECP strategy
owners, ECP teams, marketing, and government affairs staff.
From the product use standpoint, a computer's major environmental impact arises from
electricity use. Therefore, IBM dedicates resources to developing engineering designs that
minimize electricity requirements. The AS/400 division, for example, has designed its product
for energy efficiency, integrating automatic power-on and power-off programming enabling the
system to tailor its energy use to individual usage patterns. Striving to meet the U.S. EPA's
voluntary Energy Star program goals, is a priority for IBM's personal computer division.*
While IBM does not typically use product environmental attributes in marketing its
products, a brochure marketing the environmental attributes of IBM's AS/400 mid-range
computer is one of IBM's early attempts at using environmental performance in product
marketing.5 In addition to highlighting reductions in energy use trends for this product, the
brochure highlights pollution prevention opportunities implemented for the product's
manufacture, including elimination of CFCs, methyl chloroform, and methylene chloride.
Similar brochures have been developed for storage system products and high-end systems
(mainframes.)
* Energy Star is a voluntary program of U.S. EPA. Qualifying products such as personal computers, monitors, or
printers, for example, must power down to 30 watts or less after a specified time period of inactivity. Other
requirements are also placed on products.
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Case Study - IBM
Table 3-1. ECP Attributes
Attribute
Attribute Guidance
Design for easy disassembly
Design for modularity/expandability
Electromagnetic compatibility
Batteries
Acoustics
Power consumption
Limiting plastic materials for major
mechanical parts
Coding of plastic parts for materials
identification
Use of recycled materials
Recyclability/reutilization of parts
Part finishing
Electromagnetic compatibility (EMC)
protection
Part fastening and joining
Part labeling/marking
Eliminating regulated materials
Facilitate product disassembly through product design,
enabling recycling and reutilization of parts
Design products so that components can be replaced and
upgraded, thereby extending product life
Design monitors to meet IBM standards for electric and
magnetic fields
Identify suitable cadmium- and lead-free batteries
Minimize noise from machines to meet IBM standards
Minimize power consumption to promote energy
conservation
Limit the variety of plastics to aid material identification
and increase volumes for recycling and reuse
Coding, as required by IBM standards, facilitates reuse
and recycling
Recycled materials recovered from unpainted and
unmetallized parts is recommended
Use parts recovered from end of life (EOL) machines,
when possible, and design parts to be reutilized
Integral, molded-in finish, is recommended, eliminating
need for paints and solvents; if paint is used, recommend
powder coatings as having lower environmental burden
than water or solvent based paints
Metallic foil is environmentally preferable to metal based
paints or electroless plating or vacuum deposition of
aluminum to provide EMC protection of parts
Snap fit joining of parts is preferable for fastening and
joining to facilitate material recovery and recycling
Molded-in labels/markings for plastic parts is
recommended to assist recovery and recycling without
contaminating the material with labels
Use of PBBs, PBBEs, leadj cadmium, mercury metal
and/or compounds, and ozone depleting compounds is to
be avoided
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Case Study — IBM
The company is working to improve communications between product and marketing
staff, recently holding a workshop attended by ECP team members, ECP strategy owners and
marketing staff; The focus of the workshop was translating product environmental
improvements into customer benefits, and leveraging these improvements in the marketplace.
Product development teams are also encouraged to furnish environmental performance
information to product marketing teams.
Role of Life-Cycle Design in ECP
Minimum environmental burden is IBM's overarching goal for developing environmentally
conscious products. In 1992, IBM began exploring if and how LCA can be used for determining
relative environmental burdens.* Specifically, IBM's initial objective was to assess the role of
LGA:
1. in selecting materials and processes with minimum environmental burdens at the part
and sUbasssembly levels and
2. as a tool for IBM's engineering community, informing product decisions.6
Because of the complexity of a computer, IBM's approach is to explore LCA's use for
evaluating parts and subassemblies constituting the bulk of a computer's weight (which is 80%
structural parts by weight and includes metals and plastics), and to study only those parts and
subassemblies for which alternative material or process options are available. This approach can
require working with hundreds of IBM's suppliers to obtain data and information on parts and
subassemblies which in part constitute the final product which consumers purchase. ECECP staff
organize meetings with key suppliers, educatihg them about IBM's approach to designing
environmentally conscious products. For example, when working with a polymer supplier to
provide a recyclable polymer, supplier and ECECP staff will meet to address recyclability goals. If
a study is to be conducted on a product provided by the supplier, a team from the supplier firm
meets with ECECP staff for a one day educational seminar to address life-cycle principles and
practices arid issues germane to the supplier.
IBM then hires consultants to work with their principal suppliers. Consultants sign
confidentiality agreements with the suppliers to obtain necessary data, an arrangement which
creates an arm's length relationship between IBM and its supplier community. Currently, LCA is
being used to investigate differences between materials (solvent-based paints versus powder
coatings, for example) but hot differences between suppliers of the same materials or components.
In this fashion^ the company uses LCA as an overall guidance framework for choosing materials
arid technblogieSj leaving detailed process and operating decisions to its supplier community. To
date, IBM has worked with approximately ten suppliers in this fashion. Response from suppliers
has been positive which is largely attributable to IBM's communication with suppliers explaining
ECP's goals and objectives.
* While IBM's application of LCA does not conform with the SETAC/EPA definition of LCA provided in Chapter
1, we use the term "LCA" in this section to conform with IBM's terminology.
3-11
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Case Study - IBM
Two publicly released studies demonstrate IBM's application of LCA methods. Methods
for fabricating sheet metal computer covers were the focus of IBM's first study.7 Conducted
collaboratively with Scientific Certification Systems (SCS) between 1993 and 1994, this study
examined three protecting surface treatment options for IBM's PS/2® Model 95 steel cover —
electrogalvanizing, aluminizing, and galvannealing — and two decorative finish options — powder
coatings and water-based paint Two steel manufacturing technologies, basic oxygen furnace
(BOF) and electric arc furnace (EAF), were also examined, although IBM does not specify these
technologies hi its steel purchasing. Activities excluded from the study's boundaries include
fabricating the cover from sheet steel, assembling the cover with the computer, operating the
computer, and ultimate disposal. The environmental profile of these activities presumably would
not be affected by choice of surface treatment or decorative finish options.
Primary (i.e., from vendors) and secondary (i.e., from literature) life-cycle inventory data
were collected for surface treatment options, decorative finish options, and steel manufacturing
technologies. An "enhanced inventory evaluation" method that classifies and characterizes data
into 20 categories was used hi lieu of a more formal impact assessment method since, hi IBM's
view, a consensus regarding impact assessment methods is currently lacking. These 20 categories,
referred to as critical environmental burdens (CEB), represent data aggregated by similar chemical
properties (e.g., sulfur oxides), environmental impact categories (e.g., ozone depletion), or resource
use (e.g., water, minerals). CEBs are further classified by input categories (resources and energy)
and output categories (air emissions, water emissions, and solid waste).
Aggregating data into CEBs facilitates comparisons of surface protection treatments and
decorative finish options and provides a format that is protective of confidential information from
the vendor's standpoint. For example, Table 3-2 presents life-cycle inventory data aggregated by
CEB categories for powder coatings versus water-based paints for a single computer housing. The
"Environmental Savings" column hi this table depicts resource and environmental gains achieved
by powder coatings. Environmental savings from water, for example, is approximately 6.6 in favor
of powder coatings; mat is, for each single computer housing, 6.6 kg of water use is avoided when
powder coatings versus water-based paints are used. In this inventory, all categories except toxic
water pollutants (-4 mg/computer housing) either favor the powder technology or result in no net
environmental gain. In percentage terms, the most dramatic gains are in energy feedstocks,
hydrocarbon emissions, and oxygen depleters.
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Case Study - IBM
Table 3-2. Paint Finishing Subsystem
Critical Powder Based Water Finish Environmental Environmental
Environmental Savings Costs
Burdens
Resources
Water (kg)
Wood(g)
Metal Ores (g)
Minerals (g)
Energy
Nonrenewable (MJ)
Feedstock (MJ)
Total Energy (MJ)
Air Emissions
Carbon Dioxide (g)
Carbon Monoxide (g)
Sulfur Oxides (g)
Nitrogen Oxides (g)
Hydrocarbons (g)
Particulates (g)
Unclassified (g)
Hazardous (mg)
Water Emissions
Total Solids (g)
Oxygen Depleters (g)
Toxic Pollutants (mg)
Solid Wastes
Unclassified (g)
Hazardous (g)
6
NR
NA
41
6
2
8
0.33
0.25
4
2
3
0.71
O.001
NA
2.8
0.0011
17
41
NA
13
NR
7
81
12.6
8.7
21.3
0.52
0.24
6
4
33
0.72
O.001
NA
3.0
0.0059
13
44
NA
6.6
40
6
7
13
0.19
2
2
29
0.2
0.005
4
3.3
Note: NA signifies data not available at time of report.
Table adapted from Reference 7.
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Case Study - IBM
The authors conclude that electrogalvanizing is environmentally preferable to other surface
treatment options, powder coatings are preferable to water-based paints, and EAF-produced steel is
preferable to BOF steel. IBM has used this study's results hi recommending the use of powder
coatings and electrogalvanizing to its designers, issuing a technical report to its design community
and presenting study results at an annual symposium. Due to data quality concerns in this study,
including data that could not be verified or substantiated, IBM has not mandated these processes.
However, most major products using decorative finishing have subsequently switched to powder
coatings. Study results have not had as significant an effect on surface treatment option selection as
electrogalvanizing is already widely used since this surface treatment is often required for
functional reasons and many components provided by far upstream suppliers (e.g., suppliers to
IBM's suppliers) arrive as electrogalvanized.
IBM continues exploring the use of LCA for material and process choices. A second study
collaboratively conducted with Ecobalance evaluated the trade-offs between disposal options for
PVC monitor housings.8 Three disposal options were examined — incineration, landfilling, and
closed loop recycling — using mostly secondary data. Study boundaries include transporting
monitors to a disassembly site and subsequently transporting the PVC monitor housing to the
landfill or incinerator. For the recycling option, following disassembly, the housing is transported
for grinding and remolding. Production of virgin PVC also enters the study boundaries for
recycling, crediting the option with the avoided environmental burdens of virgin PVC production.
Life-cycle inventory results are presented in Table 3-3. In this study, inventory data are not
aggregated into CEBs, although some data are aggregated into broader pollutant categories (such as
hydrocarbons and hazardous chemical waste). Similar to the prior study, a "less is better" impact
assessment approach is used for ascertaining the environmentally preferable disposal option,
monitor recycling. Recycling is the best end-of-life option in 28 out of 33 inventory categories,
taking second place to incineration in four categories — coal use, nitrates in water effluents,
landfilled PVC, and other solid waste generation. Thirty of the 33 inventory categories contain
negative numbers for recycling, indicating the avoided raw material inputs, environmental releases,
and energy use achieved by avoiding virgin PVC production.
IBM concludes from its experience to date that life-cycle inventory results, coupled with a
less is better approach to impact assessment, can be used for informing product decisions if and
when conclusive data are available. However, basing product improvement decisions solely on
life-cycle inventory data is not prudent due to inherent data uncertainties. The company is therefore
unlikely to use such studies as a single decision tool for formulating product improvement
decisions. Thus, while IBM remains committed to its EGP program, the future of further life-cycle
studies is less certain. Rather than funding an LCA of a product component or material, the
company opted in 1996 to contribute to industry association efforts including an LCA of end-of-life
options and development of a life-cycle design tool.
LCA results must also be weighed amongst other criteria, namely performance, reliability,
safety, and cost. The company may be willing to incur minor cost increases from implementing
environmental improvements, but performance, reliability, and safety criteria cannot be
compromised.
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Case Study - IBM
Table 3-3. Inventory Results
Inputs
Outputs
Energy
Raw Materials
Crude Oil (in ground)
Coal (in ground)
Natural Gas (in ground)
Limestone
NaCl
Water (unspecified use)
Air Emissions
Particulate Matter
CO2
CO
Sox
Nox
NH3
C12
HC1
Hydrocarbons
Other Organics
Water Effluents
BOD5
COD
Chlorides
Dissolved Solids
Suspended Solids
Oil
Sulfates
Nitrates
Total Nitrogen
Sodium Ions
Metals
Solid Waste
Waste (hazardous
chemicals)
Waste (landfilledPVC)
Waste (slags and ash)
Waste (other)
Total Primary Energy
Electricity
Units
kg
kg
kg
kg
kg
liters
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
g
kg
kg
kg
kg
MJ
kWh
for Three End-of-Life Options
Landfilling
0.036
0.0002
0.0001
0.007
0.15
115
0.41
0.16
1.17
0.0007
0.31
0.00
0.0002
0.0006
0.42
0.0002
0.005
2.26
0.00005
42.18
0.0012
Incineration
0.025
-0.67
0.004
1.50
-0.008
33.6
2400
1.07
-13.0
-4.17
0.0143
300
-13.7
-0.02
0.0002
0.0007
0.48
-0.004
0.007
-0.0004
0
1.73
-0.44
19.85
-2.11
Recycling
-1.07
-0.44
-1.28
-0.004
-1.54
-4.23
-8.37
-4,000
-5.35
-27.5
-33.2
0.0011
-0.004
-0.48
-42.6
-1.60
-0.18
-2.46
-89.4
-2.65
-5.36
-0.10
-9.61
0.00004 "
-0.01
-5.14
-0.45
-0.003
0.02
-0.10
-0.14
-103.48
-2.35
Note: Bold numbers indicate best end-of-life option
Table adapted from Reference 8.
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Case Study - IBM
3.4 Observations
IBM's approach to LCD is, above all, a pragmatic one. The company sees the value of
LCA thinking as a way of supporting its corporate commitment to product stewardship. However,
multiple forces — some unique to IBM and some associated with the electronics industry as a whole
~ steer the company away from a highly prescriptive, rigid application of life-cycle techniques to
one best characterized as selective, opportunistic, and flexible.
Above all, the electronics industry is one of continuous and rapid technological change. In
IBM's case, this change is manifested not only in its hardware products, but in the very nature of the
company itself. From an organization built on the design and manufacture of mainframe
computers, the company in recent years has redefined its business as information services,
encompassing both hardware and software products and services. Relying on proven product lines
and proven technologies is a recipe for failure in the electronics business, and IBM's transformation
in the last decade reflects this simple reality.
Rapid technological change, coupled with intense competitiveness, requires both innovation
and agility among product managers. To remain competitive, managers must be given
responsibility and authority to conceive new product ideas, translate these ideas into concrete
designs, and move quickly from design to manufacturing. With an average 18 month time horizon
from concept to market-readiness, IBM (or any electronics firm) can ill afford to impose a highly
prescriptive design protocol and analytical methods which may slow a product cycle. For this
reason, the company has steered away from the "textbook" approach to LCA in favor of a
customized approach which accommodates the relentless drive to innovation and quick product
turnaround characteristic of the electronics industry.
How does IBM's LCD program mirror these conditions? First, product managers retain a
high degree of autonomy in making final design decisions. ECP sets an overall framework for
considering materials choices and works on broader issues of product improvements. However,
ultimate design choices are left to product managers in the belief that only they are in a position to
weigh the performance, reliability, safety, and cost considerations with environmental attributes of
a product. Beyond product-specific flexibility, the separation of longer-term process-related
improvements versus shorter-term materials choices allows the company to pursue its product
stewardship goals without compromising near term business objectives.
Second, the highly horizontal structure of IBM operations presents a continuing challenge
in transferring life-cycle thinking to its thousands of suppliers. Again, the company has opted for a
flexible, experimental approach, seeking to spread the message through non-coercive LCA "trials"
focused on paint finishing systems, fabrication of sheet metal computer covers, and disposal
options for PVC monitor housing. The approach used in these studies is not a cradle-to-grave
approach, but limited to stages, inventory items, and impact categories which direct attention to
major trade-offs in materials and process choices. The outcome of these exercises will inform
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Case Study-ISM
ECECP's subsequent materials and process guidance documents. How the results eventually affect
supplier decisions remains to be seen.
Third, the PEP, the basic instrument for operationalizing environmentally-conscious design
at the product level, is an evolving tool which attempts to 'balance the needs of short product cycles
while meeting the company's commitment to product stewardship. Because design is not a simple,
linear process but one involving multiple iterations and refinements, PEPs number in the hundreds
each year. ECP teams at the site level, who serve as local "stewards", apply qualitative ECP
metrics to design and redesign decisions. The challenge of ECP data management itself is
formidable, even for a computer company the size of IBM. Looking ahead, moving toward more
quantitative ECP metrics has both its benefits and risks. With the right tools, feedback to design
teams on the environmental consequences of materials choices could become virtually
instantaneous. At the same time, for designers to make sense of these consequences — no matter
how quantitative and how accurate — will require translation of disparate impacts into usable
decision rules. This remains a major challenge to IBM, and any other firm, which seeks to
operationalize life-cycle concepts into a working LCD tool.
3.5 Endnotes
1. Louis V. Gerstner, IBM Policy Letter Number 139A, July 14,1995.
2. IBM, ENVIRONMENT: 1994 Progress Report, p. 10.
3. IBM, PEP Content Guidelines, no date
4. PEP Implementation Guidelines, no date.
5. "IBM AS/400 Advanced Series ~ Designing with a Green Pen," IBM, 1994.
6. Inder Wadehra and Anne Brinkley, "Life Cycle Assessment for Information Processing
Equipment," presented to Tellus Institute, April 11,1995.
7. Brinkley, A. et al, "Ecoprofile Studies of Fabrication Methods for IBM Computers:
Sheet Metal Computer Cover," presented at International Symposium on Electronics and
the Environment, May 1994.
8. Brinkley, Anne, et al., "Life-Cycle Inventory of PVC: Disposal Options for a PVC
Monitor Housing," presented at International Symposium on Electronics and the
Environment, May 1995.
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Case Study - Bristol Myers Squibb Company
4. CASE STUDY - BRISTOL-MYERS SQUIBB COMPANY
4.1 Company Profile
Bristol-Myers Squibb Company (BMS) is a worldwide manufacturer of health care and
consumer products with research, development, manufacturing, and distribution sites spanning
thirty-three countries and six continents. In 1995, BMS employed 47,000 people worldwide with
total sales of $ 12 billion.
BMS's four core businesses, each organized as a separate group, include:
1. Pharmaceuticals, including anti-cancer, heart, central nervous system and
dermatology, accounting for 58% of Company sales;
2. Consumer and personal care products, including head and cold remedies (Excedrin
and Bufferin), hair care products (Clairol, Matrix), skin care products (Keri, Alpha
Keri), and deodorants and anti-perspirants (Ban and Mum), accounting for 16% of
Company sales;
3. Medical devices such as artificial limbs and surgical instruments, accounting for
14% of Company sales; and
4. Nutritionals, including infant formulas (Enfamil), accounting for 12% of Company
sales.
4.2 Environmental Management and Policy
An effective environmental management structure, along with a solid corporate
commitment to continuous environmental improvement, is essential to successfully implementing
life-cycle design programs. We begin with an overview of BMS' environmental management
structure and programs to understand how LCD programs are operationalized within the company's
environmental management program. *
A commitment to the environment and worker health and safety appears in the Bristol-
Myers Squibb Pledge, a company mission statement. To its employees, the company
acknowledges its obligation to provide a "clean and safe working environment" and in communities
where its plants and offices are located, "constructive action in support of ... environmental
. progress." A separate Environmental, Health, and Safety Policy appears in Text Box 4-1.
This information is described in further detail in Bristol-Myers Squibb Company's Report on Environmental
Progress, May 1995.
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Case Study — Bristol Myers Squibb Company
Text Box 4-1. BMS Environmental, Health, and Safety Polity
It is the policy of Bristol-Myers Squibb to protect the health, safety, and quality of life of its
employees, customers, and the public, and to conduct all of its activities hi an environmentally
sustainable manner which takes into consideration the integrity of natural systems - i.e., land, water,
air and biodiversity.
Bristol-Myers Squibb will strive to continuously improve its environmental, health, and safety
(EHS) performance by minimizing and, where feasible, eliminating negative impacts associated
with its facilities, activities, and products. Management will ensure that every employee
understands the importance of, and is responsible and accountable for, integrating EHS
considerations into their daily responsibilities.
Bristol-Myers Squibb, its divisions, and business functions will consider the EHS concerns of
stakeholders, and work in an integrated manner to identify, evaluate, and resolve EHS impacts
related to the management of resources and their related byproducts - i.e., selection, use and
exposure.
To the extent feasible, Bristol-Myers Squibb will give preference to suppliers and contractors
whose EHS commitment and practices are consistent with its own, and who have demonstrated
environmentally-responsible products, services, and management.
Bristol-Myers Squibb, its divisions, and business functions will develop and maintain EHS
performance measures, conduct regular performance evaluations, and report findings to internal and
external stakeholders.
Bristol-Myers Squibb will regularly evaluate the internal and external factors driving EHS
concerns, and make appropriate revisions to this policy and related programs.
Compliance with all relevant government requirements and company policies and guidelines will
be the mhiimum acceptable level of performance for the Company's divisions, business functions,
and employees.
BMS believes that communicating environmental goals and policies to staff, as well as
progress towards meeting those goals is important for maintaining an informed and motivated staff.
In 1993, and again in May 1995, BMS released a biennial Report on Environment Progress
describing the company's environmental, health, and safety (EHS) programs and initiatives and
documenting progress towards meeting goals. Both internal and external stakeholders (e.g.,
stockholders, NGOs) are primary audience for this document which is widely circulated amongst
all employees.
Responsibility for transforming environmental policies into action rests with the Vice
President of Environmental Affairs, Occupational Health and Safety. The Vice President is a
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Case Study — Bristol Myers Squibb Company
member of the Corporate Issues Committee headed by the Company President and CEO. This
committee provides a voice for keeping the President/CEO and the Board of Directors apprised of
environmental, health and safety issues faced by the company.
Environmental programs, policies and procedures at BMS are initiated at the corporate
level, but each business unit is responsible for implementing and overseeing its own environmental
program. Business unit programs are evaluated at the corporate level, ensuring that corporate
environmental goals and procedures are implemented. Ari Environmental Health and Safety
Steering Committee, comprising one representative from each business unit within the Company,
provides further overview of EHS issues and progress.
4.3 Life-Cycle Design: A Corporate Environmental Framework
BMS's Environment 2000 program, a company-wide environmental initiative launched in
1991, demonstrates the Company's use of LCD as an overarching theme to its EHS programs.
Program goals include:
• protecting the quality of life of employees and the public;
• minimizing natural resource and environmental demands;
• eliminating accidents and regulatory noncompliance;
• measuring performance;
• communicating openly with stakeholders; and
• creating competitive products for an increasingly environmental-aware marketplace.'
Product life-cycle management is the cornerstone of this program, with the goal of minimizing
environmental impacts of BMS's products by evaluating opportunities for improvement at each
stage of the product's life cycle: design, manufacturing, packaging, distribution, use, and disposal.
To support BMS' product life-cycle management commitment, the Company in 1992
initiated its life-cycle design and redesign program known as Product Life-Cycle (PLC) review.
PLCs are used to "identify and reduce negative EHS impacts at each stage of a product's life, from
design, manufacturing and packaging to distribution, use, and ultimate disposal."2 The life-cycle
stages encompassed by PLCs (and shown in Figure 4-1) include:
• research and product development;
• marketing;
• manufacturing;
• packaging;
• sales, distribution, and transportation;
• consumer use; and
• final disposition.
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Case Study - Bristol Myers Squibb Company
Figure 4-1. Environment 2000 - Product Life Cycle*
Packaging
Manufacturing
Sales,
Distribution, and
Transportation
Marketing
\
Environmental Impacts
Consumer Use
Research and
Product
Development
Final Disposition
* Adapted from Bristol-Myers Squibb Company, Report on Environmental Progress, May 1995
PLCs are initiated by assembling a cross-functional team comprising staff from purchasing,
research and development, marketing, manufacturing, quality assurance, sales, customer
service/distribution, packaging, regulatory affairs, accounting, and EHS. Through a series of team
meetings, staff identify EHS impacts of a product, options for improving the product's EHS profile,
and the costs and benefits of identified improvements.
At the corporate level, BMS has committed to conducting PLC reviews of all its major
product lines by end of year, 1997. Ensuring that this goal is met is the responsibility of each
division. As of May, 1995 BMS had initiated and/or completed PLC assessments for the following
13 product lines.
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Case Study — Bristol Myers Squibb Company
Table 4-1; PLC Reviews Initiated/Completed for BMS Product Lines
Pharmaceutical
Group
Consumer Products
Group
Medical Devices
Group
Nutritional
Group
Excedrin analgesic
Plastibase compound
Pravachol compound
Ban deodorant
Finale hairspray
Herbal Essences shampoo
and conditioner
Infusium shampoo and
conditioner
Keri lotion
Mum deodorant
Natural Instincts hair color
Ultress hair color
Active Life/Colodress
Plus ostomy pouch
Enfamil infant
formula
In addition to Environment 2000, other initiatiYes drive the company's PLC program.
BMS in 1991 endorsed the International Chamber of Commerce (ICQ Business Charter for
Sustainable Development, a set of sixteen principles guiding environmental management of
businesses. The Business Charter calls on industry to "develop and provide products or services
that have no undue environmental impact and are safe in their intended use; that are efficient in
their consumption of energy and natural resources; and that can be recycled, reused or disposed of
safely." The Company believes that the charter is consistent with its strategy for environmental
management and that it provides a useful framework for reporting progress on EHS programs and
initiatives.
Many company programs and initiatives build upon BMS' PLC program. PLC reviews are
an integral component of Capital Appropriation Requests (CARs). All requests for capital projects
require CARs which, in turn, require review by the facility EHS coordinator. The coordinator must
consider permitted environmental releases; potential for spills and explosions; hazardous and
nonhazardous waste generated, stored, and disposed; disposing of raw materials, intermediates, and
final products; employee health and safety risks; and energy consumption. CARs submitted for
new products and/or packaging must be accompanied by an evaluation of its life-cycle impacts.
For existing products, the results of PLC reviews can help substantiate CARs for projects to be
undertaken for those products.
Recognizing that CARs may be biased if the full array of environmental costs and savings
associated with environmental projects are not considered, BMS is striving to more fully capture
these environmental costs and savings. Linking EHS costs to specific products and processes is
one goal — the pharmaceutical division uses an activity-based costing system which may be
adopted for use by other divisions. Developing better methods to account for benefits of
environmental projects is another related goal.
While purchasing and packaging decisions are a component of PLC reviews, separate
purchasing and packaging guidelines have been issued by the company. The Environmental
Guidelines for Package Development direct the business units to minimize environmental impacts
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Case Study — Bristol Myers Squibb Company
of packaging by considering opportunities for source reduction, recyclability, refillability and
reusability, and safe disposal (e.g., no use of heavy metals in packaging). BMS participates in the
Coalition of Northeast Governors (CONEG) Voluntary Packaging Initiative which requires
reporting of packaging reduction efforts, thus enabling the company to track its progress.
Purchasing guidelines direct the company's purchasing staff to consider source reduction,
recycled content, recyclability, reusability, renewable resources, energy efficiency, the supplier's
environmental commitment, and other environmental attributes (e.g., handling and disposal
concerns) in their purchasing decisions. Purchasing staff are also expected to keep suppliers up to
date on BMS's environmental commitments and objectives. Information about the company's PLC
review program and some literature utilized internally by the company have been distributed to
suppliers. The businesses are responsible for evaluating suppliers and giving preference to those
that have EH&S commitments and practices consistent with those of the company.
The company established a best practices transfer database in 1994 to provide BMS
facilities worldwide with information relevant to best design, production, and waste reduction
practices, including information on benefits, costs, implementation time, and annual savings. This
computer-searchable database, also available in hard copy, is accessible to all of the company's
facilities, and assists the PLC review process. Information generated during PLC reviews is placed
in the database after it has been reviewed and verified. This information is contained under the file
heading "Product Life Cycle" so that teams participating in PLC reviews can use the database for
generating ideas. Improvement opportunities identified from PLC reviews are cross referenced in
other database categories as well. The Best Practices database is not intended for tracking
environmental regulations, although another database is being developed for this purpose.
4.4 Operationalizing Life-Cycle Design at Bristol-Myers Squibb Company
Product life cycle review (PLC) is the nomenclature used for the Bristol-Myers Squibb
Company's life-cycle design program. PLC reviews provide a method for systematically
examining EHS impacts of a product, and identifying and evaluating options for improving the
product's EHS profile.
BMS views life-cycle assessment (LCA) methods developed by Society of Environmental
Toxicology and Chemistry (SETAC) and U.S. Environmental Protection Agency (US EPA) as
overly burdensome and providing negligible additional benefits to their existing approach. Life-
cycle inventories, requiring data on material and energy inputs and environmental releases
associated with each life cycle stage, are considered overly data intensive and obtaining such data
from raw material suppliers is often difficult as it is not readily available. In the company's view
their efforts are best spent evaluating and improving processes under their control. Impact
assessment is viewed as difficult, and, at this juncture, an imperfect science. To overcome these
barriers, BMS has developed a semi-quantitative approach that is buttressed by numerical data,
where available, enabling the company to identify improvements at various stages of the life-cycle
of the product. This process recognizes LCA as a valuable conceptual framework for guiding
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Case Study — Bristol Myers Squibb Company
product and process improvement, without being hindered by burdensome data requirements and
lack of consensus regarding impact assessment methods.
Life-cycle stages/business activities encompassed by the PLC review include:
« Research and product development, including design and redesign of products and
processes, implications of raw material use, potential manufacturing impacts, and
ultimately, consumer use and disposal;
» Marketing, including identification of consumer-preferred environmental
characteristics, consumer requirements, and product promotion;
o Manufacturing, a review of energy and material use and waste generations and
emissions arising from product manufacture;
• Packaging; including impacts of packaging materials, filling, and disposal:
» Sales, distribution, and transportation, including product promotion, selling,
transporting and storage;
• Consumer use which includes unpacking, consuming and/or operation; and
• Final disposition, including the product, its packaging, and any residual product
disposed via incineration, landfilling, recycling, or reuse.
PLCs capture manufacturing and final fabrication in a single manufacturing stage and add
two life-cycle stages/business functions - product research and development and marketing.
Product development is the core of life-cycle design; BMS believes including this function allows it
to integrate EHS criteria into the earliest stages of product design and redesign, providing the
greatest opportunities for eliminating or mitigating adverse impacts of products and processes.
All review teams include a marketing representative responsible for the product line being
considered. Marketing serves many roles in PLC reviews. Marketing research identifies what the
consumer wants from a product, including its performance, price, and appearance. Product
environmental attributes must be balanced with these other attributes, ensuring that reliability, cost,
and performance are not comprised. Thus, marketing may place constraints on product
improvements. For example, eliminating the blue dye used in Ban was one improvement option
identified by the Ban PLC team. However, marketing was concerned that eliminating the color
would be perceived by the product's loyal consumers as a significant change. As a result, the dye
was not eliminated, but an additional product in the Ban line, Ban Clear, was introduced.
Because a product's environmental attributes can give it a marketing edge, or provide a new
angle for marketing a product, marketing staff provide insights to product improvement. Marketing
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Case Study — Bristol Myers Squibb Company
staff also consider the environmental impacts of their activities, such as using recyclable materials
or recycled content in advertising campaigns or point of purchase advertising.
Boundaries for PLCs are shown in Figure 4-2. BMS does not consider the environmental
impacts arising from raw material acquisition (e.g., mining impacts). Instead, it bounds PLCs
beginning with materials as received by BMS from its suppliers. For example, opportunities for
reducing packaging waste resulting from raw material use (such as buying raw materials in bulk)
are evaluated, while impacts incurred by BMS' suppliers during raw material manufacturing are
excluded. BMS has been educating their suppliers about its PLC program, encouraging, but not
requiring, them to undertake similar reviews, and providing them with literature utilized internally.
Thus, BMS' PLC program encompasses "gate to grave" rather than "cradle to grave" life-cycle
stages.
Figure 4-2. PLC Boundaries
BMS1 approach integrates life-cycle concepts with traditional pollution prevention (P2)
opportunities assessment by examining P2 opportunities in each life-cycle stage of the product and
its processes. However, it goes beyond traditional corporate P2 programs by examining life-cycle
stages beyond BMS1 "gates," such as product use and disposal. Like P2, the PLC program looks
beyond compliance and end-of-pipe treatment, examining opportunities for reducing energy and
raw material use as well as reducing pollutants at their source. For example, reducing worker
exposure to a hazardous chemical (by eliminating it, substituting a less hazardous or non-hazardous
alternative, or improving housekeeping to reduce chemical use and exposure) is given priority over
controls for minimizing exposures.
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Case Study — Bristol Myers Squibb Company
Because life-cycle stages cross staff
functions within the company, PLC reviews begin
by assembling a team comprising staff from
multiple business functions. Thus, PLC teams may
include staff from purchasing, research and
development, marketing, manufacturing, packaging,
and EHS. Assembling a cross functional team
brings various areas of expertise to the PLC, as well
as ensuring that other product and process design
constraints — e.g., cost, performance, and reliability
~ are not ignored of compromised.
Over the course of several meetings, the
team is educated about the Company's
environmental, health and safety goals, and the role
of PLC reviews hi meeting those goals. Staff return
to their respective divisions arid functions to
examine environmental and health and safety issues
germane to their business function, and examine
opportunities for reducing the identified impacts. Through subsequent meetings, team members
provide their findings and seek feedback from their colleagues. Based upon several criteria (e.g.,
ease of implementability, costs and savings, and avoided impacts), the team then collectively
decides which improvements are to be recommended to management.
The Keri PLC team, for
example, consisted of staff from
Bristol-Myers Products and Westwood
Squibb Pharmaceutical. While Bristol-
Myers Products distributes Keri
Lotion, Westwood Squibb acts as a
contract manufacturer, manufacturing
Keri Lotion for Bristol-Myers
Products. This PLC was the first to
cross divisions within Bristol-Myers
Squibb Company. PLC team
representatives included staff from
purchasing^ product development,
quality assurance, marketing and
distribution, clinical supply,
manufacturing, and EHS.
4.5 The PLC Process
PLC reviews comprise eight steps typically spanning four to six months and four to six
meetings Of the project team. BMS hires ari outside consultant whose responsibilities include
facilitating the PLC team meetings; providing meeting minutes, and assembling a final report. This
final report includes an overview of each step in the PLC review process and provides the list of
product/process improvements recommended by the project team to management. Following is the
typical sequence of events (see Figure 4-3).
Step 1 - Assembling PLC Team
The Vice President of Environmental Affairs, Occupational Health and Safety initiates a
PLC review by presenting an overview of the Company's Environment 2000 and PLC programs to
upper level managers in each business function (e.g., research and product development, marketing,
manufacturing, EHS). Selecting PLC team members to represent each business function is the
responsibility of these managers. Staff are chosen for their expertise as well as their enthusiasm for
the process. A PLC coordinator is also selected to facilitate the review process.
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Case Study — Bristol Myers Squibb Company
Step 2 - Educating PLC Team
Introducing team members to the principles of Environment 2000, and how PLC review
can help achieve those goals is a primary objective of the first meeting. Drawing from examples of
previous PLC reviews, team members are provided an overview to the PLC approach used by
BMS, and the benefits realized from prior PLC reviews (e.g., reducing environmental releases,
increasing productivity, and reducing costs).
While the company has developed a generic framework for PLC reviews, tailoring the
framework to the varying needs of BMS1 different business units is encouraged. With different
business units operating under differing regulatory frameworks, changes in product ingredients or
process changes may be constrained. Thus, it may make sense to set aside certain life-cycle stages,
focusing instead on those stages where improvement opportunities are most promising and
numerous. For example, FDA approval of drug ingredients presents a major hurdle in
reformulation of regulated pharmaceuticals, thereby constraining product reformulation options.
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Case Study - Bristol Myers Squibb Company
Figure 4-3. PLC Process
Step
1
Assemble PLC
team
Educate
team
Select
product
Define scope
and boundaries
Assign
responsibilities
Identify and
evaluate EHS
impacts and
improvements
Prioritize
improvements
<
Produce
recommendations
to management
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Case Study — Bristol Myers Squibb Company
Text Box 4-2. Keri Product Line
In conducting this step, the Keri team first identified the
product line:
• Keri Original
• Keri Silky Smooth
• Keri Fragrance Free
• Keri Green
• KeriUV
• Keri Original 77
As the latter three products are only marketed in Canada,
the team narrowed its focus to the first three products.
After discussing the manufacturing and sales volumes,
trends, and formulations, the team selected both Keri
Silky Smooth and Keri Fragrance Free forthePLC. The
principle drivers to this decision were anticipated sales
trends and product formulation.
Step 3 - Selecting the Product
Because numerous
products may exist under a brand
name (e.g., Keri Original, Keri
Silky Smooth, etc.), and
conducting a PLC review for
each is too time consuming, the
team narrows the focus of the
PLC at the first meeting by
selecting a product or group of
similar products under the brand
name. Criteria for selecting a
product may include
manufacturing volume, sales
volume and trends, and
formulation complexity and
ingredients in each. Other
criteria also may be used. For
example, the team may decide to
use the PLC review as an
opportunity to examine methods
for minimizing known or
suspected hazards that arise during a product's manufacture and/or use. Alternatively, if product
and/or process changes are already underway for a specific product, the team may decide to focus
on more mature products (i.e., older products that have already achieved their maximum market
share) in the brand line which may offer greater opportunities for improvement.
The agreed upon set of criteria (which may vary between PLCs) are used to evaluate each
product and help reach consensus on the product to be reviewed by the PLC. Consensus building is
an important step in keeping staff engaged in the process; all must agree with the group's decision
about which product to review. An outside facilitator assists this process as a neutral party to the
decision.
The team has much latitude in applying the criteria and indeed, different groups may apply
them differently. For example, the team may decide to look at a product with decreasing market
share since there is more pressure to achieve cost savings by reducing environmental costs or
reshaping the product to appeal to the green consumer market. Conversely, the team may decide
that it is more important to review a product with increasing market share, thereby reducing its
environmental costs and making it more cost-competitive.
Step 4 - Defining PLC Scope and Boundaries
Goal definition and scoping - identifying the PLC's purpose and determining its boundaries
(the first step in LCA) - also occurs in the first meeting. As shown hi Figure 4-2, the boundaries
for the PLC may be characterized as "gate to grave," beginning with materials received by BMS
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Case Study T- Bristol Myers Squibb Contpaay
from its suppliers, and extending to product use and ultimate disposal. Impacts* arising from
receipt of raw materials (e.g., packaging, mode of transport)* as well as the impacts of the raw
materials themselves, are included in the PLC. However, impacts linked to extraction and
manufacture of raw materials and inputs into BMS products are outside the PLC boundaries.
Material Safety Data Sheets (MSDSs) provide information on the environmental attributes of raw
materials used by Bristol-Myers Squibb. While the company does not require LCA information or
data from its suppliers, it has been educating their suppliers about its PLC program and
encouraging them to undertake a similar review,
Step 5 - Assigning Responsibilities to Team Members
Team members receive BMS1 PLC support document3 at the first meeting. This document
explains the rationale for undertaking a PLC review and provides an overview of the PLC review
process. Organized by stages of the product life-cycle, the document outlines numerous
environmental, health and safety issues which may be relevant to various stages of a product
These stages include:
• product development;
• marketing;
• manufacturing;
packaging;
• sales, distribution, and transportation;
• consumer use; and
• final disposition.
Background information is provided for each issue, further explaining its relevancy and
identifying potential sources of information for addressing pertinent questions related to each EHS
issue. For example, one EHS issue facing manufacturing is the use of hazardous chemicals in the
manufacturing stage. As shown in Table 4-2, the support document lists sources of infqrmatiqn for
evaluating whether chemicals are a regulated hazardous chemicals. Pollution prevention techniques
for minimizing or eliminating the identified chemiqals are suggested in the document (e.g.,
chemical substitution), along with a framework for evaluating potential improvements to ensure
that alternatives are superior to current materials, that is, they achieve net gains in environmental,
health, and safety.
* BMS uses the term "impact" to signify potential adverse environmental effects, although they dp not
conduct a formal impact assessment as defined by SETAC/EPA LCA methods.
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Case Study — Bristol Myers Squibb Company
Table 4-2. Evaluating an Illustrative EHS Impact for Manufacturing
Does the production
process, including
maintenance activities, use
materials containing a
known hazard or threat to
human health or materials
regulated by a government
agency?
Several key chemical lists can be evaluated for determining the
regulatory applicability of the manufacturing process:
• ACGIH Carcinogens
• NIOSH Carcinogens
• California Proposition 65 Carcinogens and Reproductive Toxins
• Section 302 Extremely Hazardous Substances (40 CFR 355)
• Section 313 Toxic Chemicals (40 CFR 372)
• CERCLA Hazardous Substances (40 CFR 302.4)
• CWA Hazardous Substance List (40 CFR 116.4)
• OSHA Specifically Regulated Substances (29 CFR 1910.1001-
1101
• OSHA List of Highly Hazardous Chemicals, Toxics, and
Reactives (29 CFR 1910.119)
• Clean Air Act Hazardous Air Pollutants (40 CFR 61)
• Hazardous Substances (40 CFR 300)
• TCLP Constituents (40 CFR 261,265,268,271, and 302)
• Storm Water Pollutants (40 CFR 122)
• Process Hazardous Chemical List
• National Toxicology Program Annual Report on Carcinogens
• I ARC Human Carcinogens (Groups 1, ,2 A, 2B)
Source: Bristol-Myers Squibb Company, Product Life Cycle Support Document, Dec. 1994
Similarly, Table 4-3 illustrates the" support document's approach to evaluating
environmental impacts associated with product packaging.
Table 4-3. Evaluating an Illustrative EHS Impact for Packaging
What is the packaging
system for the product
being assessed, and what
are the associated
environmental impacts on
air, water, land, etc.?
In considering the environmental impacts of the packaging system, it is
important to keep in mind the following issues:
• Identify environmental burdens of energy use, and
infrastructure/capital equipment required for:
- exploration and extraction
- cultivation, harvest, and replenishment
- handling and transportation
- storage and processing
• Minimize environmental burdens by considering:
- toxics and source reduction/substitution
- recyclability, degradability, disposability
- use of non-renewable resources
- environmental, health, and safety risks
• Consider legal implications (e.g., disposal, disclosure, taxes)
Source: Bristol-Myers Squibb Company, Product Life Cycle Support Document, Dec. 1994
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Case Study — Bristol Myers Squibb Company
Team members are assigned responsibility for a particular life-cycle stage according to their
expertise. Using the support document and prior PLCs as a guide, team members are directed to
review BMS's PLC methodology.
Step 6 - Identifying and Evaluating EHS Impacts and Improvement Opportunities
PLC participants identify and evaluate EHS impacts and potential product and process
improvements using an iterative process. Between the first and second meeting, team members
review the support document to assist them in identifying EHS issues relevant to their segment of
the product life-cycle, and identify potential opportunities for improving the product's EHS profile.
Seeking assistance from other team members, as well as outside staff, is encouraged, recognizing
that PLC expertise is multi-functional.
Estimates of material and energy savings, avoided pollution, and costs and savings incurred
by each opportunity are included in this review. For example, if an R&D team member
recommends a formula change, such as reducing the amount of an ingredient, each staff function
would evaluate the change based upon their expertise. The representative from manufacturing
would estimate the amount of material savings while purchasing would translate this into a cost
savings. If the new formula required new equipment, manufacturing and engineering personnel
would evaluate equipment costs, installation and labor costs, differences in energy use, etc.
Improvement opportunities are aimed at eliminating, not transferring, emissions to another
media. The team considers not only the quantity of emissions, but also relative toxicity, since a
process modification may leave an emission volume unchanged although a less hazardous material
is emitted.
At the second meeting, team members present
their findings to the group. Ensuing discussions provide
cross-fertilization of ideas and feedback, generating new
ideas and identifying additional information and data.
Between the second and third meeting, the team
completes the analysis of impacts and improvement
opportunities, using this information at the next meeting
to prioritize improvement opportunities.
Step 7 - Prioritizing Improvement Opportunities
Previously identified improvement opportunities are revisited at the third meeting, with an
eye towards selecting the most promising options. These are the options that will be recommended
for implementation to management.
Forty-five potential improvements
were identified by the Keri PLC
team at the second meeting. These
improvements include reformula-
tions, packaging changes, process
changes, and identifying and
reducing product returns which
must then be disposed.
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Case Study -? Bristol Myers Squibb Company
Each option is evaluated using three criteria:
1. ease or difficulty of implementing;
2. costs for implementing; and
3. benefits of implementing the option (e.g., reduced costs, increased productivity).
These criteria inform the final determination of the priority each option should receive (e.g., high,
medium, or low).
Time and resources required for implementing an improvement are important drivers for
determining ease or difficulty for implementing an option. This criterion considers laboratory
testing, new clinical testing, regulatory filings, and market testing required when changes are made
to a product and/or process. Physical space limitations are also weighed for improvements
requiring floor space in the manufacturing line or inventory storage. Technological feasibility —
whether an option is technically proven ~ is another component of the criterion.
Anticipated costs (criterion 2) and benefits (criterion 3) of an improvement option include
one-time capital costs and annual operating costs, including those that may arise from production
effects (e.g., decreased cycle time, increased performance); changes in energy and raw material
requirements; and changes in amounts and types of releases to the environment (including work
environment).
Table 4-4 provides illustrative cost and savings categories that may be incurred from
reformulating Keri Lotion, i.e., decreasing or eliminating an ingredient. On the cost side are items
such as consumer testing for acceptability of the reformulated product, stability testing to determine
affect on shelf life, clinical testing, and the cost of generating new art work for the product label.
Table 4-4: Potential Costs and Benefits of Product Reformulation
Costs
Benefits
Consumer testing
Stability testing
Clinical testing
Changing product label
Raw material savings
Decreased cycle tune
Reduced utility costs
Reduced waste disposal costs
Reduced pollution control costs
Reduced manifesting, recordkeeping, and reporting costs
Reduced worker training costs
Reduced insurance costs
Reduced transportation and storage costs
On the savings side, raw material savings are a prominent benefit of reformulating the
product. Other potential savings include decreased batch manufacturing cycle time (e.g., decreased
process cleaning time) and reduced waste disposal costs by eliminating disposal of the ingredient's
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Case Study — Bristol Myers Squibb Company
packaging. If the eliminated ingredient required refrigeration or heating, utility costs would be
reduced.
Eliminating or reducing the use of an ingredient may have positive effects on pollution
control and waste management costs. Dust collection systems required for ingredients generating
nuisance dusts and medical surveillance programs required for occupationally hazardous
ingredients may be eliminated. Staff time required for tracking, reporting, and manifesting
hazardous materials may be reduced. Pollution control costs may be reduced by eliminating
ingredients exerting biological oxygen demand (BOD) on aqueous waste streams (e.g., from
process cleaning) or ingredients that contribute to air emissions. Insurance costs associated with
use of flammable and/or hazardous materials also may decrease.
Costs and benefits for implementing an improvement may be quantitative or qualitative,
and may or may not be monetized. Monetizing costs and benefits, while at tunes difficult, has the
advantage of converting the impacts of an improvement option into a standard, easily
understandable metric for managers -- dollars and cents. At this stage of the PLC review, direct
costs and savings are often monetized, while indirect and less tangible costs are not. For example,
the product development team member noted that cost savings attributable to reformulating Keri
Lotion include reduced raw material costs, reduced energy needs, and reduced process time. Only
the easily quantifiable raw material cost savings were monetized, whereas the decrease in process
time was estimated, but not monetized. Energy savings were neither quantified nor monetized. For
projects requiring substantial capital expenditures subject to standard appropriations request, these
initial estimates are refined and expanded to obtain a more comprehensive financial picture of a
proposed improvement
Once each improvement option is evaluated using the three criteria, its priority is ranked as
either high, medium, or low. An improvement option easily implemented, not incurring capital
costs, with numerous benefits would be a "high" priority option. However, options that are difficult
to implement may still be deemed a priority if the benefits outweigh the costs. Ranking an
improvement's priority is also based upon whether profitability - payback, internal rate of return, or
other indicator - is likely to occur in the short or long term.
Step 8 - Produce Recommendations to Management
High priority improvement options identified in Step 7 are recommended by the team for
approval by management. The final report generated from the PLC review identifies each option,
presents estimates of monetary costs and savings, and qualitatively describes EHS benefits (such as
reduced worker exposures, less hazardous waste generated). An appointed team member presents
and reviews the report with management to obtain approval for the priority improvements.
PLC reports are sporadically reviewed to determine whether business and/or market
changes warrant reprioritizmg the lower priority improvements. For example, while eliminating
the blue dye in Ban was an improvement option identified by the Ban PLC team, the option
received low priority due to Marketing's concern that eliminating the color would be adversely
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Case Study — Bristol Myers Squibb Company
perceived by the product's loyal consumers. Rather than eliminating the dye, an additional product
in the Ban line, Ban Clear, was subsequently introduced.
4.6 Observations
Recognizing LCD as a valuable conceptual framework for identifying and evaluating
process and product improvements, BMS has developed a semi-quantitative approach for
identifying improvements. This approach, known as product life-cycle review, systematically
reviews those stages of the life-cycle over which BMS is wholly or substantially responsible, but
extends beyond the company's gates by including product use and disposal. By so doing, the BMS
process has some elements of product stewardship wherein producers consider, if not take full
responsibility for, use and disposal of the products they manufacture.
BMS recognizes many benefits to its PLC program and approach. PLC reviews provide
opportunities for reducing EHS impacts of the company's products and processes. Reducing these
impacts translates into cost savings for the company, helping to create cost- and environmentally-
competitive products. BMS has completed 18 PLC reviews and identified improvement
opportunities with potential savings of $2.8 million.
PLC reviews improve the reception of Environmental Health and Safety staff by product
and operations managers. As noted by one EHS staff member, when EHS staff functions were
primarily compliance-driven, staff were negatively viewed as environmental "police." However,
with the company realizing cost savings as a result of PLC reviews, the role of EHS has been
boosted and PLC has evolved into a contributor to broader objectives of product quality, customer
satisfaction, and market competitiveness.
The cross-functional project teams are credited with bringing together a diverse staff
working together to assess and improve EHS performance. The varying areas of expertise provided
by team members allows cross-fertilization of ideas. An objective of BMS's Environment 2000
initiative is to make staff realize that environmental protection is the responsibility of each and
every employee. Cross-functional project teams help achieve this goal, placing responsibility for
improving environmental performance beyond EHS staff and squarely in the mainstream of all
traditional business functions.
The BMS PLC process reveals several challenges and opportunities a company faces when
implementing a PLC review program. First, identifying a team leader to take ownership for the
process is important. Due to organizational and staff function changes, leadership changed over the
course of the Keri PLC review. As a result, the process at times was delayed and an anticipated
four to six month process required ten months.
Second, because implementing changes to a successful product can be difficult, PLC
reviews provide a vehicle for affecting product improvements that may otherwise be neglected. For
example, changing product ingredients may not be a business priority if that product has a large
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Case Study — Bristol Myers Squibb Company
and/or increasing market share. However, under the umbrella of a PLC review, management may
be more willing to examine such changes, especially if they result in lower EHS impacts and costs.
Thus, team members should avoid a priori decisions, carefully examining each and every product
and process improvement. Since it can be difficult convincing company stakeholders to leave their
hats at the door (e.g., marketing staff may be very reluctant to alter a successful product), explicitly
stating this goal in the first meeting helps to better define expectations for the team.
Third, product improvements may be unfairly rejected on economic grounds if the broad
array of costs and savings resulting from an improvement are not assessed. Thus, it is important to
consider the comprehensive inventory of costs and savings, going beyond direct conventional costs
(e.g., labor, equipment, and raw materials) to include indirect costs (e.g., compliance costs,
insurance) and probabilistic costs (e.g. liability costs incurred by spills). Raw material cost savings
by themselves may be significant enough to warrant eliminating an ingredient from a product. In
such cases, expending further staff time to quantify other benefits may not be necessary.
Finally, further quantifying potential costs and savings may be warranted, however, if the
improvement option appears unprofitable or has a borderline profitability (as indicated by a long
payback period, or a low internal rate of return, for example). Other avoided costs may be the
driver of an improvement option's benefits. Eliminating the use of a hazardous chemical, for
example, may eliminate numerous compliance costs such as worker training and medical
surveillance; hazardous waste tracking, manifesting, and hauling; and permitting. By not
quantifying these benefits, an opportunity for improving a product may be missed. The challenge is
striking a balance between an initial economic screening using selected cost items and a more
comprehensive analysis which may identify critical but neglected cost items. PLC reviews may
thus benefit by including staff with expertise in capital budgeting and environmental cost
accounting. While PLC reviews usually include an accounting staff person, such representation
was lacking for the Keri PLC.
4.7 Endnotes
1. Bristol-Myers Squibb Company, 1995. Report on Environmental Progress, May.
2. Ibid.
3. Bristol-Myers Squibb Company, 1994. Product Life Cycle Support Document (U.S.
Version), Dec.
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Case Study -- Armstrong World Industries
5. CASE STUDY — ARMSTRONG WORLD INDUSTRIES
5*1 Company Profile
Armstrong World Industries, Inc. is a manufacturer arid marketer of interior furnishings and
industry products that include:
• floor coverings, including flooring and adhesives;
• building products, including acoustical ceiling and wall systems, and grid suspension systems;
and
• industry products such as insulation for industrial equipment, gaskets, and specialty rubber
parts.
The company employs 10,000 people at its 49 plants worldwide, including the United
States, Canada, Mexico, England, France, Germany, Italy, Spain, Switzerland, Netherlands, India,
Australia, and China.
In recent years, Armstrong has undergone numerous changes, selling its furniture subsidiary
(Thomasville furniture) and combining its ceramic tile operations with Dai-Tile International, lii
addition to changes hi its product lines, the company has reorganized its management structure with
the goal of moving additional corporate-level environmental arid R&D programs down to the
business units.
These recent changes affected this case study in several ways. Initially, product stewardship
was the responsibility of the Product Environmental Performance program, a segment of the
company's Environmental, Health and Safety (EH&S) group. This corporate-level program was
eliminated in 1996. Some of this group's functions have been transferred to Armstrong's business
units, but other efforts, at least in the interim, have been discontinued. These organizational
changes provided an Unexpected opportunity to document how LCD fares in the face 6f corporate
restructuring that has characterized large U.S. firms throughout the 1990's.
5.2 Environmental Management and Policy
Until 1994, environmental management responsibilities at Armstrong were divided across
two groups: Safety and Health, overseeing occupational safety and health compliance, arid
Environmental Affairs, Overseeing environmental compliance and providing periodic
environmental assessments of Armstrong's production facilities. Because of a growing overlap in
regulatory responsibilities between these groups, they were combined in 1994, forming the
Environmental Health arid Safety (EH&S) group.
In late 1996, the company implemented a second wave of EH&S restructuring to better
integrate environmental management systems into its business units. Previously, day-to-day
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Case Study — Armstrong World Industries
management of Armstrong's environmental policies and initiatives chiefly rested with the EH&S
group, a corporate-level group. However, environmental initiatives, including the company's
Product Environmental Performance program, were not sufficiently percolating down to
Armstrong's business units, the level at which decisions are made about what a product contains
and how it will be manufactured. To bridge this gap, Armstrong established environmental steering
committees within each of its four business units.
Text Box 5-1. Corporate Policy on the Environment
Armstrong recognizes the importance of protecting the environment and using resources
intelligently. We are committed to exercising environmental stewardship in our dealings with
customers, employees, government, and community neighbors and in meeting an obligation to
future generations.
Our overall goal is to make sure that our activities as a corporation are in harmony with the
natural world around us.
Armstrong's policy on the environment embodies these aims:
1. To exercise care in the selection, use and conservation of energy and raw materials,
especially natural resources, to assure that we are not wasting such resources.
2. To make use of research and production technology to provide for the protection of our
environment in workplaces and communities and to seek to reduce risk to the earth, its waters
and atmosphere.
3. To be prepared for emergencies and to act promptly and responsibly to protect people and the
environment should accidents or incidents occur.
4. To make only products that are environmentally compatible in their intended use by our
customers and consumers, and to accompany them with adequate information for their
intended use, maintenance and disposal.
5. To prevent pollution at the source, to reduce waste, to make use of recycling in all our
operations and to take care that we dispose of unneeded materials in an environmentally
appropriate manner.
Source: Environment, Health & Safety Progress Report, 1995
Armstrong's environmental policies are jointly established by the President's Office and the
Board of Directors. The company's Corporate Policy on the Environment (Text Box 5-1) includes
commitments to manufacturing environmentally compatible products using production methods
that protect the workplace and community environments. The company's Environmental Health
and Safety Review Committee, chaired by Armstrong's Executive Vice-President, is charged with
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Case Study — Armstrong World Industries
overall management of these policies. Other committee members include the Senior Vice-President
of Human Resources; Vice President of Public Affairs; Senior environmental attorney; Director of
Environment, Safety, and Security; and the Manager of Safety, Health, and Hygiene.
The Environmental Health & Safety Coordinating Committee, comprising the Vice
President of Manufacturing from each division, a representative from Human Resources and the
legal department, and the Director of Environment, Safety, and Security, provides a link to the
manufacturing divisions. This committee is responsible for implementing new environmental
programs.
It is the responsibility of each business unit's Environmental Steering Committee to
establish the environmental strategy of the business unit and to monitor the environmental activities
of the unit to ensure implementation. To provide continuity and a bridge between the company and
business units, the corporate level Director of Environment, Safety, and Security and the Manager
of Safety, Health, and Hygiene (whose primary responsibility is industrial hygiene), are members of
each Steering Committee. Other committee members include personnel from product development
teams, legal department, and the Vice President of Manufacturing for the business unit.
Plant managers are responsible for environmental compliance at their facilities. Three basic
requirements must be fulfilled by plant managers: (1) completing a plant-level pollution inventory
quantifying non-product outputs; (2) using inventory results, P2 plans must be filed quarterly; and
(3) a multi-media third party audit must be completed every three years.
Three times a year (since January, 1991), Armstrong produces an environmental newsletter,
Environmental Releases., distributed to employees around the world. A series of articles have
presented an introduction to LCA and examples of how the ideas are being put to use in the
company. The company's Annual Report provides a list of yearly environmental accomplishments;
a separate environmental report, first produced in 1995 and currently being updated, further
describes the company's environmental initiatives and progress. This report will be updated
biennially.
Additionally, Armstrong's business units recently began issuing separate brochures
reporting environmental efforts germane to each unit. Armstrong's Building Products Operations
brochure describes the business' activities conforming with the P2 hierarchy (reduce, reuse,
recycle), environmental life-cycle "information" for the company's acoustical mineral fiber ceiling
panels (an example is provided in Figure 5-2), and an environmental index of selected products.
For each product, the index provides the recycled content, a description of the product's durability
(e.g., cleanable, paintable, warranty lifetime), and the light reflectance value indicative of energy
use. A comparable brochure is being prepared by the company's flooring unit. These brochures
are distributed to Armstrong's customers — specifiers (e.g., architects) and end users.
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Case Study — Armstrong World Industries
5.3 Product Environmental Performance
In 1990, Armstrong created its Product Environmental Performance program as a corporate-
wide initiative. Emerging product environmental issues, including indoor air quality (IAQ), were
the primary driver of this initiative. Product Environmental Performance expanded environmental
issues beyond plant compliance to IAQ issues arising from use of Armstrong's products and
product stewardship initiatives for continuous environmental improvements of products.
This corporate-level program was one of the key programs whose mission, in Armstrong's
view, was not effectively translated into the activities of its business units. Thus, the program was
disbanded at the time of the reorganization. Disseminating the program's core objective ~ product
stewardship ~ is a remaining challenge as Armstrong adjusts to this reorganization. Nonetheless, it
is worthwhile looking at the central elements of the program prior to its discontinuation and
integration into other Armstrong programs.
Prior to reorganization, a life-cycle framework was established to support and provide
background to Armstrong's product environmental performance program. It provided "an
organized, comprehensive way for measuring environmental burdens associated with a business,
product, process, or other activity; for assessing the impact of these burdens on the environment; for
identifying options for improvement; and for making decisions regarding the implementation of
such options."1 Armstrong focused its efforts in three directions:
1. developing process chains to map the life cycle of Armstrong's products,
2. developing life-cycle inventory data that are linked to these process chains, and
3. developing an environmental checklist for new product/process development.
Assessing the impacts of its current products and identifying opportunities for mitigating those
impacts were the goal of the first two activities; minimizing impacts of future products was the
goal of the third activity.
A first step in launching the Product Environmental Performance program was developing a
methodology and framework for assessing the total environmental performance of .Armstrong's
products. The LCA framework described in EPA and SETAC documents provided the backbone
to the company's methodology, though adaptations occurred to meet the company's needs.
Armstrong began by developing detailed process flow diagrams of the production processes
for floorings and building products (Armstrong's major products) using off-the-shelf graphics
software. A generic version of the graphical map is presented hi Figure 5-1. At the center of the
map is a "process" defined to include processes, actions and activities. Inputs to the process
include:
• energy materials and their sources required for the process (e.g., fuel oil, gasoline, electricity),
• primary inputs, defined as "the key or fundamental elements that are operated upon by the
process and lead to the "Primary Output" of the process," and ancillary materials, i.e.,
5-4
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Case Study — Armstrong World Industries
additional inputs needed to complete the process such as water, packaging, and maintenance
materials.2
Figure 5-1: Generic Production Process
ENERGY
PRIMARY
INPUT
ANCILLARY
MATERIALS
CO-PRODUCTS
PRIMARY
OUTPUT
ENVIRONMENTAL
RELEASES
Next, spreadsheet software was used to link life-cycle inventory data to the graphical maps.
Substantial efforts were directed towards collecting these data; Armstrong collected much of the
necessary life-cycle inventory data for those portions of the production chain residing within
Armstrong's "gates" - i.e., manufacturing, sales and distribution.
Extending the life-cycle inventory boundaries beyond Armstrong's gates to upstream
processes (e.g., raw material acquisition and processing) required an outreach effort with
approximately twenty key suppliers to obtain information about their process inputs and
environmental releases. An initial letter to suppliers from the President of Armstrong Flooring
requested these data to support Armstrong's Product Environmental Performance program.
Responses to this effort was mixed — several Armstrong suppliers were familiar with LCA and
were already actively using the life-cycle framework to assess their own products and processes. In
other cases, the life-cycle framework was a new concept to many suppliers.
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Case Study — Armstrong World Industries
The level of detail and data quality provided by suppliers was highly variable. A major
obstacle to obtaining supplier data was confidentiality. Overcoming this hurdle required additional
Armstrong contact and persuasion of managers at the supplier company. In many cases, however,
suppliers simply did not have the data available and expending resources to collect data were not
considered a priority.
The company avoided using generic, industry average data as its relevance to Armstrong
was considered limited. For example, while life-cycle inventory data are available for polyvinyl
chloride (PVC), PVC formulations used for packaging applications differ from PVC formulations
used by Armstrong's floor manufacturing operations. Generic data which focus on PVC packaging
formulations do not account for these differences. Because Armstrong lacked complete inventory
data from suppliers, and because it considered generic inventory data as a poor substitute for
missing data, the company did not have complete inventory data for any of its products.
Currently, Armstrong is continuing to map process chains, but instead of collecting
complete life-cycle inventory data, the company has narrowed its data collection efforts to raw
materials, energy use, and waste generation at the plant level. In the company's opinion, consensus
is lacking on appropriate metrics for life-cycle inventory data. Until methods further evolve, it is
hesitant to use more substantial resources for collecting data. At this juncture, Armstrong does not
plan to further pursue life-cycle inventory data from its suppliers.
Total En vironmental Assessment
To assist internal data collection for its Product Environmental Performance program,
Armstrong instituted a plant-based computerized data collection system known as TEA (Total
Environmental Assessment). TEA is comprised of five modules. The first module is equivalent to
a plant-level life-cycle inventory, encompassing raw material and energy inputs and output data
(including air and wastewater emissions, and solid and hazardous waste) on an annual basis. These
data were, by and large, routinely collected by Armstrong's facilities prior to implementing TEA as
part of Armstrong's facility pollutant inventory. All plants worldwide annually file a pollutant
inventory, an element of Armstrong's environmental management system instituted in 1991 to
more expansively examine opportunities for minimizing environmental burdens arising from its
manufacturing facilities. This inventory quantifies yearly emissions to air and water on a pollutant-
by-pollutant basis, extending beyond compliance-based pollutants to including for example CO2
and non-hazardous solid waste, in addition to hazardous waste. Data consistency across facilities is
ensured by using a standard inventory regardless of a facility's location.
The second TEA module is an environmental management system enabling the facility to
track progress towards improvements identified by audits. The third module is a calendar
documenting timetables for permits while the fourth module tracks facility violations. The last
module is a database of environmental standard operating procedures (SOPs), developed by the
individual facility, but based upon generic SOPs issued at the corporate level.
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Case Study — Armstrong World Industries
Eleven of Armstrong's plants are currently using some elements of TEA — nine in the
United States, one in the Netherlands, and one in Germany. To minimize system costs, Armstrong
augmented its staff with university students for installing and setting up the TEA computer system.
For example, University of Illinois at Urbana-Champaign students were involved in developing
and installing TEA at Armstrong's tile manufacturing plant in Kankakee. In collaboration with
students from Oklahoma State University, Armstrong recently implemented the most advanced
version of TEA in its Stillwater facility.
Using TEA data, Armstrong has identified processes to target for improvement.
Improvement options are identified and evaluated across various criteria, including resources such
as labor required for implementing the improvement, and capital expenditures. The facility's
industrial engineer makes final decisions based upon a cost benefit analysis, weighing the costs of
implementing the improvement against the project's benefits, using criteria such as return on
investment (ROI). Prioritization of improvement options also is heavily influenced by external
factors, including regulations and stakeholder (i.e., customers and public) concerns. VOC
regulations, for example, catalyzed switching from VOC-containing printing inks to water-based
inks and substituting water-based adhesives for VOC-containing adhesives.
TEA data have also provided insights to the origin of some IAQ issues. Armstrong
discovered that some of their IAQ issues were arising from impurities in raw materials. As a result,
they are working with their suppliers to provide a cleaner raw material. TEA data have also
assisted in making recycled content decisions, enabling higher recycled content in some products
such as ceiling products with a recycled content of approximately 79%.
Information from TEA is shared among plants manufacturing the same product. Using this
information, decisions regarding process changes can be initiated at different levels, including
individual plants, a group of plants (that meet on a regular basis), and from the corporate level. For
example, the decision to eliminate 1,1,1-TCE was initiated at the corporate level by the Vice
President of Manufacturing, although the plants using the chemical and Armstrong's R&D Division
were involved in examining substitutes. Armstrong uses mineral spirits to control the viscosity of
plastisol, a coating for PVC flooring, resulting in off-gassing of mineral spirits after the flooring is
laid. Armstrong decided to make plants aware of the situation through personal communication
and an educational seminar with the plant environmental coordinators and plant managers.
However, process change decisions must be initiated by the business unit's Vice President of
Manufacturing.
Armstrong generates "Life Cycle Information" sheets from TEA data integrated into the
company's LCD framework to communicate environmental information to some of its major
customers, such as WalMart. These sheets provide a descriptive overview of the processes required
for obtaining the raw materials entering Armstrong's plant, processes occurring at Armstrong,
installation/use/maintenance activities, and recycling/waste management opportunities. As shown
in Figure 5-2, the life cycle information sheet for Corlon sheet flooring, no data are provided in
5-7
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Case Study — Armstrong World Industries
Figure 5-2. Corlon Information Sheet
LIFE CYCLE INFORMATION
@mnstrong CLASSIC AND STANDARD CORLON SHEET FLOORING
There are an increasing number of requests for information on "Life Cycle Analysis" of building materials. Although Life Cycle
Analyses on various products have been published, there currently is not a consensus in the scientific community on what factors
should be considered in a Life Cycle Analysis and how these factors should be measured and interpreted in terms of environmental
impact.* Thus, many of the Life Cycle Analyses which are being distributed are simply the opinions of the authors. Currently there
is an ASTM subcommittee working to develop a consensus standard on how a Life Cycle Analysis should be conducted. Until this
subcommittee reports its findings, we are providing specifiers with Life Cycle information (not a Life Cycle Analysis) of Armstrong
Classic and Standard Corlon Sheet Flooring.
1. Raw Materials Stage
Limestone is a common natural material available in
great supply. Obtained locally for reduced k
transportation costs. ^rffls^v,,
Polyvinyl chloride resin is a cost_eflectiye polymer^ r^
derived from oil or liquefied natara|gaj ^aj^'
(sodium chloride). BVC res
applications from flooring to"
tubing, toys, ^'^Maim&cturi-c resins use
Iiquifie4natural gas brpetroleum reacted with chlorine
from the s»K to'form.Vinyl chloride monomer. The PVC
manufacturing* process rigorously strips the monomer
front tha.reaaxJomplying with all safety and health
^
additipn to limestone and polyvinyl chloride,
ers, stabilizers, and colored pigments are added
ito iinp"rove the product and provide the function and
[aesinetics for this commercial product.
backing used on Classic and Standard Corlon
ts is made from inorganic filler, a latex binder,
and nott-respirable organic and inorganic fibers.
43SRecvcle/Waste Management Stage
Classic and Standard Corlon can be selectively installed
over existing flooring, thus eliminating the need for
removal and disposal processes.
ently there is little opportunity for the recycling of
Corlon Sheet Flooring in the U.S.
Disposal of Classic and Standard Corlon can be made
with no known harmful impacts on any landfill which
i accepts construction wastes.
2. Manufacturing Stage
• The raw materials are compounded at moderate
temperatures to form the finished product.
- -.f,, * Some scrap is recycled during the manufacturing
!•'* "if?'' .^process; additional scrap material is used for floor mats
*>', ''frlfi' ,lf or fugs with the remaining scrap being disposed of in
tejgifii • S»sn.approved landfill.
'"^IJlil^
3. Installation/Use/Maintenance Stage
5rr";'i~Ve??>
ii«*[* *"](£*>•**;
•Canadian government document "PribcipJ
Environmenta Publicity and Advertising" "
C1994 Armstrong World Industries-April 1994
Classic and Standard Corlon are designed^
installed over wood, concrete, and sele
floor coverings, eliminating the cost of r
disposal of existing flooring.
Use of medium to low VOC adhesive? will i
emissions during installation. OnlyJ
and S-200 are recommended for the install]
floors.
Recycled and recyclable packaging r
package Classic and Standard Corlon Sh
The amount of trim scraps produced du
installation process is very small;
in any landfill which accepts c
Standard and Classic Corlon arc i
containing a high percentage of n
Armstrong does not formulate or.p
asbestos, 4 PCH, or lead in thei"
Sheet Flooring. ..^.^
Under laboratory condition^gMiiS^g.,
analytical equipment, voy^pwfanwjmts of VOCs can
be detected from Classic aS^Sjanciard Corlon which
ultimately diminish^) a'ffiSSeiectable level after 30
days. ^£%M ..,
Pasac'aad'Standard CorJon do not have an absorbant
f;ffier^bre,*do not act as a sink absorbing
igSyOCs and other pollutants.
;and Standard Corlon require initial and
itinuing maintenance for best performance and
appearance.
of Corlon
.
ticated,
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Case Study — Armstrong World Industries
these sheets. Similar sheets have been prepared for additional commercial products, including
acoustical mineral fiber ceiling panels, floor tile, vinyl sheet products, and adhesives, and included
in environmental stewardship program reports prepared by the business units.
Successfully implementing the TEA system (including data collection) requires a plant
employee, usually the environmental manager, to assume system "ownership." The Vice President
of Manufacturing will implement the system only if requested by the facility. By portraying TEA
as an environmental management tool, rather than a product improvement tool, the company has
had some success with implementing TEA at certain production facilities. To date, environmental
management standards emerging from ISO 14000 have not been a driver for TEA adoption, but
may become a more important factor in the future if these standards gain wide acceptance.
New Product Development Process
For new products, Armstrong has introduced LCD concepts into its New Product
Development Process via a checklist, Environmental Checklist for Product Transfer Points.
Checklist custody is transferred to appropriate staff as a product moves from R&D, to factory
testing, to full scale production, ensuring that environmental information is similarly transferred.
The goal of this checklist is to provide environmental management oversight of R&D projects and,
to early on, uncover and mitigate environmental concerns. The overarching framework ensures
compliance with Armstrong's Corporate Policy on the Environment and seeks to ensure minimum
environmental and occupational health and safety impacts arising from R&D and subsequent
manufacturing activities, compliance with legal and regulatory requirements, and minimum impacts
from product use and disposal.
Ensuring that only approved chemicals are used in new products is one function of the
checklist. Before introducing a new chemical in the manufacture of a new or existing product, its
MSDS must be submitted and its use approved by the Environmental Health and Safety Review
Committee, a corporate level group. An approved chemical list resides on Armstrong's computer
system and is accessible to all business units. MSDS-type information must be supplied on the
checklist, including a list of special handling precautions and required protective equipment for
chemicals included in the product's formulation.
A series of questions requires information about environmental releases resulting from the
product's manufacture, including VOCs, Title V Hazardous Air Pollutants (regulated under the
Clean Air Act), and hazardous waste generation. Moving beyond manufacturing impacts, an LCD
perspective is embodied in questions about the product's packaging, and use, including exposures
resulting from consumer use or installation.
R&D staff view the checklist as a valuable screening tool in the product development
process. Challenges to routinizing use of the checklist include gaining its acceptance from the
business units' R&D product development teams. Because regulations and permits may change,
the checklist may require updating during the R&D process. Armstrong plans to eventually transfer
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Case Study — Armstrong World Industries
the checklist from paper to a computer-based system. Presumably, updating such a system will be
easier. Employees using the checklist oftentimes lack an understanding of environmental
management and must consult with environmental engineering staff to successfully implement the
checklist.
5.4 Observations
Initially, Armstrong's Product Environmental Performance program was largely reactive,
driven by stakeholder concerns about indoor air quality (IAQ) from off-gassing of chemicals
contained in building products. In response, the company established its program to carefully
examine material inputs and identify opportunities for reducing IAQ problems. Increasing
customer requests for information about the environmental impacts of the company's products,
coupled with the company's desire to continuously improve its products, became the principal
drivers of Armstrong's Product Environmental Performance program.
The program's goals and scope were bold — mapping out all the processes for
manufacturing Armstrong's major products; collecting life-cycle Inventory data for these processes,
including data beyond Armstrong's "gates", i.e., upstream data from suppliers, and downstream
data for waste disposal; and implementing facility-level computer systems for collecting these data.
The program had an internal champion, the program manager, whose chief responsibility was
overseeing and implementing the program. However, a key ingredient to success was missing --
allocation of sufficient resources in the business units manufacturing the products. This left the
program vulnerable as the company went through major restructuring of its operations.
Building upon ongoing corporate reorganization, including a realignment of the company's
EH&S management structure, the company addressed this problem. The functions of the Product
Environmental Performance program were reallocated to the business units, along with general
EH&S responsibilities, placing these responsibilities squarely in the purview of the business units.
By moving product environmental performance responsibilities to the business units, responsibility
was placed in the hands of the staff who actually make decisions about a product's design and
manufacture. Given the extensive resources necessary for collecting firm-specific life-cycle
inventory data, trying to collect information beyond the firm's gates was perhaps overly ambitious.
Thus, the program's breadth was altered by discontinuing upstream and downstream data collection
efforts.
Armstrong currently faces typical transitional challenges of reorganization, translating and
strengthening its corporate commitment to product environmental improvement to an operational
level. This is a slow process of internal marketing, education, and capacity-building as it transfers
responsibilities from the corporate to business unit level. Ultimate success hinges heavily upon the
ability to mesh life-cycle information systems with more traditional compliance reporting systems
as the responsibilities of the business unit managers broadens from compliance to proactive
environmental management. Doing this in a way that minimizes resource requirements and
maximizes value added to the business units will go a long way to ensuring long-term success.
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Case Study — Armstrong World Industries
5.5 Endnotes
Personal communication from Dr. James Tshudy, former manager, Product
Environmental Performance.
Tshudy, J.A., "Environmental Life Cycle Analysis: The Foundation for Understanding
Environmental Issues and Concerns," presented at 33rd Annual Conference of
Metallurgists, Toronto, Ontario, August 20-25,1994.
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Conclusions
6. CONCLUSIONS
Armstrong, BMS, and IBM demonstrate a range of LCD practices, demonstrating the
reality that there is no one size fits all approach hi transforming LGA approaches into a working
decision-support tool. While all three LCD programs continue to evolve, our study suggests a
number of themes that serve as valuable lessons both for other firms and for government initiatives
aimed at advancing LCD practices.
Figure 6.1 illustrates the elements that comprise LCD.
Figure 6-1. Elements of Life-Cycle Design
Pragmatism Buy-in
LCD
Supplier Involvement Teamwork
Motives. LCD initiatives are likely to be driven by linked environmental and economic
pressures. Moving beyond compliance to stay ahead of regulatory trends, improving customer
(either distributor or final consumer) service and product quality, and creating green market
opportunities, typically provide the impetus to building and sustaining an LCD program.
BMS's LCD program documents the strongest link between environmental and economic
improvements. The company has completed product life-cycle (PLC) reviews for eighteen of its
products. The environmental improvements identified in these reviews has yielded a potential
savings of $2.8 million. This economic benefit does not include potential revenues arising from the
sale of "green" products; thus the potential benefit may be greater.
Pragmatism. Selective, non-prescriptive, customized, and flexible describe the approaches
to LCD adopted by Armstrong, BMS, and IBM. For these firms, rigid protocols simply do not
mesh with business reality. For example, while BMS has developed a generic framework for PLC
reviews, the framework is tailored to the varying needs of BMS1 different business units to account
for the differing regulatory frameworks under which each unit operates. When conducting a PLC
for a mature product, BMS's pharmaceutical division is likely to set aside product reformulation
6-1
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Conclusions
options, for example, as such reformulations require approval from the U.S. Food and Drug
Administration (FDA), an expensive and timely process.
Product cycle time and trade-offs with other design criteria (e.g., performance, reliability,
safety, cost) necessitate an adaptive approach to LCD. The shorter the product cycle and more
competitive the marketplace for the firm's products, the greater the need for adaptability.
Electronics firms, such as IBM, facing an average 18 month time horizon hi translating product
concepts to market cannot afford LCD methods which may delay a product cycle. Thus, the
company separates product development processes from.process development processes, and under
its product stewardship program, uses separate procedures for identifying environmental
improvements for each.
Buy-in. An effective environmental management structure, coupled with a solid corporate
commitment to continuous environmental improvement, is key to a successful LCD program.
Armstrong, IBM, and BMS have each established corporate environmental policies emanating from
high levels within each company. Translating these polices into actions requires educating and
achieving buy-in from employees across many levels of the company. All three companies educate
their employees via environmental reports (separate from their corporate Annual Report) which are
circulated to employees, in addition to external stakeholders (such as stockholders and NGOs).
Each company engages staff hi its LCD programs via differing mechanisms. Both
Armstrong and BMS have used traditional top-down approaches. By contrast, IBM uses both a top-
down and bottom-up approach, involving staff from affected divisions of the company when
establishing or revising any of its environmental policies. Thus, when IBM established a new
corporate instruction on Environmentally Conscious Products (ECP), staff from all of IBM's
hardware divisions were involved with drafting the instruction. This draft was forwarded to the
division presidents for formal review and concurrence and then forwarded by a Vice President to
senior management.
When a corporate level program is not successful in percolating its goals down to the
business units, the program is susceptible to abandonment, as evidenced by Armstrong's
experience. The company's corporate Product Environmental Performance program was not
effectively translating program goals into the activities of its business units, the level at which
decisions are made about what a product contains and how it is manufactured. The program was
discontinued, and its mission, along with general EH&S responsibilities, was placed squarely hi the
purview of the business units. One result of this realignment, however, was that the internal
program champion was reassigned to other duties before program proponents were cultivated at the
business units. Thus, the company currently faces the challenge of developing this ground-level
support.
Streamlining. Complex, resource-intensive LCD systems may contain the seeds of their
own undoing. They are tougher to market internally and more vulnerable to orphaning during
business downturns and restructuring. Because LCA skepticism is abundant in the business
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Conclusions
community, organizational change can easily turn into a reason to slow or halt an LCD program
which is viewed as too costly or lacking division or facility-level buy-in and concrete benefits.
Reducing the stages and impacts is one way of making LCD affordable and relevant to
internal decision-making. All three companies practice such streamlining in some form, especially
in the 'upstream extraction, transport, and intermediate manufacture stages of the product cycle.
Armstrong is the only company that attempted to collect life-cycle inventory data for the complete
life-cycle of its products. Doing so required an outreach effort with approximately twenty key
suppliers to obtain process input and environmental release data. Armstrong had mixed success
with these efforts — the level of detail and data quality provided by suppliers was highly variable.
Obstacles to collecting these data included confidentiality concerns and a lack of resources for
collecting data that were not considered a priority by the supplier.
Using LCD as a tool in its ECP program, IBM has focused on upstream production stages
to assess how the tool can be used in selecting materials and processes with minimum
environmental burdens at the part and subassembly level. Eighty percent of a computer's weight is
comprised of structural parts. Thus, by examining the materials comprising those parts, e.g., metals
and plastics, IBM focuses on the greatest opportunities for reducing the environmental burdens of
its products.
While streamlining always runs the risk of missing a major indirect or
upstream/downstream environmental impact of a product or process, it does reflect the boundaries
of corporate stewardship commonly defined by most U.S. firms today. However, at least on the
downstream-side of the product cycle, customer demands for higher levels of product service are
likely to drive firms to steadily expand their LCD programs to include downstream use and post-
use impacts. This trend is part of the larger and emerging concept of extended product
responsibility that is emerging hi both Europe and the U.S.
Suppliers. Supplier relations as a component of LCD programs are uneven and slow to
evolve. Our collaborating firms generally show an arms-length, non-coercive relationship with
suppliers when it comes to implementing LCD programs. Liability and proprietary concerns, and a
reluctance to impose costly data development requests, are some of the impediments to more
aggressively bringing suppliers into the LCD fold. IBM uses a unique approach to overcome these
hurdles, hiring consultants to work with their principal suppliers. These consultants sign
confidentiality agreements with the suppliers hi order to obtain necessary data. These data may
then be supplemented with secondary data from the literature. This arrangement enables the
company to distance itself from potentially proprietary information.
Nonetheless, without supplier involvement — including information exchange between
customer and supplier essential to support final design decisions — the absence of upstream
inventory data will continue to impair a comprehensive life-cycle perspective on product design
and redesign.
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Conclusions
Teamwork. The most effective LCD programs are those that recognize the cross-
functional nature of LCD, and integrate multiple business functions into the LCD process. Product
designers, materials engineering, process engineers, operations, marketing, and accountrng/finance
are all party to making LCD work. The reason for this straightforward: LCD cannot, and should
not, be defined as a purely or even predominantly "environmental" initiative. Instead, the language
that sells internally is process improvement and optimization, customer service, product
differentiation, and market competitiveness. LCD programs which speak only to environmental
benefits are bound to flounder, or peak early at a low-level of buy-in. But to communicate the
multiple benefits of LCD requires an audience drawn from multiple business functions, each of
which sees its value to running its segment of the business.
These themes point to a future in which LCD gradually continues to make inroads into
corporate product development, but in diverse and often diffuse ways throughout the product life
cycle. In the mid-term, realizing the benefits of LCD will require its integration in standard business
functions such that each such function sees its benefits. This kind of seamless integration will help
LCD avoid the risk of being another "environmental" program which costs, rather than saves, and
constrains, rather than strengthens, the market position of the firm and its products.
Paradoxically, the future may see a reversal in this kind of environmental handicap. In the
longer term, LCD may enable a firm to achieve its voluntary, or mandatory, sustainability
objectives. This may occur by uncovering opportunities for .reducing life-cycle impacts,
dematerializing production systems and, more generally, helping firms achieve eco-efficient
operations - higher value products and services with less material input per unit output.
Government initiatives such as this study which help shape LCD as a working, flexible decision-
support tool will contribute to achieving this long-term objective.
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