"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 25
Have you ever heard of the term "inverse manufacturing"? It refers to a manufacturing system that considers the entire product life (planning and designing, manufacturing, use and disposal) at the design phase and incorporates into the design consideration of the process of collecting used products, dismantling, separating, and reusing them in the form of components and materials.
Material recycling (to return collected used products to resources), and thermal recycling (to extract heat to save the use of resources) have been in common use for some time. Many of these are inefficient recycling methods because manufacturing (a "progressive" process) and disposal after use (a "regressive" process) are done differently, and because much energy and chemicals are used in the latter process.
In contrast, inverse manufacturing minimizes the consumption of resources, energy and the volume of waste, while also creating value. This is because the method combines the progressive and regressive processes within the entire lifecycle of a product to create a closed loop in which components and materials are recycled. Inverse manufacturing has been propounded as a model for sustainable manufacturing over the past dozen years or so, but practicing it is not easy and only a limited number of companies have succeeded in adopting it as a business model.
In 1995, Fuji Xerox, Co., Ltd. began selling copy machines manufactured by inverse manufacturing aimed at reusing components. In 2003, the company reported a surplus of 60 million Japanese yen (about U.S.$570,000) on items covered under its environmental accounting system.
A surplus in environmental accounting means that the income from reusing components exceeds expenditures for the purpose of product recycling. The former includes costs saved by reduced purchase of new components, savings on recycling costs, and the price disparity between new and reused components. The latter includes expenditures incurred by collecting and dismantling used products and recycling.
"Our business model for copiers was originally to lease the machines to provide copying service to our clients," says Mr. Hiroyuki Akiyama, Head of the Environmental Management Group and CSR Group of the Quality and Environmental Management Department. Fuji Xerox, since its foundation, has been inspired by the idea of resources recycling that the company will sell the values created by its products and the products are to be recovered in a responsible manner. Supported by this distinction and guided by the strong belief that the company will aspire to manufacture products by not using new resources to the extent possible, it has succeeded in establishing inverse manufacturing that makes business sense ten years after initiation.
Fuji Xerox was inaugurated in 1962 as a joint venture between Fuji Photo Film and Rank Xerox of the U.K. to build a sales office in Japan for "Xerox" electrophotograph copier machines. Currently, its products include copy machines, printers, facsimile machines and digital complex machines, information technology devices such as personal computers and work stations, and software. These products and services are marketed in Japan, China and the Asia Pacific region. The consolidated sales for fiscal 2004 were 1.0293 trillion yen, of which about 90 percent was from Japan. The corporate group's workforce was 36,000 in fiscal 2004.
It was back in 1993 that Fuji Xerox introduced this inverse manufacturing system. After seriously considering how to deal with the depletion of natural resources, the company had reached the conclusion that recycling would not be enough to reduce new natural resource inputs. Then a goal was set to produce high quality products with reused parts as good as those newly produced, which was a very challenging goal to achieve.
To assure the quality of recycled parts equivalent to new ones, it is necessary to determine the precise lifespan of each component. Even if each part is expected to have the same life, it could become much shorter or rather longer respectively depending on frequency in use, the environment where the machine was installed, and maintenance condition. Therefore the first challenge to take on was how to measure and categorize the specific conditions in use of each part and how to sort out them by categories.
One of the ideas to tackle this challenge was to utilize sensors. Copy machines are equipped with so many sensors that detect flows, materials and sizes of papers whenever making a photocopy. Because of this, they are often called as sensor monsters by engineers. The application of this sensor technology enabled them to determine the lifetime of each part by collecting and analyzing data on how the machine was used.
Also, to increase the parts reuse ratio, it is crucial to design products taking into account how to reuse parts repeatedly. Fuji Xerox has made efforts to establish a recyclable design, such as increasing the lifetime of parts, designing products so that long-life parts and short-life ones can be separated easily as well as they can be reusable in the first place. Moreover, the company endeavored to increase the number and types of parts that can be used for a wide range of machine models. According to the engineers in its designing department, they always consider how to utilize engineering drawing of existing product models when designing new models.
The most remarkable feature of Fuji Xerox's inverse manufacturing system is to enhance reusing of parts not just for the current product models but also for future models, up to three product generations hence. The parts designed only for one model cannot be reused when the applicable model is discontinued, even if technically they are not end-of-life yet. However, if the parts are designed as reusable for different models, they can be applied even for new models and thus continue to contribute to reducing environmental impacts as a result. In fiscal 2003, about 60 percent of reused parts were applied for third-generation models.
With such efforts, the company succeeded in increasing the reuse ratio of components to 54 percent in fiscal 2003. Also, in the same year, new natural resource input was decreased by 2,200 tons a year, which accounts for about 3.5 percent of the total amount of resource input. This means that Fuji Xerox made it possible to produce three out of a hundred copy machines without using any new natural resources. Furthermore, the company was successful in achieving zero waste by sorting out non-reusable parts thoroughly to recycle them.
What are the next challenges for Fuji Xerox now that inverse manufacturing is on a good path? "It is to spread the made-in-Japan system to the entire group. In December 2004, we launched a recovering, dismantling and recycling plant in Thailand, which will be our base in Asia," Mr. Akiyama replies. At the plant, used copiers and printers are being collected from nine Asia-Pacific countries and regions, and they are separated into 64 categories.
In China, they are planning to create a similar system. And they are already on the way. In December 2004 and January 2005, company factories in Shenzhen and Shanghai achieved zero emissions. .
In addition, Fuji Xerox, in its efforts to reduce resource depletion, has another significant initiative: a sustainable supply of paper for copiers and printers. Increasing consumption of paper is said to be one of the causes of destroying forest resources. The company is taking measures to supply what it calls "the most environmentally conscious paper," in cooperation with paper companies.
In Japan, recycled paper with high ratio of used paper has been marketed widely. But virgin pulp is still necessary, because the fibers can only be recycled up to four or five times. The company has set a target for 2010 of having 50 percent or more recycled pulp content in its products, and of having all the remaining pulp coming from forests and plantations that have been certified as being sustainably managed, such as forests certified by the Forest Stewardship Council (FSC). In 2004, it achieved 82 percent for the use of recycled pulp and environmentally conscious pulp, such as pulp from plantations.
To enhance the initiative, the company set six procurement standards and began applying them to copy paper and material suppliers: compliance to laws and regulations, sustainable forest management, bleaching treatment without chlorination, etc. It aims at full compliance in 2006 to meet the standards, and will cease dealing with suppliers that fail to comply.
Moreover, Fuji Xerox started to finance a eucalyptus plantation project in South Island in New Zealand. In spring 2005, the company manufactured woodchips from the plantation for the first time. This eucalyptus plantation acquired FSC certification, and woodchips from the forest were processed at an FSC-certified plant, then shipped to Japanese plants in March 2005. On June 1, 2005 Fuji Xerox and its affiliated company, Fuji Xerox Office Supply launched the sales of environmentally sound paper labeled "FR," which contains 50 percent of plantation pulp, partially made from woodchips from the company's FSC certified plantations, and 50 percent of used newspaper pulp. The "FR" is eco paper for copy machines and printers, made from the company's certified plantations, and blended in Japan-- a first for this type of product.
Fuji Xerox declared "Corporate Excellence" concepts to enhance three types of value "Tsuyoi, Yasashii, Omoshiroi," (roughly translated as "Strong, Kind, and Interesting") in early 1990s, well before other companies were discussing "corporate social responsibility" or the "triple bottom line" of environment, economy and society. The company stated early on that it aims to be "strong" enough to compete, and "kind" for society and the environment, with its employees who regard their work and life as "interesting" as a driving force. It's efforts to realize sustainable society are based on these concepts.
Initiatives for Resource Depletion Prevention http://www.fujixerox.co.jp/eng/ecology/eco_en06/
Aiming for sustainable paper supply http://www.fujixerox.co.jp/eng/ecology/paper/index.html