Resource Efficiency in Plastics Processing
Part 1 - Resource Efficiency

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The first in a series of Worksheets by Jonathan Churchman-Davies and Dr. Robin Kent for Envirowise on Resource Efficiency in the Plastics Industry.

UK Government Environment and Energy Helpline 0800 585 794

Introduction

The UK plastics industry is highly focused on the cost of labour and sees any growth in imported products as being due to the ‘lower labour costs of overseas suppliers’. The reality is that labour costs are now a minor component of the overall cost of most plastics products. The cost of materials and overheads are far more important to the total product cost, but UK industry still focuses overwhelmingly on the labour cost.

Unless the UK industry addresses the real issues of resource usage and overhead management then business will continue to migrate offshore whilst the UK industry chases a mirage of ‘labour cost reduction’. The first industrial revolution used machinery to increase labour efficiency and the UK became a world industrial power. The techniques of the industrial revolution and improved labour efficiency are now available worldwide and this might seem a recipe for accepting the loss of UK manufacturing industry, but the rules have changed.

The worldwide plastics processing industry is at the start of a ‘second industrial revolution’ where the key to success is in rapidly improving resource efficiency through ‘Cleaner Design’ to increase the effective use of all resources. This means:

‘Sustainability -development which meets the needs of the present without compromising the needs of the future.’

Gro Harlem Bruntland

What about labour efficiency?

The structure of costs in plastics processing is changing rapidly. Direct materials costs are remaining relatively static as a proportion of costs but direct labour costs are going down and overheads are rising. These changes in the cost components mean that labour efficiency is no longer the only key to industrial success.

The importance of the cost components may be changing but the efforts of most companies remain rooted in the ‘labour efficiency’ model and are out of proportion to the importance of the costs. Until the industry realises and accepts these fundamental changes then survival efforts will be directed at the smallest component of costs, will continue to be ineffective and the UK processing industry will continue to lose ground to lower cost competitors.

 

Despite this, the UK plastics processing industry can remain a competitive force by addressing the new cost structures and improving resource efficiency to achieve dramatic cost reductions.

What matters?

Today, the important things are profitability and simple survival. This involves focusing on reducing the important and real costs of direct materials and overheads (85 to 90% of the costs), adjusting the efforts to reflect the new reality and accepting that the basics of the whole industry have changed.

In the future, rapidly improving resource efficiency through ‘Cleaner Design’ will require management and control of the full product life cycle. The life cycle issues of the future will be:

The product life cycle - the key to the future

A route map to the future

The product life cycle starts to provide a route map and a basis for planning the actions needed to guarantee future survival for the UK plastics processing industry.
Achieving continued profitability and survival in the future will mean taking charge of the company’s destiny rather than allowing it to be dictated to you.

Why focus on products?

One study* has shown that:

Products consume and waste vast amounts of materials and on average 80% of a product's overall cost and environmental impact is a result of the design decisions taken at the start of the design process. Focusing on product design improvements and using Cleaner Design concepts can produce remarkable improvements in resource efficiency and profitability as well as reducing a range of environmental impacts.

* Factor Four: Doubling Wealth - Halving Resource Use. von Weizsacker, E; Lovins, AB; Lovins, LH. Earthscan Publications (1997). ISBN 1853834076.

What is cleaner design?

Cleaner design is design to minimise the environmental impacts over the entire product life cycle and to meet customer requirements. It is a proactive environmental management tool to reduce the environmental impacts of a product throughout the life cycle. It is also a method of addressing wider issues, such as product cost, resource depletion, waste and pollution.

Cleaner design involves meeting the customers’ requirements whilst using the minimum amount of resources and creating the minimum amount of environmental impact. Cleaner design aims to move from the traditional linear approach to product life (manufacture, use, dispose) to a more cyclical approach to allow material to be re-used or recycled at the end of its life.

What next?

The tasks facing the industry will change in the future - past experience and methods will no longer be sufficient to meet the new challenges, legislation and demands.

Over the next few months we will look at the various aspects of Cleaner Design, try to define the important issues and tasks and most importantly try to provide a route map to the future for profitable and sustainable operations.

More Information 

Available free from the Environment and Energy Helpline (0800 585 794) or can be downloaded from this site.

'Resource Efficiency' Series.

The 'Resource Efficiency' series is designed to give plastics processors a route map to the future for the plastics industry. The series is:

Part 1: Resource Efficiency (This Section) 
Part 2: Manufacturing - Targeting Efforts   
Part 3: Use - Optimising Usage   
Part 4: End-of-Life - Minimising Outputs 
Part 5: Raw Materials - Minimising Inputs 
Part 6: Distribution - The Essential Link

 

Download the complete series as an Adobe Acrobat file.

 

Last edited: 29/03/04

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