Beyond “going green”

5/22/2009 - Sustainability as a business value is here to stay — so firms may as well embrace and incorporate that concept.

That was the overarching message expressed by speakers and panelists during the Kellogg School’s Manufacturing Business Conference on May 13. The day-long event at the James L. Allen Center was hosted by the MMM Program, a joint degree offering between the Kellogg School and Northwestern University’s McCormick School of Engineering.

Keeping with theme of “Sustainability: Creating Long-Term Success,” the conference featured several panel sessions designed to help executives bring the principles of sustainability to bear on business challenges. The topics included “Going Green and Beyond,” “Targets, Trends and Techniques in Manufacturing Turnarounds,” “Protecting Intellectual Property in Emerging Markets,” and “Offshoring or Onshoring: Where is Manufacturing Headed Next?”

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  During the panel “Going Green and Beyond,” Lynne Kiesling, moderator and Kellogg senior lecturer, kicked off a discussion on sustainability by proposing a set of key questions. “What are the costs of sustainability?” Kiesling asked. “What do you see coming next in green technology? What are the perceived obstacles of companies going green?”

Eric Wilmot, principal strategist for New York City-based frog design, inc., noted that companies that are investing in sustainability are putting pressure on other firms to follow suit. For example, clothing manufacturer Patagonia has developed an interactive Web site called the “Footprint Chronicles,” which allows consumers to trace on a map the route their clothing has traveled from manufacturer to distribution. For each clothing item, Patagonia explains which practices are sustainable — such as manufacturing clothing locally — and which are not. Wilmot explained that this move by Patagonia puts pressure on other clothing companies to be honest about their sustainability practices.

The final speaker at the conference, Conrad Winkler ’95, vice president of Booz & Co., explained to attendees how the recession is shifting the business environment. “It’s going to create significant structural change,” the MMM graduate said. “To have a long-term competitive advantage, you have to figure out where your company is going.”

Winkler proposed an eight-step process that can help firms develop a long-term competitive advantage:

• Look beyond the crisis
• Fire up cash
• Review product profitability
• Reduce capacity
• Rationalize overhead cost
• Use facilities more efficiently
• Improve labor productivity
• Change wage rates
• Reduce raw material prices to market

“Though the current environment is challenging, this is the time for manufacturers to make the bold moves to achieve future success,” Winkler concluded. “By taking acting now, manufacturers have the potential to greatly improve their market positions in the longer term.”