Blending Manufacturing Operations With The Surrounding Environment

“It’s Not Easy Being Green—Maintaining Environmentally Friendly Supply Chains in the Electronics Industry.”

Kevin Butt, General ManagerChief Environmental OfficerToyota Motor Engineering & Manufacturing North AmericaEnvironmental & Safety EngineeringProduction Engineering Division

April 19, 2006

Outline

Organization Structure For Sustainability

Sustainability Concepts for Manufacturing

Application to Automobile Manufacturing

Conclusions

Environmental Front WheelDrive

Su

pp

lier

Profit

Cu

stom

er

EnvironmentalCorporate Citizenship

Safety & Health

One ToyotaOne Toyota

Self RelianceSelf Reliance

Business Process Kaizen

Supplier Enhancement

Cost Reduction

Customer Satisfaction

All Team Members

People Development

2010 NA Environmental Vision

To become the most admired/respected automobile

manufacturer by demonstrating continuous environmental

performance improvements resulting in environmental environmental

leadership/sustainabilityleadership/sustainability

How do we get there?

Environmental Management Systems

ISO 14001 Certification

Enhanced Environmental Management System

Committed Team Members and Management

Professional Environmental Staff

Enhanced EMS & “Internal Auditing”L

evel

of

EM

S

ISO14001 Requirement

Before ISO certification

After ISO certification

Achieve Zero violation/complaint = TOYOTA Requirement

EMS did not prevent violations/complaints or did it assure performance improvements

High

(Relatively)

Need to achieve Hoshin Targets= Enhance current EMS

Enhanced EMS

Low

ENV

Manager

K. Aldrich

PE-FAC

Manager

B. Bremer

EnergyEngineerJ. Russell

Environmental Working GroupGM

K. Butt

SA

N. Ueda

ENVEngineerM. Benz

ENV

Coord

Komatsu

PE-FAC

Coord

Maeda

Ê* Å* Ë*¿* È* Ã*

*Engineers from each section will be asked to join on a case-by-case basis to provide expertise on development of targets, standards, and vision.

CoreMembers

Working GroupMembers

ChairmanMr. Tanigawa

VP-PESecretariat

K. Butt

Environmental

PlanningMembers

General Managers from all

PE Sections

Production Engineering Environmental Steering Committee (PE

ESC)

Role and Responsibilities of the PE ESC are to provide resources to assure that NA PE achieves the action Plan targets by assuring the development of short /long term plans, risk standards, and equipment standards so that cost effective implementation can take place in a timely manner.

Sustainability Concepts

Renewable Resources Recyclable Resources Assimilative Capacity

Renewable Resources

To be considered Renewable, resources must regenerate at or greater than the rate that they are consumed:

• Oil => not renewable only because rate of regeneration is less than rate of consumption

• Biomass => may be renewable depending upon how it is used

Recyclable Resources

Basic extraction of non-renewable resources is minimized through reprocessing and reuse many times

• Aluminum• Iron/steel• Many Plastics• Other Chemicals

Assimilative Capacity

Return to the natural environment is done without disruption by controlling the time, location and quantity of the release

• Requires careful study and control to establish proper balance

Automobile Manufacturing Applications

Sustainability Initiatives for Automobile Products

Sustainability Initiatives for Automobile Manufacturing Byproducts

Innovative Business Initiatives to Improve Sustainability

Sustainability Initiatives for Automobile Products

World Business Council for Sustainable Development (WBCSD) Sustainable Mobility Project

Fuel Economy Improvement Vehicle Recycling After Sales

Sustainable Mobility Project

The Sustainable Mobility Project, a sector project of WBCSD, includes participation from 12 auto/energy companies globally

The project is tasked with developing a vision for sustainable mobility 30 years from now and identifying the pathways to get there

Sustainable Mobility Project

Workstreams Include:• Sustainability indicators• Vehicle design and technology• Fuels• Infrastructure• Demand for personal mobility• Demand for goods and services mobility• Policy measures• Urban and Long Distance mobility etc.

Sustainable Mobility Project

Factors for Sustainable Mobility:• Access to mobility• User costs• Travel time• Reliability and comfort• Safety• Security• Greenhouse gas emissions

Sustainable Mobility Project

Factors for Sustainable Mobility (cont.):• Impact on the environment and public well-being

• Conventional emissions• Impact on eco-system• Transport-related noise

• Resource Use• Transport-related energy use and security• Transport-related land & material use

Sustainable Mobility Project

Factors for Sustainable Mobility (cont.):• Impact on public revenues and

expenditures• Equity Implications• Prospective rate of return to private

business

Fuel Economy Improvement

Vehicles are the largest consumer of petroleum fuels in the world

• Increasing Engine Efficiency• Variable Valve Timing• High Efficiency Diesel

• Improving Power Transmission• Improved transmission technologies• Efficient subsystem design

• Improved Aerodynamics

Vehicle Recycling After Sales

Target of achieving 95% Vehicle Recovery Rate:

• Develop dismantling technology• Develop recycling/recovery technology• Use recycled material

• Material selection with consideration for recycling

• Use renewable resources• Expanded reuse of parts

Vehicle Recycling After SalesTarget of achieving 95% Vehicle Recovery Rate

(cont.):• Reduce substances of environmental concern

• >90% reduction in Lead usage/vehicle• FY2011 target to eliminate lead, mercury, cadmium

and hexavalent chromium globally• Cadmium – Eliminated the cadmium paste used in some

electronic parts• Toyota developed mercury-free discharge lamps and began

using them in the Porte

• Develop recyclable structures for vehicles

Sustainability Initiatives for Manufacturing Byproducts

Global Warming Prevention

Reducing Substances of Environmental Concern

Reducing Waste

Conserving Resources

Sustainability Initiatives for Manufacturing Byproducts

Note: Data for 10 Japan Production Plants and Logistics Operations in FY2004

Global Warming Prevention

Heat Recovery

Non-production energy use reduction

Improved efficiency of utility systems

0

2

4

6

8

10mmBTU/

veh

Average mmBTU/Vehicle

Reducing Substances of Environmental Concern

R&D for new paints and solvents

High efficiency process technologies

Improved production line operating techniques 0

510152025303540

g/

m2

1998 FY'01

FY'02

FY'03

FY'04

FY'05

Average VOC g/m2

Reducing Waste

Material substitution

Improve process technologies

Reuse material in the same process

Recycle to beneficial reuse

Recover energy05

101520253035

kg/veh

Landfill Waste kg/vehicle

Earth Care Center

Conserving Resources

Reduce primary raw materials

Reduce Water Use:• recycling systems• low flow/no flow

processes• recover condensate

0.7

0.8

0.9

1.0

1.1

1.2kgal/veh

Average Water Usage kgal/vehicle

Biotechnology and Afforestation BusinessBegan in 1998 with only seven

members

Areas of activity:

Conclusions

Sustainablility concerns exist at all stages of manufacturing• Environmental Management• Design• Production• Sales/after sales

Incremental improvement is making progress in many areasInnovation and risk will lead to new technologies and

dramatic advances toward sustainable future