The following report outlines some of the initial findings from the preliminary
data. Please note that this report is based on data collected so far. Additional surveys and
continued analysis will lead to more thorough analysis in the future.
Our analysis of the survey is organized in the following mannec General
Environment Management, Air Emissions, Paintshop Management, Utility Management,
Solid Waste, and Water Pollution. At the end of the document you will find a summary
of the major variables, as they average across North American and Japanese plants, along
with the performance of your own company. The data on individual company and plant
performance is being held strictly confidential

Briscoe, Forrest

Koike, Ami

Maxwell, James

Oye, Kenneth

Rothenberg, Sandra

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# W-0171a(IMVP Restricted)INTERNATIONAL MOTOR VEHICLE PROGRAMFY ’97 MVP WORKING PAPERSPRELIMINARY REPORTINTERNATIONAL MOTOR VEHICLE PROGRAM:ENVIRONMENTAL PRACTICE SURVEY RESULTSJames MaxwellKenneth OyeSandra RothenbergForrest BriscoeandAmi KoikePreliminary Report: Environmental Practices SurveyPreliminary Report: International Motor Vehicle ProgramEnvironmental Practice Survey ResultsInvestigatorsDr. James MaxwellProf. Kenneth OyeSandra RothenbergResearch AssOCiatHForrest BriscoeAmi KoikeMay 1997Draft - Do Not Cite or CirculatePreliminary ReportIntroductionEnvironmental Practices SurveyThe following report outlines some of the initial findings from the preliminarydata. Please note that this report is based on data collected so far. Additional surveys andcontinued analysis will lead to more thorough analysis in the future.Our analysis of the survey is organized in the following mannec GeneralEnvironment Management, Air Emissions, Paintshop Management, Utility Management,Solid Waste, and Water Pollution. At the end of the document you will find a summaryof the major variables, as they average across North American and Japanese plants, alongwith the performance of your own company. The data on individual company and plantperformance is being held strictly confidential.General Environmental ManagementThis section outlines major comparisons in the area of general environmentalmanagement. Throughout the analysis, it is apparent that di~erences in managementapproaches are due to a mix of internal organization and culture, as well as externalregulatory and institutional pressures. Externally, Amen-can plants are responding to ahistory of strict and complex environmental regulations and growing communitypressures. Internally, Japanese management practices rejlect a greater reliance oncorporate level resources combined with an interest in contiruud improvement inmanufacturing processes.There is considerable variation in how plants are stilng environmental affairsand the activities performed by these staffs. Both North American and Japanese plantsrelied heavily on staff above the plants level for obtaining and disseminating regulatoryinformation. As can be seen in Table 1, Japanese plants reported many moreenvironmental staff than American plants. This practice has also carried over to a numberof Japanese transplant facilities. There are a number of possible explanations for thelarger number of environmental staff in Japan. The first two explanations are related tothe process of defining environmental responsibilities. In Japan, 2/5 of the environmentalstaff were also reported to be responsible for health and safety, while in North Americathese functions are often handled separately from one another. Second, for those plantscloser to Tokyo, EH&S staff that work at the corporate level may also be considered plantlevel, depending on the frequency and nature of interaction with the plant. Third, andperhaps most important, environmental activities that are normally public-sector in theNorth Americ% such as waste water treatment and incineration, are the responsibility ofplant EH&S personnel in Japan, increasing the required size of the environmental staff.In fact, Japanese plants are required to have certified plant staff to manage these activitiesat each of their facilities.Draft - Do Not Cite or Circulatepreliminary Report Environmental Practices SurveyTable 1: Environmental Management -Japan North AmericaAverageNumberof Environrnemd Staff 19 2% Env. StaffAlso Responsiblefor Healthand Safety 40 0% llme EnvironmentalManagerSpendson the Plant Floor 60 20Plants in both North America and Japan report active environmental managementprograms, though the exact nature of these programs varies between the two countries.Environmental managers in North America report spending an average of 20% of theirtime on the plant floor while managers in Japan report on average 60910.Again, this maybe the result of differences in question interpretation, where Japanese respondents mayhave interpreted “on the floor” as “at the plant.” Another likely explanation is that thelarger number of environmental managers in Japanese plants allows them to be moreactively involved in plant process. In fact, many environmental staff in Japanese plantshave other responsibilities, such as maintenance. This maybe encouraged further becausethey are less burdened by the strict environmental regulations facing their counterparts inNorth American plants.Both internal and external audits were conducted at almost all plants in NorthAmerica and Japan. Internal audits were reported to occur more frequently in NorthAmerican plants (on average at least every 3 months and often every month as comparedto less than one every six months for Japan). The high frequency of internal audits inNorth America is most likely due to commonly performed “walk around” audits that serveto ensure proper chemical handling and disposal. On the other hand, Japanese plantsreported a greater rate of external auditing (once a year in Japan compared to on averageonce every 2 years for the North American plants), a difference that could be due tovariations in regulatory requirements. It is interesting to note that environmental auditswhich were until recently, a foreign concept to many Japanese plants, have disseminatedrapidly throughout Japanese industry. The Japanese interest and commitment tocomplying with 1S0 14001 is one of the key forces leading to the expansion ofenvironmental auditing in Japan.On average, external audits in Japan were performed by corporate staff, while inNorth America audits were performed by outside consultants. The use of externalconsultants may indicate a greater need for external validation in North America wherepressures from local communities and environmental groups are keenly felt. Thisdifference in external pressures is further evidenced by the observation that Japaneseplants reported a greater reliance on staff above the plant level for communication withcommunity and other groups external to the firm. While this could be due to a greaterinterest in control over external information in Japan, it is likely also reflects the stronglocal community pressures in North America, to which plants must directly respond.Air EmissionsDraft - Do Not (3te or CrculatePreliminary Report: Environmental Practices SurveyThe primary measure of air emissions isthat the Japanese plants emit a third more VOCSVOC emissions. Our analysis suggeststhan their North American counterparts(Figure 1). Because of the lower precentage of Japanese plants in the sample: thedifferences may be even greater than those found to date. The lower emissions levels inthe US are due to tighter regulatory standards in North America. Regulations for odor inJapan, however, do require the use of control technology (primarily incinerators), causingsome of the lower emitting Japanese plants to have emissions at levels below several ofthe higher emitting plants in North America.I?igure 1: VOC Emissions/Vehicle 1993VOC Emissions/Vehicie 1993NA JPThe data also suggest that plants in Japan and the North America are, at this time,taking different approaches to air pollutant reduction. As can be seen in Figure 2, NorthJapanese plants reported a higher contribution of abatement equipment to air pollutantreduction in 1994 than did North American plants. From discussions in Japan, is is clearthat Japanese plants are relying more heavily on abatement equipment than in the past.The Japanese plants may be reaching the present limits of reductions through processchange, and are now turning to abatement equipment to meet new regulatory demands.American plants continue to rely on abatement equipment as a strategy to meet evertightening standards. However, a growing emphasis on pollution prevention in Americanindustry, supported by government program such as EPA’s 33/50, are starting to promotevoluntary pollution prevention and source reduction efforts.Draft - Do Not Cite or CirculatePreliminary Report: Environmental Practices SurveyFigure 2: Air Pollution StrategyAir Pollution Strategy6040-%30-20-10-JP NADespite these efforts in the United States, a preliminary look at use of solventsand cleaners (Figure 3 and 4) suggests that in 1993 plants in Japan, on average, wereusing smaller volumes of solvents and cleaners with slightly better success at reducing (orat least not increasing) these potential pollutants.At this time, we do not have much data on toxic air emissions, which has been akey priority in the 1990 U.S. Clean Air Amendments.Figure 3: Solvent and Cleaners 1993Solvent and Cleaners(LiterNehicle) 199374 .6- “Purge and ~- ,Cleaner(LNerlVehicla) 4- .3- “2- “1- “0 Ir 4Japan NorthAmericaDraft - Do Not Cite or CirculateReliminary Report: Environmental Ractices SumeyFigure 4: Solvent and Cleaner ReductionI Solvent and Cleaner Reduction (92-93)1Liters1993-Liters19920-0.2-0.4-0.6-0.6-1-1.2-1.4-1.61Paint Shop Environmental ManagementFor both the North American and Japanese plants, responsibility for coordinatingday-to-day paint area production issues largely resides lies with the paint shop managerand responsibility for coordinating technical production issues is shared between the paintshop manager/coordinator and engineering manager. There were differences however, inthe realm of influence of these latter technical managers. In Japan, the technical managerwas reported to have more influence on strategic issues such as paint formulation choicesand obtaining permits. In North American plants, technical managers had a greaterinfluence on operational issues such as shop maintenance and operation of equipment.One explanation for this difference is that in Japanese plants influence on operationalissues may be shared more widely than in North American plants.Japanese plants report that there are few full time suppliers working in the paintshop (average of 1.0), while in North American plants the average number of full timerepresentatives of suppliers at the plant is 5.5. One reason for this difference is the closephysical proximity of Japanese suppliers to their customers, allowing them to provideessentially “on-site” representation. This difference also reflects a growing trend in theUnited States for suppliers to have a greater role in paint shop management. In theUnited States, it was consistently reported that suppliers have a greater amount ofinteraction on a number of major paint shop decisions such as assisting plants in processimprovement Japanese plants, however, reported a greater level of interaction with paintsuppliers regarding future paint formulation. In North America more long termformulation decisions are made at the corporate level, partially explaining this lower levelof interaction.Another indicator of the growing role of suppliers in North Arnerican.plants is thesmall number of plants that report the use of financial incentives to encourage suppliers toidentify ways to reduce process costs.Draft - Do Not Cite or Circulate 6Preliminary Report: Environmental Practices SurveyFigure 5: Plant/Paint Supplier InteractionEl y- Im IL-EAaaiatanceto St.pplier Share shareyourahop on monitoring information informationcoatinga final quafity about paint to plan futwaoptimization of coating tokity paint adventUtility ManagementDifferences in energy use in North American and Japanese plants were significant.Average energy use per vehicle was significantly lower for Japanese plants (6.4 1MMBTU/vehicle) than for their North American counterparts (10.82 MMBTU/Vehicle).As can be seen in Table 2 and Figure 6, energy use and conservation efforts were likelyinfluenced by energy costs, which were reported to be more than three times higher inJapan. Many management variables reflected the increased focus on energy conservation.In Japan, for example, budgeting of energy is done at the level of the department,increasing department incentives for conducting conservation effoxts. In North Americ~most budgeting is still done at the plant level. The number of energy meters used incritical areas was also repotted to be greater in Japanese plants, indicating a greaterinterest in monitoring energy use.Table 2: Utility Use and CostsAvemze Japan Avenage North AmericanMMBTU/Vehicle 1993 6.41 10.82$/MMBTU 17.58 5.08Enerw Coat (S/Vebicie) 108.2 63.09Number of_ Metera 3 2.2Water M3JVehicle 1993 7<15 10.39$IM3 Water 0.95 0.35Water Coat ($/Vehicle) 5.09 2.74Number of Water Metera 5 1.95Drai7 -Do Not Cite or CirculatePreliminary Report: Environmental %acticcs SurveyFigure 6: Energy Use Per VehicleMMBTU/VehicIe 1993NA JPWater use follows a similar path to that of energy. North American plants reporthigher water use than their Japanese counterparts, while Japanese plants payapproximately twice that of North American plants for water per vehicle. Within bothJapan and North America water use is associated with the age of plant (older plants usemore water). The stronger use of water meters in Japanese pkmts, however, may indicatea greater interest in water use monitoring and conservation. Since water use is to a greatextent built into the capital equipment of a plant (i.e. heating and cooling towers, paintbooths), it may be that plants with relatively newer equipment will have similar water uselevels regardless of their location.Figure 7: Water Use per VehiclemA3 Water/Vehicle 1993NA JPWater PollutionPlants in both North America and Japan rely heavily on abatement equipment toreduce water pollution. As suggested above, Japanese plants all operate waste watertreatment systems on their facilities and devote considerable attention to reducing andpreventing water pollution. Many facilities are working to reduce organic materials,nitrogen and phosphates, substances which cause eutrophication. Japanese plants areresponding to strict local water standards. Despite their heavy reliance on waste waterDraft - Do Not Cite or Circulate 8preliminary Report: Environmental Ractices Surveytreatment systems, Japanese plants report a g-eater reliance on process improvement forreducing water pollution than their American counterparts. (We have data on sludge, butit will be provided in a future report.)Figure 8: Water Pollution Strategy60.50- E proceea improvementn materialrecyciing40- .“h — 0 abatementtechnology30-20-10-0NA JPSolid WasteAs seen in Figure 9, plants in both countries are reporting that recycling is acentral component of their waste reduction strategy. A notable difference, however, isthat Japanese plants report that they look towards process improvement to greater extentthan plants in North American. One reason for this is that in Japan, landfNling costs arelarge and resources are more expensive. Therefore, many opportunities for recyclinghave already been explored. In contrast, in North America the popularity of recycling hasemerged over the past five years, resulting in a contribution of this strategy to solid wastereduction.70606040‘?63020100H1. :--. ----A It n pr~ Imf.?r.vwmwm It jn matariairecyoiing IIENA JPFigure 9: Solid Waste Reduction StrategySignificant differences were reported between North American and Japaneseplants for solid waste (waste includes Ianfilled, incinerated, and recycled waste materials).The data indicates that Japanese plants, on average, generate about 20% more plasticwaste. One explanation for this difference is that Japanese plants reported plastic thatwas recycled internal to the plant while Americans did not. This would make aDraft - Do Not Cite or Circulate 9Preliminary Report Environmental Practices Sumeysignificant difference because many of the Japanese plants have injection moldingprocesses at their assembly plants. In addition, Japanese plants report a greater percent oftheir plastic waste going to incineration with energy recovery, an economically superioralternative to Iandlll]ing that is often not available in the United States because of strongcommunity opposition to incineration siting. This may give plants in North America agreater incentive to reduce plastic waste. On the other hand, the reliance on incineratorsmay give some Japanese plants the incentive to keep plastic waste streams higher tooptimize incinerator performance, depending on the way in which the incinerator isfinanced and operated.Figure 10: Cardboard and Plastic.-2 14: 12fj ‘i!s:S’2oEL tkg Plastic and Cardboard WasteNehicle46EF?!!!zENA JPAs can be seen in the Figure 10, Japanese plants had far less cardboard waste thandid North American plants. This difference can be primarily explained by a difference inpackaging strategy in the two countries. As seen in Figure 11, Japanese plants reported afar greater utilization of indefinitely reusabIe containers than plants in North AmericaGreater use of returnable containers in Japan may be the result of a relativelygeographically close supplier network that makes container return more feasibleeconomically an~ in many cases, financially beneficial.Figure 11: Container DisposalI I bI I Container disposal I30. I20.o~Drsft -Do Not Cits or Circulsts 10

Environmental Practice Survey Results

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