As far as the use of products is concerned, stricter limits or prohibitions on the use of pollutants (meaning, for example, asbestos-free products, new exhaust emission standards) have had, and continue to have, an influence on product design and production techniques. As for waste disposal, schemes aimed at transferring more responsibility for disposal to manufacturers and traders are of particular importance.
Strict environmental regulation can be seen as a considerable disadvantage when considering factory location. Taking Germany as an example, 1.7 % of the republic's GDP was spent on environmental protection in 1991, two thirds of this by private industry. Although there is general consensus that this policy makes sense in the long run and is indispensable, we must ask if this challenge does not represent an invaluable locational advantage in the long term. Do these constraints not lead to innovations in products and processes as well as to new markets? Germany has the highest share of the world market (1990) for environmental protection technology (21 %), ahead of the USA (16 %) and Japan (13 %).
Financial estimates for solving the environmental problems inherited in the former GDR are going through the roof. Many other countries, amongst them some of Germany's immediate neighbours, are not yet aware of this situation or its consequences. No doubt all industrial countries will be faced with these challenges sooner or later. But then the efforts we are making today will give us an invaluable competitive edge, with a large market for know-how and machines for environmentally safe manufacturing processes emerging. A significant number of companies have already taken up this idea as a matter of sales policy. In both capital investment and consumer goods, progressively more purchasing decisions are being influenced by environmental considerations.
Take, for example, the field of electroplating, which because of the chemicals used, is a major hazardto the environment. Electroplating companies are obliged to invest heavily in waste disposal, in particular for drainage filtering, making it difficult to integrate the electroplating stage into the overall manufacturing process. This has led to a new approach: instead of the workpiece being transported to the individual baths for surface treatment, the 'chemical' comes - inside a sealed machine - to the workpiece. Inside the machine is a processing chamber which is filled alternately with the necessary fluids for the cleaning and separating processes. The unit manufacturer assumes the responsibility for disposal as part of the service, so that the operator is not burdened by the specific problems of an electroplating shop. He can integrate this machine into his production process and operate it as he would any other. Here, new requirements have led to new solutions and have thereby generated a forward-looking innovation.
ENVIRONMENTAL TECHNOLOGY – AN IMPORTANT
Environmental protection is not only of constitutional importance, it is becoming increasingly more significant as an economic factor. Each year, the expenditures on environmental protection are being increased. These will continue to rise due to the growth in the existence of environmental protection systems despite a downward trend in investments.
In previous years, investments in environmental protection have also undergone a structural change which makes the necessary sums appear too low. It has been ascertained that statistics normally only take so-called “end of the pipe technologies” (i.e. connected filters and sewage treatment processes etc.) into account. At present, however, the conversion to process and product integrated environmental protection based on an environmentally friendly production process is taking place. Appropriate measures form part of modernization and expansion investments which is predominantly of advantage to the machine and plant building industry. They increase the level of environmental protection although a special arithmetical compilation would be impossible and of little use.
The high rate of investment in environmental protection has now borne fruit and this is particularly made clear by the drop in the emission of pollutants (sulpher dioxide) in Bavaria.
By ground redevelopment and the preservation of healthier air and water and of nature and the countryside may be achieved a distinct location advantage.
A further point is also worth mentioning however, i.e. the fact that not only a few industrial sectors benefit from the high expenditure on environmental protection. In addition to specialist environmental protection companies, the demand ensuing from environmental protection is also of particular benefit to the most diverse companies in the machine building and steel construction industries, electrical engineering, control technology, measuring and analysis technology, process engineering, the construction industry and the manufacturers of numerous types of apparatus, equipment, working materials and devices required in environmental protection.
Environmental protection is a growth industry and this is also demonstrated by the “investments” in organizational structures which have not yet been statistically compiled such as the dual waste system (DSD) and other disposal and recycling systems. In this respect, the processing industry will be a particularly interesting growth industry. This collective term is used to describe all companies which deal with the recycling of raw materials and/or other marketable products from refuse or waste materials and particularly companies which deal with the separation and sorting of refuse or the disassembly of used products and/or processing, refining and marketing the materials thus obtained. Environmental protection technology has good prospects and the evaluation of patent statistics Ifo-Institut für Wirtschaftsforschung has shown that Germany is the world’s leading inventor in the processing industries and surpasses the USA and Japan in practically all areas of processing technology with regard to the number of registrations. Inventions involving the destruction of solid refuse or its conversion into useful and safe items are of the utmost significance and approximately a quarter of all German inventions involving the recycling of synthetics came from Bavaria. A vast growth market is opening with regard to the prevention of water pollution.
Prospects should not only be viewed on a national level however. The European single market promises new stimuli for the environmental protection industry. In 1988, the European Community amounted to approximately DM 9.4 billion.
Surveys have shown that companies regard the sales potential in the EEC single market (with its improved prospects concerning public invitations to tender) as an incentive for intensifying activities abroad.
New politico-environmental initiatives must thus gain a foothold throughout the whole of the EEC from the start to achieve the most widespread effect possible and to prevent the local economy from having to bear onesided cost burdens and competition disadvantages. Nobody should lose sight of the discernment that every money unit invested in environmental protection must first be earned.
INVESTING IN PEOPLE
It is important to consider restructuring methods of paying employees in order to attain maximum financial efficiency. A study examined the relationship between piece-work and hourly pay, operating the two schemes in parallel. Initially, piece work and time-related pay schemes were operated in parallel. A survey revealed that the efficiency level for piece work was equal to the prescribed 'sound barrier', in this case 135 %. Hourly paid workers achieved between 40 and 100, and an average 70 %. So contrary to many people's expectations, the hourly-paid workers were by far the 'most expensive'. In the units, a veritable 'performance explosion' was observed amongst this group; the comparative figure is now 120 %. Lead times have fallen by 30 to 40 %. There is no longer any stockpiling of work in progress; raw material is available on call from stock, as determined by the unit concerned and not by a central administration!
The workforce is now paid according to productivity, in the form of bonuses, divided as a matter of principle equally amongst the whole group, taking both shifts together. The group has an elected speaker who has a full work load and receives no financial reward. This prevents the position of foreman from being secretly re-established, an effect which can be observed in many other examples of group working. The large reserve of potential speakers is in itself amazing; the figure is over 50 %. The fear which is occasionally expressed that the pay scheme in such a group must result in a harsh social climate, is not borne out here. The performance differentials which inevitably arise do not result in individuals being ostracised, which must be due at least in part to the attention paid to human factors.
Meetings of all unit employees take place at regular intervals, as a rule weekly, and notes of these meetings are taken as a matter of principle. They deal mainly with efficiency improvements, since these are in the natural interest of the employees. Work is currently under way to establish a corporate model in which each employee's self-image and that of the company are expressed to the customers.
It should be clear by now that the solutions of the future can not be 'bought off the shelf, but must be pioneered. A process of change in awareness and behaviour must be given priority over the use of technical aids. In many cases we are still at square one. Only if corporate management works unequivocally towards this goal will it be possible to mobilise middle management and staff. This requires a reappraisal on the part of all concerned, a process which will be wearisome and in part painful, but which is absolutely essential. History teaches us that structures and organisations which are only concerned with hanging onto power and which no longer offer new ideas and solutions, will sooner or later disappear and be replaced by new ones; it this that industry, through innovation, must endeavour to avoid.