The Eco-Innovation Challenge

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The Eco-Innovation Challenge

48

Box 4.2 | Material efficiency in the manufacturing

sector –the German case

Approximately 800 billion Euros are spent annually on materials by the manufacturing sector

in Germany (Destatis 2010). While material costs seem to make up a share of 45% of to tal

costs on average, expenditures for energy and personnel are indicated to be lower (Demea

2010). Yet many of the efficiency measures implemented in companies have been directed

at labour productivity, not material productivity (KfW 2009).

Since 2005 Demea (the German Federal Ministry of Economics and Technology the German

Material Efficiency Agency) has been advising companies, in particular SMEs in the

manufacturing in dustry, about options for improving their material efficiency. After some 700

cases Demea experiences are pro ving that material efficiency can be done at a profit. Nearly

half of the companies achieve material efficiency improvements with investment costs under

10,000 Euros and 20% of companies for around 50,000 (Demea 2010). Mea sures for

improving material efficiency can be process-orientated, pro duction-orien tated, production

peri phe ry-orientated, and personnel-orientated (see Table 4.1).

In the Demea cases, around 200,000 Euros have been saved per company through material

efficiency gains on average, which means that the material efficiency measures had a

leverage effect of factor 20. This is the equivalent of around 3,300 Euro per employee and

increases the yearly sales-to-profit margin of about 2.4%. In relation to their turnover, small

com panies have the highest relative material cost-savings potential (Demea 2010).

Additionally, those industries classified as resource-intensive, like the manufacture of

appliances, metal products, plastic products and the chemical industry, have the highest

potential for material ef ficiency gains (KfW 2009).

Supported by political measures the realization of material efficiency measures in the

German industry can save material costs with an amount to around 60 billion Euros yearly

between 2012 and 2015 (Arthur D. Little 2005).

Table 4.1

Classification and examples of measures for improving

material efficiency in the manufacturing sector

PROCESS-ORIENTATED

INTEGRATION OF

A QUALITY MANAGEMENT

SYSTEM

ESTABLISHMENT OF

A RECYCLING SYSTEM

PRODUCTION-

ORIENTATED

Replacement of

additive material and

operating material

New production

methods

PRODUCTION

PERIPHERY-

ORIENTATED

Warehousing

and consignment

Packaging

PRODUCT-

ORIENTATED

Re-design,

new material,

less material,

less material variety

Standardization,

modularisation,

typification

PERSONNEL-

ORIENTATED

Awareness raising

and training of

the employees

Employee motivation

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