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Sustainability and Profit Go Hand in Hand

RFID helps companies preserve the environment and boost the bottom line.
By Minda Zetlin
Mar 06, 2016

At Detroit Diesel, there's an area employees call the "green corner." The Daimler Trucks North America affiliate, which builds engines, axles and transmissions for long-haul trucks and other heavy-duty vehicles, has won so many awards for its environmental achievements it had to put up a special shelf to hold them all—including the RFID Journal Green Award, which the company won in 2015 for using RFID to reduce paper waste (see Omni-ID's View 10 Tag Aims to Replace Paperwork at Detroit Diesel, Other Factories).

Detroit Diesel builds engines to customer specifications, so each requires a "build book" to provide workers with assembly instructions and checklists. Last year, Detroit replaced paper build books—each a 40- to 60-page document—with Omni-ID's RFID visual tags, which display instructions.

Before adopting the RFID solution, when customers requested changes after an engine was in production, the new instructions had to be printed, and then operators would tear out the relevant pages and staple in new ones. With the factory pumping out approximately 410 engines daily, the build books consumed roughly 5 million pages annually.

Today, the company can quickly update any changes in the software, and then download the information to the tags. Workers can also use the Wi-Fi-enabled RFID tags to call for needed parts, reducing production delays. "We not only are able to save millions of pages of paper and ink, we can update to build information in real time," says Robert Hyden, a Detroit Diesel systems engineer who served as project leader on the RFID implementation. And because the paper books took manual labor to distribute, "there's a payback in manpower as well," he says (see Visualize This—Detroit Diesel Goes Green With RFID).

"There's tree green and then there's cash green," Hyden says. "At the end of the day, you have to make a profit. On the other hand, you want to be a good corporate citizen. We take into account both profitability and environmental impact when we do a new project." Most of the time, the two objectives are aligned. "I don't think, the way things are going, that you can separate those two," he says.

It's a viewpoint smart business leaders in myriad industries are adopting. "Many companies are actively integrating sustainability principles into their businesses, and they are doing so by pursuing goals that go far beyond earlier concern for reputation management—for example, saving energy, developing green products, and retaining and motivating employees," wrote the authors of a McKinsey & Co. report released in 2011.

In 2015, the firm went back to take a closer look at exactly how becoming greener is boosting the bottom line for the companies it surveyed. "We found that companies that built sustainability into their operations saw immediate benefits, which gave them the momentum to do even more," the new report noted. Though these benefits included avoiding public relations or regulatory risks, many found the same programs that made them greener also saved them money by reducing the use of resources such as fossil fuels and water, and lessened the risk of a business disruption should those resources become scarce.

Like Detroit Diesel, other companies are turning to RFID to marry their profit and sustainability objectives. They are not just claiming to be good corporate citizens—a common PR practice called "greenwashing" that, ultimately, is bad for business. Increasingly, consumers are paying more attention to the environmental impacts of products and manufacturers. Credibility issues can hurt entire industries, exposing them to scrutiny and criticism, and engender mistrust in companies that make false claims. In some cases, companies can be fined for deceptive marketing.

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