Case 7 - Lunkomex
8. Appendix
8.2 Appendix B – Interview transcripts
71
72 6. What is your point of view on certification and standards for sustainability such as ISO 14001 for environmental management systems?
These certifications are expensive and there are so many certifications that we would not know which one to get. We believe that it is too much paper work. And in the end we are not sure whether this is necessary for us to do.
7. Do you see any barriers to engage in sustainable practices?
Yes, the high costs to get certifications are a tradeoff. And the fact that there is no clarity which one would be best to get.
73 Interview with case company 2
Name of the company: Automotive Maquiladora S. de R.L. de C.V.
Person interviewed: Mr. J. Andrade - Operations manager of Automotive Maquiladora June 24, 2015
1. Before we start, could you please give a short overview of your business?
We are one of the production plants of BBB Industries LLC that is based in Alabama in the United States. Our business is to remanufacture breaks for light and heavy vehicles. Our business is profitable due to the fact that remanufactured parts cost about half than new parts.
Consequently, customers are thus not only making a “green” choice, but also a financially sound decision when buying their products.
2. What do you understand under the term “sustainability”?
I understand that sustainability refers to reducing the impact on the natural environment. So all forms of energy reduction, waste reduction or polluting less are sustainable actions.
3. Do you currently engage in any sustainable initiative? Why or why not?
We are doing Lean Manufacturing. This is a tool to eliminate waste throughout our operation processes. We have Lean Champion employees that provide training on lean practices to employees throughout the entire organization. So we receive training on the lean practices of BBB Industries. Our Lean Management focuses on reducing waste from remanufacturing operations. This includes a reduction in power usage, an efficient management of our inventory and a reduction in material scrap. We also installed an efficient lighting system in our facilities to reduce electricity consumption.
To be honest we also saw that other companies in the same line of business as ours have adopted sustainable practices successfully. This observation gave us the incentive to do so as well. The problem that we had at the beginning was that sustainable practices are not clearly defined, so they are kind of open to interpretation.
74 4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
Yes we do benefit. Lean Management has helped us to reduce operating costs by about 30%
compared to the time before we introduced waste management practices.
5. Do you feel compelled to introduce sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
We feel compelled due to the nature of our business. Remanufacturing promotes reuse so that there is less waste in this world. We are proud that our business helps to protect the environment.
According to the Automotive Parts Remanufacturers Association (APRA), remanufacturers like us have a positive impact on the environment in four ways: energy conservation, pollution reduction, reduction in the use of raw materials and landfill space conservation.
6. Do you receive any support (financial, capacity building or other) to engage in sustainable practices or certifications/standards?
We only receive support from our parent company BBB Industries, they helped us get certifications and train us on Lean Management practices. They also pay all the costs associated with these sustainable practices.
7. Do you own a certification for sustainability for example ISO 14001 or any other?
Yes we have ISO 14001. We also have quality certification Ford Q1, ISO 18001 for health and safety management and TS 16949 for quality and waste management.
8. What is your point of view on certification and standards for sustainability such as ISO 14001?
If we would have had to get ISO 14001 or any other certification on our own we would probably do not have any. They are very expensive and we are not able to pay for them on our own. The problem is not only the initial investment to obtain a certification but the ongoing costs associated with keeping it like the continuous evaluations.
75 9. Do you see any barriers to engage in sustainable practices?
In general I think that certifications are too expensive for small companies that cannot get them without help. So the costs can be seen as a barrier. We are lucky to be part of BBB Industries that got the certifications for us.
76 Interview with case company 3
Name of the company: Constructora DHAP S.A. de C.V.
Person interviewed: Mr. M. Rivera - Operations manager of Constructora DHAP July 30, 2015
1. Before we start, could you please give a short overview of your business?
We are a small company from the State of Mexico. Our company was founded in 1964. By then we were named Grupo Industrial SEA. In 1979 we changed our name to Constructora DHAP S.A. de C.V. Today we are more commonly known as DHAPSA. Our business is to manufacture trailers, ambulances and bodies for vehicles and we also install medical equipment in cars.
2. What do you understand under the term “sustainability”?
Sustainability is doing something for the environment like using less resources and polluting less.
3. Do you currently engage in any sustainable initiative? Why or why not?
We do not have a formal certification for such practices. But we are currently following a process to identify ways in which we can reduce waste throughout the company. The main reason for this is to see where we can save costs from production because our industry is very cost-competitive.
4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
We are still at the beginning of implementing waste management, but we can already see that we save around 5% of the cost for materials due to a more efficient production process.
5. Do you feel pressure for introducing sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
We see that several other companies in our industry have obtained ISO standards for environmental management. But this is currently too expensive for us. The thing is that we cannot afford the continuous costs that we would have to pay each year to maintain the certification.
77 6. Could you receive any support (financial, capacity building or other) to engage in sustainable practices or certifications/standards?
No, that is why we have not obtained any certification for sustainability.
7. Do you own any other certification?
We only have ISO 9001 for quality management.
8. What is your point of view on certification and standards for sustainability such as ISO 14001?
They are very costly so we are not able to get them on our own. As mentioned, the ongoing costs are a problem for us.
9. Do you see any barriers to engage in sustainable practices?
Yes, ISO 14001 is too expensive for small companies like us. We need financial support to get the certification. There should be some kind of program from the state or so to help companies like us.
78 Interview with case company 4
Name of the company: Meximotor S.A. de C.V.
Person interviewed: Mr. M. Sánchez - Chief of operations at Meximotor August 10, 2015
1. Before we start, could you please give a short overview of your business?
Our company was founded in 1994 and today we have 35 employees. We are the most important remanufacturer of motors for vehicles in Mexico. We remanufacture motors for the clients with car fleets like Coca-Cola, Pepsi, FEMSA and Grupo Bimbo. Our main market is Mexico, but we also export to the United States, Canada and Latin America.
2. What do you understand under the term “sustainability”?
Sustainability is to take care of the environment and to do something good for the environment like reusing materials to use fewer resources and to pollute less.
3. Do you currently engage in any sustainable initiative? Why or why not?
Our business strategy is essentially a sustainable initiative. We believe that the remanufacturing process we provide is superior to general recycling processes due to the fact that the original value-added of the product is preserved. To extend the life of a product through remanufacturing is the key to preserve the environment, rather than just recycling materials.
It seems that the application of environmental practices is still quite flexible. There is no “one way” to do it right. We observed other companies in the remanufacturing business that were profiting from sustainable practices. This observation has encouraged us to engage even more in sustainable activities. So we decided to obtain the certification for Industria Limpia from PROFEPA to reduce our impact on the environment. We also have QS-9000 for quality management.
79 4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
Since we obtained Industria Limpia from PROFEPA, our sales increased by about 10%. We also noticed a positive impact on our employees. Our employee turnover has also decreased. We conducted an employee satisfaction inquiry about half a year after we became “Industria Limpia”
and our employees responded to be more motivated. In addition they stated to be proud that our efforts to reduce our environmental impact were recognized and rewarded by PROFEPA and our clients as well.
5. Do you feel compelled to introduce sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
We feel compelled to be sustainable due to our business values and the nature of our business.
We believe that doing well for the environment is something that every company should do. Our customers like that we are sustainable, but they have not pressured us to do something sustainable.
6. Did you receive any support (financial, capacity building or other) to engage in sustainable practices or certifications/standards?
No, we obtained our certifications on our own.
7. Why did you choose Industria Limpia instead of ISO 14001 or other?
We decided to obtain the certification from PROFEPA because it is less expensive than ISO 14001. Many bureaucratic processes such as the renovation of the certification are free of charge with PROFEPA.
8. What is your point of view on certification and standards for sustainability?
They are very costly but they give us legitimacy for what we do. It is important to have a formal recognition for your efforts because it can have a positive impact on customers and employees.
That is at least what we experienced.
80 9. Do you see any barriers to engage in sustainable practices?
International certifications like ISO 14001 are very costly. But there are other options like PROFEPA. So it depends how much value you put on sustainability within your business.
81 Interview with case company 5
Name of the company: Manufacturera Mexicana de partes de automóviles SA de C.V.
Person interviewed: Mr. B. Duarte - Operations manager of Manufacturera Mexicana August 11, 2015
1. Before we start, could you please give a short overview of your business?
Our company was founded back in 1995. Today we are a medium-sized company with 119 employees. We produce radiators and temperature control systems for light and heavy vehicles and our main market is Mexico.
2. What do you understand under the term “sustainability”?
Sustainability is to take care of the environment by using appropriate management within a company to reduce hazardous materials, pollution and waste. And also use the resources more efficiently to reduce the need for more resources.
3. Do you currently engage in any sustainable initiative? Why or why not?
We have ISO 14001 for environmental management systems that means that have a lower impact on the environment than companies that do not have this certification.
4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
At the beginning we did not know how we could benefit from ISO 14001. Now we see that it had a positive effect on our bottom line, with a 15% increase in sales.
5. Do you feel compelled to introduce sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
We saw that it was necessary for us to get ISO 14001 because many competitors started to get it and important customers indicated that sustainability is important to them. So we were a bit afraid of losing customers to the competition.
82 6. Did you receive any support (financial, capacity building or other) to engage in sustainable practices or certifications/standards?
No, we obtained our certifications on our own.
7. Do you have other certifications as well?
We have three for quality: Q1 Ford, ISO 9001 and ISO 16949 for quality management.
8. What is your point of view on certification and standards for sustainability such as ISO 14001?
They are very costly at the beginning but it pays on the long term. As least we could see that we gained new customers and increased our sales.
9. Do you see any barriers to engage in sustainable practices?
ISO 14001 is quite expensive. So I believe that it is a problem for many small companies if they do not have some kind of financial support.
83 Interview with case company 6
Name of the company: Murcar S.A. de C.V.
Person interviewed: Mr. P. Márquez - Chief of operations at Murcar August 3, 2015
1. Before we start, could you please give a short overview of your business?
We are a 100% Mexican firm that produces electronic products and replacement parts for light and heavy vehicles. We sell to the car manufacturing industry and the lighting industry in Mexico.
2. What do you understand under the term “sustainability”?
Sustainability means to take actions to preserve the environment like producing less waste and using less electricity or water.
3. Do you currently engage in any sustainable initiative? Why or why not?
We do not have any certification for sustainable practices. They are too expensive for us right now. We are however revising our energy consumption to reduce it and save costs.
4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
Since we started with energy efficiency, we see that we are saving around 3% compared to before, but we are not sure how much potential there is in regards to cost savings.
5. Do you feel pressured to introduce sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
We would like to acquire ISO 14001 or some other certificate to show formal actions in sustainability in the future because we see that it will become a requirement from customers.
6. Could you receive any support (financial, capacity building or other) to engage in sustainable practices or certifications/standards?
84 No, I do not think so. Maybe bank loans, but they are expensive in Mexico.
7. Do you have other certifications?
We have ISO 9001 for quality management systems.
8. What is your point of view on certification and standards for sustainability such as ISO 14001?
They are very costly and financially unbearable for us at the moment.
9. Do you see any barriers to engage in sustainable practices?
ISO 14001 and other certifications are very expensive. This cost is a barrier for us. We will need support from our customers or the government to gain access to finance that is not as expensive as that provided by banks.
85 Interview with case company 7
Name of the company: Lunkomex S.A. de C.V.
Person interviewed: Mr. R. Castillo – Chief of operations August 3, 2015
1. Before we start, could you please give a short overview of your business?
We are a manufacturer of metal frameworks and bodies for vehicles. We also produce small metal parts for automobiles for the local market. We mainly distribute our production to Lunkomex, S. de R.L. de C.V. our parent company that sells to the most important car manufacturers in Mexico like Volkswagen, Nissan, Ford and General Motors, Fiat and Chrysler.
2. What do you understand under the term “sustainability”?
Sustainability is to be responsible with the environment.
3. Do you currently engage in any sustainable initiative? Why or why not?
We have ISO 14001 for environmental management systems. We therefore follow all the sustainable practices that ISO requires.
4. Do you believe your business benefits from engaging in these sustainable practices and how?
Why or why not?
Our customers like Volkswagen and Nissan demand that we have quality certifications and ISO 14001. So the fact that we fulfill these requirements has helped us to keep good customers.
5. Do you feel pressured to introduce sustainability standards or certifications (e.g. due to values or pressure from consumers, government regulation, large customers, or others)?
The pressure from large car manufacturers has led our parent company and consequently us to get ISO 14001. They demand these certifications. I think we might have lost customers to the competition if we did not have the required quality and environmental certifications.
6. Do you have other certifications?