Environmental Aspects

Running head: Environmental Aspects

Environmental Aspects

Bruce McCormack

University of Phoenix

ENVIRONMETAL ASPECTS

A businesses' external environment can be defined as all the factors outside an organization that are taken into consideration by the organization in its decision-making (Duncan, 1972). The external environment is made up of three components: the remote environment, the industry environment, and the operating environment. In order to gain competitive advantage, an organization needs to study its external environment and make use of the opportunities there. To sustain a competitive advantage, the organization must respond to the information gathered through its study of the external environment by altering its strategies and plans as the need arises. The organization will study any number of factors of its external environment, which can include the state of the economy, government interaction, the legal landscape, or its suppliers and service providers.

Environmental scanning is the acquisition and use of information about events, trends, and relationships in the organization's external environment and is used to plan the future course of action. An organization hopes to improve its position in the future by understanding the forces of change and developing effective responses through environmental scanning. Environmental scanning is the main source of information that an organization uses to adapt to its changing external environment.

Detroit Diesel Remanufacturing Corporation (DDRC) has five engine remanufacturing plants located in the United States and Mexico. These plants take in diesel truck and off-road diesel engines, disassemble them to their core, and through high intensity heating and cleaning processes, remove the oil and grease contaminants. The restoration process uses computer-aided measuring, gauging, reassembly, and testing to assist factory workers in bringing the engine parts to original, and sometimes better than original, blueprint specifications. Remanufacture can be thought of as the original recycling, though it goes even further by involving resource conservation. Where recycling returns raw materials to their original state prior to reuse, remanufacturing reuses original parts. The main goal of remanufacturing is to extend the product life of equipment. Studies have shown that global remanufacturing efforts save enough energy each year to equal the output of five nuclear power facilities or 10,744,00 barrels of oil. Nearly 85% of the energy expended to manufacture an original product is saved through the remanufacturing process. The raw materials saved through remanufacturing would fill 155,000 railroad cars (Bilicki, L., 2005).

Product remanufacturing as a whole, not strictly focused on engine remanufacture, is affected by a number of macroeconomic variables. Companies are focusing on reducing their negative impacts on the environment and looking for opportunities to gain or retain competitive advantage. This points to the macroeconomic variable of government regulations; governments worldwide are enacting and enforcing strict regulations on all aspects of production of new goods and disposal of end-of-life products. Production is also a variable affected in remanufacture, which is a form of asset recovery where only the components that are technologically obsolete or worn out are replaced. As more assets are recovered, fewer units need to be produced, lowering production costs. Remanufacturing also affects new product development. Weaknesses in product structure and materials are identified and focus can be directed to areas of in need of improvement. Consumer costs are another macroeconomic variable considered by companies when remanufacturing products. Remanufactured