World class manufacturing processes

The World Class Manufacturing (WCM) program – first adopted by the Group about 10 years ago and now implemented at nearly all manufacturing sites worldwide – represents the concrete application of the Group’s focus on the environment and reducing the impacts of its production processes.

WCM is a rigorous and integrated manufacturing methodology that involves the entire organization and encompasses all phases of production and distribution. In 2013, some 41,700 WCM-related projects were implemented, including several specifically targeted at reducing environmental impacts. Through the Environmental Pillar, WCM develops and applies tools and methodologies to reduce waste and optimize use of natural resources. Approximately 3,000 projects based on this pillar led to significant reductions in energy consumption and approximately €70 million in cost savings.

Other measures to ensure a responsible approach to environmental management include the development and application of an Environmental Management System (EMS) that conforms to ISO 14001 standards. Adopted at all plants worldwide, the EMS consists of a system of methodologies and processes designed to prevent or reduce the environmental impact of the Group’s manufacturing activities through, for example, reductions in emissions, water consumption and waste generation and conservation of energy and raw materials. At year-end 2013, 100% of Group plants included in the 2012 scope of reporting were ISO 14001 certified.

Sustainability - World class manufacturing processes

Energy Consumption and Emissions

The Group is continuously researching new solutions to reduce use of fossil fuels and greenhouse gas emissions in response to increasingly strict regulations. Over time, this has also resulted in significant energy-related cost savings.

A total of approximately 2,400 energy-related projects developed during the year as part of WCM contributed to a reduction of approximately 2,000 terajoules of energy, with a corresponding reduction of approximately 180,000 tons in CO2 emissions. One example is the new paint shop at the Group’s Sterling Heights Assembly Plant near Detroit, Michigan. In auto manufacturing, painting is the most energy-intensive process. Natural gas, electricity and water are used to meet stringent process control requirements. The new paint shop at the Sterling Heights plant (which covers 100,00 square meters) uses a highly-efficient “Cascading Air/Recirculating Air” process to significantly reduce energy and water usage, recirculating 90% of air. This innovation provides annual energy savings of approximately €1.3 million, avoiding approximately 24,000 tons of potential CO2 emissions through direct and indirect energy reduction, while also resulting in a significant reduction in water use.

Despite those energy-related initiatives, the increase in production volumes for mass-market and premium brands in NAFTA together with extreme temperatures throughout the year were the main contributors to a year-over-year increase in energy consumption of 5.4%. However, consumption in 2013 remained well below levels recorded for 2010 and 2011.

Direct and indirect energy consumption

Fiat Group worldwide (TeraJoules)201320122011
Total energy consumption 48,322 45,692 48,875

Total CO2emissions from manufacturing processes also increased over 2012 (+5%), but remained well below levels recorded for 2010 and 2011.

Total CO2 emissions

Fiat Group worldwide (thousands of tons of CO2)201320122011
Total CO2 emissions 4,178 3,965 4,196

In 2013, utilization of energy from renewable sources at Group plants increased to 20.9% of total energy consumed(1) (20.5% in 2012).

(1) Includes all plants of Fiat Group Automobiles, Ferrari, Maserati, Comau, Magneti Marelli and Teksid.

Water Management

In many parts of the world, scarcity of water resources is currently one of the greatest challenges faced by governments, businesses and private households.

To protect this essential natural resource, the Group has adopted Water Management Guidelines that establish criteria for sustainable management of the entire water cycle, including technologies and procedures to maximize recycling and reuse of water and minimize the level of pollutants existing in discharged water.

In 2013, the level of water reuse in the manufacturing cycle at Group plants worldwide was 98.8%, representing a total of more than 2.1 billion m3 in water savings.

As a result, water withdrawal was reduced by 3.6% over 2012 maintaining the trend of continuous reductions (‑27.1% versus 2010)(2). Lower water consumption at plants worldwide generated total savings of approximately €2.5 million.

Water withdrawal

Fiat Group worldwide  (thousands of m3)201320122011
Total water withdrawal 24,936 25,874 29,862

(2) First year in which Chrysler Group was consolidated and therefore scope of operations is comparable with 2013.

Waste Management

Fiat Group is committed to preventing waste generation to reduce the consumption of raw materials and the related environmental impacts. Throughout the Group, procedures are in place to ensure the maximum recovery and reuse of materials. What cannot be reused is recycled. If neither reuse nor recovery is possible, waste is disposed of using the method having the least environmental impact, with landfills only used as a last resort. These principles are incorporated in the Waste Management Guidelines formalized in 2012 and adopted at Group sites worldwide.

Continued improvements in the waste management cycle meant that the level of waste generation in 2013 was substantially in line with the prior year despite the increase in production volumes. Compared with 2011, however, there was 2.5% reduction.

At Group level, the percentage of waste recovered increased to 72.7% of total waste generated. Waste sent to landfill accounted for 24.3% and essentially related to inert sand from Teksid foundries. Plants which produce for the mass-market and premium brands, however, reduced waste to landfill either to zero or very close to zero.

The Group is also committed to reducing hazardous waste and in 2013 it achieved a 3.1% year-over-year reduction in hazardous waste generated (-36.7% since 2010).

In 2013, the reduction in the total volume of waste generated led to savings of around €4.5 million worldwide.

Waste generated

Fiat Group worldwide (thousands of tons)201320122011
Waste recovered 1,316 1,271 1,247
% of waste recovered 72.72% 72.20% 67.24%
Waste disposed of 493 490 608
Total waste generated 1,809 1,761 1,855
of which hazardous 39 40 51