Re: Uli Behringer of The Music Group Q&A
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Dear Rafi and Mark,
once again thank you for your question on Environmental Measures and Responsibilities.
This is a huge topic for us at MUSIC Group because of course we own the factory that produces our products. While competitors who use contract manufacturers can easily turn a blind eye to compliance, we take responsibility for our own compliance and of course absorb the sometimes significant costs of doing so.
In our view there are two important aspects to environmental responsibility for which we are accountable. The first relates to the way our products are made and the measures we take to ensure that we leave as small an environmental footprint as possible. The second relates to the impact our products have on the environment when they are in use and at the end of their service lives.
We are lead-free
In 2006, the European Community introduced the RoHS Directive (Reduction of Hazardous Substances) which restricts the use of six hazardous materials in the manufacture of electronic equipment. It is widely known as the “Lead-Free” regulation but actually includes 5 additional substances, even-more toxic than lead. While compliance is legislated in the EU, with the exception of California, leaded products are still allowed to be imported and sold in the United States.
Lead is one of the very poisonous and harmful substances as it causes severe brain and nerve diseases in humans and animals. Since lead is water-soluble and it is heavily concentrated in electronic waste, it can easily enter the water supply through the groundwater as it is washed out from dumping grounds and ultimately ends up in our drinking water.
The EU is trying to mitigate this impact with the WEEE Directive (Waste Electrical and Electronic Equipment) which sets targets for collection, recycling and recovery of electrical goods. It is part of a pan-European legislative initiative to solve the problem of huge amounts of toxic e-waste.
Several years ago, we decided to become an early adopter of lead-free manufacturing. To do so we had to invest not only in the specialized equipment needed to apply lead-free solder, but to also convert all our soldering machines, PCB's and board-level components to lead-free versions. Our decision was to implement the RoHS Directive for all of our products sold world-wide, despite the lagging legislation the US and other markets.
It is important to note that many factories in China still manufacture leaded products and export them to the US plus other countries as leaded components are often less expensive. That’s where manufacturers take short-cuts.
Even parts suppliers try to cheat by falsifying compliance certificates, so we have implemented a test laboratory and equipped it with expensive equipment that allows detection of hazardous material.
The benefits of a fully lead-free manufacturing environment have been recognized immediately by our employees who work in the factory. In addition, when we upgraded to lead-free manufacturing we also installed a sophisticated solder fume suction system to evacuate all gases from the wave solder and hand soldering stations. This is a rarity to this day in China where workers are exposed to solder fumes with no positive airflow to disperse the gases.
We recycle material
Wherever possible we recycle waste even if it comes at a higher cost, rather than just disposing of it. For example, we employ a huge vacuum suction system in our wood processing facilities that gather all of the waste material produced from cutting and shaping wood. Unlike most manufacturers in China who simply sweep up and dump this waste, we return it to our vendors for recycling and re-use in the manufacture of man-made wood products. Vacuum suction systems are not common in China (and not even in the West) as they come at a substantial cost. However, we see this as our contribution to the environment and protection of our workers.
Once a year we invite our business partners from across the world to visit China and completely open our factory to them. There are many videos on-line where you can see our manufacturing and environmental standards. People who have visited our “MUSIC Group City” commented that it is the cleanest and best organized factory they have seen, and not only in China; comments we take great pride in.
We use recycled material
Several years ago we started a huge initiative to introduce more environmentally friendly packaging for our products. One of the biggest objectives was to replace poly-foam used in packaging by pulp completely made out of recycled paper material. With the exception of some heavy and fragile equipment such as guitar amps for example, which require high-density poly-foam, we have converted all of our packaging to recycled and recyclable material.
Our packaging, product manuals and any other paper products shipped from our factory now must contain significant percentages of post-consumer waste. We have converted to the use of vegetable-based inks wherever possible in our printing, even using them on full-color packaging. We also demand that our plastics suppliers demonstrate post-consumer recycled content where product performance and durability are not adversely impacted.
We live “Green Energy”
Across the company we subscribe to the Japanese “Kaizen” (continuous improvement) principle which calls for preservation of resources by continually preventing waste. This important principle drives everything from the way we run the factory to how we light our offices using natural light wherever possible. It also drives the way we allocate engineering resources to constantly advance the value proposition.
As I mentioned earlier, we have opened two research centers; in the UK as well as in China. The focus of these Centers of Excellence is not direct product development, but true technology research in areas such as power conversion, networking, wireless, etc. While it is common knowledge that the return of investment in research is unpredictable, we view the creation of intellectual property as a critical differentiator and driver of the value proposition.
Among the breakthroughs developed in our research centers to date is a radical new amplifier technology we have termed “Class-Zero” as it is fundamentally different from Class-D technology. By successfully integrating a switch mode power supply with an amplifier we have combined both into an ultra-efficient single stage that delivers up to 94% power efficiency. A patent has been applied for and hence we can talk about it now.
As it happens with research projects, the breakthrough developments can sometimes have even greater potential in other than the initial application. Interesting is the fact that the “Class-Zero” technology might now lead us into very different fields of power conversion such as Solar technology or Automotive application where efficient and sine-wave based power conversion is crucial. The benefits there are potentially many times greater than in power amplification.
We are no longer “linear”
Traditional linear power supplies and amplifiers have a poor energy efficiency of 30% or less, which means 70% of all energy is lost and converted to heat. Over the last several years we have made a concerted effort to convert most of our products from inefficient linear power supplies and Class-AB amplifiers to more energy efficient designs.
I am proud of the fact that we have built one of the best digital power engineering teams in the industry that enables us to design cutting-edge SMPS and Class-D based products with total efficiencies of up to 85%!
Several years ago we bought the complete Coolaudio technology portfolio from a large US semiconductor company called Intersil. The portfolio consisted of around 10 important patents covering Class-D amplification, which have served as the foundation for our continued development of these technologies. Since then we have invested massively in R&D resources to develop ground-breaking products such as the iNuke power amps as well as the Eurocom Installed Sound products.
When we started looking into the Install market we discovered that manufacturers were still making 70/100V amplifiers with linear power supplies, Class-AB amplifiers and heavy output transformers; delivering system efficiency of 20-30%! Even worse was the fact that products of this type are typically left running 24/7 and of course the current draw even with no program material can be enormous when compared to digital power systems. We knew there had to be a better way.
We started a 2-year development effort to produce the industry’s most energy efficient product line, including transformerless 70/100V amplifiers that, when combined with SMPS technology could deliver power efficiencies of up to 85%. The development effort resulted in multiple patent applications and delivered 14 power amplifier designs that set new standards for efficiency.
While the Install market is generally very conservative, we have already received extremely positive responses in relation to our new Eurocom line. Customers do seem to care about "green power" which we find very encouraging. We have invested heavily in leading the industry through cutting-edge technology and not merely following established competitors. We truly believe that our energy-saving technology will become the industry standard in the Install market, even if it will take some time.
We estimate that our Eurocom amplifiers can pay for themselves in energy savings alone over 2-3 years.
Eurocom products are now shipping and the huge energy saving benefit has already been recognized by our customers. Hopefully the European Community and progressive States like California will take the lead by declaring the use of energy efficient technology mandatory also for the Install market.
I always believe that “Green Initiatives” should ideally be connected to commercial benefits as then it becomes a true “win-win”. In today’s world, people have become much more sensitive to environmental concerns which means that their buying behavior will ultimately force manufacturers to adopt change.
By finding ways to deliver those environmental benefits while also improving our own efficiencies, we become first movers in this area much as we were when we moved manufacturing to China 20 years ago.
