Along with the sophistication of management, there are diverse seeds for the consulting business.

Along with the sophistication of management, there are diverse seeds for the consulting business.
The consulting business for ISO 14001 certification has already blossomed, but in the future, consulting business in more specific fields such as zero emissions, energy conservation, environmental accounting, and environmental h-reporting is likely to take off.
One of these companies is PE Asia Corporation, which is developing a consulting business in the field of LCA (Life Cycle Assessment).
In Japan, LCA initiatives are in full swing, with some leading companies incorporating environmental considerations into new product development or attaching environmental labels for various purposes, and are gradually spreading to other companies.
PE, a pioneer in LCA consulting.
The company was established in May 1999 as the Japanese subsidiary of Germany's PE Europe (headquartered in Dettingen), a pioneer in the LCA consulting business.
PE Europe is a joint venture between PE Europe and Kankyo Kenkyu Gijutsu Kenkyusho (Institute for Environmental Research, Minato-ku, Tokyo), which handles environmental assessments, etc. (capitalized at 20 million yen.
Capital: 20 million yen, 49% owned by PE and 35% by Kankyo Kenkyu Gijutsu Kenkyusho (KKE).
The company is engaged in the business of proposing environmental impact reduction methods to companies based on LCA methods.
Although this business was not well-known in Japan at that time, and still is today, PE Europe already has a lot of experience in this field.
PE Europe was established in 1991.
The company has developed many LCA consulting projects in Europe and North America, and has a staff of less than 30 people, including part-time employees.
The company's annual sales are 2.5 million Deutsche marks (approximately 162.5 million yen).
PE's business first divides the process of resource extraction, production, distribution, and disposal into different stages, and then ascertains the flow of materials and energy.
Based on this, the company quantifies the environmental impact at each stage, conducts LCA evaluations, and reviews existing products and processes from the perspective of energy conservation and resource recycling, or proposes improvement measures when developing new products.
As an example of actual consulting, there is a German automobile manufacturer that owns a paint shop that handles 1 million vehicles per year.
The temperature in the paint shop was set at 20 to 22 degrees Celsius, but after PE's investigation and analysis, it was determined that quality could be maintained without such strict temperature control, and a proposal was made to increase the temperature range by 2 degrees Celsius.
This led to a reduction in energy consumption, a 35% reduction in CO2 emissions, and an annual cost reduction of 5 million Deutschmarks (approx. 320 million yen).
Life Cycle Engineering Approach.
The most distinctive feature of PE's consulting services is the LCA method, in which "environmental aspects," "cost," and "technical performance" are converted into the same evaluation axis for a comprehensive assessment.
PE calls this LCE (Life Cycle Engineering).
The company's basic concept is to bring LCA, which has traditionally been academic, closer to actual business, so that LCA can be applied to engineering rather than simply as an evaluation tool.
While environmental aspects are evaluated by LCA and costs by LCC (life cycle cost), technological aspects are judged based on how far they deviate from the development team's or company's target values.
Therefore, even if Company A has a high technological point, it does not necessarily mean that Company B, which is doing the same thing, will have the same high technological point, depending on its targets.
However, the data is effective as a material for judging the direction of business and product development within the company.
By converting these data into the same evaluation axes based on PE's unique know-how, it is possible to judge whether a product has high technicality but high cost, or has excellent environmental aspects but low technicality, or whether a product with excellent technicality and environmental aspects is costly but can appeal to the general public as a company's signboard. This is a powerful decision-making tool for companies.
This is a powerful decision-making tool for companies.
The survey and evaluation are only one part of LCA.
What can we read from them and link them to the reduction of environmental impacts in product development and processes, and furthermore, to cost reductions?
In other words, the company's needs are in this area.
Business development in Japan.
P.E. Asia is also developing its business in line with this concept.
In addition to providing concrete proposals for improvement measures to reduce both environmental impact and manufacturing costs based on LCA methods, the company is also involved in the preparation of critical reviews that evaluate LCA conducted independently by companies and determine whether it is justified.
Mr. Hatori explains, "Our specialty is not to undertake LCA calculations, but to provide consulting services in which we work together with our clients to identify areas for improvement and follow up on them.
In fact, at Mercedes-Benz and other companies for which PE has provided consulting services, the in-house staff has grown through working together and has reached a level where they do not need PE's help.
In addition, together with PE, they are developing LCA methods specific to Mercedes-Benz.
In Japan, there is still a culture of reluctance for outsiders to enter the process and work together, but "the key is how much confidentiality you can maintain," he said.
We are working on many projects in the same industry in Europe and the U.S., but we do not care whether our competitors are receiving consulting services or not, and we are utilizing PE know-how to create good products and generate profits," says Hatori.
Currently, their main clients are automobile, automobile parts, machinery equipment manufacturers, and chemical (materials) companies that have proven track records at PE's headquarters.
In Japan, rather than outsourcing LCA on a one-off basis, the aim is more to make the LCA methodology their own, and many of the contracts are for one- to two-year projects, according to Mr. Hatori.
Currently, the company has concluded such contracts with several companies and is developing its consulting business in the form of participating in each company's LCA projects.
The company also sells Gabi3, LCA software jointly developed by PE and the University of Stuttgart, Germany, which accounts for about 15% of the company's sales.
The consulting business is of course the mainstay of the company's operations, but these product sales have made it relatively easy to get the business off the ground," he says.
GaBi3, which strongly reflects the concept of LCE, enables LCA evaluation of environmental impact as well as life cycle cost evaluation of what costs are incurred during the life cycle (e.g., electricity consumption, logistics costs, disposal costs, etc.) if the data is collected.
This is used for LCE evaluation based on the three axes, including technological aspects.
The system also includes a function to evaluate each impact category using the global warming potential and other factors being considered by the ISO.
The price is expected to be about 1.5 million yen.
Taking advantage of the most important feature of the system, such as its cost relevance, we are also considering linking it to environmental accounting.
In five years, the company aims to have 25 staff members and annual sales of 600 million yen.
There are currently five staff members.
Each of them is a specialist in their respective industries and is well versed in technical matters.
Even if you only know LCA, you can't provide consulting services.
We have to be able to understand the development of new products, material selection, process improvement, and so on.
You have to be from that industry to be accepted and trusted.
However, this makes securing human resources in the future a challenge.
As Japan quickly became the world leader in the number of ISO 14001 certifications, there is a strong possibility that interest will increase in the future, from the establishment of eco management systems to performance evaluation and LCA.
In such an environment, it should become essential to go beyond LCA, which merely obtains results, to analysis of the process of obtaining good results, and our business is expected to gain more recognition.
But will its arrival be in a year or much longer?
In any case, the timing will be difficult to determine how to secure and train personnel while borrowing people from PE for the time being as the need grows," he said.