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HAN SOLAR

Company Overview
According to the European Photovoltaic Industry Association,
Photovoltaic panels could provide almost a quarter of the worlds
required electricity by the year 2020. By 2012, solar panel
manufacturing was growing at a rapid pace. As manufacturing
processes became more sophisticated and competition increased,
panels continued to be made in greater quantities and lower prices.
Han Solar, a San Francisco based company benefitted from this growth
and from the support of the government programs. Increasing world
population resulting in increased demand for electricity combined with
the fact that governments around the world continued to implement
new regulatory policies to support consumption of solar energy and the
production of solar energy systems, made Han Solar, with its thriving
photovoltaic panel (PV) business, seem timely.
However, as reflected in its thriving solar panel business recently, the
companys profits had started to drop. At first, the companys
managers thought that the economy was to blame. But, after seeing
that their competitors were still growing, they began to question their
theory. Eventually, after analysis, the Han Solar team determined that
the decrease in profits might be due to the companys lack of focus on
the environment. Other competitors claimed that their panels were
manufactured and distributed through conscious green processes. But
Han Solar had no immediate answer to these claims.
Previously, the company had positioned itself as one of the least
expensive solar panels. But, as competition increased, this became
less compelling to consumers. Thus, company management realized
that they had to come up with a new strategy for the company. They
decided to increase focus on the environment so that they could
position their company more positively to consumers.
It was found that the emission of carbon dioxide occurred mostly
during the manufacturing process, not during the use phase. The
manufacturing process of photovoltaic panels involved nine major
operations:
1.
2.
3.
4.
5.
6.
7.
8.

Silica Extraction and Refining


Silica into Silicon
Transformation of mg-Si to sog-Si
Casting and Wafer Production
Chemical Attack
N-film Formation
Application of electric contacts
Passivation and ARC

9. Panel Assembly

Do you think Han Solar's green SCM strategy will help it


overcome its current slump? What could be other possible
impacts of sustainability efforts of this firm?
Solution:
a). Han Solar in its early years was able to leverage on the fact that
they were one of the least expensive producers of solar panels.
However, it seems that over a period of time customer preference
moved towards environment friendly products, which not only harms
the environment but also have manufacturing processes that emit very
low greenhouse gas emissions. This is evident from the fact that
despite economy going down, which they thought was the reason for
bad performance, their competitors were doing really well in solar
panel business and they were essentially branding themselves as
environment friendly. So Han Solar decided to formulate a supply chain
Management strategy to reduce green house gas emissions wherever
possible by analyzing Manufacturing and distribution process.
So our view is that SCM strategy will definitely help them the company
realize the gains however Han solar should try to provide the
environment friendly products at a cost as low as possible.
b). Other possible impact of SCM strategy could be economic and
social impacts.
Economic: Change in process of manufacturing or method of
delivery might actually reduce the overall cost and hence help make
the company profitable. Also, government might come up with
certain schemes to incentivize such companies with low GHG
emissions.
Social: As a part of SCM strategy, those process will be followed
which leads to less Greenhouse Gas Emissions which will lead to
better safety and health for employees. Moreover, Employees will be
more satisfied with the work since their contribution to the Green
house gas emission will go down.

What is the carbon footprint of the manufacturing process?


Solution:
Manufacturing
Location
China

Total Energy
Required
178.5

Carbon Footprint
(g/kWh)2
788

Total Carbon
Footprint
(Kg/kWh)
140.65

Germany
Mexico (Avg.)
Mexico (NW)
USA

178.5
178.5
178.5
178.5

349
515
298
573

62.30
91.93
53.19
102.28

What is the carbon footprint of each distribution network?


Solution:
Route Details
Mexico-California
China-California
China-California
China-MexicoCalifornia
China-MexicoCalifornia
Germany-New
Jersey- California
Germany-New
Jersey- California
GermanyCalifornia

Distance
(Km)
200
12000
12220

Mode
Truck
Air
Ship

Carbon footprint
(Kg-CO2eq)
835
160200
1680.25

12350

Air+Truck

163037.5

12700

Ship+Truck

2553.75

10160

Ship+Rail

3278.75

10050

Ship+Truck

16522.5

8500

Air

113475

What could be the possible network alternatives to supply


photovoltaic panels to California, considering other factors like
costs and transportation lead-time?
Solution:

Route Details

MexicoCalifornia
ChinaCalifornia
China-

Carbon footprint
Transport (KgCO2eq)

Carbon
Footprint
Manufacturi
ng
(Kg/kWh)2

835.00

53.19

160200.00
1680.25

140.65
140.65

Total
Carbon
Footprint
(Kg-CO2)

888.19
160340
.65
1820.9

Cost ($)
(Supply)

Lead
Time
(day
s)

500

11000
900

6
21

California
ChinaMexicoCalifornia
ChinaMexicoCalifornia
GermanyNew JerseyCalifornia
GermanyNew JerseyCalifornia
GermanyCalifornia

0
140.65

163178
.15

13150

10

2553.75

140.65

2694.4
0

1600

26

3278.75

62.30

3341.0
5

2080

28

16522.50

62.30

4250

26

113475.00

62.30

11150

11

163037.50

16584.
80
113537
.30

What should Han solar do in the short term?


Solution:
Based on our analysis of Total Carbon Footprint, transportation cost &
lead-time, Mexico-NW is the best-fit region for manufacturing of solar
panel parts. Han solar should slowly start shifting solar panel
manufacturing to Mexico-NW, which has the least TCF, transportation
cost & lead-time.
It should start from Transforming mg-Si to sog-Si, which consumes
highest energy and then process of converting Silica to Silicon which
has second highest energy requirement.
By doing that, Han solar will be in position of repositioning itself as a
green company while maintain the low cost advantage.