Just after I blogged on Sun’s eco-responsibility efforts, a press release came from IBM. For the last few years, IT manufacturers seem to be taking real initiatives to deal with their end-of-life and end-of-use products.
IBM’s press release on last year's recycling and renewal efforts (recycling used for renewal, refurbish, reuse, and resale in the secondary market) reveals exciting numbers for remanufacturing industry and environment. IBM started its recycling efforts many years ago to deal with the products returning from lease contracts. These are end-of-use products most of the time still have value in them and therefore presents a source of revenue. Of course, then came the end-of-life computers, which cannot be used because either they are technologically obsolete or too worn-out to be used. Main concern in the second category was how to dispose them in an environmentally safe way and how to extract usable parts (if any) and materials, such as plastics, metals etc...
IBM deals with products in both categories, they refurbish, remanufacture, and resale or re-lease. Aside from IT equipment, IBM also refurbishes and resells medical diagnostics equipment such as MRI. Each week IBM Global Asset Recovery Services takes in more than 40,000 pieces of IT gear from clients worldwide. The equipment, which includes IBM and non-IBM servers, PCs, laptops, mainframes, is recycled or refurbished at 22 sites around the world. In 2006 alone, IBM had an overall 99.22% recovery rate and an incredibly low landfill rate of 0.78%. Since 1995, IBM has documented the collection and recovery of over 1.4 billion pounds of product and product waste worldwide and they achieved to divert 1.2 billion from landfills.
These numbers are very encouraging and exciting. Now we know that as long as they get products returned they deal with them properly, try to recover these products and materials for new uses and divert them from landfills as much as they can. But, what is the actual return rate among all products they sell? IBM collects a very significant amount of products, and they recover 99%, but one can’t help but wonder what percent of end-of-use and end-of-life IBM products they can get back. If you have any idea, data or information please share with us!
Please check IBM take-back practices here, and read the press release here.
Wednesday, April 25, 2007
Monday, April 23, 2007
Competitive advantage and remanufacturing
I have been working on some research projects on how to generate competitive advantage from remanufacturing activities. Reading the interview of David Douglas, VP of Eco-Responsibility at Sun Microsystems at TreeHugger took me back to the conception stages of my research.
At the beginning some people told me remanufacturing is never (and won’t be) seen as a “core business” or a part of business that can create competitive advantage for the firm. My ideas were totally on the contrary: first, if conveyed to consumers and media appropriately, it could generate “a green image,” which in the long run will pay off to the company hugely-first as a socially responsible corporate image and then translated into profits with the expansion of environmentally-conscious customer segment. Second, I believed, among other green initiatives such as recycling, remanufacturing will rise as the most revenue generating initiative. In a planet, where raw materials are increasingly expensive, energy sources are depleting and in turn getting really pricey, remanufacturing is not just a cost-generating, legislation-complying tactical decision for the companies, it is a long-term profit-generating strategy!
I disagreed with some colleagues, some professors, and even with some relatives, who knew about the topic and have professional experience. So, I needed to back up my ideas: I went to four prominent companies and interviewed executives responsible for remanufacturing. I can tell you lots of things about these interviews: but long story short, they all believed that remanufacturing can be a competitive advantage in different ways; a couple has already been competing with remanufactured products in their respective markets.
Now let’s hear David Douglas's opinion at Sun. He is not just talking about remanufacturing. He talks about all the initiatives Sun takes, such as remanufacturing, recycling, eco-responsibility designed products etc…
“TreeHugger: How can we balance the very real demands of the business world with goals such as sustainability, which are ultimately less about competition than getting the job done?
DD: I disagree with the premise of the question. Done right, sustainability can be a serious competitive advantage. If you look at business separate of sustainability, and sustainability separate of business, then try to put them back together it won't work in the long run.”
****
“We're attacking that on every front, including reducing hazardous chemicals, reducing the environmental impact of manufacturing the systems, and recovering, remanufacturing and recycling our products at the end of their useful life.”
****
“Eco-responsibility is about trying to do business in a way that's good for the environment and for the company's business at the same time. I often joke that 'eco' stands for both ecology and economy, since we're not trying to do either of them at the expense of the other.”
****
“My hope is that every year Sun's business and products have a lower environmental impact, and at the same time increasing efficiencies and environmentally friendly products and services are increasing Sun's competitive position in the market.“
****
My final notes: Sun Microsystems tries to achieve its sustainability goals by designing environmentally friendly products, processes and reducing the end-of-life impact of their products. They introduced their first eco-responsibility designed computer chip in 2005. 80% of their products enter remanufacturing, they recover all metal and plastics, and less than 5% reaches to landfills. Their products comply with RoHS directives in Europe. For full interview go to TreeHugger. For details on Sun’s product take-back, remanufacturing and reuse programs, please see this report.
At the beginning some people told me remanufacturing is never (and won’t be) seen as a “core business” or a part of business that can create competitive advantage for the firm. My ideas were totally on the contrary: first, if conveyed to consumers and media appropriately, it could generate “a green image,” which in the long run will pay off to the company hugely-first as a socially responsible corporate image and then translated into profits with the expansion of environmentally-conscious customer segment. Second, I believed, among other green initiatives such as recycling, remanufacturing will rise as the most revenue generating initiative. In a planet, where raw materials are increasingly expensive, energy sources are depleting and in turn getting really pricey, remanufacturing is not just a cost-generating, legislation-complying tactical decision for the companies, it is a long-term profit-generating strategy!
I disagreed with some colleagues, some professors, and even with some relatives, who knew about the topic and have professional experience. So, I needed to back up my ideas: I went to four prominent companies and interviewed executives responsible for remanufacturing. I can tell you lots of things about these interviews: but long story short, they all believed that remanufacturing can be a competitive advantage in different ways; a couple has already been competing with remanufactured products in their respective markets.
Now let’s hear David Douglas's opinion at Sun. He is not just talking about remanufacturing. He talks about all the initiatives Sun takes, such as remanufacturing, recycling, eco-responsibility designed products etc…
“TreeHugger: How can we balance the very real demands of the business world with goals such as sustainability, which are ultimately less about competition than getting the job done?
DD: I disagree with the premise of the question. Done right, sustainability can be a serious competitive advantage. If you look at business separate of sustainability, and sustainability separate of business, then try to put them back together it won't work in the long run.”
****
“We're attacking that on every front, including reducing hazardous chemicals, reducing the environmental impact of manufacturing the systems, and recovering, remanufacturing and recycling our products at the end of their useful life.”
****
“Eco-responsibility is about trying to do business in a way that's good for the environment and for the company's business at the same time. I often joke that 'eco' stands for both ecology and economy, since we're not trying to do either of them at the expense of the other.”
****
“My hope is that every year Sun's business and products have a lower environmental impact, and at the same time increasing efficiencies and environmentally friendly products and services are increasing Sun's competitive position in the market.“
****
My final notes: Sun Microsystems tries to achieve its sustainability goals by designing environmentally friendly products, processes and reducing the end-of-life impact of their products. They introduced their first eco-responsibility designed computer chip in 2005. 80% of their products enter remanufacturing, they recover all metal and plastics, and less than 5% reaches to landfills. Their products comply with RoHS directives in Europe. For full interview go to TreeHugger. For details on Sun’s product take-back, remanufacturing and reuse programs, please see this report.
Wednesday, April 18, 2007
Green Ford
A recent article features Ford's green efforts for global sustainability. One of their initiatives is to increase recyclability and remanufacturability of their vehicles. A good example on the remanufacturing's role in sustainability (setting aside its role in overall profitability).
From the article;
"Ford Escape and Focus Are Over 80 Percent Recyclable – Dismantlers and shredders process more than 94 percent of all salvaged vehicles. They collect parts and materials for reuse, remanufacturing and recycling. Usually, 75 percent of an automobile’s content is recycled – including steel, iron, aluminum, copper and other non-ferrous metals. The Ford Escape and Focus exceed the norm, being over 80 percent recyclable. "
For more on Ford's green initiatives, please read the full article here.
From the article;
"Ford Escape and Focus Are Over 80 Percent Recyclable – Dismantlers and shredders process more than 94 percent of all salvaged vehicles. They collect parts and materials for reuse, remanufacturing and recycling. Usually, 75 percent of an automobile’s content is recycled – including steel, iron, aluminum, copper and other non-ferrous metals. The Ford Escape and Focus exceed the norm, being over 80 percent recyclable. "
For more on Ford's green initiatives, please read the full article here.
Monday, April 16, 2007
What do they do with returns?
Do you ever wonder what does manufacturer do with the product you returned? Well, the answer to this question -for consumer electronics industry- is reported in a study conducted by Reverse Logistics Executive Council. Unfortunately there is no information on the date of this project (probably before 2004), but I think numbers still makes sense and reflect more-or-less the reality in the industry.
According to this study conducted on 65 consumer electronics company, more than one-third of companies recycle their returned products. One-fourth goes with remanufacturing and then selling to 2nd markets. Since there is no information on the condition of returned products, it is unknown to us whether it is logical that one-third of these companies recycle their returned products. However, the rate of throw aways is striking: approximately one-fifth of companies just throw away returned consumer electronics products. That's a big percentage, can you imagine what kind of profit and environmental sustainability opportunities exist?
Centre for Remanufacturing
Please check out --http://www.remanufacturing.org.uk/-- the website for Centre for Remanufacturing. The center is part of Oakdene Hollins, a UK based consulting company. It is one of the most active portals I have seen recently and compiles numerous sources under one umbrella. You can find recent industry news-events, list of remanufacturers in Europe, published-unpublished research studies and reports. Also, you can browse to learn more about remanufacturing and the remanufacturing industry in UK.
Thursday, April 5, 2007
Life with RoHS
In Europe, RoHS (Restictions of Hazardous Substances) and WEEE (Waste Electrical and Electronic Equipment) directives of EU force firms to review their way of doing business and affect their perceptions of remanufacturing activities because remanufacturing is a way to comply with these directives in a profitable manner. Please take a look at this article evaluating the past 9 months of RoHS and its effects on the firms. Then, read this: a comparison between China RoHS and EU RoHS.
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