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.