Transcript Design for Competitive Advantage

Sustainability in practice
A case of environmental packaging
for ready to assemble furniture
Manuel Seidel, Mehdi Shahbazpour and A/Prof. Des Tedford
Presented by Manuel Seidel
Structure of Presentation
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Motivating factors for sustainability in
business
Sustainability as a competitive factor
Implementation barriers
Prerequisites for success
Case Study – furniture manufacturer
Motivating factors for
Sustainability initiatives
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Legislation
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To comply with a set of regulations
Moral responsibility
Competitiveness
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Improve profitability by gaining market
share through advertising environmental
compliance
Cost reductions through energy and
material savings
Sustainability
as a competitive factor
In the EU sustainability has become an order
qualifying (hygiene) factor in recent years.
However:
In New Zealand, sustainability does not yet carry
as much weight as a competitive factor when
compared with Europe.
Implementation barriers
Difficulties for New Zealand
manufacturers who want to improve
environmental performance due to:
Absence of external driving forces
(legislation, market pressure)
 Limited resources available for
sustainability projects
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Prerequisites for Successful
Sustainability Projects
To overcome these difficulties,
sustainability initiatives must satisfy
the following requirements:
 Support of top management
 Keep project costs to a minimum
 Benefits must be quantified
 All other dimensions of performance
also need to be satisfied
Case Study of Furniture Manufacturer –
Environmental Packaging
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CML is a NZ SME specialising in Ready-to-Assemble (RTA) furniture
CML has made a commitment to sustainability and is aiming to obtain
ISO14000 certification
CML spends around $500,000 annually on polystyrene for packaging – a
significant expenditure for a non-value adding component
Polystyrene
blocks
Furniture
components
For the product pictured the cost of polystyrene per pack is $2.40
Why should polystyrene
be reduced or eliminated?
• Polystyrene is harmful to the environment (moral
responsibility)
• It is difficult to recycle, with no kerbside recycling available in
New Zealand (customer satisfaction affected)
• An increase in market share can be achieved through
advertising of the company’s environmental compliance
(ISO14000, EnviroMark etc)
• Previously unavailable markets may be penetrated (e.g
Europe)
• The New Zealand Government is planning to introduce
stricter laws and environmental regulations in the near future
• Possible cost reductions
• Increase in local competition (IKEA entering NZ market)
Reasons for polystyrene
popularity
Polystyrene is:
 low in cost compared with other materials
 provides excellent impact protection
 has a ‘memory property’
 is light weight
Project Approach
Review of packaging issues, and investigation and analysis of
current packaging rules at CML
Packaging
guidelines and
legislation
Market trends and
industry practices
Organisational
issues
Practical Issues
Packaging
design rules
Development
of alternative
solutions
Experimental
investigation of
proposed
solutions
Comparison of Systems
Alternatives
Investigated:
Polystyrene Foam
Cardboard
Corn-starch
Shrink-wrap/Cardboard
Shrink-wrap/Polystyrene
Proposed Packaging
System
Shrink-wrap
sub packages
Low number of
internal cardboard
components
Project Outcomes
1. Short term – Polystyrene reductions
• Reductions of up to 14% achievable
• Potential for $70,000 annual savings
2. Medium term – Shrink wrap
• Reduce damage within packages
• Increased customer satisfaction and reduced
return of damaged goods
3. Long term – Cardboard or Corn-starch replacement
• Open the European market
Conclusions
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Low cost projects can achieve very good
environmental and cost saving results
Acquiring government funding is an important
requirement to successfully completing
sustainability projects in New Zealand.
University student projects make a great affordable
resource for companies.
Export markets with stricter environmental
legislation can be used as an incentive for
improvement.