how hp, dell, kodak, and sony achieve eco-efficiency throughout product life cycles

7/28/2019 How HP, Dell, Kodak, And Sony Achieve Eco-Efficiency Throughout Product Life Cycles

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CORPORATESTRATEGIES FORECO-

EFFICIENCYWHITEPAPER PREPARED BYMBASTUDENTS

AT THEUNIVERSITY OFNORTHCAROLINAS

KENAN-FLAGLER BUSINESS SCHOOL

HOW HP,DELL,KODAK, AND SONY ACHIEVE ECO-EFFICIENCYTHROUGHOUT THEIRPRODUCT LIFE CYCLES

Authors

Brian Wilson (MBA 2006)

Tarry Baker (MBA 2006)Takafumi Sako (MBA 2006)Won Kook Lee (MBA 2006)

Abstract

There is an increasing awareness of the need for sustainable practices in theentire product life cycle, particularly in manufacturing sectors. This can beachieved through eco-efficiency. Eco-efficiency is achieved through thedelivery of competitively priced goods and services that satisfy humanneeds and improve quality of life while progressively reducing environmentalimpacts of goods and resource intensity throughout the entire life cycle to alevel in line with the Earths estimated carrying capacity.

Using four major companies - Hewlett Packard, Dell, Kodak and Sony - as casestudies, this paper analyzes how consumer electronics companies achieve eco-efficiency throughout their product life cycles. It highlights specific programsof each firm in the areas of product design, procurement, production,distribution, and product recycling. The authors conclude that efforts towardsimproving eco-efficiency, if implemented and managed properly, can yieldtremendous benefits and most importantly can lead to a competitiveadvantage for the implementing company.

Publication DateK e y w o r d s : 2005

Hewlett-Packard, HP, Sony, Dell, Kodakeco-efficiency, recycling, productdesign, manufacturing, electronicsenvironmental protection, informationtechnology, high tech, electronic waste,lifecycle analysis

2005 Kenan-Flagler Business School, University of North Carolina, Chapel Hill, NC,USA. Reprinted by permission. Available online at www.cse.unc.edu. This white paper was

prepared by MBA students for class MBA251B Sustainable Enterprise, taught byprofessors Albert H. Segars and James H. Johnson. It is reprinted for educational purposes.Citations and source accuracy have been reviewed, but cannot be guaranteed; clarificationsor comments may be directed to [email protected].
http://www.cse.unc.edu/http://www.cse.unc.edu/


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HOW HP,DELL,KODAK, AND SONY ACHIEVE ECO-EFFICIENCYTHROUGHOUT THEIRPRODUCT LIFE CYCLES

Table of Contents

I. Introduction1. Definition of eco-efficiency2. Method of analysis

II. Corporate Strategies for Eco-efficiency1. Hewlett Packard2. Dell3. Kodak4. Sony

III. Conclusion and Recommendations

Appendix A - Kodaks Health, Safety, and Environmental Goals

I. INTRODUCTION

Smart companies developed environment protection such as waste water and waste materialtreatment in 70s and 80s. Nowadays, more advanced efforts to address ecological issues arebecoming essential for most companies. For example, as of July 1, 2006, the European Union willrestrict the presence of certain substances - lead, mercury, cadmium, and hexavalent chromium - inelectrical and electronic products offered for sale. In Japan, Law for recycling of specified kinds ofhome appliances was executed in 2001. Kyoto Protocol calls on 38 industry countries to reduce CO2and other greenhouse gas emissions from the year 2008 to 2012. With this backdrop in mind, we

investigate how forward-thinking companies, especially within the consumer electronics industry,plan and implement eco-efficiency programs.

1. Definition of eco-efficiency

According to the World Business Council for Sustainable Development (WBCSD), eco-efficiency isachieved through the delivery of " ...competitively priced goods and services that satisfy humanneeds and bring quality of life while progressively reducing environmental impacts of goods andresource intensity throughout the entire life-cycle to a level at least in line with the Earth's estimatedcarrying capacity."1 Further, eco-efficiency includes three objectives for sustainable enterprise:reduction in consumption of resources, reduction in impact on nature, and increase in product orservices value.2 Based on these definitions, we analyzed how consumer electronics companies

achieve eco-efficiency throughout their product life cycles and within their limited budgets.

2. Method of analysis

We chose Hewlett Packard, Dell, Kodak, and Sony as representative consumer electronicscompanies, mainly based on breadth of their eco-efficiency initiatives and the ease of access to

1 http://en.wikipedia.org/wiki/Eco-efficiency2 Walking the Talk: The Business Case for Sustainable Development, Chad Holliday, Stephen Schmidheiny, and PhilipWatts

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pertinent information. In the product life cycle, consumer electronics companies typically designproduct, procure materials, manufacture products, distribute them to consumers, and recycleproducts (see diagram below). We compared these companies strategies for eco-efficiency in eachproduct life cycle stage and then analyzed how a sustainable enterprise can utilize strategies for eco-efficiency to compete in the industry.

Diagram: Product Life Cycle

ProductDesign

Procurement

Production Distribution

Recycling

II.CORPORATE STRATEGIES FORECO-EFFICIENCY

1. Hewlett Packard

Approach to eco-efficiency

Hewlett Packard (HP) is committed to providing products that are eco-efficient in all stages of its lifecycle. It realizes that "environmental impacts can occur at every stage of the product life cycle: fromproduct design, through manufacturing and transport, to use by customers and, finally, disposal atthe end of a product's life."3 Its programs and processes were developed to minimize these impactsas illustrated in the figure below.

3 http://www.hp.com/hpinfo/globalcitizenship/index.html

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Source: www.hp.com

Product Design Stage

In 1992, HP established a Design for Environment Program that had 3 priorities: energy efficiency,materials innovation, and design for recyclability. They wanted to create products that required lessenergy to manufacture and use, required fewer materials and had less of an environmental impact,and were easier to upgrade or recycle. The premise entailed development of products which wouldmeet international standards for eco-labeling. Currently, more than 1,000 HP products carry theEnergy Star eco label sponsored by the U.S. EPA. This translates to "over 94% of Personal Systems

Group products and 98.5% of the Imaging and Printing Group Products" carrying the Energy Stareco label.4

The program developed Design for Recycling (Dfr) standards that focused innovation towardsproducts with minimal environmental impacts. These design features include:3

Modular design to allow components to be removed, upgraded or replacedEliminating glues and adhesives, for example, by using snap-in features

4 Ibid.

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Marking plastic parts weighing more than 25g according to ISO 11469 internationalstandards, to speed up materials identification during recyclingReducing the number and types of materials usedUsing single plastic polymersUsing molded-in colors and finishes instead of paint, coatings, or platingRelying on modular designs for ease of disassembly of dissimilar recyclable materials3

This provides designers with a clear set of guidelines to assess a product's recyclability before it iseven produced.

Some examples of products designed for the environment include the HP laptop, HP All-in-One, HPCRT monitors, and others listed below:5

Parts and resins in monochrome LaserJet print cartridges have decreased by more than 50%since 1992.

Compared to their predecessors, HP laptops use significantly less energy when in lowerpower mode. After a period of inactivity, the HP laptop automatically switches to lowerpower mode and consumes less than one watt of power; the Energy Star requirement is 15

watts.

HP uses recycled glass from discarded cathode ray tube (CRT) monitors in themanufacturing of new CRT monitors. Up to 40% of glass in new HP CRT monitors isrecycled glass from discarded CRT monitors.

The HP All-in-One combines a printer, scanner, copier, and fax machine into a singleproduct and reduces material consumption during production by 40%.

The average pages printed per gram weight of LaserJet cartridge has increased by 139%from 1990-2004.6

HP continues to make progress as it designs products with minimal environmental impact.

Procurement Stage

HP's spending in materials and commodities in the IT industry gives HP large buying power amongits suppliers. "In 2004, HP purchased approximately $53 billion of products and materials,components and manufacturing, transport and other services from approximately 7,000 suppliersglobally."37 Suppliers "must comply with HP's requirements specified in the Electronic Industry

5 Ibid.6 Ibid.7 Ibid.

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Code of Conduct and the product content environmental guidelines found in the GeneralSpecification for the Environment (GSE)."8 The Electronic Industry Code of Conduct was developedin collaboration with Dell, IBM and their environmental management system (EMS) providers topromote industry standards for socially responsible business practices across the global supplychain. The "General Specification for Environment (GSE) prohibits or restricts certain substancesfrom use in HP products or in the manufacturing of HP products." 9 Furthermore, HP givespreference to those suppliers who have achieved ISO 14001 certification, which indicates they haveimplemented their business practices with an environmental management system.

As of July 1, 2006, the European Union will restrict the presence of certain substances --lead,mercury, cadmium, and hexavalent chromium --in electrical and electronic products offered for sale.HP is working closely with its partners in order to be compliant by this date.

Production Stage

HP is one of the first "multinational businesses to obtain a single, global ISO 14001 certification forworldwide manufacturing operations." HP has reduced energy consumption and toxic emissionsduring production by ensuring environmental management processes are in place at theirmanufacturing facilities. Such processes help HP determine their ecological footprint. As a result,in 2004, HP "reduced natural gas use by 12%, solid waste volumes by 3%, water use by 7%, and

hazardous waste volumes by 20%."10

Distribution Stage

Looking at product distribution, HP participates in Clean Cargo and Green Freight Groups and hasconcentrated on reducing toxic emissions from transportation by focusing on product packaging.For example, HP "decreased unused space in camera packaging by 25% by using a high-densitypolyethylene." As a result this created more efficient shipments because HP could ship "50% moreproducts per pallet while decreasing packaging materials use by half." While reducingtransportation impacts on the environment, HP saved $1 million in packaging costs.11

Recycling Stage

In 1991, HP launched the Planet Partners program that operates globally and handles the end-of-liferecycling processes for its products. It collected and recycled more than 120 million pounds of usedproducts in 2003. In 2004, almost 360,000 pounds of inkjet cartridges and approximately 27 millionHP LaserJet print cartridges were recycled. Furthermore, more than 95% of the materials ofreturned HP inkjet print cartridges were diverted from landfills.

Some initiatives HP has taken to increase customer awareness of recycling are the following:

E-coupons: e-coupons offer online recycling customers savings on new products fromHPshopping.com.In-box labels and envelopes: Postage-paid labels and envelopes are included in manyreplacement HP LaserJet and inkjet print cartridge boxes in the United States and Europe.Standards: HP has global recycling standards for management of end-of-life computerhardware products that address labor and safety at supplier operations.Public policy: HP has worked closely with national, state and provincial governments todevelop shared responsibility recycling legislation where producers are responsible forthe recycling of their products."12

8 Ibid.9 Ibid.10 Ibid.11 Ibid.12 Ibid.

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With these initiatives, HP expects to recycle 1 billion pounds of electronic products and supplies by2007.13

EvaluationHP has taken a lead in addressing electronic waste and recognizing that innovation in productdesign will improve recycling efforts. The company's Design for Recyclability Standards areincorporated into a tool that is used worldwide by product designers. In addition to addressingelectronic waste, HP plans to raise its standards for its global supply chain in the next 3-5 years.These goals include the following:

Complete assessments with 100 high priority suppliers in 2004, 250 in 2005 and 500 in 2006Add Supplier Code of Conduct to all product materials supplier contracts by 2005Collaborate with industry and suppliers to establish an industry standard supplier code ofconduct by 200614

One of the challenges HP will need to address is how it can determine the environmental

performance of its products. There should be performance metrics along every stage of the productlife cycle to ensure that HP is meeting its goals. HP does not address long-term future goals forattaining eco-efficiency. A key to its success will be how it prepares for the future.

2. Dell

Approach to Eco-efficiency

Dell is actively seeking ways to provide eco-efficient products and operations that meet itscomprehensive environmental policy and standards. Dells commitment to eco-efficiency issummarized as follows: Dells vision is to create a company culture where environmentalexcellence is second nature. Dells focus on integrating improved environmental performance intoall aspects of its business is strong and driven in large part by its commitment to serve customersand to do what is right for them and the world we share. 15

Dells overall approach to eco-efficiency includes stewardship of the environment andimplementation of programs and processes to ensure its operations and products areenvironmentally sound. Dells focus on business efficiencies and customer satisfaction drives itsenvironmental stewardship program to conserve product energy consumption, reduce or eliminatematerials for disposal, prolong product life span and provide effective and convenient equipment

13 Ibid.14 Ibid.15 http://www.dell.com/downloads/global/corporate/environ/2005_Sustainability_Report.pdf

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recovery solutions. Dell has also established criteria for its suppliers, and actively continues toexplore ways to expand markets for environmentally preferable computer systems.

Dell continuously addresses the critical issues related to its products, operations and servicesthrough its company-wide environmental management systems. The major environmental policyobjectives include: design of products with the environment in mind, prevention of waste andpollution, continuous improvement, demonstration of responsibility to stakeholders, andcompliance with the law.

Dells environmental policy provides a comprehensive framework that is designed to ensuresustainable practices throughout the entire life cycle of the product. As Dells market grows into awider circle of relationships, it continually refines its process controls and further developing aculture focused on the basic elements of sustainable practices such as resource conservation andwaste management.

Dells approach to environmental responsibility incorporates every stage of the product life cycle toprevent pollution and conserve natural resources, achieving environmental responsiveness intandem with sound business management.

Product Design StageDell fully recognizes that even a small environmental consideration during the early stages of aproduct design can have a large effect on the environmental impact of a product throughout its lifecycle. The Dells Design for Environment (DfE) program instills environmentally sound principlesinto product design. The Design for Environment (DfE) incorporates into product developmentenvironmental attributes such as extension of product life span and decreases in equipment energyconsumption.

For example, Dells modular, upgradeable design - parts can be removed without use of special tools- allows easy repair and upgrades, thus lengthening the useful life of the computer. Dell also strivesto design packaging with optimization techniques to reduce the amount of packaging used and toship products for more efficient and eco-friendly methods. During FY2005, Dell implemented a newinbound packaging program by replacing wooden pallets used to ship computer chassis and

monitors into its facilities with plastic slip sheets, thereby allowing fewer shipping containers to besent to Dell via ship, truck and train.16

Dell continuously modifies the design of its products to enhance energy efficiency of product. Forexample, most of the desktop, workstation and portable products consume less than 5 watts in alow-power mode and exceed the current levels set by the EPA for energy efficiency. Dell has chosento default the power management settings to meet the EPA requirements for Energy Starcompliance for OptiPlex platforms.17 Dell has also taken the extra step to reduce the amount of timerequired by the EPA for Energy Star compliance of 30 minutes to enter the low-power mode to 15minutes to save even more energy. By enabling the power-management features of all OptiPlexdesktop and notebook products, Dell has reduced the CO2 emissions by 45%.

Procurement StageAs a company with an extensive global supply chain, Dell recognizes that sustainable businesspractices cannot stop with its own operations but must also be extended to its global supply chain.Two important initiatives include the Restricted Materials program and requirement of its suppliersto gain ISO 14001 and OHSAS 18001 certification.18

16 Ibid.17 OptiPlex Environmental Brochure18 http://www.dell.com/supplierprinciples

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Since 2002, Dell has intensified and formalized the Restricted Materials program by directing itssuppliers to restrict and/or eliminate certain environmentally sensitive materials in the componentsand products supplied to Dell. Dell requires suppliers to provide restricted materials declarationsfor each new part supplied to Dell, indicating compliance with its Restricted Materials programspecifications. If restricted materials are found in supplier components, Dell takes corrective actionto eliminate these substances. To date, Tier 1 and regional suppliers represent approximately 90% ofDells product procurement expenditures and over 140 suppliers have enrolled in this program.

Furthermore, Dell gives preference to those suppliers that have gained ISO 14001 and OHSAS 18001certification, which indicates they provide the primary international standard for environmentalmanagement systems, and the standard for occupational, health, and safety management systems.19

Production Stage

Dells computer assembly processes do not generate significant air emissions or hazardous waste, oruse significant quantities of water. Nevertheless, Dell is committed to programs that reduce energyand water usage for conservation of natural resources.

Dell set goals to reduce energy and water usage, aiming to achieve reduction in electricconsumption by 10%, reduction in irrigation water consumption by 25%, and increase in use of clean

sources of energy. For example, Dell purchased 6.2 million KWh of electricity, approximately 10%of the total power consumed in 2005, from clean sources of energy such as wind-generated power.

Distribution Stage

As a partner in the EPAs SmartWay program, which aims to cut emissionsfrom logistics operations, Dell shipped more than 90% of its U.S. volume viaenvironmentally friendly SmartWay-certified carriers in 2004, exceeding theEPAs requirement of 50%.20 Optimizing freight from planes to truckscontinues to be one of Dells key areas for emissions reduction. Since airtransportation produces almost eight times more harmful emissions thanground transportation, air-to-ground conversion has tremendous potential foremissions reduction. In 2004, the air transportation only accounted for 8% of

total shipments, compared to 25% in 2000 and the air shipments were reducedby 6% for a net emissions reduction, thereby significantly reducing emissions.

By aligning manufacturing centers around geography instead of product lines and moving closer tothe end customers, Dell aims to reduce the average distance traveled to reach its end customers,which in turn helps reduce GHG emissions. Its manufacturing facility planned in North Carolina isalong the east coast of the U.S., where the majority of its customers are located. The opening of thisfacility is expected to further help reduce GHG emissions.

Recycling Stage

Dells broad strategies and programs for equipment reuse and recovery are amongthe industrys most progressive and comprehensive in many of its regions. Forexample, Dells Recovery and Waste Disposition Environmental Guidelines achieveconsistent guidance for all of Dells disposal channels globally. The intent of theseguidelines is to provide an infrastructure to appropriately manage electronicwaste, generated both from customers as well as through Dell service andmanufacturing operations. Dell also offers a wide range of environmentallyfriendly recycling and reuse services to consumers to dispose of outdatedcomputer equipment that no longer has a useful life. Dell now provides U.S.consumers a recycling option both at point-of-purchase and after point-of-purchase.

19 http://www.dell.com/downloads/global/corporate/environ/2005_Sustainability_Report.pdf20 http://www.dell.com/environment

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All Dell manufacturing facilities are ISO 14001 certified and collect and recycle or reuse a variety of

Evaluation

eloped an environmentally and socially sound culture that has made it the worlds

ell strongly values long-term sustainability and recognizes that it is part of the society in which it

he following recommendations sum up more sustainable principles, setting out a benchmark for

materials, including cardboard, office paper, plastics, foams, metals, batteries, disks, aluminum cans,bottles and pallets. Dell achieved 85% recycle/reuse performance for non-hazardous waste at itsfacilities in 2004.

Dell has devleading technology company and that will sustain its success in the market place in the long run.Dell has been strongly committed to continuous improvements in environmental performance andis clearly and deliberately more responsible as evidenced by its environmentally-conscious efforts.Dell evaluates how the company can contribute to the pursuit of a sustainable society outside theimmediate impact of its products and processes. For example, by linking to other organizationsconcerned with sustainability and promoting sustainable behavior among its employees. In Dellseco-efficiency efforts, we can get some implications about what motivates a company to reduce itsenvironmental impact, and what short- and long-term costs and benefits it can realistically expectfrom this action.

Doperates and that its success is built upon the way it responds to environmental issues. Dell knows

that this approach works only if it is truly part of the social culture. For Dell, this includes anexplicit belief that businesses receive their right to exist from customers and communities, and thatthis license to operate is revocable. As a company aiming for sustainability, Dell needs to performnot against a single, financial bottom line but against the triple bottom line.

Tincreasing eco-efficiency while reducing environmental impact:

Internally, Dell should make more efforts to refine its processes and products so that theyreflect the issue of sustainability at all stages.

Externally, Dell should pursue its policy in partnership with a portfolio of non-

3. Kodak

Approach to eco-efficiency

nt vision and strategy of their eco-efficiency goals. Kodaks website

his commitment has manifested itself in the formulation and tracking of aggressive performance

governmental organizations (NGOs).

Kodak maintains a transparelists nine Guiding Principles, which stand as a strong foundation for Kodaks commitment to eco-efficiency. These principles are extremely thorough in covering many potential environmental,health and safety issues, such as research, plant operations, strategic planning, product design andrecycling, customer education, and government affairs. One of these guiding principles relatesdirectly to this transparency: To measure our health, safety, and environmental performance on aregular basis and provide timely, appropriate information to officials, employees, customers,shareowners, and the public.21

Tgoals. These goals were established in 1997, tracked over a five year period from 1999 until 2004,and then reassessed and retargeted for a period ending in 2009. The following table places thesegoals within the eco-efficiency framework stated in class:22

21http://www.kodak.com/US/en/corp/HSE/homepage.jhtml?pq-path=2879/719622 Ibid. See Appendix A for details of Kodaks Health, Safety, and Environment goals.

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The Flow of SC StrategyGoals

(for 2004-2009)Previous Goals

(for 1999-2004)Result

(1999-2004)

Product DesignEnhance productdurability

Others

ProcurementReduce materialconsumption

- Reducemanufacturing

waste by 20%

- Reducemanufacturing

waste by 20%

Reduced by47%

Use environment-friendly material

- Improved end-of-life and reducedheavy metal usage.

- Reduce/Eliminateuse of heavymetals in products

Down 85% byweight

Others

ProductionReduce energyconsumption

- Reduce energy by10%

- Reduce energyconsumption by15%

Reduced by19%

Reduce toxicemissions

- Reduce emissionsof greenhousegases by 10%

- Reduce emissionof greenhousegases from powerproduction by 20%

Reduced by17%

- ReduceMethlyene Chlorideby 35%

- ReduceMethylene Chlorideby 50%

Reduced by69%

- Reduce PriorityChemicals (28) by15%

- Reduce PriorityChemicals usageby 40%

Reduced by44%

Reduce Water- Reduce WaterConsumption by20%

- Reduce WaterConsumption inProduction by 15%

Reduced by36%

Recycling Enhance recycling

Note the major themes of material, energy, emissions, and water reduction. While Kodak does notdirectly apply quantitative goals to product design and recycling, it maintains established programsin both areas which will be described shortly.


Kodaks progress in digital camera design reveals its overall commitment to product stewardship.The following is an excerpt from the company website describing the improvements in productdesign that Kodak has made:

The 2002 models are half the size of the 1998 models, yet have as much as fourtimes the resolution. The average weight of the 2002 Kodak digital cameras isbetween 7 and 10 ounces, down from 14 to 20 ounces. And consumers now havebattery options that allow them to reuse rather than throw away batteries. Kodak'stechnological advances have also greatly reduced the power and time required todownload images onto a computer. New models with EasyShare 2.1 softwareallow a user to download 1000 images in just 11 minutes - saving 31 minutes and

74% PC power compared with the earlier generation software.23

However, it is important to note that the competitive landscape of the digital camera market is anatural driver to improvements to product design. The increasing demands of savvy technologycustomers, coupled with the steep cost decline of technology components, are catalysts for suchswift product design improvements.

23 Ibid.

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Procurement Stage

Kodak is extremely active in finding new ways to improve its efficiency in the realm of materialprocurement. The goals initially set in this area in the late 90s focused on elimination of heavymetals, mercury, cadmium, chromium VI and lead from products. 24 However, their recentlystated goals for the upcoming 5 year time horizon looks to eliminate the use of lead solder andchromium I from 95% of new products brought to market in 2008.

Production Stage

The transparent performance measures place a heavy emphasis on improving various areas inKodaks manufacturing operations. Most specifically, their goals focus on emissions andconservation of natural resources. Their previous performance and future goals in these particularareas were noted in the table depicted earlier.

Specifically, Kodak reduced emissions of methylene chloride by 36% in 2004, compared to the 200835% goal. This reduction resulted primarily from several changes in operating procedures and anupgrade made to an emissions control unit at Kodak Park in Rochester, where this material ismostly utilized.25

With respect to reduction in air emissions, Kodak has pinpointed 28 priority chemicals where it

has focused its emissions reductions efforts. Recent progress in these areas came out of upgradesmade to emissions control equipment. Greenhouse gas emissions were reduced 5%, relative to a10% goal in 2004: As part of Kodaks commitment to the U.S. Environmental Protection AgencysClimate Leaders program, Kodak is working with a third-party to provide independent verificationof its greenhouse gas emission inventory on a worldwide basis.26

Finally, with respect to the conservation of natural resources, Kodak is able to addressmanufacturing waste, energy usage, and water usage. For example, recent reductions inmanufacturing waste resulted from significant improvements in manufacturing process yields andthe improved recovery of waste solvents at Kodak Park. Energy use reduction in 2004 wasapproximately on pace with Kodaks 10% five year goal. The demolition of obsolete buildings atKodak Park in Rochester, NY contributed to this reduction. Finally, water usage declined 16% in2004 as compared to the 2008 20% goal.27

Distribution Stage

No information is readily available.

Recycling Stage

Kodaks One Time Use Cameras have been a centerpiece of their formal recycling efforts for over 15years. Since 1990, Kodak's one-time use camera has gone through four major redesigns, withengineers meeting the same three environmental design goals each time: reduce the materialcontent and energy required in the manufacturing process, increase the number of recycled parts,and increase the number of parts that are reused in the camera.28

Since then, cameras made by Kodak have been designed so that at least 77% by weight of theproduct can be re-manufactured, and all components not reused are recycled elsewhere.29

24 Ibid.25 Ibid.26 Ibid.27 Ibid.28 Ibid.29 Ibid.

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Kodak has established a recycling program for their One Time Use Cameras (OTUC) in 26 countriesworldwide. The recycle rate for one-time use cameras is greater than 75% in the United States,which is higher than any other consumer product. The following staggering numbers should benoted about one time use cameras: over 1 billion OTUCs have been recycled through Kodaksrecycling programs (80% of which are Kodak products). See the table below from Kodaks HSE 2004report:

However, this recycling program does not come without difficult challenges for Kodak while itrecycles parts of OTUCs, these recycled parts can end up as lesser quality knock-off OTUCs,which potentially harms the brand value of Kodak.

Evaluation

Kodak certainly appears to be on the cutting edge of multinationals in their commitment to eco-efficiency, as it has been consistently been ranked as a member of Global 100 Most SustainableCompanies. Its transparency in publishing its strategic eco-efficiency goals as well as its progresstowards them should be held as a great example for other multinationals looking to advance theirown eco-efficiency goals. However, it is our perspective that Kodaks success in large part resultsfrom low-hanging fruit based on the very nature of their product and industry. Therefore, theymust continue to push towards more aggressive goals not only in the current areas of focus. Forexample, with 1 billion OTUC cameras recycled in 2004, it seems logical that Kodaks next stepshould be determining how to reduce the overall production and importance of OTUCs in theirportfolio of products, instead redirecting funding towards more sustainable products such asregular digital cameras and the like. This is a challenge, as there is still a strong demand in the

marketplace for OTUC. Therefore, Kodak must determine better ways to convince the customer thatmore sustainable products are preferable to OTUCs.

4. Sony

Approach to Eco-efficiency

Sonys eco-efficiency vision is described as follows. Sony recognizes the importance of preservingthe natural environment that sustains life on earth for future generations and helps humanity toattain the dream of a healthy and happy life. Sony is committed to achieving this goal by seeking tocombine ongoing innovation in environmental technology with environmentally sound business

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practices.30 In order to achieve this vision, Sony has introduced Five Environment Indices,recognized environmental impact from the perspective of product life cycle, and defined eco-efficiency measurement.

The diagram below presents Five Environment Indices from Sonys global home page. From thisdiagram, you can see that Sony tries to identify aspects of operations that Sony can audit andimprove. The special feature of these indices is that they provide quantitative measurements ofenvironmental impact, with lower numerical values signifying smaller levels of impact. Also, Sonypublished Sony's Green Management 2005 plan which contains detailed targets related to each ofthese indices.

Source: www.sony.com

The chart below (from Sonys global home page) provides a graphic presentation of Sonys impacton the environmental from the perspective of product life cycles, including energy and resourcesused during Sony's business activities, energy consumed by Sony products when used by itspurchasers, and the recycling and disposal of products after use. Based on this chart, Sony isundertaking numerous activities to lower environmental impact to realize its environmental vision.

30 http://www.sony.net/SonyInfo/Environment/environment/management/vision/index.html

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Sony has defined eco-efficiency by using the following equation -- measured in terms of greenhousegas emissions, resource input and resource output -- and has set a goal of raising eco-efficiency to 1.5times the level in fiscal 2000 by fiscal 2005.


Although Sony does not have concrete goals in the product design stage, it designs eco-efficient

products by enhancing the energy efficiency and minimizing the environment impact of theproducts. As an example, Sony developed Energy-Efficient Digital High-Definition Televisions-Happy Wega Series. Happy Wega series offer a winning combination of low power consumption,outstanding picture and sound quality, and low running noise. Happy Wega series also realizes asignificant improvement in standby power consumption, down to 0.15W, from 0.8W for previousWega models. Also, Sony develops and commercializes Vegetable-Based Plastics and Mercury-FreeSilver Oxide Batteries. These products are designed as environment friendly product.31

31 Ibid.

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Procurement Stage

Sonys goal to reduce material consumption entails the specific goal of resource input reduction byat least 20% between 2000 and 2005. Reduction in PVC (Polyvinyl chloride) usage is a tellingexample of the progress towards this goal. MDR-Q66LW headphones use non-PVC materials intheir cord and plug. Also, Sony prohibits, phases out, or reduces use of controlled chemicalsubstances in products. In order to achieve this goal, Sony introduced Chemical SubstanceManagement Standards and Three Core Principles for Managing Chemical Substances in

Products. Shift to lead-free solder is one of results of these movements.32

Production Stage

For reduction in energy consumption through production process, Sony has set three primary goals:reduction in operating power consumption by 30%, reduction in energy use calculated in terms ofCO2 emissions from business sites by 15% per sales unit, and increase in use of renewable energy toat lease 5% of energy used at all sites. Sony has introduced energy-saving equipment and changedto fuels that lower CO2 emissions. The goals have not been achieved due to an increase inproduction at semiconductor and liquid crystal manufacturing sites in Japan and at sites in China,an increase in sales volume of major products, such as televisions and DVD recorders, and increasesin the size of LCD and plasma televisions.

For reduction in toxic emissions, Sony sets four primary goals: reduction in emissions of greenhousegases other than CO2 calculated in terms of CO2 emissions from business sites by 30%, shift toenvironmentally conscious packaging materials, reduction in waste from sites by 30% per sales unit,and control of chemical substances at sites. For the first goal, Sony has installed and promoted useof gas removal systems, and sought alternative gases that are less likely cause global warming.Using recycled plastics helps Sony progress toward their second goal. For the third goal, Sony haslowered defect rates, used material more effectively, and reduced wastewater and sludge. For thefinal goal, Sony has installed double-floor wastewater treatment tanks and proceeded withdecontamination work at two sites where contamination had previously been discovered. Thanks tothese efforts, the achievement rate for reduction in toxic emissions is very high.33

Distribution Stage

Sony also aims to reduce in CO2 emissions derived from in-house and subcontracted logisticsoperations. In order to achieve this goal, Sony has promoted modal shift especially in Japan andimproved the efficiency of international logistics.34

Recycling Stage

Sony strives to achieve a waste reuse/recycle rate of 95% or higher between 2000 and 2005. In orderto achieve this goal, Sony proceeded with television recycling and PC recycling. Mini hi-fi stereosystem made from 100% recycled polystyrene is a concrete example of Sonys recycling strategy. Asa result, Sonys current waste reuse/recycle rate is 88% for global sites and 98% for Japanese sites.35

EvaluationThe figure below from Sonys global home page represents Sonys eco-efficiency achievement basedon its own eco-efficiency measurement. From this figure, you can see that Sony is still struggling toachieve the goals of raising eco-efficiency to 1.5 times the level in fiscal 2000 by fiscal 2005.However, Sony has conducted many strategies to achieve this high goal as we have already shown.

32 Ibid.33 Ibid.34 Ibid.35 Ibid.

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We believe that it is critical to have high goals based on numbers as Sony did in order to realize itseco-efficiency program.


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III.CONCLUSION AND RECOMMENDATIONS

As we have shown, each company has good strategies to treat eco-efficiency issues in each productlife cycle stage. These efforts are summed as the following diagram shows.

Product Design

Procurement

Production

Distribution

Product L ife Cycle

Reduce the material consumption

Use environment-friendly material

Enhance product durability

Enhance energy efficiencies of product

Develop environment-friendly product

Reduce energy consumption

Reduce toxic emissions

Enhance recycling

Company's strategy

Recycling

Enhance logistics efficiencies

Use environment-friendly transportation

We also analyzed the four companies based on the eco-efficiency evaluation matrix that we learnedin class. The matrix provides a cross-cutting perspective which links product design, procurement,production, distribution and recycling, along the product life cycle. Hence, it is well suited to thekinds of integrated problems and solutions which characterize the sustainability challenge.

Key: Best = Middle = Worst =

Here, green color means the best and red color means the worst performance, while the yellow lieshalfway in between two. Nevertheless, the results of the analysis are very subjective.

Overall, this figure seems to tell us that Sony is performing the best while Kodak is performingworst. At the product design stage, HP is the best while Kodak is the worst performing. At theprocurement stage, all the four companies are generally performing well. At the production stage,

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Sony is the best while HP is the worst. At the distribution stage, Dell is the best while Kodak is theworst. At the recycling stage, all the four companies are generally performing well.

On the basis of the results of eco-efficiency evaluation matrix, each company should beginbenchmarking best practices from these comparable companies so it can address problem areas inorder to ensure future sustainability. For example, Kodak should learn from HP, which has aproduct design team focus to enhance its product design.

While no company has zero impact on the environment, a few are clearly and deliberately moreresponsible as evidenced by their environmentally-conscious efforts. Each time a best-practicecompany achieves more, or sets higher objectives, the overall goal move slightly. These marketleading companies have reaped tremendous benefits from their programs while having alsopositively effected ecological and societal change. Furthermore, these companies are likely to havemore opportunity to gain potential benefits of eco-efficiency and sustainability in the future.

It is clear from our research that companies which strive to reduce their environmental impact cansave money by spending less on water, energy, and hazardous waste disposal. As we have seenfrom our analysis of these four companies, the efforts towards improving eco-efficiency, ifimplemented and managed correctly, can yield tremendous benefits and most importantly, adistinct competitive advantage.

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APPENDIX A

Kodaks Health, Safety, and Environmental Goals

Source: http://www/kodak/com/UC/en/corp/HSE

how hp, dell, kodak, and sony achieve eco-efficiency throughout product life cycles

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