Case Study Showcase: Third Generation 'Eco-Efficiency' Implementations

B&Q is the biggest retailer of do-it-yourself (DIY) furniture in Europe. In 1996, B&Q sales were 1,283 million pounds with profits of 55.4 million pounds. The company employs over 18,000 people and sells an average of over 25,000 products. The company recently started to research the origins of its timber products. It discovered that several suppliers did not know where their supplies originated, or how the forests were managed. After further analysis, B&Q found that some of its timber came from mismanaged forests. The firm recognized its responsibility and initiated a policy to identify the environmental problems associated with its products. Since then, all suppliers now have to document their own sources and environmental problems. The company now grades suppliers on their environmental performance. In addition, it encourages them to do likewise with their own suppliers. As a result, more than 90% of the suppliers today have an environmental policy in effect. In essence, B&Q has used its large purchasing power to induce behavioral change on the part of its suppliers. About 10% of B&Q suppliers have changed their own sources in order to keep B&Q's business.

3M Germany is based in Neuss, Germany. The annual turnover of the company in 1995 was 1700 million DM, with a capital investment of 231 million DM. Total number of employees were 2,988 in 1995. The competition on computer tapes and cartridges by manufacturers from the Far East was generating a continuous price erosion in Europe. By creating the "Data Care" program, 3M offered to take back the used product, an attractive measure to environmentally conscious customers, enhancing the brand loyalty and stopping the price decline.

Aurora Electronics, based in Irvine California is one of the world's largest recyclers of integrated circuits (ICs). The company has a turnover of US$120 million and has 415 employees. Aurora Electronics sells the chips to brokers both in the US and overseas. Their IC technology is considered to be state of the art and very valuable. Aurora electronics employs its state of the art technology to remanufacture the chips to be resold. For example, a brand new Intel chip might sell for more than $400. This is an extreme case, for even chips of lower technology can generate profits.

SafeChem is a joint-venture between Dow and the recycling company Westab. It is presently operating in Germany and Switzerland and planning to initiate operations in Austria. Its capital investment US$2.3 million employing 14 full-time workers. In 1995 the company was operating at a profit and market share had increased to 20 percent of the total metal cleaning industry in Germany. The idea to create SafeChem was a strategic move by Dow, in an attempt to maintain its share of the chlorinated solvents market in Germany. It offered a system to help customers complying with the environmental legislation in Germany. SafeChem distributes its solvents in special containers ("Safe-Tainers") with an air tight pumping system. Inside the container lies the solvent drum. The company also provides empty "Safe-Tainers" to store and transport spent solvent back to the firm. As a result, zero emission occurs during the transportation and transfer phase. With the closed loop system, SafeChem includes the cost of take-back and recycling in the price of the virgin solvent.

Alpha Metals is a subsidiary of the Alpha Fry Group, which is part of Cookson's electronics division. Alpha Metals is based in Duisburg, Germany. The company employs 121 people and had a turnover of 40 million DM in 1996. Its primary business activity is the production of solder paste to the electronics industry. It has approximately 50% of the German market share, selling 40 tons per year. Major customers includes Bosch, Sony and Siemens Nixdorf. The German packaging ordinance obliged Alpha Metals to take back the glass jars that once contained the solder paste that it sells to the electronic industry. It had to find means to reuse the glass jars to avoid the ever-rising landfill cost, 1500 DM per kilo in 1995. Initially, the company calculated that it was cheaper to clean the jars (accounting for labor costs) and reuse them than to landfill the used jars. Going one step further, Alpha Metals developed a tin package that could be directly recycled upon return. The tin can (still containing the remains of used solder paste) is now melted with the raw material to make solder bars, another of the company's products.

Rank Xerox, is the UK based joint venture between the Rank Organization and Xerox Corporation. The company employs 24,000 people and has a turnover of £3.3 billion. When the firm started operations, it leased most of its copiers. Thus it was guaranteed to have a certain percentage of used copiers returning each year. The company has gone one step further and implemented specific programs to improve the return of used machines. In the Netherlands a concessionaires' incentive scheme has increased return rates to over 70%.

Siemens Nixdorf (the merger of the Siemens and Nixdorf companies in 1990) produces information technology equipment and a wide range of systems software. The parent company has offices in over 50 countries with 37,200 employees based worldwide. Siemens Nixdorf Informationssysteme AG, has a recovery plant located in Paderborn, Germany. In 1996, the companies total sales were 12,125,378 million DM and it was running at a loss of 785,096 DM. The recovery plant reconditions and recycles used computers. The firm has decided that the customer should bear a part of the burden of the disposal cost. It charges its' customers on a sliding scale based on the product type and the disassembly and recycling costs. The fee to return a note book computer is DM 25 (US $ 17.50) while the charge for a large mainframe can cost a customer up to DM 970 (US $ 680). The company is aware that when the electronic waste legislation is implemented in Germany it will be obliged to take back its product free-of-charge. For this reason, the firm has already started to institute point-of-sale recycling fees on some of its products, thus increasing the total sales price of the item (passing at least a part of the cost of disposal onto the client).

3M Germany engages specialized service companies in the recovery operation in Germany. The customer delivers the product to a collection center and the service company is responsible for the recovery and recycling of materials. The recovered materials and valuable parts are handed back to 3M. Recovery rates and invoices are sent back to 3M. While the recovery operation is out-sourced to a service company, 3M controls the overall process ensuring that recovered materials are reintegrated into the firm's manufacturing processes.

DST Logistica is a fully-owned subsidiary of IBM in Italy, with an annual turnover of 100 million lira. The company has 180 employees based at the two plants in Busnago and Basiano. It is responsible for IBM's logistics operations and the take-back, dismantling and disposal of used IBM equipment. At DST Logistica, the organizational structure is a combination of both a cooperative agreement and vertical integration. From an operational perspective, DST is a separate entity. In terms of overall business development, it is vertically integrated. One notable advantage of in-house take-back and disassembly is security. By doing the disposal yourself, you are assured that it is done safely and correctly. IBM added tighter requirements for the management of its end-of-life products in 1993, and as a result brought more of its disassembly in-house.

Apple Computers The European operationsuse recyclers exclusively to handle the disassembly and recycling of equipment from their individual take-back programs. The parent company, Apple Computers Inc, is headquartered in Cupertino California with 17,615 employees. In 1996, net sales of the corporation was 9,833 million dollar. Apple manages a network of European recyclers to handle used products. Apple is of the opinion that since a market of recyclers already exists, manufacturers have the choice of selecting the best recyclers from that market, based on the needs of their operations.

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