Industry Market Trends
Dell Turns to Nature for Packaging Initiative
January 15, 2013
The report notes that most companies today understand that effectively using resources and eliminating waste increases efficiency and keeps costs lower. Given its high potential for waste, packaging is one of the many areas companies are picking up points on efficiency. The packaging, paper and print industry supply chain analyst, PIRA International Ltd., recently published a survey of global packaging companies to identify the key drivers of "green" packaging. Almost 80 percent of respondents identified that consumers' awareness of environmental issues was either a growth driver or a major growth driver. Other factors for more efficient packaging included advances in materials and improvements in processing and converting technologies. The interesting part was that most packaging industry professionals today view these issues as growth drivers rather than growth barriers. Many companies have launched sustainable packaging initiatives recently. One of the most prominent is Dell Computer, which has formed an entire department that is focused on packaging initiatives. The company, which like its competitors once shipped its products entombed in yards of Styrofoam, has been experimenting with a wide variety of alternative solutions that are making a big difference in the company's sustainability bottom line. (Consider that Dell ships one system per second to 180 different countries through 47 global shipping nodes.) According to Dell, its customers have spoken, and what they want is greener packaging. Oliver Campbell, Dell's director of procurement for packaging and packaging engineering, together with his team, has developed what the company calls their 3Cs -- "cube, content and curb" -- to accomplish a number of goals: reduce the size of all packaging by more than 12 percent; increase the amount of recycled and renewable content by up to 40 percent; and increase the ratio of materials ready for curbside recycling to 75 percent. The company has also recognized the value of sourcing packaging partners and materials near manufacturing facilities, which has helped eliminate much of the transportation necessary to bring the packaging materials to the finished products. For Dell, which has manufacturing facilities in China, this meant experimenting with something China has a lot of: bamboo. Bamboo, a fast-growing member of the grass family, is one of the world's most renewable materials (it can grow up to two feet a day under the right conditions) and can easily be processed to replace traditional molded paper pulp, foams and corrugate materials. The bamboo is mechanically pulped at a Chinese factory close to Dell manufacturing facilities. During the process, 70 percent of the water is reclaimed and no toxic chemicals are used. On sunny days, the pulp is dried by the sun, reducing electricity use. With the help of partners, Dell put the bamboo packaging through extensive recyclability testing in an attempt to find the right blend for both quality and maximum reuse potential. The company also conducted testing with GP Harmon Recycling (a division of Georgia-Pacific), paper brokers and municipal recycling facilities with a goal of ensuring that the end result would be accepted by curbside recycling companies. Dell works with partner Unisource, a packaging design firm, for many of its bamboo containers and shipping materials, and today, about 70 percent of Dell laptops are shipped inside bamboo packaging. Another of Dell's green packaging initiatives is its Multipack program, which was designed to create efficiency by combining multiple products in one box for large orders. Working with partner Austin Foam Plastics Inc., Dell found that it not only saves packaging materials, it's helpful at the end-user end: without the need to open multiple boxes, it can cut deployment time as well as transportation costs and storage space. Perhaps the most fascinating aspect of Dell's green packaging initiative is the containers that are quite literally grown to suit. Using mushroom bioscience, Dell and its partners have developed a process that uses common agricultural waste products such as cotton hulls, rice hulls or wheat chaff. These materials are packed into custom designed molds and then injected with mushroom spawn, which begin feeding on the carbohydrates in the waste plant materials. Between five and 10 days later, the mushroom root structure completes its growth inside the mold, resulting in a packing material that looks and acts like Styrofoam but is organic, biodegradable and can be used as compost or mulch. (It's even technically edible: in an interview with MIT Sloan Management Review, John Pflueger, Dell's principal environmental strategist, intimated that Campbell once tasted a bit of the end result, proclaiming that it needed soy sauce.) For the mushroom packaging initiative, Dell partnered with Ecovative to develop the technology for commercialization. Dell officially launched the mushroom packaging pilot program in August of last year in conjunction with an unnamed Fortune 50 company that is described as a large-volume Dell customer with a progressive sustainability program. "The mushroom packaging actually performed better in the drop tests than our foams did. We were very surprised by that," said Campbell. In addition to bamboo and mushrooms, Dell has worked with high-density polyethylene (HDPE), which is made from recycled-content plastics such as used milk cartons and detergent bottles; molded paper pulp and lightweight air cushions that can be dramatically minimized before disposal, according to the website European Supply Chain Management. The company is careful in its partner network, choosing packaging partners that share its vision for cutting out waste as well as petroleum-based raw materials. It has developed a checklist it uses to evaluate potential partners, as well as monitor existing ones. "We have a process that looks at our suppliers' sustainability efforts not only in terms of environmental factors, but also workers' conditions, water usage, and others," Campbell told the website Greener Package. "So our procurement team evaluates our suppliers very comprehensively." The new initiatives have paid off for Dell. The company reported recently that its new packaging strategy has cut out 20 million pounds of packaging between 2008 and 2012 and reduced costs by more than $18 million. So while the company may be meeting high-minded sustainability goals and pleasing customers, the bottom line is that it's also saving cash.In an effort to maintain corporate sustainability goals, many companies are examining their entire product lifecycles to find places to "go green": from materials procurement to the manufacturing process and facility infrastructure to shipping and transportation to waste disposal, it's all under review. Is it because companies are becoming more concerned with the environment? For some, that may be the case, but for most, it's simply too expensive to be wasteful today. Arbitrarily using and discarding resources may be a viable (though irresponsible) option when resources are plentiful and cheap, but increasingly, this is no longer true. A report from PwC released earlier this year found that, despite a still-depressed global economy, waste management initiatives are actually on the rise.