Sustainability in practice A case of environmental packaging

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 n n 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 n Legislation n To comply with a set of regulations Moral responsibility Competitiveness n n 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) n Limited resources available for sustainability projects n

Prerequisites for Successful Sustainability Projects To overcome these difficulties, sustainability initiatives must satisfy the following requirements: n Support of top management n Keep project costs to a minimum n Benefits must be quantified n All other dimensions of performance also need to be satisfied

Case Study of Furniture Manufacturer – Environmental Packaging n n n Polystyrene Furniture blocks CML is a NZ SME specialising in Ready-to-Assemble (RTA) furniture components CML has made a commitment to sustainability and is aiming to obtain ISO 14000 certification CML spends around $500, 000 annually on polystyrene for packaging – a significant expenditure for a non-value adding component 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 (ISO 14000, Enviro. Mark 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: n low in cost compared with other materials n provides excellent impact protection n has a ‘memory property’ n 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 n n 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.