Model Answers to short cases
HP’s Recycling Program
HP (Hewlett Packard) provides technology solutions to consumers and businesses all over the
world. Its recycling program seeks to reduce the environmental impact of its products, minimize
waste going to landfills by helping customers discard products conveniently in an
environmentally sound manner. Recovered materials, after recycling, have been used to make
products, including auto body parts, clothes hangers, plastic toys, fence posts and roof tiles. In
2005 it proudly announced that it had boosted its recycling rate by 17 % in 2005, to a total of
63.5 million kilograms globally, the equivalent weight of 280 jumbo airliners. 'HP's
commitment to environmental responsibility includes our efforts to limit the environmental
impact of products throughout their life cycles,' said David Lear, vice president, Corporate,
Social and Environmental Responsibility, HP. 'One way we achieve this is through developing
and investing in product return and recycling programs and technologies globally, giving our
customers choices and control over how their products are managed at end of life.'
But HP’s interest in environmental issues goes back some way. It opened its first recycling
facility in Roseville, California, in 1997, when it was the only major computer manufacturer to
operate its own recycling facility. Now the company’s recycling program goal is to expand its
product return and recycling program and create new ways for customers to return and recycle
their electronic equipment and print cartridges. As well as being environmentally responsible,
all initiatives have to be convenient for customers if they are to be effective. For example, HP
began a free hardware recycling service for commercial customers in EU countries who
purchase replacement HP products, in advance. Partly, this reflects the EU Waste Electrical and
Electronic Equipment Directive. A similar offer exists for HP commercial customers in the Asia
Pacific region. In some parts of the world, HP has developed partnerships with retailers to offer
free recycling at drop-off events.
Why do companies like HP go to so much effort to promote recycling schemes such as
this one?
As usual, it is a mixture of corporate responsibility and self-interest. It also seems that many
parts of the world will introduce legislation that requires companies to take responsibility for the
end-of-life reuse and disposal of their products. While this is most prevalent in Europe, it could
spread to other parts of the world. Therefore, HP is, in effect, investing in developing capabilities
that it will have to deploy elsewhere in the world sooner or later. Of course, there are other
advantages. Carefully reused materials can help reduce costs. But, possibly the most important
advantage is that it allows the company to examine how its products perform in use. Careful
examination of recycled cartridges can give an indication of potential failure points and/or
aspects of the product design that could be improved.
HP has been engaged in environmental matters for some years, how might this help them
to be more effective at it?
HP opened its first recycling facility in Roseville, California, in 1997. Then it was the only major
computer manufacturer to operate its own recycling facility. This has both advantages and
disadvantages. The disadvantage is that it had to ‘make up the rules as it went along’. After all,
there was no one else to learn from. The major advantage is that, in doing so, it acquired
significant knowledge about how to collect and recycle its products. This means that it will
always be further down the learning curve than its competitors. While they are struggling to
Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition,
Instructor’s Manual
install similar systems and processes, HP will already have significant accumulated experience.
In addition, bringing product back for recycling is, in many ways, simply the reverse of its normal
logistics chain. Many issues concerned with the recycling processes could promote learning that
is useful in more conventional distribution processes.
Ecological footprints
To supply the average person’s basic needs in the United States, it takes 12.2 acres of land. In
the Netherlands it takes 8 acres, and in India it takes 1 acre. Calculated this way, the Dutch
ecological footprint covers 15 times the area of the Netherlands. India’s ecological footprint is
1.35 of its area. Most dramatically, if the entire world lived like North Americans, it would take
three planet earths to support the present world population.
So, why is this relevant to operations management?
A simple answer; because operations management is the function that, directly and indirectly, is
responsible for most energy usage. By their nature, transformation processes consume energy.
If operations managers managed to reduce consumption by just a few per cent a year it would
allow the economic growth that most people seem to want, while at the same time reducing
global energy consumption.
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© Nigel Slack, Stuart Chambers & Robert Johnston 2007