15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
MIT Sloan and EMC: Sustainable Packaging Solutions
Statement on Confidentiality
During this collaboration, EMC has introduced the team to its suppliers and shared proprietary
information about its business operations. The MIT team and faculty member are bound to a
non-disclosure agreement. This paper is written with an understanding that this paper will not be
used outside of this academic context; therefore, our team has included information about
EMC’s operations and business. Please maintain confidentiality about the information contained
within this report and an extension of our temporary insider status. Please refer to MIT’s signed
Non-disclosure agreement with EMC for further details.
Executive Summary / Abstract
EMC has already implemented an effective inbound packaging solution at its Apex, NC
manufacturing facility, and we support its positive economic and environmental impact. Because
each manufacturing location has a different set of conditions (e.g. inbound packaging is handled
by tertiary contractor in Franklin, MA, the recycling infrastructure is different in MA, NC, and
Ireland, etc.), we believe it is necessary to check the feasibility of rolling out this solution to
EMC’s other manufacturing facilities in Franklin, MA and Cork, Ireland and adapt where required.
At EMC’s Apex manufacturing facility, inbound packaging from its suppliers includes potentially
valuable polypropylene as cushioning material. Until recently all of this polypropylene was going
to landfill. One challenge is that density of the foam; in its packaged form, the foam takes up a
lot of space and costs a lot to ship. One of EMC’s waste suppliers provided a densifier from
Avangard Innovative to densify the foam. Around the start of our project, EMC installed and
started using the densifier. The supplier picks up the material for free but also does not
compensate EMC for the scrap material.
Our problem statement has three parts: (1) Has EMC chosen the best inbound packaging
solution for the Apex plant from an economic and environmental perspective?
(2) Is this solution viable / transferable to other EMC locations?
(3) What are the risks involved with this (and alternative) solution(s)?
In our effort to thoroughly assess EMC’s options, we considered alternatives to the current
densifier arrangement, including reusing the existing packaging (work stream 1), developing a
new more sustainable and affordable packaging material (work stream 2), and EMC purchasing
its own densifier to capture the material value of the recycled polypropylene (work stream 3).
The status quo of a supplier provides significant economic and environmental gains. However,
EMC only realizes a small incremental gain by purchasing its own densifier while it takes on a
certain amount of risk in taking on this role by itself.
EMC Background
Richard Egan and Roger Marino founded EMC in 1979, and it ranks 139 in the Fortune 500 in
2012. It also reported its revenue of $21.7 billion in 2012, which is the largest revenue in EMC’s
34-year history. EMC is a global leader in enabling companies to deliver information technology
as a service (ITaaS). Its services include data storage, information security, virtualization, and
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
cloud computing. The service that EMC currently focuses is cloud computing while EMC’s
services also include hardware-based services such as storage. Through cloud computing,
EMC uses its innovative products and services to help IT departments store, manage, protect,
and analyze their most important asset - information - in a more agile, trusted, and cost-efficient
way. With such excellent services, EMC own its global customer based with its 60,000
employees worldwide and sales offices and partners in 86 countries. Its customer base ranges
from public to private sectors, from startups to the Fortune Global 500, and from financial
industry to manufacturing, healthcare, Internet service and telecommunication providers. EMC
is also recognized as the company that attributes its growth to its sustained and substantial
investment in research and development (R&D). Its cumulative investment since 2003 counts
$16.5 billion. EMC has also invested $17 billion for more than 70 technology companies since
2003. It also operates R&D centers in Brazil, China, France, India, Ireland, Israel, the
Netherlands, Russia, Singapore, and US, and holds the International Organization for
Standardization (ISO 9001). With such efforts, EMC has been awarded industry-wide. EMC was
recognized in 2010 for its IT proven Project with CIO 100 Award, ranked 2nd on the Fortune’s
list of the World’s Most Admired Computer Companies in 2011. EMC also put priority on
corporate responsibility initiatives. Thanks to them, EMC ranked 19th on Corporate
Responsibility Magazine’s 100 Best Corporate Citizens List. Related to that point, EMC’s focus
has extended to sustainability challenges. EMC joined the Ceres Network of a non-profit
organization that tackles sustainability challenge and is also a member of the Electronic Industry
Citizen Coalition (EICC).
EMC Sustainability Program
As we see, EMC operates its business on a global scale. EMC is committed to acting in a
socially and environmentally responsible way and to being an attentive and thoughtful neighbor
in its local and global communities. EMC has its dedicated organization of the Office of
Sustainability. EMC’s distinguished sustainability activities are operated under the commitments
from the top managements of EMC. Under the Board of Directors, Environmental Sustainability
Board reviews and ensure of execution of strategy, and the Office of Sustainability develops the
strategy of EMC’s sustainable activities. With that well-managed organization, EMC manages its
environmental impacts, which include 1) Energy and climate change, 2) Collaboration and
engagement with external groups, and 3) Material use and waste. In order for EMC to achieve
its sustainability objectives, EMC thinks highly of its employees and their families, customers,
suppliers, investors and the greater global community. EMC thinks that environmental
sustainability is defined by them and serve them by 1) Conserving and enriching the
environment in which people live and work, 2) Creating value in the adaptations that are
required to thrive into the future, and 3) Mitigating the risks from changes in the planet that
people cannot influence.
Under that sustainability strategy, EMC puts high weight on “Material use and waste”. EMC is
committed to using less and reusing material more while EMC is protecting environment from
any risk that arises throughout its value chain. This includes how to environmentally make the
most of a packaging. EMC has optimized an outbound packaging and currently targets an
inbound packaging, which is a focus of this S-Lab project. Working on a packaging has a
significant meaning for EMC since packaging touches many business functions. Therefore, this
includes a company-wide working group that consists of the representatives from the
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
Engineering, Supply Chain, Purchasing, Manufacturing, and Logistics. In efforts to optimize
packaging solution, EMC focuses on two key areas, “Design” and “Use”. In the area of design,
even small adjustments impact on EMC’s sustainability measure very much since EMC ship
high volumes of materials and products through its inbound and outbound value chains. Also,
the important priority of EMC in shipping its materials and products is a safety. The challenge of
EMC is to balance these objectives and EMC is trying to optimize “the right-sizing” of packaging
while it also secures a safety of materials and products. EMC also thinks highly of using as
much renewable, recycled, and recyclable material as possible. In the area of “Use”, EMC
devotes itself to building out its returnable packaging program and reusing as much of packages
as possible. In doing so, EMC is closely working with its customers and suppliers. As an
example, EMC encourages its customers to return packaging easily by providing detailed
information. (http://www.emc.com/collateral/sustainability/packaging-return-program.pdf)
Through those efforts, EMC eliminated two million pounds of wastewater and $1 million in costs
in 2011.
As a side note of EMC’s Sustainability Program, EMC and MIT have previously partnered for a
sustainability project for S-Lab two years ago and maintain further relationships, e.g. through
inviting EMC guest speakers on sustainability topics.
Problem Statement
EMC is well aware of the impact its business activities have on its environment and has been
actively working towards employing and creating sustainable business practices. While EMC’s
current focus is cloud computing, the challenge of EMC’s sustainability activities is to reduce an
environmental from the hardware-side of the business, more precisely, reducing the impact of
packaging. EMC specializes on assembling the final hardware solution and not manufacturing
individual components, most components are shipped to the EMC assembly facilities in Apex,
NC, Franklin, MA, or Cork, Ireland. The final product is then shipped to EMC customers across
the world. Packaging is necessary in order to avoid external physical impact causing damage to
the delicate electronics. Both inbound and outbound logistics therefore require packaging.
Outbound packaging has been optimized in a previous program (actually with MIT Sloan
students as part of the S-Lab two years ago), so EMC’s target on this project with MIT Sloan is
inbound packaging. Inbound packaging is more challenging to handle since decisions about
packaging are made by suppliers while EMC has a control of outbound packing over its
customers. The most commonly used material for inbound packaging that EMC receives is
polypropylene, which supports the safety of EMC’s products. The problem with polypropylene is
in the difficulty to recycle it. The disk drives packaged in polypropylene are shipped to EMC’s
assembly plants, e.g. to Apex, NC; the polypropylene packaging waste was until recently
brought to a landfill since the closest recycling facility is out-of-the state and sending
polypropylene to that facility in its original state would have been very costly.
EMC measures its environmental impact with various measures, which include greenhouse gas
emissions and amount of waste sent to landfill. As stated above, outbound packaging was
optimized in the past and EMC is now looking into consult the most economical and sustainable
way to handle its inbound packing.
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
Existing Solution
EMC has already worked on a solution at its Apex plant to reduce the landfill impact of the
polypropylene packaging. From the very beginning of the project, EMC has partnered with its
local waste hauler to reduce its landfill impact. The waste hauler provided a densifier
(approximately $70k in value) to help condense the material so that the hauler could arrange
recycling via a third party. This way, transportation costs for the recycling solution were
significantly reduced (since the packaging waste now takes up less space and less truck are
needed). EMC does not receive any compensation for the recycled material, but it did not pay
for the machine or for hauling the material to landfill. Given the existing solution, our team and
the representatives at EMC have come up with three questions that we would want to consider
as part of our problem statement:
1) Has EMC chosen the best inbound packaging solution for the Apex plant (from an economic
and environmental perspective)?
2) Is this solution viable / transferable to other EMC locations (Franklin, MA and Cork, Ireland)?
3) What are the risks involved with this (and alternative) solution(s)?
We are conscious of the fact that the recycler has provided a $70k machine to EMC for free. If
they are willing to make such an investment, what do their financial estimates show?
In order to find an answer to this problem statement, we are going to discuss the three work
streams we focused on in our analysis and elaborate the consequences, pros, and cons of each
potential solution. The three work streams are 1) reuse, 2) use new materials, and 3)
densification and recycling.
Work Stream 1: Reuse
The first work stream that we considered was to reuse the inbound packaging - comparable
EMC’s solution for outbound packaging. For outbound packaging, EMC has developed solid
reusable and highly recyclable packaging for its hardware products. Since products sold by
EMC are relatively expensive, the packaging needs to fulfill several requirements, cushioning
and protection of the product for the shipping process being one of the most important. In
addition, most EMC products are larger than a refrigerator, and customers struggled to properly
dispose of the extensive packaging involved and actually demanded reusable packaging. Given
the $1M price tag for top end units and lengthy journey for delivery, EMC added robust
cushioning and sturdy wooden structural supports. To alleviate customer concerns over
packaging and to minimize environmental impact, EMC included kits to send back the material
(for free) to EMC for reuse. EMC estimates that its packaging can make up to 9 round trips. The
sustainability case for this solution becomes even more impressive for cases where customers
return old systems (even from competitors) using the reusable packaging, and EMC refurbishes
and reuses the existing shell in its upgraded system.
There are some challenges related to reuse programs, however. For outgoing packaging, there
is less than 50% participation by the customers. Therefore, much of the packaging does not
make the 9 round-trips forecasts. For inbound packaging, EMC is limited by the type and scale
of packaging used by the supplier.
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
Under this work stream, we considered two possible options: (1) using the existing packaging
for an EMC product, (2) shipping the boxes back to Seagate for reuse, and (3) melting down the
boxes and shipping them back to Seagate’s supplier for reuse.
(1) The inbound packaging carries packs of 30 drives from Seagate. EMC would like to
physically reuse the package itself, but any outbound drives from EMC are physically larger
because of additional structure added during assembly. Therefore, outgoing drives do not fit in
the inbound packages. Even the chemical composition of the cushioning material differs from
EMC’s preferred material. Seagate uses polypropylene cushioning, but EMC prefers
polyethylene cushioning. Therefore, EMC has no demand for the inbound cushioning material.
We asked Laura Nelson, EMC’s packaging engineer, and Art Mahassel, President of Atlas
Packaging, about using polypropylene in future EMC packaging. Art said that he could create a
package using the recycled polypropylene, but Laura identified a number of risks. First of all, it
required creating something new out of material that loses cushioning and other preferred
properties with each recycling round.
To figure out the business case, we performed rough estimates for the costs and benefits of
shipping the materials back to Seagate. Laura Nelson was very hesitant about reusing the
material because she could not guarantee that it maintained cushioning through reuse.
Cushioning materials are compressed during shipping and lose their ability over time. Given the
high value of the items being shipped and low margin of error, it was a risky proposition.
Because the packaging materials themselves are relatively inexpensive (costing less than a $1
per pound,) it is less expensive to create new packaging material than to ship the used
packaging material back to Seagate. Furthermore, because this would be an EMC initiative, it is
not 100% clear-cut whom to assign the costs to. Would EMC pay to bring the materials back,
and would Seagate credit EMC the cost towards future shipments? Since such arrangements
are unlikely, we struggled to convince EMC that this solution was worth engaging Seagate on.
The material itself is not dense, making it inefficient to ship. Instead of the traditional hauling
based on weight, haulers would charge for each full container. As we learned about the
packaging material bidding process, public companies struggle to change existing packaging
terms. With current market forces, recycled cardboard sometimes even sells at a premium over
“virgin cardboard material” (new material) because there is more demand for recycled material
than supply. Therefore, if EMC asked Atlas to change recycled cardboard content for existing
packaging, it would have to pay the difference in cost. Because of the pervasiveness of
packaging, this difference would have an identifiable effect on EMC’s bottom line (a 1% drop in
margins) and stock price. Therefore, from a business case perspective, this solution does not
look too attractive.
To address the reuse challenges due to density, we considered using the existing densifier to
make the packaging material more dense and shipping it back to the packaging material
manufacturer. With compression ratios above 25-to-1, there is a significant reduction in shipping
cost. However, this option requires a lot of coordination with Seagate and its suppliers.
Specifically, we would have to make an arrangement with the supplier to somehow deliver the
material. The supplier would have to pay EMC for the material or at least reimburse EMC for
transportation. EMC considered this possibility. As we learned about the recycling process itself,
there are legitimate concerns about potential mixing and the introduction of foreign (unknown)
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
material. Using a used car analogy, one supplier described that his customers refused to accept
recycled material that they did not generate themselves; otherwise, they did not know the
material’s use history or purity.
Work Stream 2: New Materials
The second work stream that we considered was finding an alternative material as a substitute
for the current material, polypropylene. On the cushioning quality side, polypropylene offers the
acceptable level of cushioning. There would also be no switching costs if polypropylene were
used. However, on the sustainability side, the recycling market for polypropylene is not that
developed and it may be difficult to find buyers for recycled polypropylene / find acceptable
prices.
EMC’s packaging engineer, Laura Nelson, who has engaged with its supplier (i.e. Seagate) staff
about changing the packaging for EMC, has explored the possibility of changing the cushioning
material. Through her examination, she identified the following potential candidates for the new
material.
The first candidate is polyethylene. On the positive side, this material is easy to recycle and the
secondary market for this material is already relatively well developed. On the negative side,
switching to this material incurs substantial switching costs and it is unlikely that EMC’s supplier
will be very open about accepting a change to the packaging material. EMC is an important but
certainly not the only client of the disk manufacturers and also has no dominant position in its
customer-supplier relationship.
The second candidate is polyurethane. On the quality side, this material provides excellent
cushioning properties. On the economic side, this material is cost effective. However, this
material uses up a lot of space (not volume-effective). Adding to this sustainability concern, this
material is hard to recycle and using this material would impose a heavy burden on the
environment. One of the most viable recycling options for polyurethane is as fiber for carpeting
(but there is no unlimited demand for carpets).
A third category of alternative packaging material is renewable material like bamboo and
mushrooms. With regard to bamboo, bamboo is melted into pulp form (like paper), and then
molded into a cushioning material. Bamboo pulp’s advantages over tree pulp are threefold:
(1) Bamboo’s growth rate is much faster than trees and is therefore a more sustainable material;
(2) Bamboo pulp is more durable than tree pulp, and;
(3) Bamboo contributes to promote healthy soil.
With regard to mushrooms, mushroom spawn and supporting material are placed in a mold, and
after 5 - 10 days, the spawn grows and forms the cushioning. On the positive side, these
materials are compostable. In addition, mushroom cushioning dramatically reduces the energy
consumption through manufacturing because mushroom grows into a cushioning by itself. On
the negative side, however, their higher weight for cushioning incurs more CO2 through
transportation. On top of that, mushroom has a potential problem in that the material might emit
dust, which leads to malfunction of the highly sensitive electronic product contents.
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
As we walked through, each alternative material has pros and cons. However, at this point, we
do not proceed with this work stream due to the following challenges.
The first challenge is that EMC is not Seagate’s only customer for this product and packaging.
Although EMC is an important client, Seagate is not willing to customize packaging for a single
client. Therefore, for Seagate to change the packaging, it must be for all of its clients. Such an
arrangement adds cost and increases the packaging inventory required at Seagate to meet
EMC’s needs. Therefore, in order to change this material, an additional and independent
business case for each supplier would need to be developed which is out of scope of this
project - and even then not 100% likely that it would succeed (because of potential political
issues, etc.).
The second challenge is that EMC does not want to be a frontrunner in terms of the packaging
technologies. With regards to this, EMC is quite a risk-averse company. EMC products are
highly sensitive and expensive electronics that EMC tries to avoid experimenting too much with.
The company wants to adopt technologies that have reliable records in other companies.
Despite Dell using some of these materials (and this is where EMC got its inspiration from), Dell
sells to a distinctly different segment for which it is more feasible to experiment. From this
perspective, aforementioned renewable materials have not gained the established reputation,
and EMC is hesitant about taking risks that accompanies these technologies at this point.
According to these challenges, EMC and us came to the conclusion that we do not proceed on
this work stream.
Work Stream 3: Densification and Third Party Recycling
The third work stream that we considered was examining the case where EMC uses a
polypropylene densifier and becomes independent in its recycling process. This can either be
explored for the case where EMC uses a densifier provided by a recycling company and where
the densified polypropylene logs are picked up by the recycling company without EMC paying
for it (current EMC solution for Apex) or a case where EMC handles the entire process on its
own, buying its own densifier and selling the densified polypropylene to recyclers. The value
captured would, in this case, come from the scrap value of densified polypropylene.
In order to examine the benefit of this work stream, we compare the following three cases from
the economic standpoint and the sustainability standpoint.
(Case 3-1) Before: The situation where EMC operates without a polypropylene foam densifier
(Case 3-2) Status quo: The situation where EMC’s partner controls recycling and provides the
densifier for free as well as free haul services, and
(Case 3-3) Proposal: The situation where EMC controls recycling (i.e. purchases its own
densifier) and captures value from material recycling.
Business Case
In order to make the business case regarding EMC’s inbound polypropylene packaging waste,
we built a model that compares the annual revenue (i.e. income minus cost) from the
aforementioned three cases:
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15.915 LABORATORY FOR SUSTAINABLE BUSINESS • 22 MAY 2013
NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
The model takes the following items into account.
(1) Income
● Salvage value = The weight of polypropylene packaging received annually * resale value
per weight
(2) Cost
● Haul cost = The annual number of haul trucks * haul price per truck
● Space cost = Space value per sqft * space necessary for the densifier
● Electricity cost = The annual electricity consumption * electricity price
● Depreciation cost = The purchase costs of the densifier / useful life of densifier
● Labor cost (We assume no incremental labor cost in case 3-2 and 3-3 because EMC
already utilizes approximately the same amount of labor for collecting the non-densified
packaging and in both cases, after the material is densified and stored temporarily at
EMC any additional labor is taken over by the recycler)
● Maintenance cost (We assume no incremental maintenance cost in case 3-2 and 3-3 as
those costs are already reflected in depreciation costs)
From the model, we may reasonably conclude that Case 3-3 creates the biggest economic
value out of the three cases (see appendix A).It is important to note that most value occurs
when comparing Case 3-2 versus Case 3-1. The improvement between Case 3-3 and Case 3-2
is much smaller and involves capital investment by EMC.
Sustainability Case
With regard to sustainability, we built a model that compares aforementioned three cases’
landfill and CO2 emission.
In terms of the CO2 emission, we regarded the case 1 as base case, and assumed the
emission would be achieved by solving the following equations.
The CO2 emission of the Case 3-1 = (polypropylene’s weight* polypropylene’s PP's
manufacturing emissions factor for virgin production) + (The number of haul trucks for
polypropylene * Transport distance * CO2 emission factors for diesel fuel / Truck’s estimated
gas mileage)
The CO2 emission of the Case 3-2 or 3-3 = ( polypropylene’s weight* polypropylene’s
manufacturing emissions factor for recycling) + (The annual electricity consumption used by the
densifier * CO2 emission factors for electricity) + (The number of haul trucks for compressed
polypropylene * Transport distance * CO2 emission factors for diesel fuel / Truck’s estimated
gas mileage)
In terms of the landfill, we assumed the volume of the Case 3-2 or 3-3 would be 0 because all
the polypropylene would be recycled.
From this model, we arrived at the conclusion that Case 3-2 and 3-3 would be the best out of
the three cases from the sustainability perspectives.
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NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
Risks
The recycler-provided densifier poses certain risks. First of all, the densifier belongs to the
recycler, and the densifier would be removed if there were any cancellation of the existing
arrangement or attempt to change its terms. Furthermore, there is no clear arrangement in case
of potential machine breakdown and replacement. Recycling contracts historically are not very
stable, especially given the variability in pricing for the virgin materials. Tim Fasolt at the Apex
Plant emphasized that we may need an alternative recycler lined up in case this arrangement
becomes untenable. Ezra Benjamin also described a previous recycler who had taken recycled
material for a loss out of the hope of incentivizing future contracts with EMC (without
communicating this intention to EMC); the recycler experienced significant financial losses on
the arrangement, and the one-year stockpile of recycled material the recycler had built up
without any clear resale path ended up in a landfill.
If EMC purchases its own densifier, it reduces its dependence on the recycler that provided the
machine. It also provides continuity in case the recycler cancels the current agreement.
However, this option requires EMC to negotiate recycling contracts for the future. If no
amenable partner exists, EMC would still recognize the depreciation for its purchased densifier
but EMC would likely have to start discarding the inbound polypropylene in a landfill again.
An additional and not insignificant risk is financial risk: Scenario 3-2 indicates that it is actually
not profitable for the recycler to pick up the densified material at their own expense and sell the
recycled material. Ezra has confirmed EMC has faced a similar situation before where the
recycler was not aware of the loss situation at the beginning and once they realized were hoping
to win additional, more profitable business from EMC. Since EMC could not provide the recycler
with more business, they recycler terminated the agreement and EMC had to find a new
solution.
This poses a significant risk to EMC since EMC prefers stable and long-term solutions, not
short-term fixes. Even though scenario 3-2 may seem profitable for a while, it may not be wise
to make themselves dependent on a recycler that loses money in doing business with EMC. A
remedy for this risk factor would be for EMC to move to solution 3-3 which shows an even more
positive net income differential.
Conclusion
Under its current arrangement with the recycler, EMC has found a financially and
environmentally beneficial arrangement. Because much of the gain has already been realized
with the implementation of the recycler’s densifier and relatively little gain remains in EMC
providing its own densifier, we recommend that EMC maintain the recycler-provided densifier
and keep the existing arrangement. Using the success of this partnership, EMC should also try
and replicate it at its other plants. EMC faces an implementation challenge in convincing
suppliers to take on the risk of purchasing a densifier. However, the densifiers can be used for
more than one type of material, so the capital outlay is not necessarily dedicated to the EMC
partnership. For example, a recycler could shift between locations at contract end. To develop
such a partnership, we must continue to refine the business case for the densifier purchase. If
profitable, EMC will be able to find partners. Although the small incremental gains (less than
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NOBUYUKI FUJIMORI • ALBERT MARTIENSSEN • ADRIAN MARTIN • YUICHIRO TSURUTA
$0.40 per pound) are not substantial for a multi-billion dollar company like EMC, it is relevant
and worthwhile for a small local recycler. Whether or not EMC can recreate the Apex recycler
arrangement at other locations (Cork and Franklin) remains to be seen; therefore, EMC may
have to purchase its own densifier and take on the risk to ensure zero landfill compliance.
Appendix A: Work Stream 3 Business Case
0
Historical
[$/ year]
Current
Proposed
(EMC operates without a (EMC s partner controls
polypropylene foam
recycling and provides the
densifier)
densifier)
(EMC controls recycling
and captures value from
material recycling)
Income
Salvage
No incremental
No incremental
7,701
=weight per box * number
of boxes * resale value per
Sub total
No incremental
No incremental
7,701
Cost
Transport to Processing Location
6,240
0
0
Space cost for the densifier
No incremental
2,619
2,619
Electricity cost
No incremental
80
80
Depreciation
No incremental
Sub total
Net income
Net income difference
No incremental
5,500
6,240
2,699
8,199
-6,240
-2,699
-498
3,541
5,742
Base case
Appendix B: Work Stream 3 Sustainability Case
Historical
Current
Proposed
Environmental impacts
10
Landfill [feet3/ year]
45,524
0
0
CO2 [kg-CO2/ year]
13,618
6,801
6,801