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If any company's supply chain is optimized for efficiency, speed and reliability, it's that of Dell Inc. The IT giant is focused on standardized processes, cost control measures and risk mitigation. But management wanted more: achieving the lofty goals of the company's own 2020 Legacy of Good plan, which calls for increased environmental protection from design to manufacture and from product use to end of life.
Dell’s innovative approach called for a framework inspired by design consultancy IDEO’s “Design Thinking” process, which has now been implemented across Dell’s entire supply chain. The three major elements of the framework include Design Thinking workshops, annual Innovation Olympics and an annual Packaging Innovation Summit.
Dell Supply Chain Sustainability Steering Committee helps prioritize projects and funnel ideas through the innovation framework. It is this governing body that is responsible for Dell reaching the 2020 Legacy of Good goals.
For instance, Dell purports to be the first PC brand to employ in-mold rolled film and texture with complex geometry part design in an effort to reduce or even eliminate paint in its products. That project drove a cumulative $53.3 million savings in packaging costs, and enabled a closed-loop recycling system that allowed Dell to use 11.7 million pounds of recycled-content plastics in new products.
Dell’s 2020 Legacy of Good plan aspires to reduce greenhouse gas emissions from its facilities and logistics operations by half, cut water use in “water-stressed” regions by 20 percent, ensure that 90 percent of waste from Dell buildings is diverted from landfills and guarantee that all product packaging is sourced from sustainable materials.
Additionally, the plan calls for reducing the “energy intensity” of Dell’s product portfolio by 80 percent, using 50 million pounds of recycled-content plastic and other sustainable materials in its products, seeing that all packaging is either recyclable or compostable, and recovering two billion pounds of used electronics.
When tackling innovation, a critical first step consists of defining the challenge and framing the problem to be solved, says Piyush Bhargava, Executive Director, Enterprise, Procurement and Packaging, at Dell. Dell’s 2020 Legacy of Good Plan became the primary framework to provide goals that are specific, relevant to daily work, and aligned with business priorities. Much of Dell’s approach to sustainability-oriented supply chain innovation is inspired by design thinking.
That means that ideas are generated, prioritized, scoped and approved for formal entry into the governed process in order to drive execution. Milestones are identified, steps are taken to develop relevant technology, the supply chain is enabled, support (and often funding) is provided to partners and innovators, goals are integrated into supplier metrics, and progress is rigorously tracked. The rigor defined here is another crucial aspect to this model. It provides the support and validation that the supply chain requires to mitigate risk and gain buy-in as processes, products and/or materials are changed.
Dell’s Supply Chain Sustainability Steering Committee, co-led by the company’s Supply Chain and Environmental/Regulatory Affairs teams, meets monthly, ensures the company follows a holistic approach that also brings Industrial Design and Product Engineering on board. Many of the best supply chain sustainability ideas in Dell have come from the bottom up through annual competitions like the Global Operations Innovation Olympics and the Packaging Innovation Summit, says Bhargava.
A dedicated project management office is vital to keep the innovation-focused collaboration on track. The project office also ensures the proper integration of project goals into supplier metrics.
The tangible outputs of the different initiatives coordinated by the Steering Committee are visible in three areas: product definition, use of materials, and manufacturing processes.
Encouraging suppliers to provide more carbon- and water-efficient solutions – and requiring more than 100 of them to report their emissions to the Carbon Disclosure Project – resulted in lower emissions and tens of millions of dollars in cost savings.
Dell itself reduced emissions of volatile organic compounds (VOCs) from its product finishes. Following IDEO’s thought-triggering process of asking questions like “how might we design products without VOC paint,” Dell has reduced the relative VOC levels of the finishes on products launched over the past two years. On the one hand, Dell designed its products to use less paint, by employing in-mold rolled (IMR) film and texture for surface. On the other hand, where it continues to use paint, the solution used is now more environment-friendly. For example, Dell says it is the first PC brand to use ultra-flat powder, which does not emit VOC. It is also using ultraviolet monocoat, which emits 60 percent less VOC than polyurethane monocoat, in addition to requiring less energy for solidification. Finally, it is also using waterborne paint solutions, whose VOC emissions are negligible.
Dell’s annual Packaging Innovation Summit, now in its eighth edition, gathers current and potentially new Dell suppliers of all sizes, from Fortune 500 corporations to start-ups, to identify new sustainable material solutions in an atmosphere of provocative discussion with an emphasis on creativity and innovation. Each summit focuses on specific packaging areas, with presentations centering on demonstrating the engineering fundamentals of each idea submitted—and, more specifically, on answering the questions of if it can work, how it can be applied to Dell’s specified target area, how much it will cost, and how sustainable it is.
In 2014, Dell used 11.7 million pounds of recycled-content plastics to make Dell OptiPlex desktops and an assortment of display products. This number represented a 15 percent increase over the previous year.
The electronics industry has historically focused on using recycled-content plastics from clean, “open-loop” sources such as water bottles and used CD cases. Although open-loop sources account today for the majority of Dell’s use, closed-loop recycled plastics—including plastics derived from electronics recovered through Dell’s take-back services—comprised 19 percent of its post-consumer recycled plastic use by volume in 2014, requiring it to reengineer its supply chain to accommodate it. As a result, in May 2014 the Dell OptiPlex 3030 All-in-One became the first mainstream desktop made with third-party-certified (by UL Environment), closed-loop recycled plastics. By the end of 2014, 16 Dell displays and three desktops were shipping globally with closed-loop recycled plastics.
By using a combination of traditional and closed-loop post-consumer recycled plastics instead of virgin plastic resin, Dell reduced greenhouse gas emissions by 8,100 metric tons of CO2e—equivalent to taking more than 1,700 cars off the road for an entire year—and saved approximately $200,000.
The hope is that Dell’s efforts will be followed by others, says Bhargava. “By 2050, there will be more plastic in the oceans than fish.”
Dell’s innovation framework is not merely an enabler of an efficient and cost-competitive sustainable supply chain, Bhargava says. “Sustainability is often seen as adding cost, but that’s not true when done right. It can be accretive to the P&L statement.”
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