Using left over materials to create other “by-products” (Aka: Recycling)

The world is now becoming more and more involved with the betterment of the environment. Companies started investigating ways to use their production process’ leftover waste and forming it into by-products which can be resold. Assistant Professor Deishin Lee of the technology and operations management department of Harvard Business School believes in the concept of By-Product Synergy (BPS). BPS “consists of taking the waste stream from one production process and using it to make a new product”. This ancient idea has begun long ago, perhaps gone unnoticed by man-kind as an important skill-set, but it quite prevalent in the study of history. For instance, the natives hunted moose, preserved the meat for winter, used the hide as clothing and the antlers for sleighs or other tools. Every part of the kill was efficiently used.

When “By-product Synergy” occurs, there may come a point where the by-product becomes more profitable than the original product. When this happens, the business will increase production in order to produce more of the by-product to improve profits. Thus, large manufacturers can potentially damage the eco-system by increasing production and producing more waste that may leach into natural habitat. So should “By-product Synergy” be attempted by all companies? Ultimately, I believe that companies introduced to “By-product Synergy” must be responsible for their actions.

References

Blanding, Michael. “Transforming Manufacturing Waste into Profit — HBS Working Knowledge.” HBS Working Knowledge – Faculty Research at Harvard Business School. N.p., n.d. Web. 27 Sept. 2013. <http://hbswk.hbs.edu/item/6800.html>.

When my family owned a trading company back in Asia, my parents never supplied Walmart because it was not profitable. This well-known American go-to superstore, Walmart, holds such a strong bargaining power against its suppliers that “they’ve driven some people out of business who shouldn’t have been driven out of business”! Even CEO Jim Wier of large supplier “Snapper Lawnmower” has refused to to continue supplying Walmart.

Wier decided to pay Walmart’s Vice President a visit. In the meeting it was revealed that Walmart wanted to make Snapper Lawnmower go large by introducing an outdoor power-equipment business based on the Snapper brand in order to compete with its competitors. This offer, surely intriguing, was waved from Wier’s mind in an instant.

Wier believed that supplying Walmart will forecast a drop in prices and quality standards of lawnmowers, hence moving Snapper away from its luxury brand image.

But leaving Walmart, was this the right choice? Perhaps Wier could have allocated the costs by moving manufacturing offshore where labour is cheaper, or by producing a new and cheaper product line just for Walmart. But Wier has not gone back on his word since. His final gut decision to leave Walmart could inspire other companies to stop supplying Walmart before their bankruptcy.

References:

BusinessManagementDaily. “How Snapper’s CEO said ‘No’to Wal-Mart — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily.” Business Management Daily — FREE reports on business, management, leadership, career, communication, human resources, employment law, technology, and small business tax. N.p., n.d. Web. 27 Sept. 2013. <http://www.businessmanagementdaily.com/24872/how-snappers-ceo-said-noto-wal-mart>.

Say hello to the NEW iPhone 5c!

Apple fans, such as myself, now enticingly await for the arrival of the iPhone 5C/5S. But will even the most loyal of apple fans continue to support Apple with the knowledge that the prestigious company is indirectly responsible for unethical worker-abuse in one of its supply chains? Jabil Circuit, an Apple supplier in China is involved with “hiring discrimination, overcrowding, poor training, mandatory overtime — three times in excess of legal limits — and the withholding of overtime pay”. These issues certainly raises a red flag and if it is not dealt with, it may affect the popularity of Apple’s latest series of iPhones.

Luckily for Apple and its strong corporate image, this ethical concern was dealt with in a speedy manner for Jabil is “taking immediate action to ensure recent allegations are thoroughly investigated and, if found to be credible, corrected”. It is smart for Apple to give the public some knowledge that they are doing their best to resolve their labour-violation concerns because it strengthens their brand loyalty, brand awareness and becomes a good reference for their corporate social responsibility culture.

Reference:

Paczkowski, John . “Apple Investigating Worker-Abuse Charges at “iPhone C” Supplier – John Paczkowski – News – AllThingsD.” AllThingsD. N.p., 5 Sept. 2013. Web. 12 Sept. 2013. <http://allthingsd.com/20130905/apple-investigating-worker-abuse-charges-at-iphone-c-supplier/>.