dell packaging: using innovation & supply chain to achieve…
TRANSCRIPT
Dell Packaging: Using Innovation & Supply Chain to Achieve…
Lower Cost, Better Customer Experience, and a Healthier Planet
October 2017
Abelia Moreno Sloey, Sr. Manager
Internal Use - Confidential
2 of 8 Internal Use - Confidential
Source: UN Population Report
3 of 8 Internal Use - Confidential
Global growth requires sustainable solutions
Source: IMF, OPEC, OECD, UN, World Bank, McKinsey
• Global population estimated to surpass 8 billion people by 2025
0
2
4
6
8
10
1970 1990 2010 2030
forecast
PopulationBillion
OECD Non-OECD Global
0
20
40
60
80
100
120
140
160
1970 1990 2010 2030
GDPPPP, Trillion $ forecast
OECD Non-OECD Global
• Increase in GDP will accelerate the consumption of resources and energy
Urbanization
• Top 600 cities will be 60% of global GDP by 2025. Global population will be 55% urban
4 of 8 Internal Use - Confidential
Is anybodybuilding newStyrofoamplants?
1. Customers want green.
2. Governments are legislating green.
3. Capital Investment is weighted green.
5 of 8 Internal Use - Confidential
Team manages materials portfolio, resource
allocation and innovation in support of these goals
Dell innovation architecture for packaging has two major goals it pursues in support of the business
Customer Experience
Cost Savings
Description
• Product protection• Warranty Expense• Out-of-box-experience• Zero Waste 2020
• Materials engineering• Supply Chain sensitivity• Logistics optimization• Operation efficiency
6 of 8 Internal Use - Confidential
Volume
Cost
High
High
Low
Low
Cost Champions
Challengers
Targets
Highly Complex
Key: ChallengerIncumbent: scaled to volume
Challenger Identification• Target cost / volume /
business needs assessed.• Challengers are identified
through a process of industry scanning
• Challengers are formalized thru structured Open Innovation Sessions.
Dell packaging innovation is never ending. “Challengers” continually arise & through incubation exert cost pressure on our core technologies.
7 of 8 Internal Use - Confidential
Dell is a leader in sustainable packaging innovation - Commercializing Bamboo to Ocean Plastic in 7 years
7 Confidential
2009 2010 2011 2012 2013 2014 2015 2016
Bamboo
HDPE
Mushroom
Molded Paper Pulp
Wheat Straw Ocean Plastic
Technology Leadership
Supply Chain
Expertise
Developed industry first technology to use rapid renewable bamboo fibers to replace oil based foam >> enabled MPP & Wheat Straw
Biological understanding to develop earth friendly materials: mushroom, wheat straw, AirCarbon
Created new eco-aware supply chains to commercialize all innovation Utilize a partner based innovation model to obtain the best technology, at lower cost Drive scaling technologies into other industries
AirCarbon
Dell Benefits
Over $53M savings driven by sustainable packaging innovation Packaging is a significant EPEAT points for PG Marketing >> customer RFQ requirements Increased regulatory requirements on packaging: Australia, California, NYC, Canada Substantial brand differentiator and high media interest
8 of 8 Internal Use - Confidential
1. http://science.sciencemag.org/content/347/6223/7682. https://link.springer.com/article/10.1007%2Fs00244-015-0172-53. http://www.int-res.com/abstracts/meps/v432/p173-180/
Ocean plastic is a looming environmental and humanitarian crisis; prior efforts raised awareness, but were ineffective in scaling
Studies show that plankton, the basis for much of the ocean food chain, are ingesting micro-fractured plastic2
Over 1 billion people depend on fish as their primary source of animal protein3
Fish account for about 17% of the global population's intake of animal protein3
Prior efforts include beach clean-up with limited distribution that did not scale
Method: Limited edition soap bottle; collected plastic from beaches in Hawaii
Adidas: Premium shoe with ocean plastic thread priced at $220 per pair
8 million tons of plastic enter the ocean every year; 60% is land based from South Asia1
That rate will grow to 80 million tons by 2025, and by 2050 there will be more plastic in the ocean than fish if nothing changes1
9 of 8 Internal Use - Confidential
Dell’s strategy is to leverage strengths in innovation and supply chain to create a scalable, commercially viable solution
• Mismanaged waste
• Within 50 km of the coastline
• Likely to end up in the ocean without improved management infrastructure
• Dell committed to expanding its use of ocean plastic
• Goal to increase use 10x by 2025
• Create an open-source supply chain for others to follow
Ocean Plastic Definition
• Target areas of highest mismanaged waste
• Intercept land-based sources; stop the flow
• Target waste in its highest economic value state
Tactics The UN Commitment
Image source: http://science.sciencemag.org/content/347/6223/768
10 of 8 Internal Use - Confidential
Longer term, Dell needs a scalable and cost effective model to support Asian manufacturing
Last year, Dell conducted a pilot in Haiti, which provided:
The Haiti pilot was successful in proving technical viability, the next step is to develop a South Asia supply chain
• The material feasibility of using ocean plastic in packaging
• A template for collection and processing specifications
• Insight into potential risks moving forward
A new focus on South Asia is needed to: • simplify logistics• cut costs• shorten lead times• focus on the heart of the ocean plastic problem
11 of 8 Internal Use - Confidential
The supply chain offers the capacity to exceed Dell’s commitment, satisfy consortium demand, and dramatically improve ocean health
• Production capacity is nearly 500 times Dell’s UN commitment
https://en.tempo.co/read/news/2016/02/09/206743460/Indonesia-Named-Second-Largest-Contributor-of-Plastic-Waste
• Raw material capacity is an estimated 380 million pounds of ocean plastic a year
(India & Indonesia combined)
• The model can be extrapolated to other locations based on supply chain requirements
Growing Dell’s use and consortium demand will dramatically increase the impact on ocean health
As use cases go beyond the Dell scope, consortium volume will increase dramatically
12 of 8 Internal Use - Confidential
The supply chain is structured to deliver additionality through a holistic view of collection, resulting in reduced flow into the ocean
Managed Material
Mismanaged Waste
Dell delivers additionality by moving the bar towards
managed waste
13 of 8 Internal Use - Confidential
1. Speed: Align innovation area with passion.Passion – as in love – is both urgent and enduring. Pick what you & your customers care about.
2. Cost: Build a structure.Structures create a tangible framework of goals. People are convinced early because you have an understandable narrative.
3. Ideas: It’s OK to ask others.Somebody else may be working on the thing you need. Find them.
Follow these tips andthis won’t be you!
For sustainable packaging innovation.
