Herman Miller Business Case

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Herman Miller Business Case

1. Executive summary

Herman Miller, an environmental leader in the office furniture industry that offers a wide variety of products including seating, systems furniture, filing storage, desks, tables and health care. In 1989, the company decided to adopt a triple-bottom-line philosophy, so it established and changed company's environmental direction by adopting "Perfect Vision" initiative that targeted zero landfill, zero hazardous, waste generation, zero air and water emissions.

In 1997, the company decided to implement a cradle-to-cradle (C2C) protocol based on eco-effectiveness vs. eco-efficiency and Waste equals food; which consisted of four key elements: biological and technical nutrients; green-yellow-orange list disassembly, recyclability and recycled content. The C2C approach focused on minimizing toxic pollution and reducing natural resources waste.

After years of extensive work, in 2001, the company decided that it was time to implement a C2C design protocol on a product that would contain recyclable materials from beginning to end; Mirra chair project was launched. Herman Miller worked toward the design process, manufacturing, engineers, supply chain managers, manufacturing associates, design consultants, trained over 300 employees, worked with suppliers to find substitutes eco-friendly materials, performed raw material assessment, met with people from sales and marketing and discussed several options for closing the loop by recycling the material from Mirra chair.

The major issue the company faced was determining the material that was going to be used for the arm-pad skin: polyvinyl chloride (PVC) versus thermoplastic urethane (TPU). PVC was known to be inexpensive and provided to be durable, scratch resistant and soft; but violated the standards of the C2C protocol. PVC had bad press due to its toxicity during manufacturing process and when it was burned or incinerated. In contrary, TPU showed that had acceptable quality characteristics; prove to be even more scratch resistant than PVC, but raw material cost was twice of PCV. Development and supply chain management teams preferred to proceed with PVC while the design for environment (DfE) team wanted to press forward with TPU. 2. Introduction

2.1 Company background

Herman Milller was founded as a Michigan Start Furniture Company in 1905. In 1923 D.J. De Pree purchased it, renamed it after his father-in-law and grew the company into an internationally acclaimed furniture design house. Herman Miller is considered as one of the top four suppliers in the US office industry that offers suite office furniture including seating, systems furniture, filing, storage, desks, tables and healthcare furniture. In 2001 annuals sales were about $1.5 billion dollars.

In 1989, the company decided to move toward environmental sustainability by changing company’s environmental policy and direction by adopting a cradle-to-cradle (C2C) design protocol for environmental sustainability. The cradle-to-cradle approach will emulate nature regenerative cycle at the end of the life cycle. C2C redesigned industrial processes by minimizing toxic pollution and reducing waste. In 2001, a Design for Environmental (DfE) team was formed to design and develop a new product. Mirra chair would be the most advanced and complete application of the C2C design protocol among any product manufacturer to date.

3.2 Identification of key issues facing the company
* In 2002, the company suffered a decline in sales due to economic crisis and pre-internet-bubble where many of its customers cutback or dissolved. * The company realized that the ways its products were designed generated waste in the production process. * Cradle-to-grave process used by the company at the time, released toxic material into the environment. * Products were useless waste at the end of the useful lives. * The major key issue that the...
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