The Challenge

Dell wanted to improve the lifecycle sustainability impacts of its notebook computers. Through its own work gathering lifecycle data from suppliers, as well as involvement in collaborative initiatives, such as the Massachusetts Institute of Technology’s PAIA (Product Attribute to Impact Algorithm) and The Sustainability Consortium, Dell had already identified the hot spots and other critical impacts that must be addressed to substantially improve the sustainability of notebooks.

Viewed through the lens of the product, these impacts constitute two types of sustainability attributes:

  • Physical attributes: Material content, energy use (efficiency), and recyclability
  • Embedded attributes represented by the sum total of production impacts (energy use, water use, waste production, social and labor effects, etc.) from extraction to component manufacture, assembly, and transport

Many of these impacts are related to the practices of suppliers, recycling partners, and transport and logistics providers. This is particularly true in Dell’s case, as all manufacturing and some elements of design and service are contracted out to a few original design manufacturers (ODMs). With respect to energy and emissions, for example, Dell has conducted lifecycle assessment (LCA) studies that suggest that half of the lifecycle energy use and related emissions for a typical notebook computer are found in the supply chain (extraction, manufacture, and transport), with the other half represented by product use.

While important progress is being made in these areas of supply chain performance, the sustainability team at Dell saw an opportunity to make its supply chain practices even more sustainable—and hence improve its notebooks’ overall sustainability profile—by working with the Center for Sustainable Procurement (CSP) to find new ways to engage and support ODMs.

The key decision-makers were Dell’s marketing and product development division, commodity team, supplier management division, operations, and its ODMs.

Our Strategy

To define the focus and scope of this case study, Dell and CSP first considered the following questions:

  • What are Dell’s business and sustainability priorities for notebook computers?
  • Where are we likely to find opportunities to improve sustainability performance that also create business benefits for our suppliers and partners?
  • In what areas are suppliers most likely to have at least some of the capacity, data, and infrastructure needed to drive improvement in a reasonable time frame?

Dell and CSP agreed that, to be successful, any proposed improvements would need to be cost effective and scalable, produce real sustainability improvements, and maintain or improve quality—all without causing any delays in production. To achieve these objectives, Dell assembled an internal, cross-functional team that brought together key players in the overall product development process, especially the commodity purchasing teams responsible for determining the desired product specifications and the supplier management teams whose job it is to work with supplier partners to make sure that Dell product specifications and production standards are being met. CSP then engaged this internal team to ensure that it fully understood and was aligned with Dell’s broader sustainability goals, and specifically, to determine how they can approach and partner with ODMs to improve the lifecycle energy impacts of notebook computers in the production phase.

Our Impact

While Dell already incorporates environmental standards into product specifications and has robust processes in place to monitor and improve suppliers’ operating practices, the two have not historically been linked. Improving the total lifecycle sustainability performance of notebooks required Dell to connect the dots between the commodity purchasing teams and those who directly manage key suppliers. Through these internal engagements, the company has aligned these teams to support its sustainability goals.

These internal engagements also led to a pilot project with an ODM partner to better understand the supplier’s energy usage with the ultimate goal of understanding how the supplier can reduce its energy use and improve notebooks’ overall lifecycle impacts. The pilot’s goal is to collect available baseline energy data from ODMs, identify opportunities for energy reductions at the facilities level, provide guidance to the ODM to realize improvements, and then measure the phase’s energy use after the project has been executed.

The information gathered and lessons learned through this pilot project will ultimately help Dell to better manage its supplier relationships and drive decision-making around procurement that improve embedded energy in this complex product category.

Lessons Learned

The power of connecting internal teams that historically have not been linked was a key lesson learned. In the case of Dell, the commodity purchasing and supply chain management teams benefited greatly from first aligning on broad sustainability objectives. They then developed category strategies for notebook computers that incorporated specific sustainability attributes as a way to create business value for the company.

Stronger internal alignment also led to a more cohesive supplier engagement strategy, particularly with Dell’s long-term suppliers with whom the company must partner to realize sustainability gains, specifically as they relate to improving the lifecycle sustainability impacts of its notebook computers.

#Information and Communications Technology, #Procurement Leadership Group, #Supply Chain