suggested for a sustainable business
DESCRIPTION
Sustainable Business Strategies for a furniture business Casa Leaders in Los Angeles. This is all from our side (student suggestions) and does not reflect the intentions of the company, plans ahead or even outlook. Done by Max, Zara, Wyatt, Ronnie and I as part of our Embedded Sustainability and Supply Chain class by Prof Batstone and Kilian Moote.TRANSCRIPT
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SUSTAINABILITY & BUSINESS RECOMMENDATIONS
By Alzahra, Malvika, Max, Ronald, Wyatt
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Operations Manager:Steven Liberman, USF 2013, Environmental Studies & International Business
Choosing Casa Leaders
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Founded in 1978
(some private company info deleted)
Scope & Scale
Wilmington store = 35,000 sq ft Long Beach store = 20,000 sq ft
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Inside the Wilmington store
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SCOPE & SCALEInside the Long Beach store
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Our Approach
1. PACKAGING
We are offering comprehensive consultation, focusing on:
4. REVERSE LOGISTICS
2. ENERGY
5. DIFFERENTIATION THROUGH BRANDING
3. TRANSPORTATION
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1. PACKAGING
It has value; utilize it towards your bottom line.
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Looking at sustainable packaging
- An economically viable, long term benefit for stakeholders & shareholders
- Dependent on other forces at large
< Close-upof mushroompackaging
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Styrofoam: Tough to store, tough to throw
• Over 90% products packaged with Styrofoam• Occupies 35% of container space and tough to press• Produces air pollution when manufactured, ground pollution on disposal.• Degrades into small pieces, may never decompose.• Made of petroleum, may not stay cheap.
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Stakeholders & political incentives
• AB-32 = Carbon Reduction• AB-1826 = Mandatory composting for business & multi-family residences• Creating infrastructure for compost capacity• Economic incentives• Driving future business decisions. May take another decade to reach full effect.
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Ecovative Design & Ecocradle
• Made from locally sourced feedstock & mycelium, the structure of mushrooms
• Lightweight, insulating, fire & moisture resistant, 100% compostable
• Price competitive & will only get better
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Sustainable Packaging Strategy for Casa Leaders
• Over the next 2 – 10 years investigate suppliers using compostable packaging.• Save $21,265 per year by making the switch. • Follow early adopters like Steelcase.• 3 garbage containers per store per week.• Estimating 50% reduction and 75% cost savings for composting• Do not pay the externalities that your suppliers escape. Everybody pays.
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2. ENERGY Let’s start with a coat of paint.
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Saving money & energy
1) Change Light Bulbs 2) Add Reflective Paint On Roof 3) Install Solar Panels
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Changing the bulbs
• In store: Change the current F32 T8 lamps to F28 T8 lamps
• Outside the stores: Change from LED to CFL bulbs
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Roof Coating
• Typical coating costs $.50-$1.50 per square foot
• Reflective coating is categorized as restoration allowing deduction of its expense
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Solar Investment
• Typical coating costs $.50-$1.50 per square foot
• Reflective coating is categorized as restoration allowing deduction of its expense
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3. TRANSPORTATION The journey that counts.
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Spoke-hub distribution for Casa Leader
• (pvt company info deleted) • Goal- Limit trips to twice per day per showroom
• Annual savings of $8280-$9000
Torrance Warehouse Wilmington Showroom
Long Beach Showroom
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GPS Truck & Fleet Tracking
• (pvt company info deleted)• GPS offers delivery notifications• Value-added to company by tracking orders• Monitor delivery employees • Schedules delivery routes according to traffic• Tracks and reduces idle time
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Downsizing Class Size/Switching to Hybrid
• Capital expenditure for Hybrid is $23,000-$45,000 more than traditional
• California grants, rebates, and tax credits bring down incremental costs
• Under good state program, ROI realized in 2.5 years
Truck Class GVWR Range MPG Fuel efficiency of Downsizing
3 10,001-14,000 10.5 24% from class 4
4 14,001-16,000 8.5 8% from class 5
5 16,001-19,500 7.9 13% from class 6
6 19,501-26,000 7.0 9% from class 7
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Adjusted Electronic Control Modules
• 7% of all truck fuel use is associated with idling
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4. REVERSE LOGISTICS One man’s junk, another man’s trunk.
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Furniture Waste
In 2012, furniture and furnishing stores had sales of $95.6 million.
But where does most of this furniture end up?
2010 2011 201210,400
10,600
10,800
11,000
11,200
11,400
11,600
furniture generated in the municipal waste stream
furniture and furnighing generated (in thousands of tons)
0.1%Recycledless than
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• Pick used furniture from earlier customers & non-profit orgs like Society of St. Vincent de Paul that collect old furniture to recycle or sell
• Refurbish it with commitment to quality
• Sell it for a lower prices in a special, separate part of the store, the Green Corner
Before After
Refurbishing Furniture
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Process of implementation
Groundwork:Agreements with the non-profit organizations.
Costs of implementations: Workers: $12/hourHours: average hours needed 5 hours/pieceMaterials: average cost of materials is $400 Space: use the space of the effected furnitureAverage cost of refurbished furniture ~ $460/set – Sell it for $650Average cost of new piece of furniture ~ 1000$/set – Sell it for $1,500
Threats of implementation: Product margin.
Success measures: “The Green corner” revenues.
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Impact of the implementation
For the environment:
Trees saved, animals saved.Less waste and piling landfills.
For Casa Leaders:
Extra revenueNew opportunity seizedGenerate more sustainable value
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5. DIFFERENTIATION VIA BRANDING Talking the Walk
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The Challenge & Solution
The consumer is price sensitive and as per Steven’s feedback, and the environment is not a priority.
But our strategies cut costs!
Solution: Push sustainable image with price promise.
The customer goes in feeling price-smartANDNot cheap, but an eco-angel.
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CASA Leaders’ Green Message to customers
GREEN ROUTE GREEN CORNERGREEN GIVER Save money,
Buy recycled furniture.Increases footfall & possibly new furniture sale.
Save money by getting discount off your next purchase when you give Casa Leaders furniture to recycle and sell.
Save money with reduced shipping cost.
On the website tell about green packaging, lighting, solar energy etc. On store front, cost-saving.
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Timeline
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Thank youQuestions?