Revenue stream flows from recycling efforts
By Dan Gottlieb -- Purchasing, 3/2/2006
Textile manufacturing is inherently a dirty industry. It uses lots of toxic dyes, water, and energy, and puts out carpet and fabric scrap that doesn’t degrade well in landfills.
About 11 years ago, Chairman, Ray Anderson, of Interface Inc., the world’s largest carpet manufacturer of commercial and modular carpet, picked up a copy of Paul Hawkins’ The Ecology of Commerce. Reading it in bed one night, the message hit him "like a spear through the chest," Anderson recounts, He decided to put his company, Inc. on a path toward "zero environmental footprint." The 11-year effort so far has allowed Interface to climb "about a third of the way up the mountain of sustainability," Anderson judges. Among the many accomplishments so far: more than $260,000,000 in savings from waste reduction alone. When A Wall Street analyst questioned the cost of these efforts, Anderson told him: "It’s making us money." The biggest reason: customer preference for greener products. "The acceptance from the marketplace of what we’re doing has been just astounding," says Anderson. As an example he cites Terratex™ fabric, introduced in 1995 as the first commercial brand made of 100 percent post-consumer and post-industrial polyester waste and reclaimed wool. It’s now the leading selling brand for Interface’s fabrics division. From the beginning of the sustainability effort 11 years ago, suppliers have played a major role in providing usable industrial and consumer discards, redesigned or recycled plastic, and bio-based raw materials.Anderson was personally involved in seeking supplier involvement. "We laid out for them what the (sustainability) challenge is. What I said was: 'This is where we’re going. The guy that can go with us is the one that gets the business. Those that don’t or can’t, won’t get the business.' It’s as simple as that." Paul Paydos, Senior VP for Planning and Purchasing for the fabrics side of the company, remembers being at the first meeting with a supplier where Anderson laid out the challenge: "I thought then: 'He’s lost his mind completely.' Later I came to my own realization he was on to something extremely important."
In contrast to companies that talk about sustainability or attack just one aspect of waste—such as energy, water , or discarded product-Interface seeks to shrink its entire environmental footprint. "It isn’t just the low-hanging fruit we go after," says Anderson. The company’s 10-year accounting of sustainability accomplishments include a 52 percent drop in absolute tonnage of greenhouse gas (GHG) emissions, water usage cut by nearly 80 percent per yard of carpet tile manufactured, and about a third of the smokestacks and 40 percent of the effluent pipes shut down.
To green the materials flow, Interface began with an inventory of everything coming in and out of its plants. "Basically we did a mass balance matrix," says David Hobbs, VP for Operations, who also wears the hat of CPM. "We started doing metrics to follow our waste streams—gas, liquid, and solid—and learned where the problems are." After drawing up a menu of candidates for waste reduction, Hobbs explains, cross-departmental teams identified the causes of waste. "If it’s people, we train. If it’s equipment, we look to manufacturing technology and process. If it’s materials, purchasing looks for a substitute." Manufacturing, engineering, and supply chain work together, Hobbs says. "We cross boundaries." Apart from infusing sustainability at the plant level, Interface has a corporate-level Sustainability Council that meets every six months to review activity worldwide. Raw material reviews are held weekly.An example of supplier involvement has been the effort to reduce the company’s dependence on oil-based raw materials. The company wanted to replace some of the raw polyester fiber used to make office textile furnishings, such as for cubicles.
Turning to recycled post consumer and post industrial waste and corn-based fibers, its textile materials base is now about one quarter recycled or bio-based. Interface is also working with a supplier on altering Nylon-6-6 so that it can be recycled. "We are working with our supplier to do that because it’s beyond our capability," explains Anderson "It’s their business, and we’re looking to them to make this breakthrough in technology." While sourcing recycled PET, Interface found a supplier that was making a small amount of fiber from recycled plastic bottles. The supplier regarded it as a niche part of its business and was charging a large premium for the product. "We told them: 'We’re not interested in buying a little bit. We want to transform our entire fiber base to PET.'" "This meant gearing up the small plant they had making PET-recycled fiber from about 1,000 to a quarter million pounds a week," Paydos explains. Over a period of 18 months the transition from raw to recycled material was made. “The supplier was pleased to fill up their business, he says. Overall, about a quarter of Interface’s entire textile output is based on recycled material, and some plants halve been running on 90 percent recycled content. Asked if there was a problem in sourcing recycled PET, Paydos says that there is a large market and that Interface uses annual purchase orders to fill is requirements. Finding substitutes for new carpet raw material has been more of an uphill effort. With the quantities Interface required: 75 million pounds for backing material alone. "Just to get 75 million pounds of good quality is a huge undertaking," Hobbs says. Purchasing is heavily involved in this "reverse supply chain"—bringing material back and identifying new waste streams. Another transition from oil-based material underway is to corn polylactic acid (PLA). Not having the technical know how, Interface entered into a shared research agreement with then Cargill-Dow. Again, these green investments are seen at Interface as good business. "The cost of converting from oil-based materials is dwarfed by the amount of business we gain out of the products," Paydos says. A "big win" in reducing its energy dependence on fossil fuels, Anderson says, is the conversion of a carpet mill from gas to methane. An Interface engineer convinced the city of La Grange, GA (nearby its plant in West Point) that its landfill could be a revenue producer. "It took a while to convince them that the city had a real asset," Hobbs says. This fall, after Interface spent about $50,000 to retrofit the mill’s boilers and the city-financed building of an eight-mile pipeline to the plant, the mill is scheduled to switch from natural gas to methane. "The way we negotiated it, it’s cheaper than natural gas," Hobbs says. Meanwhile, the city benefits two ways: (1) gaining a new source of revenue and (2) earning credit for reducing GHGs (methane naturally escaping from the landfill being 22 times worse than CO2 in contributing to global warming). Purchasing other forms of renewable energy is also part of Interface sustainability. About 11 percent of its total energy consumption comes from using renewable (wind, photovoltaic, and biomass) energy. Interface also buys renewable energy certificates that count as credits against its output of CO2. With crude prices about tripling since Interface launched sustainability, Anderson’s goal of "not taking one more drop from the ground" begins to support the double-edge meaning of "going green." For the methane conversion project and other actions to reduce its GHG output, Interface was one of 12 international firms to receive an EPA Climate Protection Award in 2004. A tougher problem has been dealing with chemicals and dyes. Paydos says the company realized it could not produce without them. A decision was made, however, not to introduce new ones until they had gone through a screening process to weed out those in the effluent streams that have to be shipped out for treatment. "We work closely with chemical suppliers to learn more about the ingredients they are putting into products," Paydos says. "They are asked to share with us the ingredients down to the chemical abstract service number level." To gain supplier cooperation, Interface guaranteed the information on the suppliers’ products would only be used internally. "It’s been slow progress," Paydos says. "It’ll be an ongoing process the rest of our lives." That long view is central to Anderson’s sustainability strategy. So is the focus on suppliers. Asked what advice he would give to company executives still thinking about sustainability, he says: "You’ve got to quit thinking of yourself as some stand-alone organization. You are your entire supply chain—from mine and wellhead to the incinerator and landfill. And if you want to begin to reduce your environmental footprint, the quickest way to start is to find those suppliers who’ve already reduced theirs."
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