Herman Miller

Herman Miller strives to create a better world around you?with inventive designs and services that enhance the places where people work, heal, learn and live, and through its commitment to social responsibility.

Tuesday 25 October 2011, by Ada Du, Daniel Chang, Felix Derkum, Nils Dinell Sederowsky

22 inspired

Why did we choose Herman Miller?

Herman Miller does very successfully apply a ?Cradle to Cradle? approach, which aims to increase the recyclability of products. They did it by choosing not the easy way, which is to solely commit suppliers to certain goals, but instead, they put much effort on co-operating with their supplier and join forces to redesign the entire chain of value creation so that the principles became inherent part of the company?s culture and its suppliers. Moreover, as Herman Miller is one of the most famous (furniture) design companies in the world, having invented several style icons, they have shown that eco may come along with style and coolness.

What are the main activities of the company?

Herman Miller designs and manufacturers furniture systems and accessories. It provides products such as office and healthcare furniture systems and accessories, freestanding furniture products for office, healthcare, and learning environments, Office and institutional seating, Small office, home office, and residential furniture, as well as filing and storage products. Moreover, they offer services such as Furniture management, Strategic facilities consulting, Leasing.

Herman Miller strives to create a better world ? with inventive designs and services that enhance the places where people work, heal, learn and live, and through its commitment to social responsibility.

Which ethical challenges does the company address?

As a company which business scope covers furniture manufacturing, Hermann Miller had to encounter two ethical challenges

(1) Consumption of renewable resources.

In 2007, 27% of the energy used by the company was already being obtained from renewable sources. However, a furniture companies cannot stop to use natural resources such as wood. Hence it is big challenges for them to work on its decision not to use threatened tropical hardwood but use recycled or reclaimed sustainable harvested wood to replace in order not to contribute to the reckless exploiting of our planet.

Ethical companies acknowledge that the natural resources are limited and that we should revise our consumption patterns. Otherwise we will end up one day without any resources and a very desolate planet.

(2) Consumption of non-renewable (metal, plastic) resource / Creation of waste

Non-renewable resources such as metal and plastic are always to be bonded in a furniture company. And as we know, abandoned sites of metal and plastic can severely damage the surrounding environment. Hermann Miller has to continue to think how to manage the effort better by recycling more, reducing use of chemicals and looking for substitutions in order not to contribute to the pollution of our environment.

What is the C2C protocol and how does it work?

The cradle-to-cradle design protocol is an industrial process certification where products are awarded that were developed in order to adhere to closed-loop system requirements. The American architect William McDonough and the German chemist Michael Braungart created the design protocol and founded McDonough Braungart Design Chemistry (MBDC). The consultancy firm assists companies in ecological redesign of production processes and products.

Cradle-to-cradle is the opposite of the design approach used in the past, which is called cradle-to-grave. The old term represents the time after the industrial revolution when universal design solutions ignore natural diversity and resources are pulled from the earth, shaped into a product, used, and thrown away. Ultimately, waste is a product of poor design. The new approach, cradle-to-cradle, strives to introduce the aspect of waste elimination to the efficiency focused production system of the past. The framework characterizes nutrients as circulators that should not be destroyed or wasted. It envisions an industry that protects and even enriches the ecological system.

MBDC states four interrelated elements for the successful implementation of the cradle-to-cradle principles:

(1) Biological and technical nutrients should be easily separable at the point of disassembly of the products. Biological nutrients are biodegradable and can be returned to nature (e.g. cotton), whereas technical nutrients are not biodegradable and consequently have to stay in the nutrient loop.

(2) All materials used for production are rated on a green-yellow-orange-red scale. The colors represent the degree of dangerous chemicals used in a material ranging from green, depicting no to little risk materials, up to red, marking high risk materials.

(3) The MBDC mentions that the final product should be designed so that it can be taken to pieces and recycled easily when its product life cycle has reached the end.

(4) The product should be manufactured out of recyclable or biodegradable material to reduce the emission of the above-mentioned waste.

How was the C2C protocol implemented at Herman Miller?
The process of implementation of the cradle-to-cradle (C2C) protocol took place in 1997. In this year the company implemented protocols to improve the environmental performance especially in terms of sustainability. A team was founded to control and monitor the project. The team composed of several specialists from different fields like Advanced Projects, Engineering, Materials Research, Supply Chain Management, Environmental Health and Safety, Finance, and Marketing. Over the following three years, after adopting C2C to the company?s strategy, the team of experts started to design the first practical parts with regard to MBDC. In order to reach the implementation of C2C a consistent cooperation between different departments was necessary.

In 2001 the first C2C protocol was applied to a product from the beginning to the end. This product was the Mirra Chair. In a very detailed way the composition of the chair was analyzed and every part was determined to fit in the MBDC list of materials which where environmental friendly to produce disassembly, and recycle. When it came to the point that the process should be designed Herman Miller trained all responsible employees beforehand in order to explain the new company strategy.

The actual designing process was then oriented on a scorecard, which showed after a certain calculation the degree to which the product met the criteria of MBDC. The first threshold was at a score of 50%, which proved the material to be at least ?yellow? or better according to the Green-Yellow-Orange-Red list, which indicates the dangerous impact on human health and the environment.

The whole implementation process was well structured and planned in detail to make sure that all parts of the production as well as design processes were considered to be improved in terms of environmental issues. Additionally, the early implementation of the suppliers was helpful and created with the arrangement of existing systems a competitive advantage in contrast to competitors in the segment of environmental friendly furniture. Suppliers have been checked in order to evaluate the used material and rate it. This is definitely the correct approach to implement a completely new company strategy to achieve the environmental goals.

Why do we believe this company is really ethical and why do we trust it?

To answer this question, we should look at the roots of the company. D.J. De Pree wanted not only to serve the need for innovative furniture but also create ?things that matter?. The company should not exclusively be a workplace. Moreover it should be a place where employees can develop themselves with joy and respect. Furthermore, the environment was a large issue of the company?s philosophy. Herman Miller implemented the triple-bottom-line philosophy where financial, environmental, and social responsibility form the three pillars. Adopting the issues of environment to the official company strategy showed that it had a high priority in the orientation of the company.

Within Herman Miller the Environmental Quality Action Team (EQAT) was formed, where employees voluntarily took part to generate new ideas to improve the progress in terms of environmental issues and sustainability in general. This was completely supported by the management. Over several years until 1999 steps were undertaken to implement the environmental goals in every possible business decision. These goals were set up in accordance with the guidelines of ?Design for Environment (DfE)?, which was formed by members of the Environmental Health and Safety group in 1991. The cradle-to-cradle design was then the result of the enduring improvement of sustainability and the environmental friendliness, which should help the company to stay on the track of DfE. Concerning the processes Herman Miller achieves a position of a first mover in that business segment.

Summarizing it can be said that the company direction and the way they deal with actual issues in terms of environment the initiative was the logical consequence from its actions over the past years. And that is what we consider as very important and which is also one learning we draw from our studies about ethics: Ethical behavior cannot be a company guideline, it must be philosophy, it must be a benign virus that infects every single employee and enables him to consider ethical issues every day during his work. If a company achieves this wishful goal, ethical problems can be easily solved wherever they might occur. We think, Herman Miller did great on behalf of this. They addressed the issue very systematically and successfully managed to involve many different stakeholders. Also they do not communicate inflationary about their great achievements, which seems honest and trust worthy.

Which possible challenge might Herman Miller have to face in the future?

By working as Herman Miller does, with a constant environmental friendly way of thinking to create ?things that matters?, they always have to be alert, open minded and innovative. To be able to improve their ethical way of working and to reach their vision of creating a better world, Herman Miller will continuously have to challenge these kinds of questions. As early adopters of working with environmental sustainability and ethics in their industry, we might soon see competitors that have been influenced by the Herman Miller way of doing business ethically. This could of course be a threat, but in most cases probably just good for Herman Miller and society as a whole. In this way they spread out their message of creating a better world and influence other to do the same. At the same time they might come up with new ideas to improve their business, by looking at the competitors way of acting.

One of the most challenging questions that Herman Miller is facing concerns the cost. They produce high-end design furniture that not everybody can afford and which limits the number of costumers they have. To reach out with affordable products to everyone they will have to reduce the material and producing cost to be able to lover the prices. In this way they could create an opportunity to spread their message of a better world further.

Also, they are facing the challenge of supplier-control. While expanding the business to a larger proportion of the population that can afford their furniture, Herman Miller has to maintain its control over suppliers. The suppliers must work align with the vision of Herman Miller itself. Another idea could be to open an own factory which they are controlling their self in detail.

By looking at the industry itself and other actors, we see many companies working hard with Supply Chain Management issues. This is also something that Herman Miller should keep in mind. The SCM improvements do not only lower the cost, they also lower the environmental effects. Since the products they sell are often quite large, they could always figure out smarter solutions to pack and transport the products.

Last but not least we suggest Herman Miller to continue with the Environmental Quality Action Team way of working. In this way the employees voluntarily take part to generate new ideas to improve the progress in terms of environmental issues and sustainability in general.

Bibliography

http://www.hermanmiller.com
Lee D. & Bony, L. (2009). Cradle-to-Cradle Design at Herman Miller: Moving Towards Environmental Sustainability. Harvard Business School

Location: Zeeland (United States of America, Michigan)

Sector: Manufacturing, Wholesale and retail trade

Official website: http://www.hermanmiller.com

Key figures:

2011 Sales: $1.65B
1-Year Sales Growth: 25.05%
2011 Net Income: $70,8M
1-Year Net Income Growth: 150,18%
Total Assets: $814,4M
Market Value: $1,22B
Employees: 5.805
Company Type: Public

Source: Hoover, retrieved October 25th 2011

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