Insights by Opportunity Green

Greening the Supply Chain: Herman Miller Case Study

Posted on 08. Sep, 2009 by Ben Upham in Business & Policy, Design & Culture, Products

Opportunity Green caught up with W. Drew Schramm, Herman Miller’s SVP of Global Supply & Quality, to quiz him about the challenges in greening the supply chain.

Herman Miller has been a global leader in building a sustainable product line, and has won multiple environmental awards since 1991. The company has set out an ambitious sustainability plan called “Perfect Vision 2020,” which calls for a basically zero impact company, both in operations and across the product line, by 2020.

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We assumed the biggest challenge was figuring out how to carry the higher cost of green components. Schramm acknowledged the tricky balance “between doing the right thing and staying alive as a company,” but said an equal if not bigger challenge has been figuring out just how sustainable, or not, their products are in the first place.

Each part of every chair, desk and cabinet the company sells is analyzed down to its component ingredients, as small as 100 parts per million, and the manufacturing process used to make them measured for environmental impact.

The company has about 280 suppliers, and each of these had to share with Herman Miller the details of their manufacturing process, which often involved closely-guarded trade secrets.

“In the beginning it was literally chemical compositions we had to know, and having them give us the formulas for their process was not easy for them to do,” said Schramm. “Most cases they trusted us. Some cases we had suppliers who said were not going to give it to you, so we said we’re not going to use your products any more.”

Then there’s their suppliers’ suppliers, with whom the company often had a limited or non-existent relationship. “That’s when it gets interesting,” said Schramm. “Now imagine taking that to China.” Let complications ensue.

The Cost High-Wire Act

While logistics and detective work were the biggest challenge, cost was, and remains, an obstacle.

“We’re not at that tipping point yet where customers are willing to pay a slight premium for environmentally friendly stuff,” said Schramm. “Our job is to not make it cost more.”

That means in some cases, Herman Miller shares the cost with suppliers. In some cases they pass it along to the consumer. And in others they swallow it themselves.

But what the company has found is that sustainable manufacturing really can solve its own problems.

For instance, Schramm cited their “Mirra” chair. The chair had a metal rod for a spine in the back that was coated in plastic, and thus not recyclable. So Herman Miller challenged the supplier to find a solution, and they came up with a wholly plastic spine that is 100% recyclable, lighter, just as attractive – and cheaper.

Another example is the use of formaldehyde in wood board, a key component in a lot of furniture. Reduced formaldehyde board is significantly more expensive, so Herman Miller gave customers a choice.

Then public opinion stepped in: the State of California, concerned about formaldehyde’s toxicity, introduced legislation limiting the amount of the chemical in wood board. Suppliers, eager to be compliant with the California regulations, stepped up manufacturing of reduced or formaldehyde-free board, driving down prices.

Nonetheless, creating an entirely sustainable product line without losing customers is a high-wire act.

“The scary thing is there’s too many times where we’re the lone wolf out there,” said Schramm.

Hopefully not for much longer.

Tags: California, Global Supply & Quality, Green Supply Chain, Herman Miller, Mirra Chair, Perfect Vision 2020, Sustainable Products, W. Drew Schramm