Beach Combing

I’m vacationing this week. My grand-daughter, Carolina, has new sandals to vacation in. They have LEDs that flash red when she runs. Also, a tag with the sandals proudly boasts that “the insole board in this shoe contains 70% recycled content. Of that 70% recycled content, 80% is from recycled plastic bottles and the remaining 20% is from recycled post-industrial material.”

A large sign in the window of a Billabong leisure apparel shop near my hotel announces that 14,500,000 plastic bottles have been recycled to produce a line of sports clothing. Used bottles to surfing gear. Pretty cool.

A half – liter bottle of Aqua Fina brand of drinking water tells me that redesign of the bottle about 10 years ago has resulted in cumulative savings of 70 million pounds of plastic. 70 million pounds is a lot of plastic pellets – something like 500 railroad cars full. If one approximates virgin molding at $1 a pound, the math is real easy.

A Green StripeTM brand plastic beverage glass from the hotel bar boasts that the plastic is made from corn rather than from some petroleum derivative, that the beverage glass is recyclable, and that the beverage glass is compostable!

The point for manufacturers is that the entire life cycle value stream for entire classes of manufactured products is changing rapidly, along with the associated costs. The array of viable materials alternatives available to manufacturers is expanding, sometimes in surprising ways. “Recycled material” is no longer a four – letter word. Rather it means either reduced effective materials cost, a revenue stream from the selling the recyclable scrap or, at worst, no cost of disposal. Moreover, recycled material content in finished products can be a significant marketing advantage. Product design, even with something as simple as a plastic bottle, can have enormous cost consequences, especially when value stream transport costs are considered along with reduced usage. And, new materials alternatives, with very different cost bases can result in competitive advantage (or disadvantage). Consider, for a moment, that the price drivers for corn at any given time may be very different from the price drivers of petroleum derivatives, especially in a global economy.

Comments anyone? Opinions? Relevant experiences?

… Chuck