Sustainable Furniture Case Study

Efficiency and best practice have always been fundamental to J T Ellis & Co., furniture manufacturers of Huddersfield in West Yorkshire.

“We never set out specifically to be a sustainable company. The fact is that the way we run the company lets us tick most of the sustainability boxes.”

Ellis Furniture supplies kitchens and bathrooms to the retail sector and kitchens, bathrooms, bedrooms and a whole range of specialised furniture to contract clients. These include care homes and hotels, and schools, universities and other buildings in the public sector.

 “PFI has not been universally popular, but it’s been good news for us.”

PFI operators frequently have an obligation to maintain a building and its facilities for decades. Ellis uses traditional glue and dowel construction with high quality timber, which means they offer a quality product that lasts for years - and at a competitive price. Every product from Ellis Furniture has a 10-year guarantee, but in practice it will last much longer than that. Indeed, in a corner of the company’s showroom there’s a suite of student furniture that was originally installed in Durham University in 1985. It’s clearly seen a lot of use but it’s still functional. In principle it could be refurbished and re-used.

What makes a sustainable business?

First of all, the fact that Ellis makes durable and long-lasting products clearly demonstrates sustainable use of resources. Unfortunately, at present no-one gets recognition for making durable products. In the UK, where we generate 117 million tonnes of waste each year, the longer a product lasts the greater effect it has on reducing that figure - a contribution to sustainability that really shouldn’t be ignored. Secondly, the company carefully controls its raw materials. Wherever possible, timber comes from FSC (Forest Stewardship Council) certified sources, which means that every tree harvested comes from managed forests, and every tree is recorded and replaced. Walnut and cherry from the US are managed in a similar way but certified by a different body. Other countries have their own schemes. What is noticeable on the Ellis factory floor is that every stack of timber is tagged with details of origin. For every product shipped, the company knows exactly where the raw materials came from.   

I raised the question of energy security. How sustainable is a manufacturing business when there are predictions of national electricity blackouts within the next two years? Like most businesses, their energy supply is in the hands of the government, the generators and the weather. It’s just not practical to have a complete back-up generation system, and it’s not as though the factory is producing anything perishable that needs refrigeration or chemical reactions that must be held at a critical temperature. Of course there are essential services that must be protected so there’s a UPS in the computer room which will permit a managed shutdown of IT without loss of data. There’s also one diesel back-up unit on site. It sits next to a massive water tank which feeds the sprinkler system. Every Monday it’s fired up to prove it’s ready and waiting should an emergency occur.

And renewable energy?

What about renewables? A 200,000 square foot factory has a lot of roof area and it’s no surprise that solar panels are under serious consideration. They will never supply all the factory’s needs, but the current subsidy regime means they will make a significant saving and certainly more than pay for themselves.

Another aspect of energy is more problematical. Ellis Furniture has to dispose of waste, and offcuts of timber and strip are collected by a company which remanufactures them into particle board. All very green, although Ellis still has to pay for the waste to be taken away. Enter the government with its subsidies for biomass boilers. The policy was set up to support electricity generators such as Drax Power - operators of the UK’s largest power station - to convert to more environmentally-friendly biomass. (Whether it is truly environmentally friendly is a debate for another day!) In view of the massive investment involved, some £700m, the government has confirmed that the scheme will stay in place at least until 2037. Back in Huddersfield the regulations mean there’s a choice between recycling the timber waste at a cost and saving money on energy by burning it in a biomass boiler. It's a simple choice. Burning it in a boiler is not as green as recycling it, but this is business.

Why ISO 14001?

Putting in an environmental management system (EMS) to ISO 14001 was in response to public sector clients. A lot of the implementation involved documenting practices and procedures which the company already had in place. The fact that the EMS has been installed means that clients immediately know that Ellis Furniture meets recognised standards. Indeed, having the standard is frequently a condition of tendering. Clients know that the EMS is revalidated each year, in this case by BSI, which is an added incentive to the company towards continuous improvement. With this in mind Ellis undertook a lean manufacturing project, which led them to a fundamental re-arrangement of the factory layout. They freed up enough space to allow them to give up off-site storage facilities and save the cost. The revised layout improves productivity as the work now comes to the operatives, following a logical flow, and they no longer have to follow the work.

What about packaging?

Most Ellis products are sent out without packaging. The majority of the business is with the public sector and contract customers. The company delivers these orders on its own transport, securing units to the sides of the van and separating them with blankets, which of course are used again and again. Units for the retail market are packaged in cardboard as the company does not handle delivery to the final consumer and needs to make sure they arrive safely. At least the cardboard can be recycled.

And finally…

I’ve often said that sustainable business is good business. It makes sense to get the standard and get the credit for it.  Ellis Furniture proves the point that good businesses are generally sustainable.

Thanks to Tom Ellis, Joint MD, JT Ellis & Co    

Sustainability Sells

My article was published in the May/June 2014 issue of Winning Edge, the Magazine of the Institute of Sales and Marketing Management.

If you’re not part of Team Green you may not be on your clients’ preferred list for much longer. Green? Isn’t that about people in sandals and beards saving the polar bears? Maybe, but today we’re talking about green business, and how it’s affecting you, your clients and your sales.

Sixty-five of the world’s largest corporations, from Abbot Laboratories through BSkyB, Ford, Microsoft, Philips and Coca-Cola to Wal-Mart wrote to all their suppliers last year and asked them to disclose how they were going to cope with climate change.  And green business is not just about climate change, it’s about sustainable forests and sustainable fisheries, it’s about renewable energy, water, waste, carbon footprints and scarce resources. Open any FTSE 100 Annual Report and the Corporate Sustainability Report drops out, showing how they are making the world a better place. In a word, Green Business is going mainstream, and your clients will soon be knocking on your door to ask what you’re doing about it, if they aren’t already. 

In practical real-world terms, what does all this mean for you and your sales team? It’s about understanding the client’s needs - something you do all the time - but recognising that those needs are constantly changing. They can’t be truly green without your help. For your client, there are three main drivers towards sustainability - Reputation, Revenue and Regulations. Help yourself by helping your clients with these. 

But hang on! Before you start, do you know how your own organisation measures up? Have you seen the corporate environmental statement? Does your company work to ISO 14001 or any of the other sustainability standards? Make sure that you and your team can give the client the full picture. Make sure the people in back office and boardroom are giving you the full picture!

Reputation is the Number One driver which puts suppliers in the spotlight. Since the supermarkets found horse meat in their burgers and the press revealed the sort of conditions that Apple iPads were made in, these organisations have been desperate to claw back their credibility. Everyone else has been desperately looking at suppliers to make sure that nothing like that will ever affect them. If you do the minimum, their reputation is safe. If your company is doing more than it needs to, you’ll be more attractive as a supplier. On the other hand, in the face of the consumer your clients need to put their hands on their hearts and tell the world that they’re doing their greenest best - and if you’re not green and you supply them you’re making liars of them.

Number Two, Revenue, or profitability, is a key part of sustainability. Sustainability is about doing more with less. If we can build the same product with less material we’re saving material cost. We may be saving production time, using less energy and making less waste as well - all driving more profits to the bottom line. How can you help your customer do more with less? Can you offer a product, a process or a system which will make your own clients more efficient and save them money? Makes it easy for them to make the business case! Can you do it before your competitors do?

Number Three - Regulations - everyone’s favourite! Quite simply, if you’re not complying with the increasing number of regulations it’s a deal-breaker - at the very least. Of course it’s not just the regulations that your own organisation has to obey, you have to think about it from the customer’s point of view. ISO 14001 - Environmental Management and ISO 26000 - Social Responsibility are desirable but not legally binding. On the other hand, REACH (Registration, Evaluation, Authorisation and restriction of Chemicals) and the CRC Energy Efficiency Scheme are just two of the many regulations which must be observed to avoid penalties.You don’t always need to be an expert in these things, but you do at least need to be aware of the jargon and know whether these are issues you can help with. Things are changing all the time, so if you keep up to date on the regulations affecting your particular market, part of your added value could be helping your clients keep up to date as well.

Objections? There are always objections, and there are very strong opinions on both sides of the question. You don’t need me to tell you not to get into an argument! 

“You’re not doing nearly enough!” To answer that you need to be clear on exactly what your organisation is doing and you need to know that what you are offering will comply with the standards that your client must meet. Ideally you’ll also know what’s being planned to make your organisation even greener.

At the other extreme: “This green rubbish?” (Didn’t the prime minister say something like that?) “It’s all a waste of time and money!” Actually, sustainable business is all about efficiency and doing more with less. Companies adopting a sustainable strategy are finding that it generally saves money. Savings you can share with your clients, even if they don’t believe that sustainability is a good thing.

Should you walk the sustainable talk? Certainly there will be some people who will be really upset if you turn up in a gas-guzzling 4x4. How about rewarding your top salesman with a hybrid? The Porsche Panamera, for example, or maybe a Lexus. There are green cars right across the range now. The BMW i3 is certainly worth a look. With 0-62mph in 7.2 seconds and a range of up to 200 miles it’s not at all what you expect from an all-electric car!

“It’s just a fad, isn’t it?” No, sustainability is here to stay. It’s the new way of doing business and the new way of staying in business, in the face of expanding world population, rising energy prices and declining resources. If sustainability was just a fad, would Tesco have set up its Knowledge Hub - the world’s largest sustainable supply chain resource? Would 722 institutional investors holding US$ 87 trillion in assets be supporting CDP to monitor the climate risk in their portfolios? Would Dow Jones have been publishing a sustainability index for the last 15 years? Would we have ever heard of the Global Reporting Initiative, Environmental Impact Statements or Carbon Footprints?

So sustainability is firmly here to stay. And as always, to succeed in this competitive world we all have to keep that one jump ahead. It’s not enough to be lean and mean. This time, you’ve got to be lean, mean and green as well.