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Ricoh Europe is finding that putting customers first, and investing in the quality of management, can have green business benefits
Ricoh is a name many office workers will recognise. The Japanese company is the biggest supplier of office copier machines in Europe, with more than a quarter of the market. It is a leading maker of fax machines, printers and scanners too.
The company has barely any consumer presence, selling mainly to corporate customers. But Ricoh is keen to build its brand and reputation among global clients. It reckons strong green credentials play well with buyers in big companies picking office suppliers.
Ricoh’s major European customers want to know what the company is doing in terms of sustainability, says Matt Fisher, business excellence group manager at Ricoh Europe’s CSR division. He says: “Global customers are much more aware of these issues. Their tenders ask us about sustainability policies and what we do.”
Last year Ricoh Europe published its first sustainability report, partly to meet this demand from European customers for sustainability information, Fisher says. It also joined the United Nations Global Compact as a separate entity. Its Japanese parent has been a member since 2002.
Fisher says Ricoh has an opportunity to help corporate customers reduce energy use. “There is a difference between what a machine is capable of and how it is used,” he says, explaining why green design is not always enough to make a product good for the planet. It’s like a green car, he says. “When it’s tested, it has great fuel economy. But if it’s badly driven, it delivers lower performance.”
So how does an office supplier bridge this green gap? Invest in service and maintenance, according to Fisher. He says: “Our guys are looking at how the machines are being used in practice and feeding that back into the loop for [product] development.”
Ricoh has 7,000 service personnel in Europe, almost half of its headcount on the continent and is one of the few office suppliers in the world with an in-house service force. Machine maintenance is bundled into every contract.
The feedback that service teams pass on from customers is vital in helping Ricoh refine product designs, Fisher says. He cites the news that customers were not letting machines switch to stand-by, even though they were programmed to do so when not in use. IT departments were over-riding the presets to keep the machines running. The reason: the time it took for the machine to warm up – about a minute – was too long for many a bored office worker to wait. Ricoh has now designed copiers that warm up from automatic stand-by in 10 seconds, after focus groups found that this was an acceptable waiting time.
Ricoh plans to cash in on customers’ desire to go green further with a new consultancy service, which it launched in Europe in February. The company will analyse how much printer paper customers are using, offer advice on how to best reduce it and assess customer progress towards these targets by using software to connect to office printers remotely.
It also pays for Ricoh to make sure its own environmental impacts are soundly managed. Business customers in Europe want to know that all Ricoh companies on the continent meet minimum environmental management standards, such as ISO 14000 or ISO 14001, says Fisher. These should guarantee that the supplier has the correct procedures for producing, shipping and disposing of products in an environmentally sound way.
Ricoh has sent no waste to landfill from its major global production sites since 2001. Components are mainly made in Japan and China, and then shipped to Europe where they are assembled. Ricoh no longer ships completed machines from Asia to Europe. In the UK, machines are built to order and delivered straight to customers. Fisher says tinkering the supply chain in these ways has cut transport costs, saving emissions, and means customers get their goods sooner too.
For components arriving on the continent, Ricoh Europe is looking for cheaper and greener ways to distribute them. It now sends products to Italy via rail from its main warehouse in Bergen Op Zoom, in the Netherlands. Switching from road to rail for this journey has cut transport costs by 30% and carbon dioxide emissions by 68%. Ricoh could soon do the same for sending goods to Spain, says Fisher.
Finally, when customers have finished with machines the company makes sure they are reused where possible. Ricoh Europe has a number of refurbishment centres in its major markets where it takes used machines. Old copiers, printers and other products are cleaned up and sold on to the second-hand market. Those that cannot be reused are recycled. In the UK, old photocopiers are used to make grit for roads and even turned into lobster pots to be used by fishermen.
Ricoh Europe’s focus on reducing environmental impacts in a way that lets it cut costs, speed up product delivery and make products easier to use shows that it understands sustainability as part of overall business excellence. It also reflects the company’s roots. The parent company is schooled in Japanese quality management. This focuses on long-term planning, collective problem-solving and constantly refining systems to improve the way products are made.
Fisher is clearly a believer. For him, the link between business excellence – continuing to improve business processes and increase product quality – and sustainability is a no-brainer. He says the score a company gets in quality management assessments is a much better indicator of how well it is managing social and environmental challenges than information in its sustainability report. He explains: “It’s very hard to tell how good someone’s sustainability report is.”
The Global Reporting Initiative, which aims to offer such a benchmark on sustainability through a common reporting framework, does not show how sustainability is improving business performance, Fisher says. “GRI is lovely, but the badge that you get at the end of it does not tell you anything.” The grade a GRI reporter receives reflects how many indicators it reports against, not how well it manages sustainability.
Fisher argues that companies should use the European Foundation for Quality Management model, designed to measure business excellence. Companies are invited to assess themselves against the model and take part in annual awards. The model’s eight fundamental concepts include corporate responsibility, how a company develops its people, how it innovates and continues to learn as an organisation, and how inspirational, or values-driven, its leadership is.
EFQM was set up by leading European companies in 1988 in response to advances made by the “quality movement” in the US. American efforts to improve the quality of management, not the management of quality, were themselves a reaction to the lead taken by Japan in this area in the 1970s. In Europe, BMW, Bosch, Philips and TNT have been the main advocates of the EFQM model over the past two decades. Ricoh Europe first used the model in 2001. It is now one of eight companies, called pact members, that have been asked to lead the development of the EFQM model.
One company that agrees that quality management models are a good way to assess sustainability is Lloyds TSB. In March the bank asked 60 business managers to complete a self-assessment using the EFQM model. The information in these self-assessments will feed into the company’s corporate responsibility report. Lloyds has been doing this for five years.
Lloyds’ corporate responsibility manager, John Swannick, explains: “If you use an approach like a management model assessing how to improve performance, it has a much bigger impact than any exercise in data collection. The report is an outcome of this process and is not an end in itself.”
EFQM’s key strength as a model for assessing non-financial performance is twofold. First, it is a model that many in business recognise and use: 30,000 companies in Europe use the model. In comparison, barely 800 companies worldwide produce a sustainability report using the GRI guidelines.
Second, EFQM supporters say it assesses environmental, social and governance factors within the context of an overall assessment of the business. Swannick says: “It’s the age old debate: what comes first, better management or better corporate responsibility? If you use EFQM, you are rowing in the same direction.”
For the compact?
Fisher says the EFQM model could be adopted by the UN Global Compact as a way to measure how well participants are doing at implementing the compact’s ethical business principles.
The compact’s executive head, Georg Kell, agrees that advice for members on how to implement the 10 principles have a “great affinity” with quality management models. He explains: “We are pulling in exactly the same direction. The management methodologies to implement the Global Compact are totally identical to the quality paradigm movement.”
In its early days the compact had a memorandum of understanding with EFQM to combine efforts, and offer some training programmes. That has not been followed up. Today the compact would not endorse a particular management model. Kell says the EFQM model, for example, is “too regional” for such a global organisation.
Ricoh Europe’s enthusiasm for the EFQM model may or may not catch on. But its focus on quality management to improve product design and delivery is clearly shaping its view of sustainability – and starting to win it increasingly green-minded customers.
Ricoh Europe – facts
- 16,000 employees in 19 countries in Europe and the Middle East and Africa.
- 400,000 customers.
- 97% of used copiers were recycled in 2007.
- 94% of toner cartridges were recycled in 2007.
- 8% reduction in CO2 emissions from 2006 to 2007.
Source: Ricoh Europe Sustainability Report 2008
When recycling or reusing old computers, public and private customers have a major, non-environmental concern: data security. Ricoh’s Matt Fisher explains: “Some people say the only way to make sure your information is safe when you get rid of a laptop is to destroy the PCB with a hammer.” But when taking back a machine from a customer to a refurbish centre, he says: “You have to have those assurances that the information is being deleted properly”.
This concern also arises when machines are in use, as office suppliers frequently connect to devices remotely, usually to help customers fix problems. This allows them to view data stored on machines. Fisher says: “The paranoid piece that you have to get through is: ‘Are you going to read every document that is going through there and send it off to a server somewhere?’” Another ISO standard, ISO 27000, can help reassure customers. But a reputation for being responsible counts for more, Fisher says.