As environmental issues go, reducing waste is a pretty easy sell. After all, waste results in lost natural resources and lost profit.
At NIKE, Inc., we define waste as any material purchased anywhere in our supply chain that does not ultimately end up as a useful component of product, or cannot be reused at the end of product life. This includes packaging, shipping material and product samples, in addition to a wide range of manufacturing waste such as scrap fabric, leather and rubber. This definition – which is broader than most companies’ – forces us to think about waste at all points across our value chain.
Our ultimate, long-term vision is the conversion of raw materials into finished products with zero waste, as well as “closing the loop” on materials use – that is, using only materials that can be fully recycled.
Our Approach, Progress and Performance
The largest amounts of waste in our value chain are due to product packaging and shipping, followed by waste generated in footwear manufacturing. Our product creation teams work to eliminate waste from our designs from the outset, and we collaborate with materials vendors and manufacturers to eliminate it along the way.
Nike Product Creation Teams
Our product-creation teams make decisions while designing our products that heavily influence the amount and type of waste that will be created during manufacturing. Our Nike Considered Index and its successors provide a scoring mechanism that both shows designers the waste implications of their decisions and provides an incentive to design less-wasteful (therefore higher-scoring) solutions.
One way our teams can earn higher Index scores for their designs is to avoid waste through “pattern efficiency.” For example, fabrics with omni-directional graphics (e.g., dots) can be cut with a lot less waste than fabrics with uni-directional graphics (e.g., stripes). Over the past five years we have achieved a 19 percent reduction in waste related to the production of footwear uppers.
Contract Manufacturers and Material Vendors
We regularly work with our contract finished-goods manufacturers to assist them in reducing waste. To date, we’ve focused on helping them to optimize manufacturing processes, segregate waste at the source, measure waste types and volumes, and target reductions of high-volume waste materials. We have also led the development of six dedicated recycling centers in three countries – China, Vietnam and Indonesia – to support our closed-loop vision.
Our factory rating indexes (described in the Materials and Manufacturing sections) are, for the first time, providing incentives for contract factories and material vendors to participate in waste-reduction activities and certifications. Those vendors and factories that earn high sustainability scores – including waste-related measures – score better in our indexes and are better positioned to keep our business.
In NIKE Brand footwear manufacturing, we had a goal to achieve a 17 percent reduction in total waste from FY06 to FY11, as measured in grams of waste per pair of shoes. We met this target in FY09, and as of FY11 had achieved a 21 percent reduction (see chart). In FY11, total waste generated by our NIKE Brand contract footwear manufacturers was 48.7 million kgs, 85 percent of which was diverted from incineration or landfill through in-house recycling, closed-loop recycling, downcycling and other efforts.
Nike World Headquarters
At NIKE, Inc. World Headquarters in Oregon, we have worked hard to improve recycling rates. While our total waste rose in FY11, along with our employee base, the percentage of waste diverted from landfill through commingling and composting rose from 54 percent in FY09 to 65 percent in FY11.
At our distribution centers, we have begun assessing our waste, most of which is corrugated cardboard, and most of which is recycled. We have also been seeking opportunities to reuse inbound shipping boxes for outbound shipping, rather than discarding and recycling them. Our distribution center in China has been testing this process.
We have recently set new targets for reducing waste, one being a 10 percent reduction from manufacturing waste across NIKE, Inc. and shoebox weight per unit through FY15 (from FY11 baseline), building on reduction in footwear manufacturing waste of more than 35 percent per pair in the first 10 years of the program. In addition, we are expanding our engagement with apparel and equipment contract factories, including helping them to segregate scrap and to implement data management systems as building blocks for reporting, establishing baselines and target setting.