Deckers Outdoor Puts Foot Down on Waste
Deckers Outdoor Corp., which designs, manufactures and markets footwear and accessories for outdoor activities and casual lifestyles, is in the early stages of developing its corporate responsibility and sustainability program. When Mark Heintz, director of corporate responsibility and sustainability, came to the company from Hewlett-Packard two years ago, one of the first things he did was create a five-year plan with three pillars:
- Fair and Safe Factories: Deckers works with third-party factories, but still believes it is the company's responsibility to make sure workers are treated properly.
- Environment and Sustainability: This covers both product design and factory operations. “The goals here are to reduce the footprint of our operations, as well as the environmental impact of our products,” says Heintz.
- Community Engagement: This addresses employee volunteering and philanthropy.
“As relates to the second pillar, we have introduced a discipline around sustainability,” he continues. “The first thing a company needs to do before it tries to reduce energy, waste and water is assess its current state and look at its footprint.” So when Heintz arrived, he arranged to conduct an environmental impact assessment, including the environmental impact of the company's buildings, transportation network, and factories. “We quickly realized that the factory piece is huge,” he states. “In fact, as much as 80% of our footprint is from the factories.”
Focus on Waste Improves Soles
According to Heintz, reducing waste is not only good for the environment, but it also saves money. “It is a basic business efficiency program,” he says.
One of the most successful waste management initiatives relates to how shoes are built in the factories. “In terms of making the soles, we used to use a process called die cut, which is similar to a cookie-cutter process,” he says. Workers in the factories took a sheet of ethylene vinyl acetate (EVA) foam, about four feet by eight feet, and stamped out sole-shaped pieces. However, this resulted in about 40% waste. Deckers arranged to have the factories shift to an injection molding process to make the soles. “We created a mold and now inject the EVA into the mold in liquid form, and then trim off a little bit of waste,” he explains. This has reduced waste to only 5%. Given that the company produces millions of soles a year, this has resulted in huge savings.
Deckers also worked with upscale retailer Nordstrom on a packaging program. “The sales clerks were frustrated with all of the brands in terms of the amount of packaging they had to discard when they bring pairs of shoes out to customers to try on,” he states. This dunnage included paper and inserts. It also took a lot of time for the clerks to replace all of the dunnage in situations where customers decided not to purchase the shoes. “We reviewed our packaging process and found a way to reduce the dunnage significantly,” states Heintz. In fact, the company was able to reduce packaging waste by 76,000 pounds over a six month period. This not only saved money for Deckers, but Nordstrom, of course, was very happy with the results.
Deckers has also been finding ways to reduce waste in its mammoth distribution center in Camarillo, California. The products that come from the overseas factories arrive at the DC and are then picked to be shipped to customers. Again, there is a lot of excess packaging in the form of cardboard boxes, etc., most of which had ended up in landfills. Deckers purchased a compactor and now compacts 90% of the cardboard waste, which is sold to cardboard recyclers.
Recycling extends throughout the facilities. “We have also been able to improve the recycle rate of waste in our office from 30% to upwards of 65% by introducing simple things such as better signage for recycling, more uniform containers, and education and promotion of the program to employees,” Heintz says.
Doing Goods – at Home and Overseas
Deckers has always worked to find ways to engage employees in the corporate responsibility area through a program called Deckers Goods, which emphasizes all the good deeds the employees do out in the community. The company pays employees to do 24 hours of volunteer work in the community each year. “We have had an amazingly high rate of participation and success,” says Heintz.
The company began to look for ways to take this engagement to the next level, encouraging employees to look for ways to improve efficiencies internally and reduce the company's environmental footprint. The result is the Corporate Responsibility (CR) Heroes program, launched in mid-2012. “We have an awards ceremony each year to celebrate some of these ideas,” Heintz reports. In fact, the person who suggested shifting from die cutting of shoe soles to the injection molding process was one of the company's CR Heroes for 2012.
As a way to achieve more gains with sustainability in the overseas factories, Deckers works with relevant industry associations. It recently joined the Leather Working Group (LWG), a certification body that rates factories on their environmental performance. LWG offers Gold, Silver and Bronze certification. Currently, Deckers has almost 75% of its tanneries certified by LWG, and is shooting to have all of them certified by the end of 2013.
Deckers works with the Outdoor Industry Association's Sustainability Working Group, which is also working on uniform requirements for factories related to energy, waste and water. The benefit is similar to that of LWG - ending the need for a large number of companies to visit the same factories and asking the same questions and seeking the same kinds of results.
Still, the company wants to do more, by getting more personally involved. “In 2013, a colleague and I are going over to China and focus on a specific product line to study the energy and water that are used, and the waste that is generated,” Heintz says. With this information, the company hopes to come up with even more ways to reduce energy, water and waste.
For more on Deckers' environmental initiatives.