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April 8, 2010
April 8, 2010
April 8, 2010
April 8, 2010
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Greening Of The Gaming Industry: Where Is The Beef? – Part 3
To see the Part 1 of my blog click here
To see Part 2 of my blog click here
At G3 after the Wal-Mart executive articulated the retailer’s goals for sustainability and the NGO BSR spokesman painted the overall landscape for corporate social responsibility, the publisher Warner Brothers Interactive Entertainment, the Packaging and Media supplier AGI and the Distribution Company Ditan came together to begin a dialog to understand the challenges and explore solutions in a unique environment organized by MESA and EMA.
The video game industry panel consisted of Lisa Lake-Fernandez, National Sales Manager, AGI Polymatrix; John Quinn, Executive Vice President, Worldwide Operations, Warner Interactive; and, Jeff Leitman, Vice President, Business Development, Ditan Distribution. Moderating the panel was Cody Sisco, Manager, Advisory Services, Business For Social Responsibility (BSR).
 The supply chain was represented by the following enterprises:
AGI Media, a unit of MeadWestVaco’s Consumer Solutions Group, is a global provider of media packaging and services.
Warner bros. Interactive Entertainment over a decade has produced franchises like Harry Potter, The Matrix, Scooby-Doo, The Powerful Girls and Looney Toons to name a few.
Ditan Corporation has been an agile and responsive logistics management solutions provider specializing in Retail Product Lifecycle Management since 1994.
G3 Panel
The potential to pluck a low hanging fruit is always a powerful energizer in any formidable pursuit and Darin Dickson provided one very compelling one. Based on video game industry software sales of about 268 million units in 2008, Dickson pointed out that a case weight of 60 grams (under 50 grams for NDS/PSP) or representing an average weight reduction of 5 grams per case, savings in plastics (Polypropylene) would amount to 1,700 Metric Tons per year or the equivalent weight of 316 African elephants. This will generate $3.5 million in material cost reduction and yield additional benefits in transportation cost and carbon footprint reduction.
Lisa Lake-Fernandez
Lisa Lake-Fernandez mentioned that the focus of AGI Polymatrix is to “achieve 20% reduction in the weight of DVD packaging in a cost-effective and timely manner so that the automated machines at the replicators run seamlessly.” She continued, “We have been named to the Wall Street Sustainability Index for 5 years in arrow and adjudged the best of breed last year. In search of new products we are guided by the realization that heavier is not always better. Polypropylene purchase last year was reduced by 9.2 million pounds, reducing carbon emissions significantly. New controls incorporated in molding machines have reduced energy consumption by nearly 20%. Furthermore, the addition of a natural enzyme has made the plastic packages biodegradable in a landfill where the micro-organisms unlock its activity.” AGI is engaged in studies to utilize PLAs for lower weight packaging but the brittleness of the living hinge poses a serious detriment after 100 uses.
Jeff Leitman
Jeff Leitman stated that Ditan Distribution has three specific goals for the enhancement of sustainability. “Having been a Starbucks supplier has enabled us to adopt corrugation which is 90% recycled for many years. Optimization and standardization of the master carton configuration promises to be a major effort for the company, going from a 12-count to a 30-count”, explained Leitman. Furthermore, “retrofitting automated packaging machines for thinner Amaray cases, proceduralizing lights turn-offs and retrofitting light bulbs with energy-saving ones have yielded significant benefits”, added Leitman.
John Quinn
 John Quinn, a former veteran of the DVD industry, explained how the DVD industry had launched six task forces to address the issues of Metrics, Replication and Distribution, Packaging, Retail POS packaging, Transportation and Education/Communication. Darin Dickson had earlier pointed out that defining the relevant supply chain for the measurement of the carbon footprint was necessary as the DVD industry had done, as defined in Exhibit 1 (Source: Wal-Mart and 20th Century Fox). While the DVD industry excluded film production in their carbon footprint analysis, the video game industry could also exclude game development and production.
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EXHIBIT 1: Scope of Carbon Footprint for DVD
John Quinn, head of EMA’s Operations Committee, explained that “standardization of shipping cartons and optimization of inner packs is an initiative being pursued comprehensively by addressing every part of the supply chain of the video game industry”. This certainly augurs well for positively impacting the carbon footprint of video games. He pointed out the favorable impact on the carbon footprint if shipments of video games could be combined with DVDs and Music to a retail store or distribution center where practical in case of one supplier or multiple ones from the point of distribution. Warner Bros. Interactive Entertainment is already consolidating games with DVDs. Obviously systems and business practices have to be re-engineered in the total supply chain to achieve consolidation of products.
Lisa Lake reminded us “the risk is not partnering with our customers to provide sustainable packaging solutions”. Mark Fisher expressed the secret of successful innovation being the 3 Cs – CoCompetition, Collaboration and Cooperation”. When you recall the Wal-Mart fact disclosed by Darin Dickson that “their direct impact on the total carbon footprint is only 8% while the rest (indirect – water, marine, agriculture, packaging and factories) have a 92% share, leads to the inference that no one company can solve the problem of sustainability in the supply chain”.
I left G3 realizing that the question Lee Scott, Chairman of the Executive Committee of the Board of Directors, Wal-Mart Stores, Inc. had asked in his 21st Century Leadership Speech in 2005 has us pondering as well, “What would it take for Wal-Mart to be that company, at our best, all the time? What if we used our size and resources to make this country and this earth an even better place for all of us: customers, associates, our children, and generations unborn?”
There are many more unanswered questions that you can help answer.
How will the top leadership, the CEOs, of the companies attending, the stakeholders of the video game industry, make it their priority to consider the pursuit of sustainability as a strategic objective?
Considering the parents of the two major first party suppliers of video games, Sony and Nintendo, are in Japan, how will a bridge be built across the Pacific to achieve end-to-end alignment.
If it makes economic sense to determine the carbon footprint of the video game platforms, how do we get publishers to engage in a collaborative effort for efficiency?
Knowing Wal-Mart’s Packaging Scorecard Goals, do we need goals for individual companies or for the industry as a whole?
Realizing that the enormous task of sustainability best begins with employees within an enterprise, how do we tap into it? Do we have to have the equivalent of hurricane Katrina?
How do we educate ourselves to deal with this enormous challenge?
I believe G3 has produced a culture of “Transcendent Leadership” as a willingness by those with functional or company responsibilities to explore solutions that benefit those far beyond the decision makers’ own departments or companies. What a relief to be told by the wise and experienced that we do not need to reinvent the wheel or increase our costs. So let the dialog continue with a commitment to leave a better world for future generations.
Devendra Mishra
Chief Strategist, MESA
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