IIM ROHTAK

InterfaceFLOR
A sustainable Green Business Venture
MANDEEP SINGH PGP02027 SECTION A 02/03/12

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InterfaceFLOR An Overview
InterfaceFLOR is the modular flooring division of Interface Inc. based in Atlanta, USA. InterfaceFLOR specializes in the design, manufacture and supply of carpet tiles for the commercial floor covering market all over the world. The company is a worldwide leader in the production of environmentally responsible carpet tiles. It is widely recognized as a pioneer in sustainable manufacturing and business practices, and has won many prestigious accolades for its environmental initiatives. InterfaceFLOR commenced business in India in 2001 and is headquartered in Bangalore with offices across India. Till date the company has sold more than 4 million square metres of carpet tiles to over 500 major customers. InterfaceFLOR was one of the first companies to publicly commit to sustainability, when it made a pledge in the mid-nineties to eliminate its impact on the environment by 2020. Known as Mission Zero, this goal influences every business, manufacturing and design decision made and underpins all dimensions of the company; people, process, product, place and profit. At Interface, Innovation is the key business driver. Interface believes in restoring the balance, the radical thinking that will help them achieve their vision in becoming sustainable and ultimately restorative by 2020. The company focuses on the 3 Rs model Recycle Reduce Reuse

Till date the company has made significant progress on this front, some of them being 82% reduction in the waste sent to land fill, 60% reduction in non-renewable

energy and 80% reduction in water intake in manufacturing, as well as saving close to $440 million in cumulative avoided waste cost in the process.

Green Issues
The waste hierarchy is a simple and well-trodden principle for effective waste management with elimination at source the most preferred option, followed by minimization, reuse, recycling, incineration and lastly disposal to landfill. Carpet tiles are renowned for their bulk, weight and virtual indestructibility when it comes to disposal. The only way to-date to get rid of them is to put them in a skip and condemn them to landfill. Every year, on average, 25 million square metres of carpet tiles are removed from offices and public spaces across Europe. Based on estimates from manufacturers and installers, tonnes of flooring waste is thought to be disposed of every year in the world. Less than 1% is thought to be recycled. A little goes into incineration but the vast majority, perhaps well over 90%, goes into landfill. InterfaceFLOR has thus invested heavily in the development of environmentally sustainable products as well as processes to minimize wastes, as a result of which the company offers carpet tiles with up to 79% recycled content.

The Business Model

Customer CUjfafkja

Value Proposition (CVP)

Target Customer Job to be done Offering

Profit Formula Revenue Model Low reliance on raw materials Become a restorative firm

Key Resources Technology Equipment

Key Processes LCA Microtuft Using low emission vehicles

The Four elements of the Business plan are described below Customer Value Proposition (CVP) Target Customer: InterfaceFLOR mainly targets institutions in the Education, Healthcare, Hospitality and Leisure sectors as well as Corporate offices for majority of its sales. Jobs to be done: Design, manufacture and supply of carpet tiles for commercial and residential floorcovering market in Europe, the Middle East, Africa and India. Offerings: InterfaceFLOR recyclable carpet tiles are renowned for their toughness, retaining their color and finish for years of use in all sorts of environments. Profit Formula Revenue Model: InterfaceFLOR follows a conventional Revenue model, i.e. Revenue = Price x Quantity. Cost Structure: Most of Interfaces cost comes from its investment in green product development through R&D expenses. It has been trying to reduce its raw material cost by the 3R model of Recycle, Reduce and Reuse. It asks its customers to return back the carpet tiles instead of disposing them in landfill sites. It also possesses the technology to recycle carpet tiles of other manufacturers, which further reduces its dependence on the variable raw material costs. Resource Velocity: The firm is committed to achieving sustainability and ultimately to becoming a restorative industry - one that uses less of the earth's natural resources than it consumes. Key Resources Technology, products: Interface has become the first of its kind carpet tile manufacturer to produce its products with 100% recycled nylon yarn. It does so through its double innovation named, Biosfera I which uses 100%

recycled nylon and also uses less yarn. The nylon for the carpets comes from used carpets and old fishnets that are no longer useful. Equipment: In 2008 Interface developed an inventive new way of cutting carpet tiles based on ultrasonic technology, used in the aeronautic sector by the likes of NASA. This new approach reduces manufacturing waste by 80% and eliminates 310 tonnes of waste material each year. Key Processes Interface realized that in order to achieve its Mission Zero, it needed to analyze the various factors which contributed to environmental degradation throughout the life cycle of the project. Hence they started with the Life Cycle Assessment (LCA) studies of all products in their portfolio. From these LCA studies it was found out that the yarn, used to make these carpets, had the biggest environmental impact on the Global Warming potential of the carpets. So, Interface came out with a new process called Microtuft, which reduced the yarn consumption by over 50% in the carpet. Interface avoids intercontinental shipping, which helps reduce the impact dramatically. Around 99% of the products Interface sells in Europe are manufactured in Europe. Additionally, Interface works with all their suppliers to increase the use of low-emission vehicles. And by grouping the deliveries with other merchandise, they able to avoid partial loads, which reduces both emissions and costs.

Interface The Architects of Change

According to model presented in the HBR article Growing Green by Gregory Unruh and Richard Ettenson, InterfaceFLOR is following the Architect strategy, as they have a culture of Innovation in their organization. Interface has always focused on the creating long term share-holder value along with environmental, social and the economic dimensions of its business, i.e. The Triple Bottom Line Approach. By

equating the cost benefits of their long term strategy with sustainable practices, InterfaceFLOR has become a market leader in the recyclable carpet tiles industry.

Greenable Attributes

ACCENTUATE

ACQUIRE

ARCHITECT

Green Development Capabilities

Another feature of this organization is that they have not limited their green practices only to product development, but have infused them in all processes which communicate sustainability as the key business goal at all levels of the hierarchy. Also to avoid the redflag of Greenwashing, Interface takes effective measures in quantifying its benefits to the environment, and publishes an annual report about such initiatives.

InterfaceFLOR has thus become a thriving, sustainable business organization.