Friday, June 10, 2011

SDM thesis asks: Starbucks cup—trash or treasure? - SDM Pulse Summer 2011

By  Ellen Czaika, SDM ’08

Editor’s note: Ellen Czaika received a master of science degree in engineering and management from MIT in 2010. She is currently pursuing a doctoral degree in MIT’s Engineering Systems Division.

Ellen Czaika
SDM ’08

What do you do when 80 percent of your cups walk out of your store, yet you want to create a system to recycle them? Engage the whole value chain. At least that is what Starbucks has been doing for more than two years.

The situation is not as simple as the cup itself, though the cup is a good artifact on which to focus. Cups are made of paper fiber with a coating, and often have a plastic lid and a cardboard sleeve. Recycling the cup is not as easy as dropping it in a recycling bin. Though, that certainly is a first step. From the recycling bins, cups then travel to facilities that bale and sell recyclable materials, and finally the cups are made into new products. Several questions still exist: Can the cups get baled with an existing grade of paper, or should they be separated into a class of their own? If they are separated, is it possible to create a market for bales of used cup material?
In her SDM research, Ellen Czaika
worked on creating a system to increase
the useful end-of-life options for used
hot beverage cups, such as the ones
used by Starbucks.

This complex multi-stakeholder system is precisely the type of system we study in MIT’s System Design and Management Program (SDM). I got my first opportunity to work on this project through Leadership Lab (L-Lab), a course I took as an SDM student. I continued working on the project for my SDM thesis.

To get started, my L-Lab student team and I spent three weeks at Starbucks’ Support Center in Seattle, WA. We visited a materials reclamation facility, a composting facility, and many departments within Starbucks, including the cup purchasing department, the storefront design group, and the global responsibility division. In addition to the contextualized learning, we conducted numerous interviews with stakeholder representatives throughout the value chain and within Starbucks.

Creating a system to recycle post-consumer paper coffee cups requires meeting the needs and interests of its many stakeholders, such as:

•    Recyclers. Recyclers often run materials reclamation facilities, which are an elaborate interweaving of conveyor belts, magnets, and gears that sort materials from a single stream of recyclable goods into various materials to create bales for sale. Recyclers sell these bales to other entities, who use the materials in other products.

•    Customers. Typically, customers drop cups into bins without pulling off the lid, taking off the sleeve, or washing out the coffee residue. More participation may be needed to separate cup materials before disposal—but customers, united only momentarily by purchasing coffee to go, are a diffuse and hard-to-represent group. Furthermore, not all customers place the same value on non-landfill end-of-life options for used coffee cups.

•    Companies that make paper cups. These businesses earn revenue by volume of cups sold, and they want to update their business models to anticipate the growing customer trend toward less waste and less environmental impact.

•    Coffee retailers. Starbucks and other retailers decide which cups to purchase. But, their primary focus is sourcing, roasting, and preparing the coffee that goes into the cups.

•    Municipal governments. Governments typically enter into contracts for hauling waste, and they enact city ordinances and other regulations. They also earn tax revenue from coffee sales.

•    Haulers. Haulers operate collection trucks, which they typically drive along established collection routes, contracted by municipalities (though the nature of this contracting potentially differs by region). Adding more specialized collections for separate materials would increase their operation and maintenance costs. They prefer to streamline their collection routes and minimize the number of drop-off locations.

•    Environmental nongovernmental organizations. The mission of these organizations is to protect the environment; they can exert a great force within the system.

The stakeholder list above can vary by location. Because waste removal and processing facilities differ from region to region, the stakeholders also differ. For example, in areas with existing composting facilities, composters become a viable competitor for the used cup material. So, any system designed to recycle/compost must be able to accommodate local differences.

At the same time, many of the organizations involved operate on the national and/or global scale, so any approach taken also needs to be sufficiently coherent to allow these organizations to benefit from economies of scale. Furthermore, US governmental regulations and the regulations of other nations are pertinent in some cases. Therefore, the system to recycle/compost used beverage cups must be viable at local, national, and global levels of scale.

The tools and methods taught in SDM are ideal to address the inherent complexity, nuances at different levels of scale, technical constraints, critical infrastructure issues, and diverse stakeholder interests of a system such as this cup system. Classes including System Architecture, System Dynamics, Product Design and Development, Negotiation and Dispute Resolution in the Public Sector, and Power and Negotiations have all been instrumental in my engagement with this project.

Toward the end of the three weeks in Seattle, my L-Lab team and I facilitated a workshop that assembled stakeholder representatives at the Starbucks Support Center in Seattle for a day focused on addressing the end-of-life options for hot beverage cups. We used facilitated systems thinking methods we had been learning in L-Lab and other SDM courses to help stakeholders better understand the system as it currently exists and to design means of achieving their goals of no cups in landfills.

The “MIT Workshop,” as Starbucks called it, began in medias res, in the middle of things, between two larger and professionally facilitated “cup summits.” The first summit was held in May 2009 in Seattle and the second was held April 22-23, 2010, at MIT.

Dr. Peter Senge of MIT and the Society of Organizational Learning facilitated both summits. I worked with Senge and the Starbucks steering team in designing the agenda for the Cup Summit 2, I led a participant activity in the summit itself, and I helped coordinate logistics.

The cup initiative is a “systems problem”—one having technical, management/organizational, and socio-political components—for several reasons: the performance requirements for the cup itself necessitate a combination of materials; infrastructures differ by location and are not easily or inexpensively changed; not all of Starbucks’ customers place the same value on non-landfill end-of-life options for the cup; and local governments are experimenting with regulation for food container end-of-life options. Creating a system that incorporates the most important interests of all its stakeholders is essential to the system’s success.

In my SDM thesis, I explored the role that facilitated systems thinking has played in this cup initiative. Using the MIT workshop we conducted as a pilot study to evaluate the methodology, I found evidence that facilitated systems thinking increased stakeholders’ awareness of other value chain members’ interests and of their own responsibilities and leverage points within the system.

I am continuing this work at the doctorate level, in the Engineering System Division doctoral program. I anticipate that facilitated systems thinking and/or consensus building principles will become a very useful addition to the system architecture and design processes because they will give architects and designers more information about stakeholders’ wants and needs and, ideally, involve stakeholders more directly in designing their own systems. This may be especially beneficial for systems that span organizational and industry boundaries and where technical expertise and knowledge about stakeholder interests are dispersed.

So, what do you do with the paper cup you just enjoyed coffee in? Follow the signs on the bins in your local area, and as you are placing the cup in the bin, design options to remake used cup material into other products. Your idea could be the next big thing.

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