UPDATE 4:05 p.m. 8/25/2014: In a Tweet publicizing this article, I included Whirlpool in hopes of drawing their attention to the opportunity in the "service economy" as opposed to the "extractive economy" - something with which I am sure they are aware, but it always helps to prod. I should have expected what I received, which was an excellent customer service response looking to help with my issue. It prompted me to note that the issues I am having are not with the quality of this specific product, the customer service of Whirlpool, or even the desire of Whirlpool to deliver a high quality product to customers so that they will get good, repeat business. Whirlpool, like other manufacturers, has to do what they can to survive in the current economic climate. I wish I knew the immediate answer to how they can make the shift...if I did, I would certainly be selling it to them and their competitors. I just want to make clear that the following is a call to question the value of our economy, not at all questioning the value of this manufacturer or their product.
We have reached a bit of a crossroads with our washing machine. It is about 6 years old...well within what I would consider to be a "normal" life, and it needs what Whirlpool considers to be a major repair. The control board that turns all the myriad user entries into the customized washer cycles, well, it has crapped out on us (to use the technical term). Not as catastrophic, the drain pump has developed a leak. The factory-authorized repair service will replace both for the tidy sum of $850. The interesting thing is...
A new comparable washer would cost about $800 from a Whirlpool authorized dealer.
This puts me in a quandary as a person who wants to make the most environmentally conscious decision. The labor aside (approximately $200 of the $850), there is no way that two parts of a device that retails at $1,000 or less cost anywhere near $650 to make. This means that Whirlpool has one of two reasons to do this:
1. They make the bulk of their money on new product sales and make it financially unbearable to make the decision to repair, or
2. They want their name associated only with high-quality products. Since this model does not provide the best service, they want to get it back, repurpose the parts, and get a new model in the hands of an existing customer.
I would love to believe that the latter were the answer, but given that the service technician who came out did not push that on us, nor did they make an offer that would dissuade me from considering another brand, I am guessing that the manufacturer only makes money when they can sell a new product from extracted resources...not by providing a service.
That is at the heart of what is wrong with the current economy.
We have so many ways to extract materials, turn them into something of value and then put them to use over long periods of time....but instead, we find the fastest way to put them in the ground and sell another bulk of materials to perform the same service. This "extractive economy" as we know it exists on the shaky foundation that a planet of 7 to 9 billion people, all demanding a high quality of life with the capital we currently use to provide it, will have enough resources to deliver all these goods. We know that for a large portion of our economy, this cannot happen.
The smarter move would be for manufacturers to move from the extractive economy to the service economy. Whirlpool would sell me the service of clothes cleaning - including water and any necessary detergents - for a monthly price (in this case, for something that should last 10 years that they would prefer to sell to me today at $800...let's say $144 per year or $12 per month). In this great internet of things, they could use communication technology to see the washer performance over time, and would see the need for repair to keep it performing as they have contracted to do. Additionally, if they maximized profit based upon how little it cost to maintain, they would likely build a more lasting product in the first place. If the device did need replacement, they would do it within the same fee. When given the responsibility to determine whether to repair or replace to deliver the same service, they would definitely use the method that used the fewest resources and least amount of labor. They would also have full responsibility for the used equipment, and would maximize the reuse of materials and minimize those materials that get wasted.
This "cradle-to-cradle" concept of manufacturing comes from the work of William McDonough, Michael Braungar, and others. It already works in the software market where we have seen the shift from the purchasing of a pack of CDs with pre-loaded software to web-based platforms where we purchase the service the software provides for a regular fee. AT&T recently moved to this format for cell phones where one can upgrade at any time as long as they keep making monthly payments.
In the ideal market, these manufacturers would enter into the agreements with local energy and water utilities, who would collect the total fees for the services of all appliances from the customers, including the cost of consumables such as energy and water. This would give the customer one place to pay, and would add the further incentive to the utility to minimize the energy use for the level of service provided. In this case, utilities would still get revenue to help maintain infrastructure, and they could make the appliance repair marketplace more efficient by sharing resources across brands and services.
However we tackle this, we need to move away from these incentives to extract as quickly as possible...and I would love it if you could make this happen by Wednesday before I have to make my decision.
No comments:
Post a Comment