Agent Regeneration and Hazardous Waste Minimization, IBM Corporation Endicott, New York Facility

CASE STUDY
Corporate Strategy
Operations Management
National Pollution Prevention Center
for Higher Education
POC # 93-1
April 1.993
Agent Regeneration and
Hazardous Waste Minimization
The IBM Corporation
Endicott, New York Facility
L Richard Oliker,School of Management,
Syracuse University
Donald Powell, IBM Endicott .
Jack Lubert, IBM Endicott
Dennis Whittaker, IBM Endicott
INTRODUCTION
International Business Machines Corporation (IBM) was given its initial impetus by Thomas
J. Watson, Sr. in Endicott, New York. In 1915, as the new president of the Computing-Tabulating-
' • • • • : 'I . ' ' -: . ;/. • ' '
Recording Company, his concepts for business success marked the beginning of the firm's growth.
He changed the company's name to IBM in 1924, as a reflection of the growth achieved up to that
• - time. , ' " v • •
' ", •' IBM's growth was sustained and continuous from that period on. The excellence of "its
accounting machines was responsible for its success up to the start of WOrld War II, which brought
' about a product change from business machines to ordnance. In 1946, IBM helped to initiate the
age of electronics through the introduction of its first commercial electronic computer. Today, the
company is primarily a manufacturer and marketer of a full range of computing information equip-
ment and software, with sales revenues in 1991 of approximately $65.billion.
• . , IBM is now aggressively working toward improving both its competitiveness and efficiency.
.Work force reductions have been accelerated to reduce operating expenses. The general product
.. line has been strengthened, and a series of strategic alliances have been announced with firms
National Poltunon Prevention Center. University of Micnigan
Dana Blag. 430 E. University, Ann Arbor. Ml 48109-1115
Primes on recycled paper .

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sugh as Apple Computing, Motorola, Siemens, etc. In addition, IBM continues to build upon its
position as an industry leader in the areas of research, development, and engineering.
These changes were made in recognition of the fact that the information technology industry
is currently undergoing a fundamental transition. This transition is "characterized by rapid techno-
logical advances, shorter product life cycles, growth of software and services, and increasing
competition. As a result, IBM'will change from a single, vertically integrated, very complex world-
wide enterprise to one of increasingly autonomous businesses. Each busfness, empowered with
varying degrees of independence-, will be focused and responsible to its markets." (IBM 1991
AnnuafReport, p. 35).
THE REGULATORY ENVIRONMENT
The Pollution Prevention Act of 1990 establishes pollution prevention as a national,objec-
tive. The Act notes that:
There are significant opportunities for industry to reduce or prevent pollution at
the source through cost-effective changes in productiori^operation, and raw
materials use. the opportunities for source reduction are often not realized
• • because existing regulations, and the industrial resources they require for
compliance, focus upon treatment and disposal, rather than source reduction....
Source reduction is fundamentally different and more desirable than waste -.
.;. management and pollution control. ' .

Manufacturing firms are impacted by the above Act as well as other federal environmental
; laws, such as the Resource Conservation and Recovery Act. Toxic Substances Control Act, the
" Clean Air Act, and the Clean Water Act.
Because of increasing demands by this complex regulatory system, which includes state
and tocal laws as well, the cost to D.S. industry is escalating rapidly. The projected annual cost of
compliance with hazardous waste controls atone is expected to exceed $12 billion by the end of this
iJI'i • ' ' "'•': : f: ', . . ' •' i I ' ;• ; . :.", •' '' •" • •'' ' ' ')',"• ' • _,
.decade. This will be double the amount spent for such compliance in 1991. Cleaning up hazardous
waste sites will add another $8 billion annually by 1999; with an added $5 billion needed to clean up
leaking underground chemical/petroleum storage sites.
. Expanded coverage of existing laws on National Ambient Air Quality Standards and toxic air
emissions will likely hasten the renovation of some manufacturing facilities. However, many older
plants are likely to close, as their revenue production potential falls below the cost of clean-up.

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In this case, the specific Environmental Protection Agency Regulation for Solid Waste, 40
CFR 259, "Criteria for Municipal Solid Waste Landfills;1 applied and could not be met, given the
amount of" chromium contained in the waste Sludge produced by the problem manufacturing process
(to be described in detail in the' next section of this case). A more definitive and limiting part of the
regulations is 40 CFR 261, "Regulation for Identifying Hazardous Wastes." Again, the waste sludge
failed to pass the test because of excessive chromium leaching potential.
• • " * ' '"-,'.
: The effective managerial approach for the future to all of this new legislation calls for a new
. approach. Manufacturers can no longer wait to see what new regulatory requirements will demand: ;
In order to survive in-the changing environmental dynamic of the rest otthis decade, they will have
to become much more proactive. This new strategy will call for an alliance between manufacturers,
regulators, and environmentalists. As is the lesson provided in this case, other firms will have to
leam that waste minimization can be environmentally as well as competitively sound.

PROBLEM IDENTIFICATION
! In the evolution of this case and as a matter of stated corporate policy, IBM is fully commit-
ted to the minimization of the environmental impact from all of its various manufacturing operations.
Hazardous waste reduction programs are in place throughout the firm to:

•; • ' i. Effect waste reduction at the source^ • .
2. Encourage recycling. . .
3. Develop and implement waste treatment technologies. .

IBM's Endicott, New York facility has expanded its operations to include science centers,
research laboratories, product development activities, and manufacturing. It currently employs
• approximately 8,500 people and its primary mission is to: ..

1. Develop and manufacture technology-packaging.
2. .Develop systems software. ,
3. Manufacture bank systems. ,

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Composed of five million square feet of floor space, Endicott.is one of IBM's largest plant-
lab sites. Its product line consists of a variety of computer processors, banking systems, circuit
packaging, and printers. It is this latter product series which serves as the focus of the case. More
specifically, a component part—printbands—of most of the impact printers manufactured at this
location. ,. '
Impact printers have over two hundred component parts. Prirrtbands are stainless steel belts
which are used in most such printers. Panels of raw stainless steel, measuring one foot by five feet
by 1/2 the thickness of a dime, from which ten prinfbands can be produced, are used in the "basic
manufacturing process described below. The resultant prirrtbands are approximately 3/4 of an inch
wide with raised characters for printing. The character sets on the bands are subject to change,
based upon specific customer requirements.
The manufacturing process used to produce printbands at the Endicott facility involves a
photolithographic process in which the stainless steel panels are chemically machined using a
strong ferric chloride etching solution containing hydrochloric acid. The waste material which results
from this chemical reaction is a solution composed primarily of ferrous chloride.
The chemical process which takes place involves an oxidation/reduction reaction in which
the iron (Fe*3) ions are reduced, while iron (Fe) is oxidized. The net product-of this reaction is the
formation of, or dissolution of iron in the solution in the form of iron ions in the +2 oxidation .state, .
called ferrous ions (Fe*2). 'This reaction may be chemically represented as:
Fe
Stainless
Steel
43
2 Fe
Etchant
+2
3 Fe C>2
Dissolved Steel
Spent Etchant
Typically, approximately £0,000 printbands are manufactured annually through this process.
at the Endicott plant. In 1986, this chemical process "consumed 158,300 gallons of ferric chloride
etching agent, and generated 1,890 tons of hazardous waste sludge, along with 34,200 gallons of, .
concentrated waste etchant which was trucked off site for treatment prior to its disposal in a landfill.
• For each printband panel, up to that period, 1.48 pounds of material had to be etched away
from the surface to form the final.product. This waste material included 1.24 pounds of iron, .2

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pounds of chromium, and .04 pounds of molybdenum. On the average, 32 gallons of the feme
chloride solution were required for the etching of one print band panel. This solution weighed 400.5
pounds, including. 60.3 pounds of iron.
The manufacturing process was a batch operation: Etching machines were filled with fresh
etchant solution once a shift. The etchant was heated to 130 degrees F, 15 pints of hydrochloric
acid was added, and the etchant was balanced by the addition of water. The operator started the
printband panels through the machine and, because the etching solution was new, the bath's
oxidation-reduction potential (ORP) was high. Thus, the etch rate was swift forthe'first group of
panels to be etched. .
As additional panels entered the solution, the bath lost_some of its etching power as the
chemical reaction took place. The operator had to keep adjusting the conveyor speed to compen-
sate for this decrease in etching power. After 12 to 14 panels had been etched, the conveyor speed
would have dropped to less than half of the original starting speed. Thus, the efficiency of the
process was dependent, in large part, on the. skill of the operator to make a high quality product in
an environment of constantly changing etching parameters.
At the end of each of the three daily work shifts, the etching solution bath was dumped, the
solution-spray nozzles were removed, the etched machine sump was cleaned, clean nozzles were
installed, fresh etchanfadded, and the bath heated up for the next shift. This set-up operation
required about two hours per shift to complete, making it a fairly expensive operation in terms of
both downtime and labor. -
the spent etching solution, plus the,waste fk>w from the panel rinsing operations, was
dumped into the site waste collection system for treatment. This waste was pumped to the facility's
waste treatment plant where the soluble iron tons were converted to a precipitate by combination
with hydroxide tons, the usual practice used in treating heavy metal wastes. This treatment resulted
in clean water, which coujd be safely discharged, and a sludge which was hauled away f rpm the
plant in large containers by .a vendor and disposed in a landfill at some considerable expense. At
that time, the plant shipped its waste to a'specific location in Quebec, where it was formulated into a
non-leachable, stabilized matrix prior to burial. ' . -.
. The waste'etch solution contained a large quantity of hydrochloric acid, which made its
' extremely corrosive. This acid was neutralized via the addition of a hydrated lime slurry solution. All

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(99.9%) of the metals end up in the precipitate. As noted, the chemical composition of the sludge is
ferrous chloride. It also includes a residual of the chromium deposits contained in the stainless
steel, which was etched away in the chemical reaction. This metal is the component which classi-
fied the sludge as "hazardous" and added to its disposal cost.
During the second quarter of 1986, the production of 80 printband panels per day created
excessive dimands on the waste treatment plant equipment, the sludge processing equipment ' .
simply could not keep up with trie waste etchant output. As an expedient alternative, the etchant
which couWnot be processed oh site was hauled in tank trucks to outside vendors for treatment.
' About ten large'tahk trucks of such material were removed from the plant that year—again, at
, ' „ ' , ,,i', ' '",,'"',' ' . ' " ' • ' :..'' ' ' \
considerable expense. •
Environmental engineers at the Endicott plant were aware at the time that ferric chloride
solutions had a market that was readily available. At many sewage treatment plants in the region,
such a solution is injected into the treatment process as an aid to accelerate flocculatibn. They
pursued this alternative option as an attractive means of disposal. Unfortunately, the chromium
content of the solution caused ft to be unacceptable for any alternative use application.
" As noted, the above manufacturing/treatment/disposal process was utilized in 1986 and tor
at least 15 prior years. Demand projections for printbands from 1986 to 1991 showed a sharp
increase. Such an increase would normally require either:

' ' 1, Additional Sludge handling equipment to be installed at the plant's waste treatment
site; or
'2. An increaseiri off-site wastef treatment/disposal dependency. (1991'printband
production plan volumes would necessitate a 300% increase.)

In late 1986, this complex problem situation was brought to a head. A chemical outage
occurred on the ferric chloride supply system which resulted in a printband production shut-down for
several days. This shut-down occurred at a time when some critical printband orders were being
processed. This shortage served to heighten management's sensitivity to the chemical supply/
waste generation problem associated with this manufacturing process.
Management's response to the above critical situation was to immediately appoint a task

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Agent Regeneration and • • . • .
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force to directly address this problem.The task force was charged to: . . . : '
• ' • i' ''-'.-' •
-•-'"• 1. Ensure adequate virgin ferric chloride .storage capacity to prevent manufacturing
interruptions. . .
2. Increase the conservation practices of ferric chloride in the manufacturing cycle,
3. Enlist engineering-groups throughout the company to invent a process to'regener-
afe the ferric chloride solution used to manufacture printbands (in line with the
. basic IBM site strategy of waste minimization).

STRATEGIC ALTERNATIVES .
Since the volume of ferric chloride etchant was so great, antfthe waste formed in the
printband manufacturing process was so voluminous, the incentive to. investigate the various meth-
. ods of effecting ferric chloride etchant regeneration was considered to be not only justifiable, but
imperative.
' All chemicalreactions are reversible. However, the ease and cost of reversibility varies
widely, depending upon the chemicals involved. In the case of the ferric chloride etching solution, it
was recognized thafvarious methods existed which could be utilized to reverse the chemical
process and reform the iron (Fe*3) ions from the spent etchant. However, it was also clearly under-
stood that regeneration of the etchant was the- only alternative which could result in a significant
reduction in the volumes of etchantused in the manufacturing process and the waste created by .
that same process.
. Inherent in all of the regeneration processes examined up to that time was the use of
extremely reactive, hazardous, and toxic chemicals, or electrical energies which were extremely
high. Chemicals such, as chlorine gas, hydrogen peroxide, sodium chlorate, and other strong oxi-
dants were often employed. Although effective in regenerating ferric chloride etchant., personnel
safety would almost certainly be atrisk when chemicals of this nature were employed. .
Rather than place its employees in ^hazardous manufacturing environment which em-
: ployed.such strong chemicals (specifically, the three cited in.the above paragraph), IBM scientists
and engineers decided to investigate three strategic, problem-solving alternatives:

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1 Creation of an electrochemical process of regeneration via.as yet undeveloped
equipment. . '
2. The injection of ozone gas into the ferric chloride solution during the manufactur-
ing process. . .
3. The use of air oxidation as the regeneration agent.
i ' •• „ ,
A. The Electrochemical Option
This option was initiated at the behest of the Environmental Engineering Department at the
,BIyi Endicott plant. The management of Printband Manufacturing was provided an in-depth briefing
of the significant impact of their etching process on the site's waste treatment systems. In order to
show good fatth in addressing this concern, Printband Manufacturing management sponsored and
funded the electrolytic process as part of trie Endicott Technical Development (ETD)'organization's
annual budget for development projects.
A high-ranking member of the ETD organization had prior experience with an electrolytic
process, and he assigned the investigation of this option to an employee with whom he shared the
responsibility for its development. An aggressive approach was taken, which projected enormous
waste volume reductions. Progress was presented in highly technical terms at monthly develop-
ment status meetings.
In presenting the results of this option, many negative references were made to the Ozone
option—which was not being developed at the Endicott plant and, as a result, riot represented at
"these meetings. When rebuttals of arguments against the Ozone option were presented, Endicott
ETD management countered that the sort of competition presented by this (the Ozone) option was
• not beneficial to the Electrolytic option and should not be pursued.- Consequently, only viable test
results were repbrte'd at these meetings, with development project assessors being led to believe
that eve/y test was successful.

B. The Ozone Gas Option
" ' Like the Electrolytic Option, the Ozone approach to agent regeneration was sponsored by
Printband Manufacturing management. It was initiated via a paper presented at an IBM technology-
based meeting, authored by a development chemist at the East Fishkill, New York, plant. His'

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Agent Regeneration and -.'._-
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etchant regeneration system was in the process of being implemented at that location after months
of testing and approvals. Like the Endicott plant.-the Fishkill process involved a ferric etchant.
. Printband Manufacturing management only became aware of the proposed Ozone regen-
- eratton system afterthey had already authorized the Endicott Technology Development organization
to inyestigate.the Electrolytic option. ETD had already been provided the funding for its activities
and no funds were available to supportthe Ozone option development efforts without a considerable
• toss of lace." . .
The Ozone option development team at the East Fishkill location wanted very badly to sell
rts system elsewhere, and so had agreed to do the development testing at no cost to Printband
Manufacturing management. Some minimally valued equipment was made available to the Ozone
process devetopers and it was refurbished for use at that location. - ••
Infrequent trips were made to visit the Ozone project by Printband Manufacturing engineer-
ing personnel for feasibility arid review purposes. Two or three development status memorandums
were weekly transmitted to the Endicott facility. All testing and results continued to be favorable. No
unsuccessful test .results, of which there were a number, were ever reported directly to Endicott, nor
was the development chemist free to travel to that location to directly report progress and status.

C. The Air Oxidation Option
- Earty in 1987, two Printband Manufacturing engineers and an Environmental Engineering
' acquaintance began work at the Endicott facility on an idea being used in the copper etching pro-
cess areas in the plant. They investigated the injection of compressed air into the piping loop
through which the etchant was circulated during etching. This method worked with some degree of •
success with cupric,chloride etch systems, but chemical thermodynamics did not appear to favor a
simiiar promise for ferric chloride; ••'•.,
. Etchant conservation practices were immediately implemented to:

-.-'.' 1. Monitor the etchant bath thrj-put to better define bath life and ensure complete
. .-•''. bath exhaustion prior to dumping to the treatment/disposal process.
2. Modify a preliminary step in printband manufacturing called "flash etch" to de-
crease ferric chloride consumption.. ' . •

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Hazardous Waste Minimization ,
However, with a minimal investment of both time and capital, the engineers were authorized
by Prirrtband Manufacturing management to set up a pilot test system using compressed air on one
of three ferric chloride etchers in the manufacturing area. The net result of the preliminary tests for
this simple $12,000 system was a repeaiabie 17% decrease in the volume of the. etchant required in
the" etch process. Most of the components of this air oxidation system were either used, donated
from inactive systems, or fabricated on site to expedite installation.
- . These six month test results and the consequent savings were significant enough to warrant
implementation of similar systems oh two new etchers being installed at that time (at a total cost for
all etchers of less than $50,000). This investment was.readily recouped through chemical and
waste volume reductions. The return was over 130%, and the payback period was achieved in
about nine months. As a 'result, no further off-site treatment of the ferric chloride waste would be
necessary.'
Additionally, planned follow-up testing, employing oxygen enriched air and pure oxygen,
was conducted in 1988. the net result of the oxygen testing was a system which would regenerate
etchant at a rate which matched normal production requirements. Etchant regeneration could now
be carried put in a working etcher at such a rate that no fresh etchant was required to maintain the
etch rate.. The prirrtband panel conveyor could be set at a standard speed, thus reducing operator
time and expense, and simplifying the etching process.
. These tests came at a very critical moment. An equipment problem on the bulk ferric
chloride system made it impossible to pump virgin etchant from either of the two 5,000 gallon bulk
supply tanks to the etchers. This would have shut down production for several days had it not been
for the (then) pilot oxygen regeneration system in place. Manufacturing continued on an uninter-
rupted basisduring the period when this pumping failure was being corrected.
These test results, were presented to management and capital funds were made available
to enhance, and upgrade the initial air-oxidizing systems to the more effective oxygen systems.
Oxygen generators were installed and the regeneration of ferric chloride etchant was fully opera-
tional in October of. 1989, three months ahead of schedule. Further testing was being conducted on
this process at the very same time that the Ozone and Electrolytic options were still being devel-
oped. Additionally, a'patent application was filed and remains active today. .
• No toxic or hazardous chemicals were employed, no exotic, sophisticated equipment
, I' " '.". '." "''• '' • ' ' ..'.'" ' ' . ; ' ' '
/; • . ' :"" ; ' " ' • . .•.••'• ••-•'•'.•' :'-'' 10 . • .

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requiring a trained staff of maintenance personnel was necessary, and operational costs were

minimal. • .
ALTERNATIVE TECHNOLOGY COMPARISON
Technology

. Ozone
Electrolytic
Oxygen
Pros

Fast reaction
Complete regeneration
Developed at IBM
Being pilot tested
Reaction by-product is water
Process in multiple use
applications

Proven feasibility in labs
Complete regeneration
Developed at IBM
Proven feasibility
Developed at IBM
Filtration not required
Minimal labor involved
Low operating costs
Easy installation
Actual cost-$150,000
Cons

Highly reactive
Toxic as by-product
Filtration may be required
Cost estimate set at $650,000
No full-scale operating system
Labor intensive.
High electrical cost and usage
High voltage hazard '. : .
Cost estimated at $650.000 (Plus)

Stow reaction
No successful operations*
Potential for full regeneration not known*
IBM would be first application
'Situation at the initiation of the testing of this option.

THE DECISION PROCESS

The Oxygen Option was ultimately approved on economic grounds. Since it was not devel-,

' oped by the Endicott Technical Development organization, some of the ties to that unit were severed

as a result of this decision. •

The "winning" system was easily implemented by making simple hookups to replace plant

compressed air with oxygen generators. While some bugs had yet to be fully worked out of the

• system, Printbanrf Manufacturing management was satisfied with its overall effectiveness. The

. approval for purchase, installation and testing of the full system was not shared with the Ozone and

. the Electrolytic development teams at the time the "go-ahead" decision was made—ori the grounds

' that the "politics" were not right. - . " .
11

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The air oxidation option was a unique method of ferric chloride regeneration, developed and
implemented utilizing a simple combination of readily available hardware and a non-toxic gas
' • (Oxygen). The final return on investment (ROI) was over 185%, with a four month payback period.
The entire system was actually paid for in the savings associated with virgin chemical and waste
costs experienced during the engineering pilot testing periods for this project. Because of the
reduced virgin ferric chloride demand, the additional bulk holding capacity was never required.
1 . . Additionally, this system is now being installed to replace regeneration methods on other etch
systems at the Endicott plant.
... This new regeneration system requires minimal maintenance and repair activity, as well as
very infrequent operator attention. The cost savings and environmental benefits, in terms of reduced
volumes of solid, hazardous waste for landfilling, continue with every printband produced today.

CONCLUSIONS
In 1991, only 4,122 gallons of ferric chloride etchant were consumed in the printband
manufacturing process. This resulted in only 78 tons of hazardous waste sludge shipped to a
landfill. This represented a production normalized reduction of 94^2% in etchant use and a 90.8%
reduction in the hazardous waste generated by this manufacturing process. .
A total system to support the oxygen regeneration option for all printband manufacturing
etchers could be purchased and installed for less than one quarter the cost of either the ozone or
the electrochemical alternative methods still .in the development stage; The inherent risks to person-
"; ' . », , * ,„ „ ,
nel associated with those two options were thus avoided. >
It is understood that without management's commitment to continuing development efforts,
a project such as this would never have realized its full potential, it is the.never-ending quest to .
continually improve on existing processes that can sometimes lead to dramatic advancements, as
evidenced in the case presented.
Waste minimization at IBM Endicott is not a targeted activity that is done on a periodic
basis. Rather, it is the daily activity for many of the engineering and rhanufacturing personnel on
that site, and at all other IBM manufacturing facilities. New waste minimization opportunities are
identified and tracked at high levels of management. It is this constant focus that has aided IBM to
significantly reduce its waste volumes in"the past few years.
12

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National Pollution Prevention Canter
for Higher Education
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March 1993
CASE STUDY
Corporate Strategy
Operations Management
Agent Regeneration and
Hazardous Waste Minimization
Teaching Note
The IBM Corporation
Endicott, New York Facility
L Richard Oliker, School of Management,
Syracuse University
Donald Powell, IBM. Endicott
Jack Lubeft, IBM Endicott
Dennis Whittaker, IBM Endicott
INTRODUCTION
As a matter of corporate policy, the IBM Corporation is committed to the minimization of trie
environmental impact from all of its various manufacturing operations. It has hazardous waste
. reduction programs in place to:

1. Effect waste reduction at the source. ..'•".'."
, 2. Encourage recycling.
',. . 3. Develop and implement waste treatment technologies. .
Increasingly restrictive and expensive environmental regulations on the federal, state, and
•local levels call for pro-active measures on the part of the management in all industrial sectors. This
case demonstrates the innovative approach taken by engineers at IBM;s Endicott, New York facility
in creating a successful solution for a complex problem which was both operational and environmen-
tal in nature. ^ . ,
National Pollution Prevention Center, University of Michigan
: " Dana Bldfl. «30 E. Univernty,-Ann Arbor, Ml 48109-1115
• . . , ' ' . . Printed on recycled paper . • . . .

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OBJECTIVES
The primary goal of this case is to provide the basis for the assessment and comparison of
.strategic solution alternatives for a complex operational/environmental problem. These alternatives
must be analyzed; their long-term viability examined; and the decision process employed for prob-
lem resolution purposes assessed. In addition', the criteria employed in that decision process, to
select one option over the other two, should be clearly understood by students using this case.

CASE SYNOPSIS
One of the components which IBM produces at its Endicott, New York manufacturing/
research facility is printbands. These are stainless steel belts, imprinted with raised character sets
to meet specific customer requirements, which are installed in many IBM impact.printers. In raw
metal form, printband panels are etched in a bath of strong ferric chloride/hydrochloric acid solution
to remove surface impurities. The resultant che'mical reaction process annually consumed (in 1986)
almost 160,000 gallons of the ferric chloride etchant, and generated 1,890 tons of hazardous waste
sludge, along with 34,200 gallons of concentrated waste etchant which had to be trucked off site for
treatment and disposal.
The costs of the virgin etchant, treatment, and disposal were on the rise. The plant's own
waste treatment facility, at full capacity, could not treat the by-product waste of this manufacturing
process (hence, the need to truck a large portion off site). A shortage of the etchant in the refer-
enced year caused a production shut-down for two days, resulting in management's creation of a
task force which was charged with the responsibility of resolving that type of production problem and
its contributing elements as soon as possible. . • ' .
• . • Three teams of engineers began to address this operational/ environmental problem situa-
tion via three technical alternatives. All three were designed to regenerate the ferric chloride etching
agent during the manufacturing cycle, and, in addition, minimize the .hazardous waste produced by
that same production process. Electrochemical, ozone,.and air (Oxygen) regeneration options were
• investigated simultaneously. -
While each of the three possible solutions for the problem had its supporters and detractors
in an internal operating 'environment of intra-organizattonai competition; the latter alternative began
' to achieve a recognizable degree of success in its pilot test stage. It was eventually selected by'top

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Agent Regeneration ana . •
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management as ife solution. It proved its capability to almost completely regenerate the ferric
.chloride etchant, thus reducing a major hazardous waste treatment/removal problem.
No toxic chemicals were, employed, which would have increased employee risk. No sophis-
ticated equipment, calling for a trained staff of maintenance personnel, was necessary. Operational
costs were minimal; and capita! cost facilitation was far below that level expected for the implemen-
tation of the other two options.

COURSES AND LEVELS
This case is designed to be used by undergraduate students (seniors) in courses which deal
with Environmental Strategy, Policy Formulation, or Business Policy. .Students at that level should
be well able to appreciateandthoroughly analyze the position of IBM in this situation. The case can
also fit an MBA-level course by the same titles. Students on that level would normally be expected
to provide more sophisticated assessments of the firm's strategic choices and its decision process.

SUGGESTIONS FOR USING THE CASE
IBM engineers and management are faced with an immediate need to ensure both the
continuity of manufacturing cycles for printbands, and the reduction of a costly and environmentally
critical waste problem (which is a direct by-product of this production process). The two aspects of.
this problem are interdependent. If the ferric chloride etchant can be economically regenerated; i.e.,
the chemical reaction in the manufacturing process reversed; then a targe portion of the waste
treatment/disposal issue will be resolved in good order. .
The case provides an opportunity for students to analyze a business situation (stabilizing
production operations) which is complicated by its environmental impact. Classroom discussion
should focus on, but not necessarily be limited to, questions such as:

1. What controls should have been in.place to prevent the types of manufacturing
. shut-downs caused by limited ferric chloride storage capacity on site?
2. What other choices did IBM management have available to it (other than the three
' options cited)? . . • . . -
3. What were the-basic decision criteria (five or more) which could have been used

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Agent Regeneration and
Hazardous Waste Minimization
Doc #93-1
by management to compare the three strategic'alternatives chosen for exami-
nation? . • .
4. What policies/procedures could be suggested to reduce any negative overtones of
intra-firm competition in the examination of the three options chosen be man-
agement as possible solutions?
' 5. What lessons can be learned from the successful process adopted?
6 yvhat are other applications for this solution approach which might be considered
' . ' • . by both IBM management and by other firms?
1 , • ' , * i • i ' •
ANALYSIS AND EVALUATION . .
Problem identification on the part of students is not necessary. The case spells this activity
out in clear detail. The interdependency of the two basic issues should, however, receive serious
appraisal. This process should bring students to the conclusion that priorities cannot be set on
these issues; i.e., this is not a series event. Both issues must be addressed in parallel in order to
achieve a successful solution.
' During the evaluation of the three strategic options chosen by management for consider-
ation, students should-be expected to employ some combination of the following (among others)
forms of analysis: • -. •
• 1.. SWOT ' .
2. Cash-Flow ' " ,
• 3. Risk . ,
4. Cost-Benefit ' .
5. Critical Incident

Increasing the on-site storage capacity for the ferric, chloride etchant may be a reflex recom-
mendation on the part of many students. -This would indeed resolve the problem of manufacturing
process continuity. However, it is, at best, a tactical resolution for a strategic problem, and can be
considered a form of short-term sub-optimization. The cost involved with such a recommendation
may be uneconomical when related to the rising costs of.waste treatment/disposal, which are not

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                                                                         Doc #93-1
Agent Regeneration and                                                      •     .    ,
Hazardous Waste'Minimization                                            . '     .
 addressed by this proposal.    ,                                   .              "•'•-.-
        Some considerable classroom discussion should be devoted to the regulatory issues
 involved and the environmental responsibilities of any company (not just IBM). As noted, waste
 treatment and disposal are expensive and these costs are escalating.  In addition, the "treatment" of
 waste materials usually means that the waste has been made less toxic or just "safe" waste. How-
 ever, some form of waste must still be disposed of.
. •   '    The current locations for that purpose may not be as secure, from an environmental point of
 view, .as one may think. Other alternatives will have to be invented in the future.  The proactive
 approach employed by IBM may be a model for other firms to follow in the context of the pollution
 prevention emphasis of this case.                               -

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