RICOH INDIA

(Group Activity 2)

By: Group 1 (Section A)

Aditya Kompella (H18005)
Garima Maheshwari (H18018)
Jay Hulani (H18021)
Subham Agarwala (H18056)
Varun Malik (H18059)
Vivek Shukla (H18061)
Structure

Ricoh India

Large Printers Production Printing Visual

Communication

HP,Epson,Canon Konica Minolta Epson, Benq, Sony and

have a total market Controls a large many others have a
share of 73.1% market share high market share

Available Options
Individual
Collective System
Responsibility

HP,Epson,Canon Epson, Benq, Sony and

have a total market many others have a
share of 73.1% high market share

Individual system
Ricoh is known for its sustainability initiatives throughout the markets it is present in and has
been rewarded as one of the most ethical and sustainability oriented company in the world.
Similar on these lines, Ricoh India Pvt Ltd. is designed towards using the recollected devices and
use the recyclable materials from it. Since 40% of Ricoh India's business is based on rent & lease
model of MFDs, it makes sense to capitalize on the existing opportunities to meet the short term
goals of 30% collection rate.

The recollected and recycled material can also be utilized to bring down the operational costs in
future transactions.

To take advantage of existing system would require a lot of effort as the current condition is
abysmal, considering that there is no account of close to 5000 MFDs rented out to customers and
huge number of customer complaints regarding non collection of devices from their premises
even after multiple requests and complaints. Thus, the existing system has to be revamped to
make it robust regarding the collection of devices for short term achievement of goals I. e. 30%
collection rate. Presently, the sales force is not picking up the used devices from the customer
locations under the garb of zero transparency of the workflow of items collection. Once the
system is made more transparent, it will automatically result in collection of used devices by
sales force, which can further be refurbished to drive down the cost. Such transparency of
process can be brought in by deploying proper tracking of the rented device. Additionally, some
incentive can be given to sales people for the backflow collection of devices, which can also be
made a part of their performance appraisal. Such revamping will not only improve collection but
is also aligned with the processes around which the renting model is designed. Thus the overall
efficiency of the system is also set to increase.

However, going solo would be inefficient when collection is attempted via the conventional
dealership network. Presently the flow of goods through the channel is unidirectional. Setting up
a channel that runs from the end consumer to the company would incur high cost and will require
the dealer network to be a part of such a channel. Even if the channel is set up, the end users and
the dealers have to be greatly incentivized to facilitate the flow of devices backwards.

Collective System
Different Players

An attempt to work with multiple companies will bring in a lot of variability in the system.
Setting up a streamlined and standardized process would thus become difficult. Different
organizations will have different customer segments with varied level of penetration in those
segments. While Richo India is a B2B company, other players might be B2C, making the points
of collection lot more fragmented. Similarly the distribution channel will be different for
different companies increasing the complexity of the collection model. Considering the different
size and market share of the organizations, cost attribution would have to be negotiated. Also, in
a joint effort extra measures have to be taken to track individual company’s collection rate.

Such a partnership would involve high transactional cost and will be very time consuming.
Communications with multiple companies will have to be made via official channels and would
involve a lot of legal work. Considering that the partnering firms will essentially be competitors
in the market, they might not agree to come on board at the very first place.

PROs

Collaborating with the PROs in the rental model will not be very productive considering the fact
that the company already has a channel dedicated to collection of machines. Moreover, if the
responsibility of collecting machines after the expiry of the contract cannot be left to the PROs,
as the machines need to be separated whether the machines can be reused with or without repair
and if they could be given for remanufacture. Only the machines with no further use can be sent
for recycling.

However, considering that the distribution channel, which involves dealers, has no backflow of
used devices, collaboration with the PROs would make more sense. Since the machines are sold
(and not rented) via this channel, it also makes strategic sense to dispose of the devices from the
point of consumption and not bring them back to the company. The PROs can use their
established network to facilitate the collection. Since the Richo is a B2B player, the points of
collection will not be fragmented. Deployment of such a network will eliminate the costs of
establishing a backward channel for collection. It will also eliminate the need for making the
dealers a part of the collection channel and hence do away with the need of incentivizing them in
any way.

Collective System Factors Individual System

Ricoh India can leverage the
manufacturing facilities of the
partner firms to handle the E-
waste or to even use re-
manufacturing strategy
Cannot be favourable as the
return value of the parts will
be high and the company
would want to utilise it.
Can be favourable as the parts
are don’t have much value at
the end of their life. And the
volumes are high to
collaborate with large players.
Ricoh will not have to
substantially invest in the
developing the capabilities
Will be done in collaboration
Less collaboration with
internal functions
Less accountability on Ricoh
Will help utilising partner’s
resources to re-manufacture
or reuse the waste
Will have less impact as all the
products of the partners will
be treated as same.
Manufacturing Facility
available in india
Production Printers
High Cost low Volume
Large Printers
High Volume low cost
Current recovery networks
Setting up of new systems
Collaboration within Functions
Accountability
Re-Manufacturing or Selling
how to dispose or utilise the
E-waste
Should products be re-
designed in a way to make
them highly renewable?
For Ricoh india it would hard
to source all the materials to
the single manufacturing
facility it has
Production have high costs
associated with them, the
volumes of Production printers
going out of service would be
less.
Large Printers, would be going
out of service on a higher rate.
Ricoh will have to deploy them
in new channels.
Will be developed on own.
More collaboration with
internal functions
More accountability on Ricoh
India
Will be have to be developed
independently.
Can be beneficial as it will help
them implement their systems
for managing the E-waste
Recommendation
What we recommend is that Richo India should revamp its rental model channel. This can be
done by putting proper tracking systems in places that will keep track of the entire journey of the
machines- deployment, returning back, repairing, releasing, remanufacturing and recycling. Such
a tracking system will increase the efficiency of the entire rental model. As far as the short-term
goal of 30% collection is considered the company can meet it via the rental network which forms
about 40% of the total sales.

In the long term, Richo India must establish collaboration with PROs. These PROs can be used
to enhance the collection rate to the desired 70%. The PROs can reach out to the end users, and
provide an economical way of disposing of the e-waste. The information of the end users can be
received from the dealers and be thus used for collection.

[2] Important Stakeholders:

Short Term:

1) Sales force : Since sales people have the additional responsibility to collect used devices
(given on rental/ lease basis) from customers/clients after the expiry of the contract, they
will play an integral role in meeting the collection target of 30%+ from year 2016
onwards.
2) Management has a crucial role to play in enforcing the rules and regulations to make
sure that MFDs after their rented/ leased date are collected back by the salespeople and it
would do a proper monitoring of the actions of the salesforce.

Long Term:

1) PRO: An appropriate PRO suitable to the needs of Ricoh will be selected which will be
responsible for collecting the used MFD and other devices from customers/client sites
and deposit them to the recyclers. A competent PRO having spread out operations will be
preferred.
2) Dealers: 60% of all the business takes place through this distribution network. Dealers
provide the real time data regarding the sales so that a detailed map of activities can be
created to forecast the life cycle of device to make sure that customers are contacted at
the right time before they can dispose of the devices.
3) Customers/ Clients: Customers will play a very important role in the given scheme of
things as this business operates on a B2B model, thus the quantity of devices that can be
obtained from them would be sufficient. Right value of the used products has to be
proposed to them so that they sell/ give away their devices to the contracted PRO.