Daily Archives: January 23, 2008

Sustainability 2008: Quick to the Draw

Another day, and another set of posts on sustainability for you to dive into!

Randy Littleson wrote about sustainability and the impact on supply chain responsiveness over on the Kinaxis Response Management blog. Randy notes that there are substantial regulatory requirements out there today and that this creates substantial challenges for supply chain professionals, especially since requirements differ across geographies. This means that if demand increases in one market, you can’t necessarily divert product from another market to meet it. However, if you take a global view on sustainability and drive it consistently across geographies to the greatest extent possible, you can get ahead of the curve and gain an advantage in your supply chain.

Alan Buxton contributed to the sustainability argument on Where Next by point out that there are two sides to every story. By contrasting two stories on Tata from The Economist and Private Eye, he pointed out that while firms like Tata are particularly active in providing basic services, such as schools and healthcare, for local communities, the selection of the site they chose for their factory tells a different story. The 997-acre site produced three crops a year and provided a decent living to more than 20,000 people. But when Tata picked it for its new plant in 2006 … the chief minister of West Bengal … announced that the land was to be forcibly acquired. Then there’s the tribals of Bastar in Chhatisgarh, fighting to prevent their ancestral lands being torn up for a Tata iron ore mine; and relatives of 13 tribal people shot dead by police at Kalinganagar in Orissa in January 2006, a village earmarked for a Tata steel plant. Where does CSR stop and sustainability start? How do you trade one for the other? When are you actually doing more harm than good? All important questions. Maybe Eric Hiller of Cost Cents will do a post on the True Economic Cost of sustainability!

Christopher Sciacca put reduced packaging into a bigger supply chain perspective over on Who Said Supply Chains Are Boring?. Christopher points out that the packaging volume for the new MacBook Air laptop has been reduced by 50% over the precious MacBook. Not only does this reduce waste, but the smaller and lighter boxes allow more product to fit on the same plane or truck. This means less trucks on the road, which means less fuel consumption, which means less CO2 emissions. Given the number of units Apple is likely to sell, this is significant.

And the next guest post goes up tomorrow morning!

Promoting Sustainability Throughout Your Ecosystem

Today I’m welcoming Jason Rushin of Nextance who is focussing on the importance of sustainability throughout the ecosystem.

What is sustainability? As the doctor mentioned in the kickoff post for this series, there are many definitions. But, I like the UN’s view that it is the intersection of social, environmental, and economic concerns. To truly sustain your business, your surroundings, and yourself, you have to take all three of these aspects into consideration.

If moving to more energy-efficiency requires you to cut costs in other areas, like workforce reductions, is that truly sustainable? Does a decrease in carbon emissions offset an increase in unemployment? Or, in reverse, would an increase in carbon emissions be OK if it came with a decrease in unemployment? How you define sustainability – social, environmental, and economic factors – is very relevant to how you achieve sustainability. But, how far you extend your vision of sustainability means even more.

Are you truly working towards your definition of sustainability if you are doing so with an inward-only focus? Sure, that’s the best place to start, but to be truly sustainable, you need to promote that vision throughout your ecosystem of employees, suppliers, partners, and customers.

Internally, responsible business practices are becoming more and more important to maintaining a progressive, diverse workforce, and enhancing and growing a business. Look at Google and how they offer free shuttles to employees to cut down on commuters, $5,000 rebates to employees who purchase hybrid cars, and their “solar panel project”, designed to reduce their use of carbon-generated electricity. These items are all cultural components of Google’s business, and are reflected in the way that they treat their employees, customers, and partners. It permeates their workforce and it expands their vision of sustainability into everything those employees do in their jobs.

Looking externally, your first thought might be on the supplier side, forcing (or incenting) suppliers to invoke more sustainable practices. But, that can have the effect of just moving the “bad” part of the supply chain farther away from your business. Sure, it makes for a great sound bite to say that you and your tier one suppliers are on a sustainability kick. But, if that just means production of hazardous materials is moved from Pennsylvania to China, did you really accomplish anything?

A recent article on Dell touted their support of the “Carbon Disclosure Project”, which standardizes the measurement of carbon emissions. This not only makes it easier for suppliers to comply with requests for carbon emission rates, it allows a baseline measurement system to reduce (or just maintain) carbon emissions going forward. Even Wal-Mart has an ambitious greening” program, and their first step was to identify metrics. To quote Peter Drucker, “What gets measured gets managed.”

The point here is again that you need to focus on your entire ecosystem as a whole. Working with suppliers to identify areas of concern and plans for improvement is the key. It is not sustainable to pass the carbon (or social or economic) buck down the supply chain.

Granted, a large corporation has a high level of influence with suppliers, especially the Dells and Wal-Marts of the world. But, what about their customers? Obviously, given the proliferation of green ad content these days, consumers are responding to a “greener” message from their favorite brands.

Apple announced responsible business practices to increase the cachet of their brand and their products. Not that Apple needs any help increasing their coolness factor, but they are progressive enough to know that sustainability matters to their customers. A few years ago, the iPod came in a package nearly the size of a shoe box. Now, they are in a tiny box barely bigger than the iPods themselves – a reduction in packaging of 69%. Apple even made note of reductions in harmful chemicals in their just-released MacBook Air laptop. It may not increase sales, but it surely helps maintain their lead as the most desirable tech brand out there.

A green message is easy, but it is difficult to actually influence the actions on the customer side of your ecosystem. Do Apple’s actions actually get customers to change their behavior? A truly sustainable organization needs to be more proactive on the customer side.

Companies that simplify a sustainable process, like Hewlett-Packard with their ink and toner cartridge return programs, are promoting sustainability beyond their walls and into their customer’s homes and offices. HP makes it easy for their customers to recycle by giving them a pre-printed, postage-paid return label and easy-to-understand instructions right on the box. It’s just as easy to recycle the cartridge as it is to throw it away.

These are all great examples of how companies are successfully promoting sustainability – however it’s defined – throughout their ecosystems. Looking inward is the first step, but then turning that view around and helping your suppliers and customers to do the same is the only way to become truly sustainable.

Even on a personal level, each of us has our own ecosystem, and our every-day choices impact that ecosystem. For the most part, I have the naive belief that when it comes to sustainability, most people want to do the right thing. I guess that’s the ultimate definition of sustainability: everyone doing the right thing, whether in their homes or at their jobs.