Daily Archives: January 24, 2008

Sustainability: The Bridge

Alan Buxton of Where Next threw another post into the sustainability debate, reminding that auctions are only sustainable if used properly. Done wrong, they can force suppliers to lower their prices to such a degree that they risk being driven out of business (bad for economic stability) and incentivize suppliers to cut corners in order to deliver at such low prices (bad for social and environmental sustainability). However, as has been alluded to in the wiki-paper, reverse auctions can be used sustainably. As Alan points out, the key is to weight the different suppliers so they are competing on a genuinely level playing field and to be prepared to award the contract to a supplier who provides best overall value for money rather than simply best price.

Jon Miller of Gemba Panta Rei asks what we can learn from Boeing’s lean supply chain stumbles. Was it poor planning, poor execution, or a combination of both? Regardless, any plan that does not consider risks and allow for contingencies is not a good plan. Jon also gives us three concrete actions to a better lean supply chain strategy. Develop a mindset of mutual trust and responsibility, organize your SPTT (Supplier Parts Tracking Team), and practice the skill of genchi genbutsu (where you go on-site and be hands-on with the supplier’s team) as a way of life, even in the best of times.

Over on SCM Pulse, Rink Ankrum points out that the Carbon Disclosure Project (CDP), a collaboration of over 315 institutional investors (including Goldman Sachs, Merrill Lynch, Allianz and HSBC) with assets under management of more than $41 Trillion (with a T), is now working with some of the world’s largest companies to help them assess greenhouse gas emissions throughout their supply chain. Furthermore, the CDP SCLC (Supply Chain Leadership Collaboration) now has members that include Dell, HP, PepsiCo, P&G, Nestle, and Unilever. It’s certainly nice to see more heavyweights enter the ring.

Some Thoughts on Sustainability

Today I’d like to welcome Paul Martyn of Track Management Group with his thoughts on the sustainability debate.

Friedrich Nietzsche loves sustainability.

I feel safe in saying this because sustainability is inline with Nietzsche’s philosophy of perspectivism. Not to bore you to death, but, according to Wikipedia, the basic idea of perspectivism “is that there are many possible conceptual schemes, or perspectives which determine any possible judgment of truth or value that we may make; this implies that no way of seeing the world is more correct” – much like today’s sustainability discussion, there are many ‘sustainability’ perspectives/schemes, however, in the absence of an absolute ‘standard’ (i.e. Kyoto) there is no way to say which perspective/scheme is more correct – this is where, I believe, the sustainability debate is today …

So, why all the philosophy talk?

Sustainability is enormous in scale and suffers a shortage of predictability – a philosophical approach to sustainability looks at logical tradeoffs, often, in contrast to empirical methods. As a math problem ‘sustainability’ is impossible to solve, so we must develop ‘common sense’ methods for evaluating our decision making at policy, corporate and individual levels. Philosophy has, by definition, helped us look at how we should live when confronted with an uncertain end. Sustainability is more a question of how we should live rather than a question of right/wrong. Philosophy is well suited to address the questions posed by sustainability.

Economically speaking, modern sustainability is based on the premise the current system is going to break and systematic changes need to be made to maintain a ‘set’ level of supply and service, indefinitely. It’s the ‘indefinitely’ part that makes sustainability a tricky problem to approach with a strictly mathematical approach. Given the system’s unpredictability, empirical methods are, often, less effective than common sense or a ‘sustainable’ philosophy. Not to mention the troubles that arise when trying to maintain ‘fixed’ levels of supply and service indefinitely – talk about a planning conundrum.

As Nietzsche said ‘A man without a plan is not a man’.

Sustainability must become a process or commitment to get better rather than a destination in and of itself. A sustainable plan needs to make sense in a broad and inclusive context and make more sense than just what’s best for the US or what’s ‘most profitable’ or ‘least expensive’, etc.

There are many perspectives to view sustainability and one near and dear to our hearts is ‘purchasing’; in a purchasing sense, sustainability includes a focus on responsibly evaluating the environmental, economic and social impact of your actions. Sustainable purchasing looks to put cost and quality in a context that includes looking at the environmental impact, supply levels, efficiency, consumption, labor and other, yet gathered, perspectives. A sustainable purchasing ‘common sense’ includes evaluating the environmental, economic and social impact of purchasing decisions.

At the end of the day, the value of debate is to regularly question our beliefs/definitions of living in a sustainable world and then act in a manner, across all of our roles (husband, father, consumer, professional, etc) consistent with our beliefs.

Kudos to Michael – this cross-blog series is an excellent example of gathering perspectives to define sustainability. I look forward to reading lots of other perspectives on sustainability and to keeping the dialogue lively in 2008.

Lastly, a little humor to lighten up this post:

“Heating bills this winter are the highest they’ve been in five years, but President Bush has a plan to combat rising bills. It’s called global warming.” — Jay Leno