Category Archives: Sustainability

The Wheatland Hop Was 100 Years Ago Today

And while it may sound like a new dance craze, it was actually a riot that took place during a strike on the Durst Ranch in Wheatland, California that resulted in four deaths. It was among the first major farm labour confrontations, blamed on the radical syndicalist trade union of the Industrial Workers of the World, and a * example of what an organization can expect if it tries to take advantage of poor workers in developing, and more importantly, emerging countries or, even worse, workers at home by trying to force interns and low-salaried workers to work long hours for little pay and no benefits.

As per the Wikipedia entry, in the summer of 1913, Durst advertised for temporary workers with a promise of ample work at high rates of pay for every hop picker that arrived on the farm by August 5. In this particular year, the supply of willing workers almost doubled the demand, and Durst slashed pay rates. To make matters worse, not only were workers on his farm making roughly half of what workers on other farms were making (for toiling twelve hours a day in fields that could reach 110F / 44C), but the workers were forced to live in tents on a barren hillside that they had to rent for 75c/week when they made, on average, $1.50 a day with drinking water a mile away and unspeakably unsanitary toilet conditions. And to add insult to injury, Durst retained 10% of the earnings until the end of the harvest, and only paid it out if the workers stayed until the end of the harvest.

It was only a matter of days before a temporary local chapter of the IWW was organized that demanded a better pay rate per lb of hops picked, worker supervision of measurement of the hops, provision of drinking water in the fields, improved toilet facilities, and assistants to help women and children load and unload heavy hop sacks. Durst responded that toilet conditions would be improved, water would be provided in the fields, and one worker could be allowed to witness the weighing process. The local chapter of the IWW then threatened a strike. Durst responded by calling the sheriff (who could not do anything for lack of an arrest warrant). By the end of August 2, a mass meeting for all of the workers was planned for August 3. On the 3, with a mass meeting underway, Durst went into town to gather authorities to put down the revolt. The sheriff, a number of deputies, and the district attorney was pulled into the ranch.

Upon arrival, shortly after the mass meeting had begun, the sheriff and his men tried to arrest the leader of the of the local IWW chapter, but workers intervened. In response, one of the law enforcement officials fired a shotgun into the air, which was taken as an act of aggression and which prompted a full-fledged riot and an attack on the sheriff, the deputies, and a district attorney.

Unfortunately, instead of being a warning siren for other farm and ranch owners that used migrant workers, it was only the first of other bitter strikes between California growers and farm workers that would take place over the next couple of decades.

In a nutshell, Corporate Social Responsibility is more than just good PR, it’s good business.

Ecovadis-Powered E-TASC: A Great Solution for ICT Supply Chain Sustainability

The Global e-Sustainability Initiative (GeSI) is a 36-member strategic partnership between the Information and Communication Technology (ICT) sector and organizations committed to creating and promoting technologies and practices that foster economic, environmental and social sustainability that recognizes that sustainability is a strategic issue. As a result of this recognition, GeSI has decided to do something about the situation. In partnership with EcoVadis, it recently developed and re-launched a new and greatly improved version of the Electronic Tool for Accountable Supply Chains (E-TASC). Designed to facilitate support and drive accountability in the area of human rights and other sustainability standards throughout the supply chain, the goal is that the tool will allow for a more effective and transparent management of ICT Supply Chains and allow companies to better report to their different stakeholders.

Within a month of launching, over 20 ITC companies are already fully deployed on the platform and using EcoVadis to assess suppliers and over 1000 ICT suppliers are subscribed and registered on the platform (which can be found at etasc.ecovadis.com). The platform has all the power of the core EcoVadis platform, which has been EcoVating the Globe for many years (as described in the linked SI post) plus new capabilities in the areas of collaboration and corrective action plans, multi-tier transparency, site audits, and SEC conflict mineral tracking (which is very important if you are a supplier that wants to supply to a US ICT company). In addition to the deep supplier sustainability, business practice, and environmental assessment, there is also an in-depth labour practice and human rights assessment as well as the ability to track sustainable procurement initiatives. But the biggest improvement by far is the ability to share supplier audits and associated data between participating member companies.

If every buyer does their own audit of a supplier, it not only presents a significant drain on the supplier (which will end up costing all of the buyers in the end), but diminishes the chance that any buyer will get a thorough audit. There are two reasons for this. First of all, if you are doing individual audits on every major supplier, the cost is going to add up quickly so you are going to opt for the minimal audit from the lowest cost provider. And you’ll get what you pay for. A check-the-box minimal review of operations and records. It won’t be hard for poor working conditions at a secondary factory, off the books underage labour, etc. to slip through. Secondly, if a supplier has to deal with dozens of audits, it’s going to try and rush each auditor through each audit due to limited time and resources. In this case, it’s going to have books, materials, tours, etc. prepared, stick to them, and possibly avoid areas that could be troublesome to you. But if all of the big buyers come together and commission one audit, through a platform such as E-TASC on the EcoVadis platform, they can afford to pay for a very thorough audit at a fraction of the price that is not stressful on a supplier’s resources. Every one wins, especially when the supplier can see their assessment through the platform, what corrective actions they have to take to improve it, and other recommendations for improving their standing with the industry overall. In additional, all parties can see the results of the audit against the industry standard benchmark.

It’s a great solution for the ICT industry and one every ICT buyer should check out BEFORE regulations come into play that will mandate more sustainability and traceability in their supply chain.

Make Sure Your Savings Don’t Perish With Your Perishables

A recent article over on Inbound Logistics on Cutting Costs When Shipping Perishables had some great tips on how to reduce your perishable related costs while shipping. This post will cover them, and provide some more tips for reducing perishable related costs while also increasing your sustainability.

All ten tips were good, but the following five were very good and often overlooked:

  • Know the seasonality trend in the regions you source from.
    This will allow you to adjust your shipping patterns to take advantage of excess capacity in advance.
  • Become a C-TPAT member.
    This expedites the release of your cargo, which is very, very, very important when shipping perishables. Sometimes it only takes a few extra hours on a truck on a scorching hot day to ruin a shipment.
  • Include ALL commodities to be imported on a single USDA import permit.
    Not only does this save time and money, but it minimizes the chance of a permit being lost and the entire truck held up for one item!
  • Purchase an annual bond.
    Not only does this save time and money, especially if you’d file a lot of single entry bonds otherwise, but, along with C-TPAT membership, it shows you are a serious, regular importer of these goods and not a fly-by-night operation which might exist only to smuggle drugs in the citrus boxes.
  • Do not load produce at night.
    When it’s easy for insects and other pests to get in unnoticed. Not only can a family of spiders ruin the grapes, but they might be illegal in the company you’re importing into, which would result in your truck getting stopped at the border and turned around.

Other ways to save money include:

  • Always home-source during harvest season.
    Unit prices might be higher, but shipping will be lower, and loss will be lower still as you won’t risk losing product in long shipments, which happens regularly when trucks break down and/or get held up at the border. Plus, many people will pay a slight premium for local produce.
  • Know the seasonality for key staples in every region, not just the ones you generally source from.
    This will make sure you’re always sourcing from the region with the most supply, which will help you to get you the lowest costs as you will be able to negotiate better unit prices and secure transportation in advance when prices are low.
  • Always import full trucks.
    With the current cost of fuel, shipping adds a considerable cost component, so you want to minimize it as much as possible. This may require an optimization solution as you have to figure out whether to:

    • order more of a seasonal item to fill the truck, and then make sure an appropriate special is offered by sales to insure the extra units are sold before they perish
    • rebalance out-of-season items from one locale to another – i.e. you would normally buy oranges from Argentina, but moving the order to Mexico during banana season will fill the truck
    • order more of an out-of-season item with a longer life span, keep it properly refrigerated, and increase the length between orders
  • If the perishables will be processed, re-optimize the processing network.
    If you’re going to can, freeze, or otherwise process the perishables into a less perishable product, do it as close to the source as possible, even if it means using new suppliers or investing in new manufacturing plants. These refined products, which are typically denser, and which may not even require refrigeration, will be much cheaper to ship and suffer a lesser risk of loss.
  • Have a plan to sell excess perishables once they reach their prime before they perish.
    50% off at the store is not always good enough, especially if they are marked down an hour before closing on a Tuesday night and will not be saleable tomorrow. For example, even overripe, tomatoes are still great for pastes and soups. You could have each store strike a deal with local restaurants that allow them to buy perishables at prime at a discount before they are unuseable, or, if you are socially responsible, setup a donation program with a local shelter or soup kitchen where the shelter can pick up perishing items each day before close before they perish (and take your cash with them). Done right, you could probably even get a charity tax write off (as long as the items were donated while still edible). You may consider these ideas beyond the scope of sourcing, but you shouldn’t when you consider that 1 in 7 people in the world are undernourished and almost 40% of food is wasted in North America. Fix this. You have the power.

Are You Prepared for a Transient-Advantage Economy?

In our three-part series this week on The End of Competitive Advantage, we described the reality facing many companies in industries where the concept of a sustainable competitive advantage has went the way of the dodo. We also noted that for these companies to survive, they had to learn to adapt to a new model where they competed in arenas, built up and tore down opportunity teams as the need arose, and gave up on the classical idea of persistent organizational structure. However, what we didn’t note was what it meant for you.

The last chapter of Rita Gunther McGrath’s book addressed the issue of what transient advantage means for you, personally, and it’s probably the most important chapter of the book for those of you where your working world is turning upside down.

What it means for you is that if you cannot adapt, you are vulnerable to losing not only your job, but your livelihood as your job might disappear. It happens. When was the last time you saw an elevator operator OUTSIDE of a classic-era hollywood movie? In order to help you figure out if you are vulnerable, and your level of vulnerability, the chapter presents you with 10 questions. If you answer no to any of them, you have some degree of vulnerability. If you answer no to five or more, look out – as the times they are a-changin’ for you!

If my current employer let me go, it would be relatively easy for me to find a similar role in another organization for equivalent compensation.
If the demand for your job is shrinking, then it might be the market is shrinking, or going away entirely, like the demand for physical film.

If I lost my job today, I am well prepared and know immediately what I would do next.
Even if you’re in the perfect job, are secure in that job, and have nothing to fear – disruptive innovations that eliminate entire industries pop up more often than you think.

I’ve worked in some meaningful capacity with at least five different organizations within the last two years.
This doesn’t have to be five different companies, but could be five different departments in your company. Adaptability is key.

I’ve learned a meaningful new skill that I didn’t have before in the last two years, whether it is work related or not.
The world is changing faster and faster and data is being produced at an unparalleled rate. A recent EMC study projects a nearly 45-Fold annual data growth rate by 2020. If you are not attempting to keep up, you will not keep up.

I’ve attended a course or training program within the last two years, either in person or virtually.
Training and education can expedite your learning process.

I could name, off the top of my head, at least ten people who would be good leads for new opportunities.
Networking is more than making, and poking, friends on Facebook.

I actively engage with at least two professional or personal networks.
Just like sole source is a recipe for supply chain disaster, a single focus could trap you in a dead-end network.

I have enough resources that I could take the time to retrain, work for a small salary, or volunteer in order to get access to a new opportunity.
Given the average amount of time to find a new job today, you should have a six month buffer. Just in case.

I can make income from a variety of activities, not just my salary.
If salaries are going away, you better have other options.

I am able to relocate or travel to find new opportunities.
You may not have to relocate permanently, but it’s a dynamic, shifting world, migrating to not just cities, but mega regions. As Richard Florida noted in Who’s Your City, talent, innovation, and creativity — are not distributed evenly across the global economy. They concentrate in specific locations. You may need to be there, at least for a time.

Now, if you answered yes to all ten (10) of these, and you aren’t already working in Supply Management – you should be, as this fits the profile of a go-getter up-and-coming Supply Management Professional. Source on!

Can Trucking Clean Up Its Act?

A recent article over on Inbound Logistics on Going Green to Save Green (which you all know is true after reading SI for years) had a scary statistic: freight trucks are on pace to increase their carbon emissions by 40 percent over the coming decades, according to the Department of Energy’s Annual Energy Outlook. Ouch!

With strict new fuel economy standards for passenger vehicles, which were never the big emission culprit in the first place (they just took the blame for all the pollution caused by ocean shipping, which contributes approximately 3,500* times the pollution produced by all personal automobiles on the planet, and ground transport), this means that trucks are going to become the biggest producer of road sector emissions. The logistics sector constitutes about 6% of the total man-made GHG emissions, with transport as a whole constituting about 12%. This says that the personal automobile, which is 50% to 60% of road sector emissions, depending on the source, accounts for less than 2% of total CO2 and GHG emissions as road transport is only about 25% of logistics emissions (with the rest coming from rail, aviation, and ocean shipping) and that trucking will soon account for more than 2% of total CO2 and GHG emissions.

This does not bode well for the trucking industry which is already hard hit with an impending driver shortage of 240,000, a 100%+ annual turnover, and onerous regulations. With the growing desire of the Millennials (Generation Y) to only work for companies that are socially responsible, this is going to make it even harder to recruit young drivers (which is a must! How long do you think an industry with an average new graduate age of 54 can last without fresh blood?)

So what can it do? While hybrid is an option for smaller trucks, such as UPS and Fedex parcel delivery trucks, it’s not a great option for 18 wheelers (which have to roll on, and will have to continue to do so even after America rediscovers rail). The first thing the trucking industry needs to do is switchover to clean diesel (ULSD) vehicles as fast as possible. Not only is it 97% cleaner than regular diesel, but a well-designed diesel engine can be 40% more efficient than a gasoline engine.

The next thing it needs to do is switch to lightweight pallets and containers. For example, as illustrated in the Inbound Logistics article, a heavy-duty plastic container has only one third the weight of a steel container, and is just as effective. Lower shipment weight translates into a lower fuel requirement which translates into lower emissions.

The third, and most important, thing it needs to do is eliminate empty miles. An empty trailer can weigh as much as 7.5 tons / 15,000 lbs, which is almost 20% of the maximum allowed weight of 40 tons on most US highways. This says that if a truck has to return to its origin point empty, it’s using 120% of the fuel requirement. So how does it do this? First of all, it only works with buyers who recycle containers and pallets so that at least one trip out of every X is full just with reusable containers and pallets. Secondly, it balances its routes by way of the right mix of contract and spot-market deliveries. As hinted at in our recent post on BuyTruckLoad.com which noted that you could expect to pay an average of 15% less on the spot market, an optimization-powered spot-market hub which analyzes a buyer’s need against all of the “empty miles” of all carriers in the area can help a carrier identify the right customers to insure that it’s trucks stay full.

And while trucking may not be able to keep pace with the passenger automobile, if it does these three things, it will be pretty close. Clean diesel has at most half the sulfur content of gasoline (which has to average 30 ppm from any single manufacturer, compared to 15 ppm for clean diesel), diesel engines will be (on average) one third more efficient, lighter weight packaging has the potential to reduce emissions by one sixth, and eliminating empty miles by 80%+ (which spot-market hubs have have the potential to do) will reduce GHGs by another one-sixth. Put this altogether and the GHG emissions from clean diesel engines, which are already twice as clean as gasoline engines, can be effectively reduced by about another five sixths, or 83%. In other words, a 40% GHG reduction is within reach, and close to the mandated 45% reduction from the federal vehicle standards which mandate a fuel economy increase of new passenger vehicles from approximately 30 mpg in 2011 to 54.5 mpg in 2025.

So, if it wants to, Trucking can clean up its act. The question is, will it?

* As per this historical post on SI, 15 of the world’s biggest cargo ships emit more pollution than the roughly 750 Million cars in operation around the globe. The world fleet in 2011 was 104,304 ships. Some are Post-Panamax and emit more pollution than 50 million cars, some are much smaller. Given the average size, the factor of 3,500 is a good approximation.