Category Archives: Sustainability

Is Your Supply Chain About To Get A Lot Leaner?

We already knew that food prices are rising considerably across the board. They’ve risen so much (29% in the past year) that the World Bank estimates that 44 Million people have been forced into poverty since last June as a result.

If this isn’t enough, thanks to the skyrocketing price of cotton (which has more than doubled in the past year, hitting all time highs), “clothing prices are set to rise 10% this spring” (BlazeMedia). Considering that the average household spends about 15% of their budget on food and 5% on clothing, which are not discretionary expenses, the average household is now looking at a total increase in their non-discretionary food and clothing expenses of 5%. Given that, after housing, food, clothing, transportation, health care, insurance, and debt payments, the average household had less than 15% of their funds for discretionary expenditures, this says that the average household now has less than 10% of their funds for discretionary expenditures. That’s a 33% reduction in discretionary funds in less than a year!

This says that any company that provides a discretionary product or service to an average consumer is now fighting over a market-share that might have shrunk by a 1/3rd. Someone is going to lose and someone’s market share is going to get smaller. This means that a number of supply chains are going to have to get a lot leaner this year for those companies to survive. Is yours ready?

Sustainable Transportation, It’s Harder Than You Think

Material Management & Distribution recently published an article that asked if “your international shipments [could] be more sustainable”. It’s a good question since not all modes of transportation are equally damaging to the environment, but the issue, as the article attempts to point out, is not as simple as carrier selection. Consider the following factors put forth:

  • ocean vs air freight
    while air shipments can emit up to 35 times more carbon than ocean container shipments, let’s not forget that a single giant container ship can emit the same amount of cancer and asthma-causing chemicals as 50 million cars and that the ocean shipping industry is responsible for 6,000 times the emissions of every single automobile on the planet — many of the older container ships in operation are the dirtiest modes of transportation on the planet
  • container size
    bigger is better if the port and the trucks can handle it, but you have to service the lowest common denominator in the supply chain
  • fuels and fuel treatments
    biodiesel blends are better, provided the equipment is built for the blends and the blends deliver sufficient octane; otherwise, the savings are minimal if the switch doubles the amount of fuel that is required
  • speed
    slower-moving vessels will consume less fuel if they are moving in the range of optimum performance; too slow will just increase fuel requirements
  • “electric” ships
    a ship that plugs into a grid only reduces its carbon and GHG footprint if the grid’s primary energy source is cleaner than the ship; if it happens to be a brand-new ship that uses low-sulfer fuel, catalytic converters, and particle traps and the grid’s primary power source is a dirty coal plant, plugging in isn’t that much greener
  • trains vs trucks
    trains are better than trucks, but the carbon savings only kick in if you use less trains than you would need trucks; if the dock is a primary distribution point and load sizes are small, it might be better to send a truck or two to five geographically dispersed DCs then to load one train with five cars that have to split off to five different trains at the closest yard
  • gate and container yard operations
    trucker friendly is good, but the whole operation needs to be efficient
  • efficiency of inbound routes
    optimization is key
  • location of production
    choosing the right location (even overseas, if it’s close to a port) has a significant impact on overall carbon production

Sustainable transportation is important, especially with impending energy and carbon costs, but getting there won’t be as easy as selecting the right carrier. A detailed analysis of the end-to-end distribution chain will be required.

America and India Respond to Rising Food Prices

America: Let’s introduce S. 510, a bill so poorly designed that not only will it fail to increase food safety (as the FDA doesn’t have the budget to properly enforce it), but it will increase food prices even further as most small food producers, farmer’s markets, and organic growers in particular will not be able to afford to comply and go out of business (which decreases the food supply and increase prices).

India: Let’s open vegetable sales counters (IndiaEveryday.in) in an effort to make sure our own people can afford to eat despite the spiralling prices of essential commodities and vegetables (as it’s unconscionable that our own people can’t afford onions).

What response do you think is better?

Do We Really Need S. 510?

If I understand correctly, the whole point of S. 510, which was way over the top as it was so broad as to be simultaneously unenforceable and the end of the farmers’ market, was to increase food safety. While a bill that will allow for the inspection of any purveyor of food, ranging from a farm corp beast like Perdue to your Aunt Maye who sells blackberry jam at the town fair (“The Most Dangerous Bill in the History of America”) might increase food safety, it’s not the only way.

What if a consumer could tell if food was safe just by looking at the packaging? Far fetched? Not at all. When food spoils (which is often the result of oxygen mixing with bacteria which creates mold), it gives off particular gasses. If these gasses are trapped, they can be tested. And if the test is in the packaging, then, just like a battery energy level indicator, the packaging could be used to determine whether or not the food is still good.

And such technology is currently being developed at Strathclyde University where researchers are working on indicators made from intelligent plastics that change colour when food starts to spoil. As per this recent article on Smart Wrapping over on BBC News, the researchers expect that their intelligent plastics, that can be used in modified atmospheric packaging, will be commercially viable in the near future. Wouldn’t this be a better option?

Improving the State of Sustainable Procurement Reporting

A few weeks ago we reviewed the state of sustainable procurement reporting and found that it still wasn’t very good. Over half of American companies are not effective at communicating their goals and structuring their policies, only half have sustainability targets, only 1 in 10 have a sustainable procurement team, and only 1 in 20 train their suppliers to be sustainable. All in all, it’s just not good.

So what needs to be done? There are a lot of proposals on the table, including this recent article on “graduating to the next level of sustainability” (in Industry Week), but the reality is that it’s not that complicated, at least in the beginning. It really boils down to these four steps:

  1. Put a Team in Place
    The first thing you have to do is assemble a team with responsibility and authority. Sustainability has to be part of their job duties and their bonus structure partially dependent on the results. Furthermore, at least one team member needs to be a C-suite executive with the authority to actually take action. If all the team can do is make recommendations, nothing will ever happen.
  2. Benchmark Current Performance
    If the current state of affairs is not understood, there will be no way to define or measure progress. The team has to start by defining some basic benchmarks and measuring against them. The team should not spend too much time on benchmark selection, as it’s pretty much impossible to get it 100% right the first time, but on selecting the most common benchmarks and measuring against them. As the understanding of the current, and desired, situation improves, the benchmarks can be modified to be more in tune with company operations.
  3. Define a Vision with Measurable Targets
    Once the current state of affairs is understood, the next step is to define the corporate sustainability vision and to translate it into specific, measurable, short-term and long-term targets. ‘Reduce waste’ is good, but ‘reduce waste by 20% over the current level of 1 Million tons within 24 months’ is better.
  4. Continually Measure Progress and Adjust Performance
    Progress must be measured at least quarterly and operational processes adjusted, or targets revised, if desired performance isn’t being achieved.

That’s it in a blog-shell. It will be a lot of work, but it’s not a difficult task to embark upon a sustainability effort.