Category Archives: Sustainability

It Looks Like We Can Sustain The Global Food Supply Chain, But

we may not be able to afford it!

Last year, when we asked if we [can] sustain the global food supply chain, we noted that global food reserves reached fifty, if not one hundred, year lows and that global shipping is currently responsible for 4.0% of all global climate change emissions due to an utter lack of regulatory requirements compared to the automative and trucking industries. This was pretty scary since it doesn’t take many natural disasters to wipe out a state’s (or country’s) crops.

According to this recent article in The Telegraph, global food prices have surpassed 2008 highs when shortages led to riots in a number of countries. Up for the sixth month in a row, primarily due to soaring sugar prices (which reached 398.4 points in December) and rises in cereals (which reached 237.6 points) and oil (which reached 263.0 points), the FAO Food Price Index was the highest since records began in 1990, reaching 214.7 points, topping the previous high of 213.5 in June 2008.

This does not bode well for the burgeoning poor, who have been out of work since the recession began in 2008.

Remember: Cheap Gas Comes At The Expense of the Environment … And Your Supply Chain

I was pleased to see this recent article in Fortune on why gas costs more — and is more profitable — out West because it hammers home three points.

  1. Gas prices are not uniform across North America, and, thus, it’s not all about the price of oil.
  2. If gas is cheaper, it’s not just because transportation costs or taxes are less, it’s because it’s dirty.

And as badly as we may want cheap gas, we should want clean air more. We need agreement on a Kyoto protocol that will mandate consistent EPA requirements across North America. Not only will our lungs thank us, but so will our CFOs — because, then, for once, we’ll have consistent fuel prices across the board and planning will be easier, and cheaper. We will be able to locate DCs at a point that minimizes the total distance across all lanes, because we won’t have to account for fluctuations in fuel prices due to local EPA laws.

Right now, because of so many fuel price variations above and beyond carrier rate variations, an average company requires the most advanced and expensive optimization solution on the market to even attempt to optimize a distribution network. This advanced software is still well beyond the budgets of smaller mid-sized companies. But if the model simplifies, the software requirements for basic network analysis decrease, and lower-cost solutions become sufficient — solutions that are within the budget of the average mid-sized company. And now its clear why cheap gas not only damages the environment, but your supply chain.

S. 510 Is Days Away From Becoming Law – Is This The End Of The Farmers Market?

I must admit that I have been a little remiss where S510 is concerned. I thought it was just another bill designed to improve labelling and traceability through the supply chain and that its net effect, if passed, would be to simply increase costs for any growers and manufacturers who didn’t already have modern systems in place to document and track every step of the agriculture-based supply chain — from farmer’s field to store shelf.

(I know that most manufacturers don’t have these systems in place, but since the technology has existed for quite some time now, I don’t have a lot of sympathy for them. Given the US crackdown on everything import, export, and supply chain related over the last few years with the threats of terrorism and all the tainted food scandals, there’s no way a food and beverage manufacturer could not claim that they did not know it was coming eventually. Plus, there are quite a number of low-cost SaaS and open-source systems out there that can do the job for a fraction of what a good ERP/MRP would have cost ten years ago when the costs were truly prohibitive.)

However, after reading this recent piece by Sam Osborn over the VBS.TV blog, I’m a little worried. Sam is calling it “The Most Dangerous Bill In The History of America”, and if he’s right, he’s not far off.

According to the post, the basics of the bill grant the FDA supreme authority over every seed that will eventually grow into an American food-stuff and the supremacy of this power stretches to the inspection of growing, harvesting, sorting, and storage operations, minimum standards related to fertilizer use nutrients, hygiene, packaging, temperature controls, animal encroachment, etc. And the bill calls 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. This would literally put farmer’s markets and most organic food producers out of business.

And it gets worse, according to Dr. Shiv Chopra, S.510 would preclude the public’s right to grow, own, trade, transport, share, feed and eat each and every food that nature makes. It will be unconstitutional and contrary to natural law. (Source: The World Prophecy)

And the bill, dubbed the Food Safety Act, passed the House of Representatives on December 21 with a 215-144 vote. All that’s left is for President Obama to sign it into law. Is this the end of the organic supply chain?

The State of Sustainable Procurement Reporting

ORSE (Observatoire sur la Responsabilite Societale des Entreprises) just released a detailed 36-page study on “Sustainable Procurement Reporting”, sponsored by Ecovadis, that aimed to identify the major trends in terms of Sustainable Procurement Policies. Many of the observations were not unexpected given the recent uptake in sustainability in the corporate world, but a few of the findings were disturbing.

First of all, the finding that European companies are twice as effective at communicating their sustainability goals and structuring their policies (75% of European companies are at an ‘advanced’ level compared to only 40% of American companies) is bothersome. Why is Europe so far ahead of us?

Secondly, despite the fact that 95% of companies mention Sustainable Procurement in their Sustainable Development reports, only 51% of companies have quantitative Sustainable Procurement targets. Without goals, it’s all just a bunch of hot air.

Thirdly, even though two thirds of North American companies (and almost nine tenths of European companies) analyze supplier performance, in some sectors, less than half of the companies assess the CSR performance of their suppliers. Why is performance so inconsistent across industries?

Fourth, only 13% of companies have a sustainable procurement team. While dedicated full time staff are not required, there should be a dedicated team of employees who have sustainable policy development, implementation, and (supplier) training as part of their job.

Fifth, on average, only 6% of companies train their suppliers to be sustainable. In order for sustainable practices to take root, they need to spread. In order for them to spread, they need to be taught.

In other words, the state of sustainable procurement reporting is improving, but there is still a long way to go. For more details, check out the detailed 36-page study on Sustainable Procurement Reporting.

To Survive in Electronics Manufacturing, You Need to Start 3R Design Now

The 2nd generation iPads are about to hit the shelves. The Android pads are coming. Blackberry’s PlayBook is almost here. And everyone and his dog are buying smartphones these days. This sounds great until you realize that this means that lots of people are going to be discarding their old phones and netbooks, of which only 10% are recycled each year (according to the EPA, as discussed in this Brighthand article that asks “why cell phone recycling rates [are] so low”).

And to make matters worse, lifecycles for these types of consumer electronics are growing shorter every month. People used to keep their phones for years. The current life-span is now estimated by most analysts to be between 18 and 24 months and some people are trading their phones in every year. When you consider that the average person now owns one or more computers, laptops, cell-phones, portable media players, GPS systems, etc., and that some estimates place the number of electronic devices per consumer as high as 10, you see a dangerous situation emerging. Adding the numbers up, we see that it won’t be long before there are 3 Billion consumer electronic devices being disposed of each year, with only 300 Million being recycled if current trends continue.

We’re at the point where we have to go beyond the standard reduce, reuse, recycle mantra that has been chanted for years, and design for recycle, as this blog first suggested to you three years ago. In addition, with certain natural resources becoming scarce, you also need to design for reduced resource utilization and reuse. Especially since many of these electronic devices still contain hazardous materials.

If design for recycle is done right, there will be a refurbishment phase which will allow for reuse as long as the device has a usable life. This has many benefits for manufacturers and retailers as the cost of refurbishment for phones, pads, and laptops can often be much less the cost of producing a new device (especially when the cost of energy is factored in as it takes huge amounts of energy to create these devices, but very little to have a human pop out a single defective component and pop in a new one). Plus, the market for refurbished devices is about to boom as there are millions of people in emerging countries who will be ready for smartphones when the next generation of mobile devices comes out in addition to millions of people in the developed world who have yet to switch to smartphones and pads.

Plus, with the cost of raw materials increasing as fast as energy, and the looming threat of end-of-life directives that would force all producers of electronics components to take their disposed products back, design for recycle just makes sense. Reducing raw materials and energy requirements will save a lot of money. Designing phones so that as many components as possible can be reused when the phone can no longer be refurbished reduces future production costs and waste. And minimizing or, better yet, completely eliminating hazardous materials can simplify and increase the effectiveness of recycling. All-in-all, designing for eventual recycling will not only save money and increase profits, but might be the only way an electronics manufacturer can survive in this tough economy if more regulations hit the industry.