Stop Blaming the Supplier! Melamine in the Milk is STILL Your Fault!

This article originally ran three years ago. (Link) It’s continued relevance is why we are repeating a slightly updated version of it.

Three years ago, research revealed that only 6% of procurement managers and directors have ever been made aware of unethical activity in their supply chain. (Source: EY.com) This was a surprising statistic since we know that supply chains in certain verticals run rampant with unethical behaviour, including violations of workers rights, child labour, and even human trafficking. However, when you think about it, it’s not all that surprising as E&Y’s recent 14th Global Fraud Survey found that 42% of executives could justify unethical behaviour to meet financial targets! Who would want to stand up to the CXO who could fire you if you know the CXO probably authorized the unethical behaviour in the supply chain in the first place!

The reality remains that as much as we’d like to believe that only 6% of supply chains have unethical activity, given that almost 86% of North American companies have a supply chain reliant upon China alone for key parts1, and 42% of CXOs will turn a blind eye, that’s a pipe dream. Depending on how rigid you want your definition of ethical to be, I’d guess that the number should be closer to 60%. Or more!

So why is it your fault if your supplier does it? Simple. As per the original survey, it’s because less than half of your organizations do any due diligence in their supply chains! Only 48% of UK firms do any due diligence at all! Even worse, 14% of respondents to the original EY survey did not even know what third-party due diligence meant, for crying out loud! You have to do due diligence and you have to ask tough questions and someone who can be trusted has to do a site visit to major suppliers at some point. If you do all this, and the supplier lies through their teeth, then, while your company may still be held financially responsible, it won’t be held criminally responsible and ethically you will know you did all you could (except cut the supplier loose before they did the unethical act, but at least you can cut them loose as soon as they do).

This is why you need good supply chain visibility, document management, and CSR monitoring. There are companies that do this, including Resilinc, Integration Point, and Ecovadis. (See the Vendor Post Index for more.) Reach out and get these types of solutions if you don’t already have them. They will be worth it.

And if you want more information, Ecovadis recently sponsored a trilogy of white papers by Sourcing Innovation on the importance of sustainability and social responsibility monitoring in your supply chain, the first two of which are available for your reading pleasure:

and the following is coming soon:

  • 5 Key Questions to Ask When Selecting a Multi-Criteria Supplier Sustainability Monitoring Solution

1 Supply Chain Disruptions, Ted Landgraf, Above the Standard Procurement Group, July 15, 2012.

When Are We Going To Wake Up and Stop Wasting Food!

Recently, Italy introduced a new law designed to reduce food waste which is being celebrated by farmers and restaurant owners as it simplifies the donation of excess food that ends up becoming food (or field) waste. Approximately 100 Million tonnes of food across the EU is wasted each year. (Source: European Commission) That amount of food would sufficiently feed at least at least another 100 Million people annually (as the amount of food a person needs in a year varies between 0.5 and 1 tonne depending upon diet, weight, etc.). This is just in the EU. In the US, recorded food waste exceeds 30 Million tonnes, and is probably much higher. (Source: Feeding America) That’s at least another 30 Million people that could be completely fed. Putting these numbers together, and assuming the average amount of food consumed by a person a year is 0.75 tonnes (and not 1), that’s about 175 Million completely satiated. There are almost 800 Million undernourished people in the world. If we assumed that they were surviving on only half the food they needed (which is not reasonable, as that’s barely sustenance, and a lot of these undernourished people are in developed countries and still eating enough to work), this says that the recorded food waste in 1/7th of the world’s population could cut the number of undernourished people in the world by half! By Half!

Italy is only the second country in the EU to adopt such laws (following a similar move by France earlier this year – Source: The Guadian), so let’s hope that at least in the UK, sanity reigns. Because in North America, and in the US in particular, it does not. It’s illegal in many cities to feed the homeless (Sources: NPR and MIC), even if the food is not passed its expiration date and untouched, or you are a Pastor (Source: The Daily Signal)!. In some states, game meat donated to shelters is burned (Source: Daily Caller). And even if you can donate food without getting fined and arrested, and someone gets sick because, while it was still good when you donated, by the time it was prepared and eaten it wasn’t (or it was contaminated when you received it with e-Coli and you didn’t know), then you can get sued for millions of dollars, so why take the risk?

This is why, as per our post from August, 2012 on why it’s Not Criminal, But it Should Be, America Trashes 40% of its Food Supply. It’s insane!

Food reserves have not recovered from the all time low, over 800 Million people, including almost one third of children in developing countries, are malnourished and the two richest economies in the world (the US and the EU) are collectively wasting enough food to solve over HALF of the problem. All this in a time when agriculture produces 17% more calories per person per day than it did 30 years ago. This is enough to provide everyone in the world with at least 2,720 kCal per day, which is 30% more calories than an average person needs. Instead, the cost of staples is rising, access to food by the lower class and malnourished is falling, and, because of stupid, stupid laws made by stupid, stupid lawmakers, the situation is getting worse. When it should be 10 times better!

As per our research from four years ago, there is no excuse for wasting more than 4% of food. (That’s still too much, but the 100% solution is always difficult to achieve right away. And when the 90% could be achieved tomorrow, let’s start there!) Not only would sanity (and laws mandating food donations and feeding the homeless instead of laws preventing this) reduce costs by $150 Billion and methane emissions by 22.5% (as rotting food makes up 25%), but the US would NOT have anyone undernourished! (14% of households in the US are food insecure! Fourteen Percent! The US is the richest country in the world, how can this be???)

Bravo France and Italy for finally doing something right! Let’s hope the rest of the EU follows suit so at least some people won’t go hungry!

RIP to the Big Idea!

This post appeared in its original form almost 5 years ago on August 31, 2011 when it was titled What’s the Big Idea. Since nothing has changed, we’re knocking it up a knotch with our borrowed spice weasel.

Seriously, like your predecessor’s Procurement, it’s dead and Buried! Inquiring (not enquiring) minds are in mourning. Because, as far as any of us can tell, there aren’t any big ideas any more. As Neal Gabler said in the New York Times article on the elusive big idea, we live in a society that no longer thinks big. And that’s bad. Why? In many fields of technology, there have been no big ideas for decades. Sure, we see new and better devices every year and sure the iPad Air Mini just came out and now you can chase Pokemon in the real world with your Pokemon Go app, but, let’s face it, the iPad Air Mini is a netbook with a touchscreen. A netbook is just a miniaturized laptop, and a laptop is just a miniaturized portable computer, and portable computers have been around for over 35 years. (Yes, you read that right, over thirty years, with the first portable computer manufactured in 1979.) And touch-screens have been around almost as long (with the first commercial touchscreen computer released back in 1983). Apple just took the technology to the next generation, while making sure it was easier to use than all of its competitors products. And as for virtual Pokemon tracking, let us remind you geo-location technology has been around for civilian use since the 1980s.

The cloud? Well, I hate to burst your bubble (actually, not true, I love to burst that bubble), but the cloud is just a return to the fundamental concept of mainframe computing with dumb terminals — one big shared computer that services a whole bunch of users who are remote and don’t want, or need, to know how the big computer works. Except this time the big computer is a whole bunch of smaller computers networked together and, since the network is very big (and, in fact, global), the computers can reside anywhere. I could go on, but, even in computing theory, almost everything traces back twenty to thirty five years (or more).

I’m almost ready to agree with the author of a recent Forbes opinion article on the New York Times article that asked why did big ideas die when he said that we live in a post-idea society where people don’t think at all. With exceptions fewer and further between by the day, most people don’t think [deep] anymore.

Why is this? As Gabler says, we are living in an increasingly post-idea world — a world in which big, thought-provoking ideas that can’t instantly be monetized are of so little intrinsic value that fewer people are generating them and fewer outlets are disseminating them.

Who’s to blame? Gabler blames the usual suspects — the web, Twitter, and everything else that, instead of facilitating a lively intellectual life, instead drowns us in information. And while some of these suspects, like Twitter, are indeed a problem, the reality is that they are a symptom and not the root cause. (Even though it was demonstrated back in 2010 that excessive use of Twitter and similar real-time communication platforms makes you dumber than a Pothead.)

The problem lies with Wall Street and VCs. They’ve convinced the business world that nothing matters beyond the current quarter and any idea that can’t be brought to market overnight isn’t worth it. We did not come further in the last 100 years than in all of human history by only focussing on products that could get to market quickly. (We have to remember that the first cross-Atlantic transmission did not occur until 1902. This transmission, and all major computational and communication advances since, did not happen in a quarter. Most of the advancements took years of research and decades to perfect.) If you’re trying to change a market — to go from a Model-T to a Jaguar — that takes years, but VCs won’t support anything that can’t be done in more than a few months. As a result all we get are small incremental improvements, with significantly diminishing returns as time goes on, as no one is investing to take the big leap forward.

And, despite claims to the contrary, we haven’t really reinvented the organization (as telecommuting and outsourcing have been common for at least a couple of decades), education, health care, or ownership. We’ve simply redefined management and, in some cases, who foots the bill. I’d like to see some fundamentally new big ideas, but unless someone from a parallel universe where they invented time travel finds away to break into this one and give me a time travel machine to go back in time, I may not live to see that day.

One Hundred and Fifteen Years Ago Today …

Gustave Whitehead, a man of great mechanical skill in the creation and construction of lightweight engines, claimed to have made the first powered flight in his Number 21 that supposedly achieved 60m above ground for 800m. Still disputed to this day, with the waters made murkier by the fact that thirty years ago a replica successfully made 20 successful flights of up to 100m, it was an important day in aviation history as it certainly would have inspired more, better, avaiation inventors to build powered planes that would actually fly and, not much later, carry cargo.