Sustainable Supply Chain Management
Who will you meet?
Cities are innovating, companies are pivoting, and start-ups are growing. Like you, every urban practitioner has a remarkable story of insight and challenge from the past year.
Meet these peers and discuss the future of cities in the new Meeting of the Minds Executive Cohort Program. Replace boring virtual summits with facilitated, online, small-group discussions where you can make real connections with extraordinary, like-minded people.
Peter Senge, the founder of the Society for Organizational Learning, a faculty member at MIT Sloan School of Management, and the author of The Fifth Discipline and says “To make progress on environmental issues, organizations must first understand that they’re part of a larger system”.
Supply chains are critical links that connect an organization’s inputs to its outputs. Some challenges in the past included lowering costs, ensuring just-in-time delivery, and shrinking transportation times. However, the increasing environmental costs of these networks and growing consumer pressure for eco-friendly products has led many organizations to look at supply chain sustainability as a new measure of profitable logistics management. For many companies, the largest opportunity for improving sustainability performances such as reducing carbon emissions, water use, and toxic chemicals is in its global supply chain. For example, up to 60% of a manufacturing company’s carbon footprint is in its supply chain, for retailers, that figure is closer to 80%.
Companies must confront the reality that their supply chains can no longer be opaque. Stakeholders demand more accountability. If we add the financial benefits of energy and resource efficiencies to this mix, a sustainable supply chain makes long term business sense and creates a competitive advantage for companies worldwide.
Businesses leading by example: IKEA
The home furnishings giant IKEA is one company that works with suppliers on a variety of challenges, from energy efficiency to sourcing materials responsibly. IKEA has pledged to invest €1.5b in renewable energy technologies. With the cost of solar more competitive than ever before, IKEA is reaching out to Chinese suppliers to find efficient systems with the quickest returns on investment. The results not only lowered the carbon footprint of IKEA’s supply chain, but saved the company and suppliers money from reduced utility costs.
IKEA is also tacking the challenge of natural resource depletion. The company is seeking the advice of forestry specialists who work with suppliers on educating them about more responsible wood procurement practices. IKEA suppliers in turn must report the origin of their wood every four months and then are subjected to audits to which they have only 48 hours to report the origins of their wood. IKEA also conducts wider supply chain audits so the company can trace the origin of wood all the way back to the actual forest. In addition to wood, IKEA also trains suppliers and other stakeholders on issues related to waste, energy and water.
Cotton is the second most important raw material at IKEA, after wood. Ikea’s commitment began in 2005 as part of its overall environmental efforts and as a founding member of the Better Cotton Initiative (BCI), which works with a diverse range of stakeholders to promote measurable and continuing improvements for the environment, farming communities, and the economies of cotton-producing areas. Ikea’s goal is to ensure that consumers do not pay a premium for cotton products that are more sustainably farmed than conventional cotton — using less water and fewer chemicals and pesticides. Currently, 34% (51,000 tons) of all cotton used in Ikea products is produced in line with BCI standards. In 2012, the annual world production of sustainable cotton was only 250,000 tons, which Ikea seeks to increase through its holistic sustainability approach.
UN Global Compact
UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption. To assist companies in improving their processes, the Global Compact has provided a platform for identifying and promoting existing material, initiatives and business practices, exploring critical issues and developing guidance on how to integrate the Ten Principles into supply chain management systems. The Global Compact encourages signatories to engage with their suppliers around the Ten Principles, and thereby to develop more sustainable supply chain practices. With over 10,000 corporate participants and other stakeholders from over 130 countries, it is the largest voluntary corporate responsibility initiative in the world.
Innovations and technology drives sustainability in supply chain
The name of the game is competition. The playing field is global. The bottom line? – Better quality, high productivity, lower costs, and the ability to quickly respond to customer needs are more important than ever, and the bar is getting higher. Businesses are striving to develop solid supply chain strategies for dealing with these issues. Some companies are using cloud based systems to keep everyone in the system—from the source of material procurement to the point of sale-up to date on what’s selling, what’s en route, and what it all means for the bottom line. Companies that use advanced Demand Driven Supply Chain (DDSC) systems have improved delivery performance by 20% and cut inventories by 33%.
Cloud-based enterprise sustainability management platform like SupplyShift serves companies with many suppliers to reduce risk and enhance sustainability in supply chains using an interactive metrics-based system that encourages competition and information sharing to drive improvement. It is built on the concept that information transparencies can incentivize action. SupplyShift provides a system to collect supply chain sustainability information through scorecards based on existing standards such as GRI, The Sustainability Consortium, and Carbon Disclosure Project (CDP).
Creating a competitive advantage and reputation
By exhibiting a genuine commitment to corporate social responsibility and ethical business practices, corporations have the power to not only transform their organizations but also their supply chains. A robust corporate citizenship isn’t limited by the vision of its shareholders and customers, and its reach certainly doesn’t end with its company headquarters. The potential benefits of improved supply chain performance are every bit as compelling as those achieved through direct action on the companies’ own operations. By bringing sustainability improvements deep into supply chains, companies can better protect their reputations from environmental violations, increase productivity and save on costs related to energy, water use and waste.
Leave your comment below, or reply to others.
Please note that this comment section is for thoughtful, on-topic discussions. Admin approval is required for all comments. Your comment may be edited if it contains grammatical errors. Low effort, self-promotional, or impolite comments will be deleted.
Read more from MeetingoftheMinds.org
Spotlighting innovations in urban sustainability and connected technology
Since the Great Recession of 2008, the housing wealth gap has expanded to include not just Black and Brown Americans, but younger White Americans as well. Millennials and Generation Z Whites are now joining their Black and Brown peers in facing untenable housing precarity and blocked access to wealth. With wages stuck at 1980 levels and housing prices at least double (in inflation adjusted terms) what they were 40 years ago, many younger Americans, most with college degrees, are giving up on buying a home and even struggle to rent apartments suitable for raising a family.
What makes it hard for policy people and citizens to accept this truth is that we have not seen this problem in a very long time. Back in the 1920s of course, but not really since then. But this is actually an old problem that has come back to haunt us; a problem first articulated by Adam Smith in the 1700s.
More than ever, urban transit services are in need of sustainable and affordable solutions to better serve all members of our diverse communities, not least among them, those that are traditionally car-dependent. New mobility technologies can be a potential resource for local transit agencies to augment multi-modal connectivity across existing transit infrastructures.
We envision a new decentralized and distributed model that provides multi-modal access through nimble and flexible multi-modal Transit Districts, rather than through traditional, centralized, and often too expensive Multi-modal Transit Hubs. Working in collaboration with existing agencies, new micro-mobility technologies could provide greater and seamless access to existing transit infrastructure, while maximizing the potential of the public realm, creating an experience that many could enjoy beyond just catching the next bus or finding a scooter. So how would we go about it?
Dedicated anti-trafficking actors across the nation are trying to build better systems in big jurisdictions like New York, San Francisco, and Los Angeles, and in smaller but scrappy jurisdictions like Waco, Texas and Boaz, Alabama. They all share the same need, for stronger interconnectedness as an anti-trafficking field, and more collaboration.
The Forging Freedom Portal is a one-stop shop where a police officer planning a victim-centered operation can connect with their law enforcement counterparts, and the right service providers ahead of time, collaborating to make sure they’re planning for the language skills, social services, and legal support that victims may need. The portal is a place where the people who care most about ending human trafficking, who are doing the hard work every day on the ground, can learn from each other and share best practices to raise the collective standard of this work.