Unformatted text preview: Supply Chains and Information: You can Ask, But They Don’t Always Tell
Michael S. Brown, Ph.D. Brown and Wilmanns Environmental, LLC April 2007 "Our task must be to free ourselves... by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty...We shall require a substantially new manner of thinking if mankind is to survive.” Albert Einstein Introduction
A little background on myself s Supply chains and organizational CSR efforts s Practical metrics and the need for information s Getting information from suppliers s Final thoughts
s My Background
s s UC Santa Cruz undergraduate degree in Politics Graduate degrees in City and Regional Planning from Cornell University
x x Emphasis on environmental and occupational health and environmental policy Research on public policy, science and technology issues s s s Worked in academia, government, industry Consulting practice focuses on business, but also includes government and nonprofit clients Case Studies Editor for Journal of Industrial Ecology, active in nonprofit environmental/political groups When the World was Simple….
s The mantra of supply chain management
x Price x Quality x Delivery In a World of Corporate Social Responsibility….
s Organizational responsibility extends deep into the supply chain
x Labor rights issues x Fair trade issues x Life cycle assessment x Global Reporting Initiative x Design for environment/extended producer responsibility Who Would have Thunk….
“TIFFANY & CO.’S EFFORTS TO HAVE MORE CONTROL OVER ITS SOURCING OF ROUGH DIAMONDS, IMPLEMENTING A CHAIN OF CUSTODIES THAT MEETS ISO STANDARDS, AND APPLICATION OF ENVIRONMENTAL/SOCIAL STANDARDS TO POLISHING FACTORIES OFFERS ONE POSSIBLE MODEL OF WHAT MAJOR DIAMOND JEWELLER RETAILERS AND MANUFACTURERS SHOULD DO.” Where Does that Leave Supply Chain Management?
Price s Quality s Delivery s Social Responsibility
x What do organizations need to know about suppliers’ businesses to fulfill goals and obligations? Organizational Goals and Obligations Regarding Supply Chain Information
s Internal uses
x Do the “right” thing x Track efficiency, costs, compliance x Set goals and monitor progress x Management decision making s External uses
x Marketing x Satisfy stakeholders x Investor relations What Could You Know?
s s s s Numbers
x Energy use, water use, emissions, violations Policies
x Environmental, social Actions
x Training, EMS Compliance with supplier, independent, internal, etc. standards Numbers and Other Metrics
s Things that are already in number form
x Many companies don’t currently count them x Need systems x It’s expensive to translate bills (energy, water, waste, etc.) into trackable data
s Most companies do not document other important things
x Activities, policies/implementation x Compliance Getting Someone Else’s Data
s Costs of getting data
x Monetary cost to suppliers x Cost to the relationship x Organizational cost s Value of data
x Does the value of the data justify the costs x If costs are fixed, how can value by maximized x If costs are variable, how can costs be minimized for value delivered Cost-Value Proposition
s Philosophical divide between counting negatives and documenting progress towards a positive goal
x Stakeholders primary interest in “less bad stuff” x Organizations struggling to define positive/ sustainability goals
s Collecting the least information that
x Satisfies stakeholders x Sufficient for good business decisions Suppliers and Customers
s Direct and indirect control of data
x Control is a relative term Auto manufacturers and Tier 1 suppliers 3 Niche company buying product package
3 x What’s in the supply cycle chain Suppliers don’t necessarily know what is in their products, especially if they are a distributor 3 If you don’t know, you can’t ask 3 Trade secrets
3 Information Hierarchy
Info you need to run your business s Info you need to manage your impacts s Info you need to satisfy stakeholders s Nice to know… I think
s Methods of Getting Data
Informal requests s Auditing
x Internal staff x NGOs x Third party auditors Supply chain surveys s Use of industry-wide data s Mandatory requirements
s Important Issues
Budget for supply chain information s If you cannot explain exactly how you will use information, don’t collect it, don’t count it, and don’t talk about it s Whatever you count, use! s If purposes change or metrics aren’t as useful as needed, change what you’re doing
s Some Examples of Supply Chain Information Uses
Aveda s Nike s Patagonia
s Plant-based hair and skin care products
x Distributes through the salon and spa industry, company retail stores Aveda-owned institutes for training students in hair and skin care and enviro s First privately held company to sign CERES Principles s Now a subsidiary of Estee Lauder Corp.
s New Ingredients, New Challenges
s Ingredients from traditional communities and newly developed sourcing
x x x x x x Sandalwood from Australia's aboriginal Kutkabubba community replacing Indian sandalwood S. African rose geranium Bulgarian rose and lavender Babassu from the Maranhão region in Brazil’s eastern Amazon Morikue from Tambopata region of Peru Uruku from the Yanawana people of Brazil Nike
Committed to sustainability as corporate ethos “Through the adoption of sustainable business practices Nike is committed to securing intergenerational quality of life, restoring the environment and increasing value for our customers, shareholders and business partners.”
s Nike Actions
Natural Step training s Organic cotton blend program > 1 million lbs/yr s Clean dyeing and finishing program s Integration of closed loop systems in product design
x Short-term--Reuse-a-Shoe program x Long-term--bring shoes back to new shoe materials Innovative Approaches
s Project to compare environmental performance of raw materials
x Starting with natural origin fibers will include polymers x How do you evaluate new materials? x Supply chain issues x Making decisions based on what’s important rather than what information is available 1990s Supplier Survey to Assess Environmental Impact
x Ask and ye shall maybe receive s One-to-one requests
x Importance of relationship to each company x Personal relationship with supplier s Upstream requests
x Successful requests limited to smaller companies x DuPont could care less 2006 Simplified LCA of PET Recycling Loop
Key supplier provided data s Assumptions about other parts of supply chain
s Final Thoughts
What does sustainability look like in an “information poor” environment? s Is satisficing (Herbert Simon) good enough? s Do we really need “perfect” information to “green” supply chains?
s Trivia Question
s Rachel Carson’s best-selling book is Silent Spring, but what was her first best-seller? The Answer
s The Sea Around Us (1951) ...
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This note was uploaded on 08/06/2008 for the course ESM 289 taught by Professor Geyer during the Spring '07 term at UCSB.
- Spring '07