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Zoning In on Sustainability

By Ingrid Ostby | November/December 2012 | 22 | 6

APICS magazineGreen supply chain issues and developments

Businesses across the supply chain have adopted sustainability measures over the past several years in order to improve profits, success, and longevity. Best-in-class organizations effectively develop teams to tackle green goals and achieve a more in-depth view of the supply chain. They put in place sustainability methodologies and metrics for greater resiliency, saving millions by switching to lower-energy light bulbs, reusing manufactured products, and myriad other sensible solutions for these economically lean times.
 
According to Preston Blevins, CFPIM, CIRM, CSCP, consultant and author of the soon-to-be-released Food Safety Regulatory Compliance: Catalyst for a Lean and Sustainable Food Supply Chain and a former APICS board member, supply chain and operations management professionals are just starting to fit all the sustainability pieces together. “I don’t think I’ve seen many explanations that connect all parts effectively,” he says. “Everybody seems to have a particular view of sustainability, but there are many moving parts, and they’re reaching a point of maturity where people really need a comprehensive overview.”

That maturity has come in measurable shifts. Blevins’s book states that, in 2009, about 26 percent of procurement departments were trained on sustainability measures and what that meant when they were talking to prospective suppliers. The next year, it rose to 42 percent; and in 2011, it was 63 percent. “[It’s] gotten that momentum because everyone is now starting to look at sustainability as a proxy for management prowess—and also its ability to minimize risk,” Blevins says.
 
Food Safety Regulatory Compliance ties together the disciplines of regulatory food safety compliance and excellence in supply chain and operations management and is geared toward small- to medium-sized food manufacturers. Within the book is a chapter that provides an overview of sustainability, particularly in terms of carbon and water emissions. 

The chapter defines some of the most important sustainability organizations and methodologies to be developed in recent years. Among them are the Greenhouse Gas (GHG) Protocol, the Carbon Disclosure Project, the Water Footprint Network, the CEO Water Mandate, and the Supply Chain Operations Reference (SCOR®) model framework. 

The GHG Protocol
The GHG Protocol involves a nongovernmental organization (NGO) formed out of other NGOs that have come together to figure out a way to measure carbon use. According to Blevins’s book, the Greenhouse Gas Protocol “is a comprehensive accounting tool with standard measurements and a suite of calculation tools to understand, quantify, and manage GHG emissions.” 

The Carbon Disclosure Project
The nonprofit Carbon Disclosure Project uses this protocol in turn with its own corporate emission reports. Essentially, both are ways to keep track of the carbon use of companies across the globe. 

The Water Footprint Network

The Water Footprint Network is a similar organization that records and manages water use by corporations. Blevins explains the concept of “virtual” water, which is used in the actual manufacturing of a product and therefore is hidden to both consumers and supply chain professionals. There is a need to disclose this amount, as it enables the company to determine what needs to be done in terms of water conservation. 

Increasingly, the issues of carbon and water usage are becoming large factors in selecting suppliers. The less carbon used, the less water used, the more transparent the product becomes. Blevins says in the future, water use especially will become a crucial element to selecting suppliers as the world faces an increasing water shortage. If you can prove your successes with sustainability through minimal water use, or carbon use, the more resilient you will be to potential clients, because of your company’s ability to do more with less. According to Blevins, about two gallons of water go into making one piece of paper; a single hamburger uses 634 gallons in its production. This issue fuels the purpose of the Water Footprint Network’s methodologies, which help companies keep track of water use and how to minimize it. 

“When I pick up a pencil,” Blevins says, “I’ll know how much carbon and water’s embedded in it because it will be in the bill of material … Over the next five years or so, this will become commonplace.”

Likewise, the CEO Water Mandate is an initiative focused on water sustainability practices that was developed by the UN Global Compact. 

Blevins says the SCOR® framework, developed by the Supply Chain Council and used by many across the supply chain, complements the missions of the aforementioned organizations. The framework serves as a model to help companies realize end-to-end supply chains via the inclusion of sustainability elements. 

Blevins’s book further details how combining each of these methods and missions can give supply chain professionals a “comprehensive view of the supply chain in terms of viability, velocity, and risk.”

DuPont Supply Chain Innovation and Development leader and former APICS board member Peter Murray, CIRM, also suggests a combination of tactics in order to execute sustainability measures. He recommends using GreenSCOR, a system based on environmental management and the SCOR® framework that helps businesspeople create greener supply chains. 

What is GreenSCOR?

  • Developed by Taylor Wilkerson, a research fellow at nonprofit government consultancy LMI
  • Couples environmental management and the Supply Chain Council’s Supply Chain Operations Reference (SCOR®) model framework
  • Keeps the main components of the SCOR® framework and amends it by including metrics, processes, and best practices geared toward environmental sustainability
  • Has the ability to enable proper green supply chain management
  • Can be used to understand and assess issues along the green supply chain
  • Makes it possible to tackle environmental management across the supply chain. 

APICS Sustainability Task Force
Another way Murray and other supply chain professionals are obtaining a thorough view of sustainable supply chains is through the APICS Sustainability Task Force. Several APICS committees, leaders, and other volunteers were exploring sustainability from their difference perspectives. “We wanted to begin to more formally embed sustainability and resilience into the body of knowledge and APICS programs,” he says. 

“We put together a task force of interested people who could bring their experience and their professional roles to really think through how we could focus on content—existing content that touches on sustainability, how we could potentially enhance or steer that differently to be more integrated, [and creating] additional collaborative opportunities with other organizations,” Murray explains. 

The goals of the APICS Sustainability Task Force
  • Make APICS a top resource for sustainable supply chains 
  • Expand membership, awareness, and content 
  • Further embed sustainability into the APICS body of knowledge and other association content.
Among the task force members are Murray; Blevins; Lisa Ross, president of the APICS Triangle Chapter and Southeast District staff officer; and Gary Smith, director of supply chain operations at the New York City Housing Authority (NYCHA). The task force was approved by the APICS board of directors last year.  Its goals are to make APICS a top resource for sustainable supply chains; expand membership, awareness, and content; and further embed sustainability into the APICS body of knowledge and other association content. 

Murray hopes to connect with professionals at similar organizations across the globe in order to better focus on engaging membership and enhancing supply chain collaboration. The plan is to then transition these relationships into increasing amounts of committee and active volunteer work revolving around content and partnership with other groups and programs. 

Murray says one of the drivers of the task force is to “provide transparency across the supply chain, much as you’ve seen done with human rights with things like Nike’s products or some of the things that are now currently being required of electronics manufacturers around concept of materials.” He says traceability and transparency issues are becoming critical parts of sustainability practices.

Blevins puts it simply: “We’re just trying to brainstorm and put together some processes and thoughts on sustainability so that we can keep APICS as relevant as possible in this area.” 

Sustainability measures and practical success
Members of the task force have sustainability success stories within their own supply chains. Murray refers to these achievements as “practical success.” One of the earlier successes Murray experienced at DuPont was through printing plates made of polymer or plastic that were sold to the packaging industry. Murray says recently there was considerable pressure on the industry to lower costs and improve sustainability performance along the supply chain. One team in DuPont’s printing plates business recognized this, as well as the sustainability and growth opportunities involved. DuPont worked with others in the business to reduce the size of the printing plates, minimizing energy use as well as waste materials—but customers still receive the same benefit. 

Gary Smith experienced sustainability success by implementing a small change that resulted in a remarkably cost-effective solution for NYCHA. Smith says his organization began its sustainability journey around 2007 when it switched from incandescent to compact fluorescent light bulbs. Even though compact fluorescents were much more expensive at that time, the energy savings more than offset that cost, and NYCHA ended up saving about $1.5 million.

When Lisa Ross was employed at Burt’s Bees as a product manager, the company culture focused on lowering water use and practicing waste management to limit what went to landfills. As Ross says, it was part of every employee’s job to eliminate waste in all aspects of the business. “Our year-end bonus was tied to our sustainability index and how well we did overall as a company, not just from manufacturing,” she explains. 

Using steam to clean manufacturing equipment and implementing low-flush toilets at the company resulted in a 70 percent water reduction. “Employees were active in the process and the solutions,” she says. “That’s good business for any supply chain.”

Resiliency
Murray and Smith both say that sustainability and resiliency must go hand in hand. “Resilience is an important aspect of sustainability that isn’t really fully formed yet,” Murray says. “Resilience is how well your business, your operations, and your supply chain [are positioned] to deal with the inevitable challenges are out there today.” 

“From my perspective, where [resiliency and sustainability] best go together is the fact that supply chain managers and other professionals are always asked to do more with less—and with supply chain that means lower inventories,” Smith says. “We’ve got to be able to maintain lean inventories, which means our supply chains are stretched to the limit ... If a vendor goes out of business or has a problem or has a natural disaster, you’ve got to be resilient and always have a plan B.” 

“When you have shifts in global economics, you look at the financial downturn that occurred,” Murray says. “[There were] problems in the financial industry that had nothing to do with the demand and consumption in the economy, and supply chains almost overreacted in that situation.” 

He cites the Japan earthquake and other recent natural and chemical disasters as examples of risks that might be offset by a more resilient supply chain. 

Blevins says there are particular steps that supply chain and operations management professionals can take to create a more resilient organization. “Companies need to become knowledgeable about SCOR®; they should invest in GHG protocols; they need to become aware of the business pressures being exerted by the carbon disclosure project; they should become familiar with the water footprint network; and the same management acumen needed to manage a supply chain today has to be applied.”

Murray says the first step is for companies to gain visibility and achieve some degree of transparency. Secondly, they should begin to focus on predictability in terms of interpreting demand more effectively. The last step, he says, is all about resilience.

“Once you have good visibility and reasonable predictability across your supply chains, you then focus on how to best prepare for the inevitable challenges you’ll face that can disrupt operations,” Murray says. “Sustainability is applicable to any size business. It’s not limited to or inaccessible to anybody because it requires some huge effort … There’s nothing holding anybody back.”

Ingrid Ostby is a freelance writer and copy editor, as well as a former APICS magazine editor, based in Brooklyn, New York. She may be contacted at ostbying@gmail.com.

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