APICS is the premier professional association for supply chain management.
APICS BLOG
Insights, analysis and ideas to advance your supply chain.

Thinking Supply Chain

Insights, analysis and ideas to advance your supply chain.
Join the conversation.

Crafting a Sustainable Market

Friday March 11, 2016
APICS-Supply-Chain-Management-Now

Who knew that when I was enjoying my Bell’s Oberon Ale that I was enjoying the benefits of sustainability as well as a terrific beer. Although sustainability might just be a facet of corporate social responsibility for some, craft brewers are looking to sustainability technology to solve some of their common business challenges. For these small, independent, and sometimes family-owned businesses, efforts in this area are primarily about finding workable solutions that save energy and other resources, with returns on investment being secondary, according to MiBiz.

“Ideologically, people in craft beer have a mindset of efficient use of resources and an affable relationship with the outdoors,” says Walker Modic, sustainability manager at Kalamazoo, Michigan-based Bell’s Brewery, in the article. “You find people [at breweries] that love the outdoors and hate inefficiencies—it’s also just smart business.”

Because of their dedication to the environment and crafting eco-friendly businesses, craft brewers look at their sustainability processes and technology as investments in the future. As such, they are more comfortable with long-term payback timelines, Modic says. This emphasis on sustainability and openness to experimentation have opened up opportunities for scientists and entrepreneurs to experiment with solutions that can capture energy, produce alternative forms of energy, and reduce waste for craft brewers. 

For example, Jakob Nalley, a PhD candidate at Michigan State University, is developing a process to grow algae in breweries’ wastewater. This mixture of yeast, spent grain, and other organic matter and nutrients provides the perfect environment for algae to grow and produce biofuel, which can be used to power brewery generators. Algae produces biofuel more efficiently than corn and other plant-based sources. 

Nalley says the process also could help craft brewers with their water-reduction goals. Because the algae consumes the nitrogen, phosphorous, and other matter in the wastewater, craft brewers can use this method to help treat the water and recycle it back into their operations, creating both financial and environmental resource savings.

Similarly, Grand Rapids, Michigan-based renewable energy firm CaseQ Technologies currently is developing a craft-scale system that can capture the carbon dioxide released during the brewing process and store it for later use, such as for carbonating beer and purging conditioning tanks. Although similar systems already exist for big-beer companies, the physical size and price point of this system are being adjusted to fit craft brewers’ needs. 

In addition to environmental benefits, sustainability technology can help these small businesses keep their operations lean and survive financially. Some of the first craft brewers who opened up shop in the 1990s had to figure out how to minimize their raw materials and maximize output, writes John Wiegand in the article. This, again, is where sustainability comes in. 

To reduce water costs, Bell’s Brewery invested in a biodigester project, which it uses to convert leftover organic matter from its wastewater into burnable methane. This system, which has been in place since 2014, processes an average of 100,000 gallons of wastewater every day. 

Of course, water conservation is important to the big brewers too. Marco Ugarte, sustainability manager at Chicago-based MillerCoors and an APICS Supply Chain Council board member, says even the smallest reductions in water use at his company can result in saving several million glasses of water. Keep an eye out for an upcoming story in USA Today about how MillerCoors works with its ingredient suppliers to reduce water use. 

Beyond these efforts, the door is wide open for experimenters to create new solutions and for companies to adopt new practices to craft sustainable businesses. 

Practical applications

Sustainability and its triple-bottom-line tenets of people, planet, and profit are growing increasingly important in supply chain and operations management. Consider this description of a sustainable supply chain from the APICS Operations Management Body of Knowledge Framework: “Sustainable supply chains seek clean methods of production, minimization of the environmental footprint of products and services, and combining environmentally friendly decisions with effective supply chain practices. Clean production focuses on waste minimization and avoidance, reusing waste products when possible, reclaiming products at the end of useful life, preventing or reducing pollution at the source, substituting for toxic and hazardous materials, reducing waste and potential pollutants in product or service as well as transportation to market.”

Are you curious about how sustainability can benefit your business? Join APICS and Michigan State University for “Reimagining Sustainability in the Supply Chain,” on March 17 at 1:00 p.m. Central. This free webinar will share insights about embracing complexity to enhance competitiveness; reimagining sustainability to support the business model; and risk and resiliency as opportunities to turn sustainability into growth, not cost. Click here to register. 
All comments will be published pending approval. Read the APICS Comment Policy.

Comment

  1. RadEditor - HTML WYSIWYG Editor. MS Word-like content editing experience thanks to a rich set of formatting tools, dropdowns, dialogs, system modules and built-in spell-check.
    RadEditor's components - toolbar, content area, modes and modules
       
    Toolbar's wrapper 
     
    Content area wrapper
    RadEditor's bottom area: Design, Html and Preview modes, Statistics module and resize handle.
    It contains RadEditor's Modes/views (HTML, Design and Preview), Statistics and Resizer
    Editor Mode buttonsStatistics moduleEditor resizer
      
    RadEditor's Modules - special tools used to provide extra information such as Tag Inspector, Real Time HTML Viewer, Tag Properties and other.
       

Comments

  1. Bharath Sankaranarayanan March 12, 2016, 10:27 PM
    This is an interesting read. I am taking an operations management class
    in which we read about the VCAP (Value, Competencies, Assets and Processes) framework for Operations Strategy.
    I feel that Sustainability comes under the "Processes" section for Breweries
    as it is achieved through Technology - an essential component of process. 

    However, Sustainability is an art and it results in cost reduction and serves as a lifeline
    for small businesses and as a process to ensure profit maximization for big companies.
    I think that Business Sustainability comes under both Competencies and Processes as
    not all industry can pull this off successfully unless they have employees with the req.
    competencies.
        
  2. Daniel Marks April 05, 2016, 04:11 AM
    Two questions for a profit-seeking firm, not for a non-profit or government supplier: 
    To what measurable objective would the return on investment be secondary?
    If there is such a measurable objective, can it justify a project that will return
    a negative return on investment? 
  3. Jonathan Thatcher May 05, 2016, 10:42 AM
    There actually are a few ways to answer this. One way is a straightforward: Does the real or perceived value of the benefit outweigh the direct cost or lost profit? For example, if a business pays to vaccinate a community to protect its local workforce, is the cost of the vaccine cheaper than the potential lost labor hours?

    There are other models that also try to measure this. The business must first remain in business in order to help others. As it succeeds, it is in a position to consider return on investment as a secondary criteria for some benefits. It’s roughly similar to Maslow's Hierarchy of Needs but at a business level. The base of this pyramid focuses on the basic needs required to stay alive and pay the bills. You need to succeed here in order to enable the middle layer. This next layer is about improving relationships, such as building customer relationships and loyalty and gaining new investors and partners. Success here allows you to climb to the highest level: corporate social responsibility. As you build strength at each level, more people become involved and see more benefit and value from the organization.

    This work must occur in harmony with business leadership and the business mission statement or purpose, which should be in agreement about business priorities. When sufficient resources are dedicate to the first priority, the remainder is passed to the second priority, and so on.

    So how do you measure this? By asking three questions: 1) Is the organization reasonably financially sustainable and therefore capable of affording this activity? 2) Does the activity directly serve the mission or purpose of the organization? 3) Given a choice, what would be the next best benefit? Does this provide more value than the current choice?