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How Sustainable is Your Personal Supply Chain?

Saybrook University | Monday June 28th, 2010 | 6 Comments

The following is a guest post by our friends at Saybrook University’s Organizational Systems Program (a 3p sponsor) – designed for students who want to understand the nature of organizations, collaborative practices, and transformative change.

by Jorge Taborga

Do you know your supply chain?

Most people don’t.  Most people never think of themselves as consumers, producers, and service providers who use companies and businesses to accomplish their goals. But we are all active members of almost innumerable supply chains, and this has enormous ramifications for the environment.

Most supply chains have little regard for conservation and regeneration – and this is as true for big companies as it is for individuals.  Non-renewable extraction of our natural resources, non-replenishment of our ecosystem services, generation of massive waste, labor abuses, under compensation, and our misguided consumption models, are all devastating results – and all par for the course – of unsustainable supply chains.

By contrast, a focus on making supply chains sustainable is a crucial step towards a sustainable global economy.  According to the Global Footprint Network, we currently are using 1.3 times the amount of resources available in the planet.  This means that supply chains need to be optimized to bring us under ‘1 Earth’ worth of consumption with margin to accommodate population growth. The more we know about our personal and professional supply chains, the more sustainable we can make them.

How do we begin to change our supply chains for sustainability?

We start with an underlying assumption and framework that businesses are in no way separate from society and nature.  Even the triple bottom line model of three connected components misses the point of the systemic nature of life in our planet.  Businesses are contained within the inner works of society and this in turn is a component of nature.

Using the Natural Step Framework, we next see what constitutes the fabric of supply chains: raw materials, ecosystem services, products and waste, and social well being.  These four systems interplay in every aspect of supply chains.  A key business challenge is that only two are included in Profit and Loss statements.  The raw materials system is the first holding a prominent place in any P&L.  Since most companies do not directly deal with true raw materials like steel and wood, there is minimal to no attention paid to replenishing these materials. ‘Products and Waste’ is the second system present in P&Ls.  Product costs are properly represented in any company’s financials.  On the other hand, waste is typically buried in other costs.  Only leaders in sustainability have identified their direct waste and related costs, and are working to improve them.  Packaging is a good place to start on reducing cross-supply chain waste.

Companies do not factor into their P&Ls the impact to ecosystem services and social wellbeing systems.  Some companies have started to adopt reporting standards from the Global Reporting Initiative (GRI). This touches upon some of the elements of the four systems (e.g. EN 1-35). This is an important first step but unless P&Ls are meaningfully affected, these two systems will not be meaningfully improved.

All designs for a global sustainable supply chain should include the four natural systems built on the concepts of regeneration and preservation. As we consume natural resources, we must develop a consciousness of regeneration in all actions we undertake.  An awareness of preservation ought to be built into our interplay with the ecosystem services with the realization that we are borrowing these resources and they must be returned.  Companies need to develop the consciousness that from inception their products and their resulting waste must factor in the impact on the global supply chain.  It should no longer be enough to establish environmental requirements from our suppliers.  We also need to partner with them in our designs, and they in turn partner with their own suppliers, all the way to the material sources.

All members of society are part of the supply chain and play a role in its evolution.  As such, no less than a holistic approach is needed to address the current situation. This requires interconnected supply chains from raw material sources to their return to the planet founded on the four natural systems. We then would achieve a less than “1 Earth” worth of consumption needed for our global sustainability.

***

Jorge Taborga is Vice President of Manufacturing at Omnicell, Inc., and a Ph.D. Student in Organizational Systems at Saybrook University.

For more information on the Global Reporting Initiative, click here.


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  • Dave2

    I really love your suggestion to build a “consciousness of regeneration” into the thought process. That's a tough one to translate into action at a corporate level. Do you have any examples of companies that are actually doing this? Or at least talking about it?

  • tkovach

    Thanks for this article. It is essential for a business to look at the sustainability of its supply chain once it has effectively greened its internal operations. Most of a business’s carbon footprint actually lies outside its internal processes. For instance, the Pew Center found that Wal-Mart’s supply chain footprint is actually 20x its internal footprint; this leaves a lot of room for leveraging and for reducing emissions and environmental impact.

    Supply chain sustainability is also increasingly being seen as the driver that may end up leveraging sustainability from a niche item across markets as a whole. This is especially going to be a major issue and driver for small businesses. As SMEs find themselves facing increasing pressure from consumers on one end and businesses within their supply chains on the other end, they are going to be faced with the need to become sustainable operations. Those that make that leap now will be well-positioned ahead of that curve when it comes and may be able to leverage those changes into new relationships or stronger partnerships with other businesses. This is one of the major arguments that we have been making to our members at COSE as we encourage them to pursue sustainability certification with our partner organization, Green Plus (http://www.gogreenplus.org).

    - Tim Kovach,
    Product Coordinator, Energy at COSE
    http://www.cose.org/blog
    http://www.twitter.com/COSEenergy

  • Clara

    Interesting framework! I would only hope that anyone in business would consider this more central to their business. Right now we have to move from thinking that it is an afterthought.

  • Chris Wells

    I really get excited when I see this new way of discussing and thinking about business and economics because what it represents at its core is a subtle but potent re-framing of the way we think about our impact on our environment.

  • http://www.HomeTips4Women.com tinagleisner

    This type of thinking is key to changing how we live our lives. It is fascinating how consumers might get out in front because they’re not making decisions based on a P&L as I agree with several articles read this morning, that for many businesses green is simply a marketing angle to grab attention.

  • KihezzieHounosrta

    Very interesting discussion. I am an aerospace engineer working on fuel combustion. So far fuel efficiency with no consideration to the environmental impact of the fuel used to be the prime concern in our research. The department of environmental engineering used to do separate research to control pollution. Last year we took an initiative to do combined research with environmental engineering department to do research on increasing fuel efficiency having environmental impact as a consideration.

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