Sustainability in the Supply Chain

Written by Guest Editor and good friend of The Retail Hive, Ray Fowler

From ugly fruit being turned into sustainable cosmetics and shoes made from dog hair and mushrooms we would all assume that these producers must be smoking something illegal..

That’s not the case as these organisations develop new products, utilising a different source of materials, they still need to be cognisant of the invisible resources, energy, water, land and people used. Hence a sustainable supply chain needs to be all encompassing and not green washing when producing products from new resources or recycling from old. There are a number of factors to consider if truly sustainable supply chains are to exist.

So, firstly we need a few facts to understand the enormity of the task. A recent study from McKinsey indicates that 1.8 billion people are due to join the global consuming class by 2025. This is an increase of 75% on 2010 and of our population there will be 100 million working age consumers in China by 2030. Back in 2015 the Patagonia clothing company revealed that 10.5 million tonnes of textiles ended up in landfill and with rampant consumerism driven by fast fashion its expected to double in the next few years.

A sustainable supply chain has to consider a number of points:

• Local improvements – Identify where new technologies can be used that use less of our earth’s resources whilst enhancing the image of the product.
• Link the supply chain sustainability goals to the global agenda – Tie in the three main factors like meeting emission targets, recycling & repurposing and developing a circular economy.
• Support manufacturers and suppliers to reduce their impact – Creating new reporting tools on resource usage, reducing the over complexity in manufacturing and packaging and lastly increase accountability.

Over and above these are the other organisations responsibilities:

• Social responsibility
• Environmental responsibility
• Financial responsibility

I am not intending to detail each of these three points but addressing them has huge benefits to organisations and the brands they promote.

Benefits of a Sustainable Supply Chain

Protecting against reputational damage

• Ensure strategy for sustainability enhances the lives of every worker in the chain and never subject workers to any risk.
• Create transparency along the supply chain and openly promote whistle blowing. No longer is it acceptable to work along the guides of “what happens in X stays in X”.
• Automotive giant VW have taken huge positive strides since ‘diesel gate’.

Reducing environmental impact

• Reducing waste can improve productivity and enhance profit.
• Nike changed some of its production practice reducing labour by 50% and consumed 20% lass materials delivering an increased margin of 0.25%.

Potential new partnerships

• A business with a sustainable supply chain will attract new partners.
• New partners can bring investment, bolder ideas and image positivity.
• Sainsbury partnered with veterinary teams in the UK to support dairy farmers which led to 55,000 cows producing 140 litres of milk more than the daily average.

Here’s what’s hot at the moment

A few ideas from some strong brands in the UK

IKEA

• Building upon their recycling of furniture they are issuing digital instructions on how to dismantle furniture and ensure it can be reused.
• Developing a spare parts options for all furniture lines to reduce disposal.
• Returning dismantled furniture for cash back.

H&M

• Recognising that they are in part to blame for fast fashion waste, developing a sustainable strategy.
• Recycle old clothing through piloting a cloth recycling system called LOOOP which when garments are fed into the machine it breaks the fibres down and then can reuse them to create a new design.

DSSMITH

• A packaging manufacturer whose aim is to produce 100% recyclable materials by 2025.
• Developing a circular economy packaging design.

PATAGONIA

• Creating the ‘Ironclad’ guarantee for all items manufactured. Any damage will be repaired and there is no set time limit.
• Introducing the ‘Worn wear’ concept that allows any item purchased can be cleaned and repaired.
• Developing pro-active activism on all subjects that are ethical and environmental.

Abel & Cole

• As a member of Bcorp they have a moral responsibility and demonstrate that in the weekly recyclable cartons and chill kits collected at the consumers doors from the previous food box delivery.
• Now launching ‘Club Zero Hero’ swapping of empty ingredient containers, cleaning and redelivering with fresh supply of ingredients.

Milk & More

• Milk deliveries with a sustainable credentials – glass bottles, electric milk delivery vehicles.
• Promoting plastic packaging alternatives.

Wherever the supply chain touch points exist, it is these that need to measure as sustainable whether that is raw materials, manufacturing, shipping, storage, fulfilling, transport, returns and disposal. Now is the time for organisations to take this responsibility but it has to be driven by the board, shareholders, the management team, employees, partners and the customers.