As I settled in to the back right corner of the Mission Bay room for a Tuesday afternoon breakout session on Supply Chain Performance, I wasn’t exactly sure what to expect. All of my previous panels at SB ‘15 San Diego had focused on consumer or employee engagement, so I was bracing myself for much drier dialogue.
As I settled in to the back right corner of the Mission Bay room for a Tuesday afternoon breakout session on Supply Chain Performance, I wasn’t exactly sure what to expect. All of my previous panels at SB ‘15 San Diego had focused on consumer or employee engagement, so I was bracing myself for much drier dialogue.
Two things surprised me: 1) The supply chain experts used more buzzwords than any of the marketing people, and 2) There was overwhelming agreement that companies must collaborate with others in order to achieve their own sustainability goals.
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Reduce duplicated efforts. If we’re sharing our data, less work needs to be done in completing surveys and audits. (Or even creating the surveys in the first place!)
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Increase traceability. It becomes easier to connect the dots between different points of the supply chain, essentially tracking data from origin to consumer.
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Address industry risks. By increasing communication, supply chain partners can achieve higher levels of alertness, potentially unlocking new opportunities for risk reduction.
The smart data that makes all of these things possible, however, is oftentimes the kind of stuff that companies often want to keep to themselves. How do we break down information barriers without sacrificing privacy?
There is a negative connotation with the word “audit” — but it doesn’t have to be that way. Helen Sahi of Avery Dennison introduced the idea that the dialogue on supply chain transparency needs to be about mutually beneficial improvements. Suppliers can go to a buyer and ask what attributes they care about.
With Avery Dennison looking at some very aggressive sustainability goals for 2025, Sahi acknowledged there is no way to hit those targets doing the same things they’re doing today. By entering into collaborative conversations with supply chain partners, the company may unlock cost-neutral alternatives to the current way of doing business that can help both parties achieve more sustainable solutions.
Christopher Weber of Kimberly-Clark Corporation echoed these sentiments. In the past, too many conversations on supply chain performance have revolved around “do everything you’re doing now, but cheaper.”
Yes, the biggest benefit of data sharing is to identify better efficiencies — aka better cost. To that point, the willingness to share the benefits of newfound efficiencies is what will unlock the barriers to further collaboration. At Kimberly-Clark, viewing the supply chain as partners is leading the company towards meeting its goals as an enterprise.
But it wasn’t long ago that organizational goals strayed away from sustainability when times got tough. Arthur Karuletwa of Starbucks reminded us of 2008, when companies were taking a gut check after the financial crisis. Even just five years ago, it wasn’t uncommon for sustainability initiatives go out the window in order to meet bottom-line targets.
At Starbucks, however, they used the opportunity to turn that trend around. Leadership developed a set of 2015 sustainability goals, including a target of 100 percent ethically sourced coffee by 2015. The company recently announced that it has reached 99 percent, an impressive feat in itself. So what about the other 1 percent?
Karuletwa explained that it’s comprised of suppliers in regions that lack infrastructure to keep up with increasing levels of expectations. The failure to reach 100 percent has been a blessing in disguise, as it forced Starbucks to stay engaged with these developing regions so that they maintain the health of the coffee growing industry as a whole.
It would have been easy to cross them off the list. But again, the theme of this conversation has been a transition to a dialogue about collaboration. Derek Singer kept this theme alive by introducing Stonyfield Farm’s trending towards a radical sense of transparency.
The company has developed an interactive supply chain map of ingredients. What makes the tool so unique is that it’s consumer-facing, available publicly on Stonyfield’s website. While this level of transparency is definitely pushing the envelope, it’s also helping the company develop capacity. Because once companies know how they stack up to the competition, it’s forcing them to “up their game.”
It’s no longer just about squeezing out costs, but bringing suppliers along on the road to improvement. As companies continue to set stretch goals for sustainability, the need to adopt a partnership mindset in the supply chain has become apparent. These brands have shown there is no better time than now to adopt the mindset of the future.
Published Jun 3, 2015 10am EDT / 7am PDT / 3pm BST / 4pm CEST