Supply Chain

SB'19 Detroit:
Transparency, Alliances Unsnarling the Tangled Webs We Weave

SB'19 Detroit was full of rich discussions from brands, technology providers and alliances driving holistic changes in supply chains and other complex systems — and shining light on problems along the way.

By Mike Hower Mia Overall and Mandy McNeil | Published 5 years ago | About a 14 minute read

Image: Alina Grubnyak

The School of System Change: Because incremental change is no longer adequate

By Mandy McNeill

In this energetic, engaging workshop, the Forum for the Future team sought to create a ‘brave space’ where we would be free to find bold solutions in the several exercises performed.

CEO Sally Uren began by presenting Forum for the Future as an opportunistic global nonprofit that believes systems change is the key to solving many global challenges — while incremental changes are a step in the right direction, they are inadequate. System change is self-sustaining, usually global, and a catalyst for more change. Designing for this type of change is one of the most important things we can do.

To back up a bit, a system is a configuration of parts connected by a web of relationships with the following attributes:

Dynamic, with porous boundaries
Individual actions may have unintended consequences
May be nested and are far more connected than anyone imagines
There are typically rules (think regulations, social norms, etc), and therefore disruptors or entities that defy those rules

Because systems are so embedded in the workings of our world, they cannot be considered broken — but just not working optimally. It’s much more helpful to think of how we can change these systems, rather than attempting to tear them down and build anew. We need to ask the question, how can we create the system we desire?

System change is both a process and an outcome. The process involves understanding the problem that needs solving, or getting to the diagnosis. This is presented as a question that we are trying to answer — something everyone in the system can understand and test their assumptions. This whole process is taught by the Forum for the Future in its School of System Change.

When a diagnosis is reached, the resolution should be well understood, as well, or it may fall flat. The environment in which a resolution is put forward may well affect its chances of changing the system. Uren presented a multilevel perspective of systems for consideration and posed the question: How can we foster innovation in the niche and bring it into the larger regime using even larger landscape pressures? A key example of an opportunity in the landscape today is the pressure of plastic elimination in the environment, where innovations have a real chance of taking hold.

Lastly, there is never a perfect answer — just answers that challenge assumptions and keep systems progressing. Uren closed by saying:

“No brand or business is an island; we are all interconnected in building the systems we want to change.”

The state of supplier diversity: Myths, challenges and opportunities

by Mia Overall

Ron Busby | Image credit: SB

Diversity is not usually talked about in the context of procurement. Ron Busby, President and CEO of US Black Chambers, Inc., is determined to change that. He worked at Xerox, IBM and Coca-Cola before joining the family janitorial services business, so he knows a thing or two about entrepreneurship, as well as about life’s hard knocks — he got cancer, lost his wife and became a single parent to two sons before founding the U.S. Black Chamber. Now, his mission is to support black-owned businesses, helping them grow and making them easy to find.

The real issue at stake is black wealth — there simply isn’t enough of it. According to Busby, the average white family wealth is $174,000, while the average black family wealth is $17,000. As he notes, that’s not even enough for a good car.

Yet, black-owned businesses are an engine of growth for individuals and communities. The US Black Chamber promotes them by working across five pillars: advocacy, access to capital, contracting, efforts to keep money in the black community by increasing annual revenues, and by developing other Chambers to do the same.

The US Black Chamber has teamed up with a number of other nonprofits; and together, they have launched Black Wealth 2020 — a collective focused on increasing home ownership, black-owned business and access to credit.

All of these things can be achieved more readily when companies conscientiously source their goods and services from black-owned businesses.

Busby left the audience with an invitation to be more thoughtful about sourcing:

“In order for there to be a great America, there must be a great black America; and in order for there to be a great black America, there must be great black businesses.”

Multi-stakeholder alliances chipping away at complex, opaque supply chains

By Mandy McNeill

Image credit: Jez Timms/Unsplash

This passionate panel shared a wealth of experience gained in some of today’s most impactful multi-stakeholder alliances working to optimize global supply chains.

The panelists discussed dealing with imperfection as they work with various stakeholders. Dan Strechay, Interim Director of Outreach & Engagement and US Representative at Roundtable on Sustainable Palm Oil (RSPO), shared that this can have a “chilling effect on transparency; medium and small growers can feel like they are putting a target on their back.” For this reason, many initiatives — such as IRMA (Initiative for Responsible Mining Assurance) — do not push for a pass/fail certification, but rather a rating on a scale. There is encouraging evidence, however, that consumers are rewarding brands for being transparent about sustainability goals and their progress towards them.

A question from the audience prompted a discussion around a unified label representing the various sustainable certifications for consumer brands. While the lower tiers of the supply chain are pushing for some unification of auditing, there are challenges. For some that have invested heavily in consumer recognition of their certification, this would represent an investment loss. As IRMA’s Senior Policy Advisor, Lara Koritzke, stated: “The power [of the label] is about the definition of good and the credible assurance of it.” In order to come to a unified label, it will need to be from a credible source.

Further discussion around policy and consensus-building revealed that the work of these alliances is not only benefiting those in supply chains, but governments looking to set up their own regulations. While sometimes slow due to the consensus-building that these alliances demand, they are most effective when all voices are heard and different points of view considered. Koritzke gave the example of the 10 years spent building trust in IRMA in order to produce their 26 chapters of standards for the mining industry. Maya Spaull — VP of Apparel and Home Goods Manufacturing at Fair Trade USA — emphasized that while there are many voices, some voices need to be prioritized to ensure that alliances are making an impact.

The main takeaways of this workshop were:

We must bring together innovators to find step function changes to sustainability issues
We cannot allow the supply chains to remain invisible
Celebrate progress towards sustainability goals

LUSH, Method talk supply chain transparency and its challenges

By Mike Hower

The theme of supply chain transparency continued with this afternoon panel. While supply chain is not a new topic in corporate sustainability, it’s more relevant than ever in an era of increased stakeholder scrutiny. Consumers are beginning to question what their products are made of, where they come from and who is making them.

In the session, Pure Strategies Managing Director Tim Greiner led a dialogue with Heather Deeth — North America Buying Manager at LUSH — and Saskia van Gendt, Senior Director of Sustainability at Method, on the challenges and travails of building and maintaining a transparent supply chain.

Deeth said LUSH relentlessly pushes for transparency in its supply chain, relying heavily on partnerships. Its ethical buying team works with suppliers to develop a currency of trust, which can be used to ensure they are meeting standards.

“One thing we are sure of is, you don’t get best answers on transparency through an audit,” Deeth said. “You do it through partnership.”

Audits continue to be a popular method of measuring and reporting on supply chain transparency — yet they are inherently flawed, since there’s little telling what suppliers are doing once the auditors leave. Partnerships give suppliers a sense of license to be good actors as they work to maintain and improve performance.

Gendt explained that many companies fear proactive communication on transparency because it might expose them to criticism.

“We want to create a model for how the world should be… but the flip side is the vulnerability this introduces,” Gendt said.

One of the ways Method has demonstrated leadership on transparency is through the construction of its LEED Platinum-certified soap manufacturing facility in the Pullman District of Chicago, whose location was selected to make a statement around urban revival. Method clearly communicated around every aspect of the facility’s construction, so that consumers understand what goes into the process of making the product.

The key takeaway was that collaborative transparency is key to building brand authenticity, and this must be delivered through strong storytelling around sustainability and social impact initiatives.

Bleeding-edge technologies shaping supply chain transparency, traceability

By Mia Overall

Image credit: Sourcemap

"Gone are the days when brands were exposed to risks from deep in their supply chains. Today, it's possible to trace every product to the source and make sustainability claims you can believe in." — Leo Bonanni, CEO of Sourcemap

We live in a world of completely globalized supply chains where one product can have inputs from hundreds of places, or be made by hundreds of suppliers. This is amazing, yet complex and risky. Technology, however, is rapidly increasing our ability to track inputs, suppliers and their geographies.

This panel focused on some of the latest emerging technologies making this possible. It was joined by Leo Bonanni, CEO of Sourcemap; Peter Girard, CEO of Toxnot; Tara O’Shea, Director of Forests at Planet; David Potere, Head of GeoInnovation at Indigo; and Jamie Tomkins, Marketing Director at Oritain — seriously smart technology innovators focused mainly on product chemistry, food, agriculture, forests and fashion.

Here are a few examples of how they’re changing the game:

Sourcemap is a technology platform that enables brands like Vans and Reeses to map out their entire supply chain, identify suppliers they didn’t know they had, measure risk, measure improvements made by direct and indirect suppliers, and trace products all the way to raw materials. When brands make commitments – such as to eliminate deforestation in their supply chain – Sourcemap helps capture the data to bring these commitments to life.

The Toxnot platform helps brands and product manufacturers, and their suppliers, to easily collect chemical data and identify the presence of hazardous chemicals. This week, Toxnot announced a partnership with Cradle to Cradle assessor MBDC to create an end-to-end traceability solution from supplier to certification. Companies as well as certification agencies use it to identify product materials and create customer facing reports like “declare labels.

Planet acquired Google’s satellites and is using them to monitor forests and land use around the world. Its satellite imagery is being used by agriculture companies to monitor fields, and verify zero deforestation commitments. Governments and agribusiness — and increasingly, banks — are using it to monitor land use changes; doing so enables them to make more money.

“In a climate-constrained world, agribusinesses and investors alike increasingly recognize the financial materiality of managing land use in global commodities production and supply. Finally, their ambitions can now be met by practical and cost-effective management tools.” — Tara O’Shea, Planet

Indigo also uses satellite imaging, as well as AI, to develop a living map of agricultural supply chains. It provides insights into crop conditions across the Americas, accurate down to the plot of lettuce that lasts two weeks longer than the lettuce grown on the plot next door. Its ability to forecast yields is better than that of the USDA, and brands and farmers both stand to gain.

Oritain use world-leading forensic science to verify the origin of products and raw materials. Traditionally, these claims would be supported by packaging, certification, data-trails — all of which are, themselves, susceptible to fraud. “When it comes to verifying where in the world something comes from, testing the ‘thing’ itself is paramount, and the only way to be 100 percent sure if where it claims to be from is true,” Tomkins said.

The outcome of technology solutions such as these is that transparency and traceability solutions are increasingly within reach of brands and consumers. Product and traceability data is quickly becoming an integral part of how products are designed, made and marketed, and consumers should continue to demand more.

Innovators disrupting the food supply chain

by Mia Overall

Image credit: Thrive Algae Oil

There is so much room for improvement within our food system! Our global population is growing, getting richer and eating more (meat), which is unsustainable from the perspective of land use, water use and emissions. Meanwhile, as much as 40 percent of food is wasted. This panel was moderated by Annabelle Stamm, Senior Sustainability Consultant at Quantis, and featured three disruptive companies at the cutting-edge of food.

Impossible Foods needs no introduction — the startup is quickly disrupting the hamburger market with a delicious, plant-based burger, now sold in Burger King, White Castle and other restaurants across the US.

Rebekah Moses, Senior Manager for Impact Strategy, shared Impossible’s vision for transforming the global food system.

Full Harvest — an online marketplace for surplus and imperfect produce — is on a mission to find a buyer for every edible part of the plant. CEO and founder Christine Moseley shared her journey into the agtech space — coming from no background in agriculture but a relentless focus on the right business incentives.

Thrive Culinary Algae Oil, headed by CEO Pareen Shah, is a cooking oil made from algae that grows in the sap of a German chestnut tree. It has less fat, tastes great and takes half as much land as olive oil to produce.

Audience questions addressed some of the big challenges involved in transforming the food sector — including certification, farmer education, and how to make harvesting incremental portions of a plant profitable.

Full Harvest’s Moseley discussed the issue of food waste and how we might make full use of agricultural yields. “There are not enough channels for this waste,” she said. While much excess food products go to charities, they are not able to accept the vast majority of what is available.

Part of the solution is doing a better job of finding useful channels for food surpluses without causing prices to go up.

The discussion also covered how companies can help shape food supply chains to be better for people and the planet.

“The biggest way to drive effective change on supply chain is to engage all actors involved in it,” Moses said. “You can do good things with one or two products; but to make the changes we need at scale, you need to address all the drivers. If you don’t have a holistic approach to this, the impact is not going to be optimized.”

The conversation closed on the topic of talking about sustainability in food. In terms of the hierarchy of messaging, none of the brands leads with sustainability — they lead with flavor, quality and/or cost savings.

Meanwhile, Full Harvest leads with cost: “I believe anything is possible if you have the right incentives,” Moseley said, “so I lined up demand and structured it in such as way there was no risk.”

Shah said Thrive leads squarely on quality. “We’ve had positive reception from retailers like Walmart, and chefs are excited; but we are still trying to figure out how to crack the food service market while not being the cheapest.”

“We don’t lead with sustainability,” Moses said. “It’s dangerous as a startup to be perceived as crunchy granola. We lead with delicious.”

It’s not easy to be a disruptor, but with the help of celebrity chefs, ever-more discerning consumers and good business models, these brands give us hope for the future of our food system.

Mike Hower

Founder & Principal Consultant, Hower Impact

Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.