Tag Archives: greenseal

Solving the Sustainable Sourcing & Green Supply Chain Management Puzzle: A 2010 Rewind

22 Dec

2010 is nearly ‘in the books’, and I vowed that I would not fall prey to the endless lists and recounting of annual accomplishments.  However, never in my 30 years in the sustainability and environmental business has there been so much attention paid to the influence of supply chain management and its role in the greening of business.  2010 has been truly remarkable in a number of key areas of green supply chain management from a number of perspectives, including: policy and governance, operations and optimization, guidance and standardization and metrics.  The green pieces of the supply chain and sustainability puzzle appear to be nicely falling into place.  Key themes that I can glean from this most incredible year are:

Big Industry Movers and Government Green up the Supply Chain- over the past year, observers and practitioners read nearly weekly announcements of yet another major manufacturer or retailer setting the bar for greener supply chain management.  With a much greater focus on monitoring, measurement and verification, Wal-Mart, IBM, Proctor and Gamble, Kaiser Permanente, Puma, Ford, Intel, Pepsi, Kimberly-Clark, Unilever, Johnson & Johnson, Herman Miller among many others made a big splash by announcing serious efforts to engage, collaborate and track supplier/vendor sustainability efforts.  Central to each of these organizations is how vendors impact the large companies carbon footprint, in addition to other major value chain concerns such as material and water resource use, and waste management.  Even government agencies here in the U.S. (General Services Administration) and abroad (DEFRA in Britain) have set green standards and guidelines for federal procurement.  More and more companies are jumping on the green train and the recognition is flowing wide and deep.

Supply Chain Meets Corporate Social Responsibility- Adding to many companies existing concerns over environmental protection, large products manufacturers such as Nestle, Corporate Express, Danisco, Starbucks, Unilever and the apparel industry stepped up in a big way to address human rights, fair labor and sustainable development in areas in which they operate throughout the world. Each of these companies and others like WalMart have embraced the “whole systems” approach that I’ve previously written about in this space and that underscore transparency and collaboration the “value” in the supply chain.  Each company recognizes that to be a truly sustainable organization, it must reach deep beyond its four walls to its suppliers and customers.

Emerging Sustainability Standards Embrace Supply Chain Management- This year, the international Organization for Standardization (ISO) unveiled its ISO 26000 Corporate Social Responsibility guidance document.  In addition, two prominent organizations, UL Environment and Green Seal unveiled and vetted two sustainability focused product (GS-C1) and organization (ULE 880) standards, both of which may markedly affect supply chain behaviors in the future.  Central to all these standards and guidelines is how important supply networks are in supporting the entire product ‘value chain”, not only from an environmental perspective, but from a social and community focused perspective.

Transparency and Collaboration Take on a Green Hue– in April, I had the honor of addressing C-suite supply chain managers and practitioners at the Aberdeen Supply Chain Summit in San Francisco.  A central theme of this conference involved the critical importance of collaboration throughout supply networks to enhance efficiencies and optimize value.   My talk (linked here) focused on how the most successful greening efforts in supply chains (like those used by Unilever, Herman Miller and Hewlett Packard) were based on value creation through the sharing of intelligence and know-how about environmental and emerging regulatory issues and emerging technologies.  Suppliers and customers can collaboratively strengthen each other’s performance and distributing cost of ownership.  Practitioners have found “reciprocal value” through enhanced product differentiation, reputation management and customer loyalty. And the continuing Wikileaks controversy is boldly reminding the business world that accountability and transparency and corporate social responsibility is vital and may even be a game changer in how products and services are made and delivered to the global marketplace.

Logistics Turning to Greener Solutionsnumerous studies and surveys conducted by peer organizations this year underscored how sustainability among carriers and shippers was central in the minds of most logistics CEO’s.  Whether it was by land, air or sea, shipping and logistics embraced sustainability as a key element of business planning and strategy in 2010.  I also had the pleasure of visiting briefly with FedEx’s Vice President, Environmental Affairs & Sustainability (@Mitch_Jackson) this fall and learned of the myriad of operational innovations and sustainability focused metrics that the company is tracking throughout its operations and maintenance activities. And UPS even mentioned its efforts to manage its carbon footprint in its catchy new brand campaign “I Love Logistics”.  Finally logistics companies are partnering with manufacturing to support reverse logistics efforts designed to manage end of life or post consumer uses of products or resources.

Lean Manufacturing Meets Green Supply Chain as manufacturing continues its slow rebound from the Great Recession, companies are recommitting themselves to implementing less wasteful production as a way to leverage cost and enhance savings.  Parallel efforts are in play also to incorporate more environmentally sustainable work practices and processes.  Enhancing this effort to lean the product value chain is recognition of upstream suppliers and vendors work practices and possible impacts they may have on manufacturing outputs. Lean efforts have been demonstrated to yield substantial environmental benefits (pollution prevention, waste reduction and reuse opportunities) as well as leverage compliance issues.  More and more, companies are exploring the overlaps and synergies between quality-based lean  and environmentally based ‘green’ initiatives.

Supply Chain and Climate Action Rounding out the year, the climate summit in Cancun (COP16) produced modest results (given the low expectations all around, what was accomplished looked huge by comparison to Copenhagen).  Activities at COP16, especially by the private sector were geared toward identifying key linkages between supply chain sustainability and climate change.   Perhaps the biggest news to emerge from the two-week conference was an effort by apparel manufacturers to enhance supply chain social responsibility and an internet database that will list the energy efficiency of most ocean-going vessels, in a scheme designed to reduce shipping emissions by nearly 25%.  As I noted, this effort is important not only because it recognizes shipping and transport as a backbone” of commerce (as other industry sponsored programs have recognized already), but because of the value of transparency in enhancing supply chain efficiencies.

Looking Forward to 2011

Yes indeed, it’s been a big year for supply chain management and its intersection with sustainability.  I see little for 2011 that will slow down this upward green trajectory, and naturally I am glad.  I am glad that more businesses “get it” and don’t want to be viewed as laggards in leaning towards a business ethic that values sustainability and socially influenced governance. I am glad that more companies are seeking out green innovation through new technologies and being ‘first movers’ in their respective business spaces.

And I am glad that you (my readers) and I am here to be part of the change.

Green Seals GS-C1 Taking Supply Chain Management in Manufacturing to a Greener, Socially Responsible Place

16 Sep

In late 2009, Green Seal[1] announced that they had developed a pilot sustainability standard for product manufacturers called “GS-C1”. This pilot standard recognizes socially and environmentally responsible product manufacturers so consumers can make informed choices while helping companies save money by reducing the resources they use and improving their brand and sales position.

The Pilot Standard is now available for public review until September 30th, so it’s not too late to get your comments into the queue.

While the GS-C1 Pilot Sustainability Standard is under review, Green Seal will be piloting a certification program for consumer product manufacturers. The objective of the pilot certification program is to gain practical understanding about the GS-C1 requirements and procedures from companies that are going through the certification process.

Among the criteria included in the standard are:

  1. Transparency and accountability on environmental and social policies at the corporate level;
  2. Aggressive goals, commitments and achievements on environmental and social issues, including greenhouse gas reductions, water and waste, indigenous peoples’ rights and biological diversity;
  3. Supply-chain management and accountability practices;
  4. Life-cycle analysis of product lines and commitments to reduce environmental and health impacts from manufacturing, packaging, transport and end of life; and
  5. Third-party certification requirements to verify environmental and social responsibility of products

Specific to supply chain management issues, the standard awards points for developing and maintaining environmentally preferable purchasing policies (for its non-manufacturing purchasing functions), product life cycle issues, including product design, packaging, transport/logistics and end-of product life management. Perhaps the relevance to supply chain management is Section 3.3, Supplier Management. Focus is paid primarily to “first tier” and highest priority and sub-suppliers.  Primary emphases are focused on:

  1. Identification of highest priority suppliers with the largest environmental and social impact/footprint
  2. Development and implementation of a documented management plan to reduce, in priority order, the social and environmental impacts of its highest-priority suppliers and sub-suppliers.
  3. Maintaining a Supplier “Code of Conduct”;
  4. Conform with Social Impact Assessment criteria described under SA8000 (including issues involving fair labor practices, bribery, governance and transparency);
  5. Monitoring of sub-suppliers (extra points are given if there is “Evidence of working with suppliers to resolve issues found during social and environmental compliance evaluations”.
  6. Accountability is recognized as well by designating a “senior officer” to be “responsible for enforcement of compliance with local laws, supplier Code of Conduct, and action plan for highest-priority suppliers and sub-suppliers.”
  7. Annually issue a publically available report on its supplier management activities and performance

The new standard represents a focal shift of sorts for Green Seal.  The organizations efforts to date have focused on assessing and documenting the environmental footprint of a specific product.  Now with GS-C1, the emphasis is now shifting to the entire product life cycle and all inputs and outputs from a supply chain perspective (the entire design, manufacturing, distribution and end of life management cycle).  This standard is but one of several new standards under development, such as ULE 880 (see my earlier post) that are taking a whole systems approach to manufacturing- a refreshing and necessary step to manage consumption sustainably while enhancing manufacturing efficiency.

Courtesy AU Optronics Corp.

Some companies are not waiting around for the specifications to be completed.  AU Optronics Corporation (AUO) is one of many examples of companies that are adapting to the ‘new normal’ in supply chain management, where environmental issues and social accountability are factored into daily operations. AUO built one of a handful of factories that are (Leadership in Energy and Environment Design (LEED) certified. The company has established a proactive program with its subcontractors and suppliers and includes elements related to quality, green products, manufacturing, labor and ethics, cost and ESH (see attached Figure). A cross-functional team from the company’s Quality Department, Risk Management & ESH Department, Procurement Department, and R&D Department, conduct audit activities. The company has strict acceptance requirements and will not accept a subcontractor or supplier until all of its environmental and social aspects of its products or services are approved. The company also conducts routine management, periodic audits, and ratings for subcontractors and suppliers.  On paper at least, AUO appears to be doing things in alignment with both ULE880 and GS-C1.

I encourage you to consider GS-C1 and ULE 880’s positions on supply chain management and plan ahead for what is undoubtedly a sign of ‘greener’ things to come in business management.

This post was originally published on the Kinaxis Supply Chain Expert Community Green Supply Chain Blog, which can be found at https://community.kinaxis.com/people/DRMeyer/blog


[1] Green Seal is a non-profit organization devoted to working towards environmental sustainability through environmental standard setting, product certification, and public education. The intent of Green Seal’s standards is to reduce, to the extent technically and economically feasible, the environmental impacts associated with manufacturing and services. (Source: www.greenseal.org)