Tag Archives: Patagonia

Redwood Forests Provide a Clue to Business Sustainability and a Greener Supply Chain

26 Oct

Thoreau did it.  So did Carter and Brezhnev, and Reagan and Gorbachev too.  They all took a walk in the woods, like I did on a recent weekend…to explore and resolve internal and external issues.  My hike took place in the coastal redwood forests of the Santa Cruz Mountains on the central California Coast.  A hike through these beautiful groves of ancient redwoods is truly an awe-inspiring, reflective experience. Redwood forests are complex ecosystems. From the tallest trees in the world to the tiniest animal, the whole forest is a working system in a very delicate balance. Everything has a role to play in this forest.

Coastal Redwoods (Sequoia sempervirens) are also known for their resistance to fire.  They are protected by a very thick bark that lacks the highly flammable resin of other tree species. These resilient trees in some cases, can live for more than 2,000 years, making them one of the oldest tree species in the world. Also, unlike most trees, redwoods lack a taproot. Instead, they have a shallow root system that can extend up to 100 hundred feet outward, forming a network of connected root systems with other trees. But despite the connected roots, high winds and/or flooding can bring these massive trees to the ground.

Now substitute the word “forest” with “supply chain”, “tallest tree” with “largest company” and tiniest animal with “smallest supplier”, and you hopefully get where I am going with this post.

I mentioned in prior posts that to make progress on environmental issues in organizations and in supply chain management, organizations must understand that they’re part of a larger system. Fifth Discipline and The Necessary Revolution author Peter Senge makes valid claims that organizations are in a better competitive position if they understand the larger system that they operate within and to work with people you haven’t worked with before.  Like a forest, where all parts depend on the other, if the balance is upset, there can be chaos and poor ecosystem health.  A supply chain is in effect a business ecosystem.  And a supply chain functions the same way as a redwood, in that it has interconnected roots rather than one strong taproot, but can be blown down by external forces that it may not be able to control.

The Concept of Business Ecosystems

Author James Moore developed and popularized the strategic concept of business ecosystems in his 1996 book The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. According to Moore, a generic business ecosystem is defined as the economic and social environment that consists of organizations, individuals, regulatory structures and controls, government organizations, customers, competitors, suppliers, and the many entities with which a business interacts. The principal purpose of the business ecosystem is to align its members towards a shared vision that is greater than the sum of its parts.  Business ecosystem value is created by the combination of participants and their contributions – and their role within the ecosystem to enable the achievement of a combined vision or goal.

Many organizations have sought ways to deliver greater product and customer value through innovative supply chain solutions. The common link is that customers’ receive value from a whole solution, which takes into account all value chain contributions.  Think HP, Microsoft, Cisco, IBM.  Traditional high tech companies.  But this thinking extends to consumer product and apparel manufacturers (Herman Miller, Procter and Gamble, Unilever, Nike, Keen, Patagonia) and major retailers like Walmart, Starbucks, Kohls.  The list grows weekly.  Each of these organizations have created business ecosystems through redefining the nature of the value for the client.  They have further created new competitive environments, with new rules and practices that account for sustainability and that challenge their industry norms through green supply chain innovation.

While my recent post called out many large companies for being procrastinators and laggards, I continue to applaud the industry leaders who’ve seen how each tree (supplier) contributes to a stronger and healthier forest (supply chain).

So go take a walk in the woods.  Breathe the air, take in the silence…and think of ways that you can help your company refocus its sustainability efforts and supply chain health for future generations to enjoy.

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Green Supply Chain Management Requires Less Procrastination & More Innovation, Leading by Example

15 Oct

Admit it- we’ve all done it.  Procrastinated. Waited until the brink of a bad outcome.  Not taken the time to thoughtfully, proactively, pragmatically complete an assignment, implement a new ‘leading edge’ technology or launch a disruptively innovative initiative.  Instead we react, overlook great ideas for something less, produce a less articulate response to an inquiry, or implement a semi thought out idea.

Even in the business world, whether in supply chain management or in adoption of the ‘triple bottom line’ in business strategy, there are leaders and there are laggards.  Innovators and adopters.  I was reminded of this when I ran across a research paper that was published in “Sustainability” Journal this past spring.  The article, “Supply Chain Management and Sustainability: Procrastinating Integration in Mainstream Research” presents the results of a study conducted by several university researchers in The Netherlands. The researchers noted that “procrastination can be viewed as the result of several processes, determined not only by individual personality, but also by the following factors:

  • availability of information;
  • availability of opportunities and resources;
  • skills and abilities; and
  • dependence on cooperation with others.”

In addition, in a review of more than 100 additional studies on procrastination, the following additional items were found to likely to influence procrastination:

  • the nature of the task, and
  • the context of the issue.

It is these last two issues that the authors raised as primary reasons for procrastination, especially regarding embedding sustainability research and practices in supply chain operations and management. The authors found that “the nature of the task”, because it’s often complex and requires many internal and external stakeholders, and therefore tends to “generate conflicts”.  Also, the roots of supply chain management and related research are generally grounded in operations management and operations/logistics.  Therefore, the researchers noted that environmental and social aspects of supply chain management are foreign,  “out of context” and not wholly integrated into supply chain management and research.  I would also argue that dependence on others is a key issue as well given the widespread, outward facing challenges associated with supply chain coordination.

So what this means is that if a concept is foreign or unfamiliar or “out of context” it’s either set aside as being non-value added.  Also because of some of the complexities often inherent in grasping and applying sustainability concepts, some just throw up their hands and say “I’ve no time for this”.  This in turn can lead to procrastination in the real-world application of sustainability in supply chain management.

In a study conducted during the height of the recession (late 2009), GTM Research found that despite its growing prominence, “sustainability is not a core part of most companies’ strategies today or …a prime driver of their supply chain agendas.”  The study found that sustainability lies in the middle of the pack of supply chain priorities today, behind cost cutting.  The graphic presents a “leaders vs. laggards” scenario.  The 23% difference between leaders and laggards related to sustainability initiative implementation is large and underscores the work that remains to advance the “value proposition” for sustainability in supply chain management.

Prior posts have described positive aspects of adopting whole systems-based, collaborative and transparent approaches to sustainable sourcing and manufacturing,  and green logistics.  Sustainable thinking in supply chain management also value chain practices supports environmental and social responsibility – so why aren’t more companies adopting these methods?

I know who many of the leaders are in implementing greener and more sustainable supply chain practices in their respective markets and I’ve written about them here – Walmart, HP, Dell, Patagonia, Nike, Intel, Cisco Systems, IBM, Herman Miller, Proctor & Gamble, Unilever, Campbell Soup, Timberland, Danisco, UPS, FedEx, Staples immediately come to mind.  Laggards? Well you know who you are, but I am not pointing fingers.

While the future looks bright for a “greener” perspective in supply chain management, there still remains a stigma that a sustainable value chain is a costly one. In reality, there may be some up-front costs associated with some initiatives- very true.  But companies must take a longer view and pencil out the ROI of supply chain sustainability best practices. And its possible by taking a leap and reaping the benefits.  I’m confident that those organizations who wish to lead (and stop procrastinating!) will find a great many benefits including:

  1. less resource intensive product designs,
  2. better supply chain planning and network optimization,
  3. better coordinated warehousing and distribution and
  4. more advanced and innovative reverse logistics options.

Those who choose to lead will realize significant cost savings, improved efficiencies and a more secure and profitable future.

Give it a whirl- what have you got to lose- or should I say, gain?!  C’mon, tell this community what you think.  We’re listening.