Posts tagged ‘Environmental sustainability’

Green Global Supply Chain Continues at Consumer’s Doorstep

July 26, 2010, 1:13 pm

The following is a guest post, courtesy of Lauren at Trade Compliance Blog. Enjoy!

The Wall Street Journal has a great article about the green sustainable global supply chain - specifically within the apparel industry – describing a new tool for consumers to determine how green their products are.

“How Green Is My Sneaker” describes a new software tool, developed by 100 retailers and apparel manufacturers, can determine the “Eco-Index” of their products. The tool calculates the score from a series of questions answered by the company and its suppliers:

The Eco Index, which is basically a software tool any apparel maker can use, poses a series of questions to companies on their environmental and labor practices—some of which require answers from the companies’ suppliers. It then assigns a score representing a percentage of a perfect score. 

The questions cover every step in the life of a product, from raw-material production to manufacturing, shipping, and even disposal. For instance, Levi’s gets points for having a recycling program that lets consumers drop off their old jeans at Goodwill, and Timberland earns points for using leather tanneries that have wastewater-purifying systems. Points are lost for using bulky packing material or transporting goods long distances. The Eco Index also includes estimates of how consumers will wash and eventually dispose of their clothes.   

Levi's Green Trade Compliance Supply Chain Jeans

Image Courtesy Wall Street Journal, Levi's. Click to view interactive version.

The tool and scoring have been in development for over three years, but roll out to the public is not expected in the immediate future – even though retailers are announcing the Eco-Index at next month’s Outdoor Retailer trade show.

Levi’s vice president of social and environmental sustainability, Michael Kobori, says the tool will be available “as soon as we can get everybody to agree” on how to publish and communicate it.

Nike is one of the sportswear and apparel makers using the Eco Index to measure its products’ environmental impact. This sounds about as easy as herding cats, given the numerous brands involved. It’s one thing, many companies say, to use the data internally, but quite another to trumpet it to the world. They want to be sure everyone communicates the data in the same way. For instance, they don’t agree on whether the index should be communicated as a single number on a hang tag or in a more detailed manner that might involve directing customers to data on the Web.  

Personally, I found the interactive graphic to be a great addition to the article. It shows how 1 pair of Levi’s jeans travels throughout the US and Caribbean – and even after purchase, how that one product continues to affect the environment.For example, the majority of CO2 emissions over the life-cycle of a pair of jeans come from the consumer’s washing machine & dryer.  Switching to cold water and line-drying cuts the CO2 emissions to a fraction compared to washing with hot water washing and machine-drying.

Levi’s also looks to be making a lot of progress in sustainability based on their research into the greenness of their products: 

As part of its participation in the Eco Index, Levi’s did a separate internal study of its own practices. As a result, Levi’s changed its transportation routes last year to make them more efficient and reduced carbon emissions by 700 metric tons. In addition to the Goodwill agreement, Levi’s also cut back on packaging, allowing only three pieces of labeling with the jeans—a back-pocket tag, a size sticker, and a price tag.  

In my opinion, sustainability and trade compliance are linked policies. Companies must have a plan in place for both- or else pay fines, waste money, lose time, and give up competitiveness in the marketplace.

Read the complete article at WSJ: “How Green Is My Sneaker?”

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Going Green and Cutting Costs

October 21, 2009, 1:00 pm

To stay with this week’s theme of establishing an environmentally-friendly supply chain, here are a few more tips from Logistics Management on going green while at the same time cutting costs: Green logistics: Industry expert cites ways of going green and cutting costs at the same time. In the article, supply chain expert Jack Ampuja discusses strategies such as redesigning packaging and logistics systems, and the effect that oil price fluctuations can have on supply chains:

Right now, Ampuja said, the smart companies are working on “what if” plans for oil prices at $100, $120, or even $150/barrel, ready to implement when and if prices go that high. With each plan, companies have to think about how many distribution centers they have, how efficient the routes are between them, how they manage inventory to feed those routes, and other issues.

“The (plan based on) $150 oil is going to give you a different network than $80, I guarantee,” he said.

Another area that companies need to revisit is packaging optimization. Ampuja said packaging can cost companies much more money than it needs to, and use too many raw materials. Companies that cut packaging down to size can cut as much as 40 percent of their shipping costs.

While there has been a buzz across the industry about the environmental sustainability issue for quite some time now, I have noticed that press coverage on the topic has picked up significantly in the past few weeks. Many of these articles, including the one above, cite presentations that various supply chain experts have given at industry events (a lot of big industry events and conferences are held around this time of year). To me, the fact that this has become such a recurring theme among industry experts is an indication that in upcoming months, “going green” will start to become the norm, and not just a competitive advantage that companies can have, as their customers will start to expect it.

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GTM Research Study: Environmental Sustainability Expected to Have a Direct Effect on Customer Relationships Within Three Years

October 21, 2009, 8:06 am

A recent survey conducted by GTM Research on 74 supply chain executives had some surprising results. Interestingly, sustainability is not at the top of the list of priorities – it falls in the middle of the pack. Companies are still investing in this area though, and the quest for energy efficiency is more popular than any other sustainable supply chain activity this year. Three fourths of respondants feel that their company’s environmental stance will have a direct effect on customer relationships within three years. Approximately one third feel it is a issue with customers today.

The below chart from GTM Research shows what their respondants believe will be the most influential supply chain activities in the next 12 months, for industry leaders and laggards:

Source: GTM Research

Source: GTM Research

To read more on the study findings, please read the press release from GTM Research. SupplyChainBrain also has a nice summary of the findings on their website.

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Looking to Go Green? Start With China: A Follow-up Post

October 20, 2009, 12:43 pm

In last week’s post about greening the supply chain, I referenced an article that suggested starting with overseas suppliers (specifically those in China) to increase the supply chain’s energy efficiency. The article also discusses how Walmart has established a supplier energy efficient program in China, where the company has set a target of improving the energy efficiency of 200 factories by 20 percent over the next three years.

Today I found a bit more info on setting up a sustainability program such as Walmart’s. This article from Logistics Management explains that the benefits go beyond being good environmental citizens:

“Shoppers are looking for a good deal, but they also expect transparency,” she said. “They want to know that retailers are sensitive to global warming and other threats to future generations.”

Regina Edwards, director, supply chain compliance, for MeadWestvaco, concurred, stating that shippers were asking for “green” metrics placed on suppliers.

“Given the fact that we are so diversified and global, our leadership realized that we had to develop a principal code of conduct for suppliers that included more than just basic compliance,” she said.

It would not surprise me if, before long, going green becomes standard operating procedure, rather than something companies implement when they can.

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