Sustainability and Recalibrating the Supply Chain

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Focused on the impact that local issues and stakeholders are going to have on the supply chain’s of many operating in China, I delivered the above presentation at the 2012 CHaINA conference in Shanghai.

Overarching goal of the presentation was to highlight opportunities for firms to strengthen current systems as well as understand/ plan for a future where the issues of environment, economy, and society increase pressure on both the top and bottom line of the firm.

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Sustainability and Recalibrating the Supply Chain

  1. 1. Sustainability and Recalibrationthe Supply ChainRichard BrubakerNovember 2012
  2. 2. Economic Performance Sustainability GapEnvironmental Social Performance Performance
  3. 3. Politicians Business Leaders CitizensHarmonious Society Change Leadership Personal Accountability Source: Get Going With Green – Ogilvy Earth
  4. 4. Extraction Waste Increased scrutiny and transparency across supply chain Brands are not safe from economic, social, or environmental problems in supply chain • KFC (APP) • Apple (Foxconn – Wintek - Catcher)
  5. 5. Defensive Strategy Offensive StrategyExternally focused on Internally focused onmaintaining/ improving improving business modelbrand without core through product and processchange• Labor / Env. Audits • Developing new product lines• Sustainability reports • Reducing resource intensity of• Green certifications operations • Designing end of life solutions
  6. 6. HP PrintersHome Printer Product Line: Currently offer 58 home printers on website 34 printers are Energy Star rated 28 offer double side (auto) printing / 19 offer double side (manual) 1 printer is made of 100% recycled plastic and can be 100% recycled HP produced Inkjet cartridges are non refillableEnvironmental Programs include: Eco Highlights labeling program Cartridge Recycling
  7. 7. Zero to Landfill 93% remanufacturable and 97% recyclable 800 managers, engineers, and technicians worked on the project Manufactured waste free plant – no remaining scrap, packaging, or plastic.Other major policies:  Xerox supplies recycling program  Cartridge Free printing – Solid Ink technology  Takeback and recycling program – Since 1991 2b lbs of waste  Waste-free factories  90% meet Energy Star v1.1 certification
  8. 8. TakeawaysThe problems that are faced are complex, dynamic, and growing:• Economic, environmental, and social issues are growing in size with lower resiliency• Costs of issues is being seen (by some) as too great with expectations of change buildingThe pressure(s) that a firm will face can come from all angles:• Often catalyzed by external issues• Required Internal/ external stakeholders alignmentCompetitive advantage of CSR/ Sustainability programs are seeing diminishedreturns:• Increased awareness and transparency leads to increased expectations:Economic conditions are increasing pressure for real (sustained) changed:• Environmental damage has led to new regulations. Regulations that increase costs• Environmental/ social damage have reduced the quality/ quantity of resources
  9. 9. “In the end, environmental, social and economic sustainability cannot beseparated. A sustainable planet must include a sustainable humancivilization – resilient human systems that respect the complicatedrelationships among poverty, human rights, economic development,environmental health, and human success”- Institute for the Future, 2008Richard Brubakerrich@collectiveresponsibility.org@ChinaCSR

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