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Approaching sustainability

  1. 1. 24 THE CSR SERIES INFRASTRUCTURE UPDATE Approaching sustainability For years, sustainability was a term loosely affiliated with the environmental movement as a way to live. Manufacturers considered to be ‘sustainable’ organisations were few, and for service providers, the application of the terminology was often questionable. It is now very evident that firms are increasingly under pressure from end customers to change business models to focus on sustainability. In this feature, Richard Brubaker, managing director of China Strategic Development Partners, advises organisations on how to take sustainability seriously E ven in the face of global recession, Rede ning sustainability for supply chain not just about clean air and planting trees to rms continue to come under pressure managers clean the air, it is about developing processes from consumers and other quarters to For those who view sustainability as that reduce the air pollution in the rst place. conduct business in a manner considered investment in solar panels, or hybrid cars, When it comes to sustainability, one of the more environmentally friendly. Indeed, while or green buildings, the request to make it rst things that should be clari ed is that the dramatic images of drowning polar bears a core part of business models will sound the environmental movement is — and imprinted onto the minds of consumers over unreasonable. However, for those executives should continue to be — separate from the the past years and the extreme spike in the who come to understand that the core of sustainability movement. price of oil last year brought a strong sense sustainability is about doing more with less, A key requirement for any business looking of urgency to the push for more sustainable their first steps towards meeting market to really transform itself into a sustainable business practices on a global level, the expectations will lead them to analysis and organisation is that the transformation current recession will very likely accelerate improvement of their supply chains. is made part of the organisation’s core the trend. For many rms, the antidote to a When meeting with organisations to philosophy. The organisation can then begin recession economy is, after all, a matter of discuss sustainability, one of the things that I to identify, on a holistic level, opportunities cutting waste and increasing e ciency, which am constantly learning is just how closely the to reduce waste and opportunities to create is essentially what becoming a sustainable concept of sustainability is associated with sustainable platforms that bring increasing business is all about. past beliefs about what needs to be done returns. Bringing the idea of sustainability The current recession is also bringing once to ‘save’ the environment. The belief is often into the core philosophy of the organisation again to the fore the idea that consumers, that changing light bulbs, using double-sided also means it is in a strong position to particularly American consumers, have been tape and buying solar panels are the solutions implement sustainability programmes in spending well beyond their means, and that for a business that wants to be considered a manner in which their impact spans the it is only through the irresponsible e orts of sustainable. breadth of the organisation. corporations that this has been possible. Fair Clearly, the issues that every organisation or unfair, the hint of a backlash against waste seeking to transform to a sustainable Moving away from waste and general tightening of belts all around operation faces go much deeper than this, Take an objective look at nearly everything also dovetails very well with the ideas behind into the core of organisational and operating we purchase as consumers and you will more sustainable business. processes, product design, and so on. It is nd that it follows a basic lifecycle process. Supply Chain Asia March/April 2009
  2. 2. INFRASTRUCTURE UPDATE THE CSR SERIES 25 ❝ Materials are extracted; there is a process or and a signi cant step in the global drive for series of processes to create the product; the HP developed the HP more sustainable business practices. It is product is packaged, a sale takes place, the normal at the moment for the majority of D2545 printer and unveiled product is used, the product is thrown away. organisations to collaborate with partners in Anyone involved in purchasing raw materials it as a ‘green option’ — 83% areas only seen as absolutely necessary to the in the past ve years will attest to the fact of the total plastic used to operation of business. that we cannot continue producing things produce the unit is made In order to realise a holistic and deep shift in the same manner as we have up to now; toward more sustainable business models, from recycled plastics, and that — environmental concerns aside — it communication between di erent partners in would simply be too expensive as the price it uses HP 60 ink cartridges the supply chain is vital. Product designers, for of metals, plastics, oil and other commodities which are molded from instance, need to understand the constraints have all soared. Our time is perhaps the rst recycled plastic resins, a of logistics partners responsible for packing time that economies have started to fully containers and making sure shipments fully product and process that understand the value of waste, and the maximise costs, both nancial and in terms savings that result from creating products in results in significantly lower of carbon footprint. closed loop systems. waste. In designing the unit, Simply removing waste from the current We have created products and processes HP also looked at packaging supply chain, though, is not enough, and in that consume energy, produce hazardous reality for organisations to see the full fruits and used materials that are waste, involve multiple transportation move- of developing a more sustainable mindset, ments, and further burden the environment through incidental waste streams. This was an issue that we began addressing at the con- 100% recyclable. ❞ they will need to develop a much stronger platform that allows products to be created using less materials and products that are sumer level through ‘Reduce, Reuse, Recycle’ While only one of a dozen printers o ered capable of being recycled. campaigns, but while consumers have taken by HP, it is an option far beyond many other up the habit of separating their garbage, printers in its class, and shows that through Product design and material selection industry has yet to fully embrace the ideas a holistic process that considers waste from In terms of product design, a majority of of how to create products and supply chains design through manufacturing through products are currently conceptualised that reduce the need for materials, e ectively usage to end-of-life, economically viable and without consideration of anything other than reuse materials, and increase the ability to sensible sustainable products and processes how and why a consumer would be attracted recycle remaining waste materials. can be developed. to them. While some key product design out ts are beginning to expand their criteria Reducing e-waste through design and Create platforms that bring increasing at the conceptual stage, few have yet to take materials returns into account how products will be disposed of Few industries have created more waste Removing waste once, or through a single at the end of their life cycles. Almost certainly, over the past 20 years than the consumer product line, is a relatively easy step to take. the manner in which products are disposed of electronics industry where new products But for a company to see the full bene ts of will not only become more of a consideration are designed at such a pace that product sustainability, a complete shift in corporate at the product conceptualisation stage, but obsolescence often precedes product end culture needs to occur. actually a key selling point and part of the of life. In other words, before a product Waste reduction in some form is overall appeal of the product. has failed, it is typically discarded for a something many modern organisations are Taking into account how recycled parts replacement that is seen as better. It is an undertaking through ISO certi cation, Six from previous models can be used in new industry where products and the processes Sigma, and a host of other lean certi cation product design, as well as other ways designs to create and distribute them create a large programmes. While e ective ways to tackle can be leveraged to contribute to future amount of waste, but it is also an industry waste, such programmes are not enough product generations, will also become more seeing change as consumers begin to and need to be expanded in order to achieve prevalent. fully appreciate the environmental cost of the real gains that becoming a sustainable For both consumer and producer, consumer electronics items. business in a holistic sense has to offer. these developments are of the ‘win-win’ To address such concern, HP developed What is required for this is everyone from variety, in that they mean less waste, less the HP D2545 printer and unveiled it as a the design group through the logistics and spend on materials, and reduced energy ‘green option’ — 83% of the total plastic used distribution group to coordinate internally, consumption. to produce the unit is made from recycled and for the organisation to open itself up to plastics, and it uses HP 60 ink cartridges dialogue on the elements of its supply chain Doing it with packaging which are molded from recycled plastic outside its four walls. One of the easiest ways to reduce waste is resins, a product and process that results in Wal-Mart recently started undertaking this simply reducing the amount of packaging signi cantly lower waste. In designing the sort of dialogue and is currently working out required in products. Overpackaging is a unit, HP also looked at packaging and used solutions with its supply chain contributors problem that is in large part due to a lack of materials that are 100% recyclable. and partners. This is a very big undertaking communication and transparency within March/April 2009 Supply Chain Asia
  3. 3. 26 THE CSR SERIES INFRASTRUCTURE UPDATE an organisation. For many products, the made through better collaboration between product line, and then work to reduce two primary goals of packaging are product logistics providers and manufacturers in the total impact by designing products protection and marketing. Quick savings terms of demand planning and product and processes that are symbiotic. It is a on packaging can be made if members distribution are very large indeed. process that is not focused on quick gains, of the design, production, logistics, and Again, it is an area where there is much or a single product line, but one built on a marketing teams communicate better with work to be done. In my conversations with fundamental understanding that rms have one another. As volumes of packaging are logistics service providers, it is often revealed an opportunity and obligation to begin reduced, gains in transportation are also that manufacturers rarely give much thought creating product whose environmental realised. to the fact that how they design, package and impact can be mitigated to the greatest To help develop supplier buy-in to its plan their shipments can radically alter the extent possible while understanding that this sustainability drive, in 2008 Wal-Mart brought footprint of their movement. process of creating e cient supply chains suppliers together with a competition to At a basic level, there needs to will increase returns for the company. see who could nd the greatest packaging be assessment of how decisions of an Sustainability is not simply adding a bit reductions without sacrificing product organisation related to product development of green to an annual report, or developing quality or placement. It turned out to be may impact the transportation of the product, one green product somehow expected to an exercise that demonstrated the reality and the gains that can be made from compensate for the rest of the portfolio of of the scale of gains that could be made. consideration of this early on and e ective items produced. It is a business mindset HP’s solution resulted in a 97% reduction in collaboration between the manufacturer and process that rms must take on. It is a packaging for one laptop line. A product that and logistics partner. On another level, it mindset that will drive a culture of constant once required a box, Styrofoam protection, entails understanding that di erent modes innovation; a culture of pride in what an and plastic covers was inserted into a bike of transportation require di erent resources organisation is producing, and a mindset that messenger bag, set inside a master carton and have different environmental impact will ultimately attract citizens to purchase the with two other laptops, and shipped with levels, and factoring this understanding items produced. cords and materials all included. into product development, demand and Its process is one that will require a distribution planning. concerted and coordinated e ort all along Transportation product supply chains — from design Of all the areas of the supply chain, Conclusion to landfill — which will in turn bring transportation is the one that is perhaps A truly sustainable product platform, built other intangible returns as increased least likely to be directly controlled by in a holistic manner, would start with the supply chain partner collaboration brings manufacturers as many do not operate process of understanding how each step increased visibility and e ciency all along their own fleets. Cleary, the gains to be along the supply chain impacts the overall the chain. Following are examples of companies recognised JUCCCE), developing products from recyclable content that as taking appropriate steps towards transforming have longer lifecycles, and are easy to recycle themselves. to sustainable businesses Shokay - Interface flooring - Luxury products with a conscience, Shokay’s roots are in The world’s largest modular flooring company. Its founder addressing the issue of poverty alleviation by bringing to and CEO had an epiphany that his firm needed to drastically market the products of those at the bottom of the pyramid. change its business operations to help avert a global disaster. Developing a model that used the underbelly fibre from Yaks, In the years that followed, he redesigned his products from full Shokay’s “Yakschemere” products are now sold in the US, floor carpets to modular carpets, redeveloped processes and China, and Japan. products so old carpets could become new, and changed fibre composites to more environmentally-friendly materials. Esquel Group - To encourage employee creativity in reducing energy BYD - consumption and pollution, company executives regularly Earlier this year BYD grabbed headlines by unveiling the evaluate employee project proposals, offer bonuses to winners first electronic car, and as one of the world’s largest battery and help them put their ideas into practice. Esquel has invested producers, they are doing research that will extend battery lives more than US$50m in energy-efficient and eco-friendly projects for many of the electronic items we use daily. over the past decade. Haworth - Serious Materials - One of the largest office furniture manufacturers in the world, Identifying that the largest user of energy is buildings, Serious Haworth has embarked on a path to sustainability by greening Materials is focused on bringing energy efficient materials to their operations in Shanghai (no landfill waste from factory). the real estate construction market. Haworth is engaging the NGO community (partnering with Supply Chain Asia March/April 2009