The first session that I attended at the 2011 Net Impact conference was entitled the Past and Future of Sustainable Supply Chain Management: A Critical Reflection. The panel featured three representatives from different organizations in the garment industry.
Sustainable supply chains is one the topics that I find most interesting and most important. Making the business case for sustainability is critical to convince businesses to mitigate their impact on the Earth. Since most consumers are not willing to pay more for an item because it is marketed as being “green,” the best place to make the business case for sustainability is to find savings and opportunities within the supply chain.
One of the takeaways from the session was that when it comes to greening supply chains it comes down to what I would call the 3Ms: measure, mitigate, and motivate. Measure the impact of the product or service on the environment through a life-cycle assessment. With this information mitigate the environmental impact by changing the activities in the process that have the largest eco-impacts. Finally, look at the organization’s strongest spheres of influence within the supply chain and motivate those outside of the organization to also mitigate their impacts.
The most pertinent example from the session was Levi’s Water<Less jeans. Levi Strauss Co. conducted a life-cycle assessment on its jeans and determined that overall the largest impact its jeans have on the planet occurs post-purchase though the washing and drying of the jeans. Pre-purchase the largest impact is from the production of cotton. Levi’s therefore developed an initiative to reduce the water and pesticide use in cotton production and made changes to its production process to use less water. Finally, to address the post-purchase impact, Levi’s developed a campaign called “Dirty is the New Clean” advocating that consumers wash their jeans less. Levi’s is successfully greening its supply chain through using each of the 3Ms.
Another key takeaway from the session was that there is a limit to the savings you can get out of a supply chain. While improved processes reduce can reduce waste, inputs or logistical costs, there is only so much an organization can do before its “greening” starts costing money.
So where is the business case for sustainability in all of this? Over the next 10 years water is seen as one of the biggest risks to the garment industry. The industry is reliant on an increasingly scarce resource. In the short-run industry companies need to reduce their water footprint throughout the supply chain. However, this only achieves going in the wrong direction slower. Therefore, in the long-run, companies need to develop new business models. One possible model is to develop closed-loop systems so that used garments are used as inputs for new ones. Another is to reimagine the business such as Patagonia has done this in its partnership with eBay in developing the second hand market for its clothes.
Supply chains will remain the focus when incorporating the tenants of sustainability into business. However, in the long-run, tweaks to cut costs will need to give way more innovative strategies.
