What Do Your Jeans and Your Car Have in Common?
Speakers at the Socially Responsible Supply Chains Conference highlight what supply chains in a variety of industries are doing to become more socially and environmentally responsible.
Did you know that making a pair of Levi 501 jeans, from cotton seed to finished garment, uses 54 showers’ worth of water and produces the same amount of greenhouse gas as driving your car 78 miles? Neither did Levi Strauss & Co. — until they conducted an environmental impact assessment on their goods. When the company also discovered that cotton represents the major arena of child labor in agriculture worldwide, the firm initiated a major effort to promote more sustainable cotton production.
Speaking at the fourth annual conference on “Social and Environmental Responsibility in the Global Supply Chain” at Stanford in April, Levi Strauss executive Michael Kobori shared what the apparel company is doing to work with investors, other brands, and nongovernmental organizations (NGOs) to encourage its suppliers to be more green and humane. His was the first of a day’s worth of talks and panels devoted to exploring how business may source, manufacture, design, and deliver goods more responsibly. This year’s theme: collaborating for the greater good.
Levi Strauss’ efforts have included directing contractors not to use cotton from Uzbekistan (which has closed many schools to force children to work in the cotton fields) until the country agrees to sign conventions and allow international monitors to assess the situation. The company also has helped some 30,000 farmers in pilot sites dramatically reduce their water and chemical use in growing cotton. “The key to success in collaborating along the supply chain is having the courage to act and lead, and making sure all parties agree on the objectives,” said Kobori.
Moving to the food industry, panelists talked about how two organizations have turned the “buy local” motto into an evolving partnership that is making NGO and corporate collaborations in the supply chain arena work for both parties. Executive director Diane Del Signore described how Community Alliance with Family Farmers advocates for California farmers, helps them to use more organic methods, and finds markets for their food. VP Maisie Greenwalt said Bon Appétit Management Co. buys that produce for use in its catering operations serving institutional settings — including Stanford, whose kitchens and events have upgraded their menus as a result. “We expect that demand may soon exceed supply,” said Del Signore.
Farther afield, in India, food is being better preserved through an improved storage and transportation infrastructure, thanks to the entry of the “golden arches” over the past six years. Abhijit Upadhye, an executive with McDonald’s in India, detailed the ordeal required to set up a supply chain that could meet the corporation’s stringent quality and food safety standards while also appealing to the nation’s mostly vegetarian population. “Our aim has always been to respect local culture, develop local partners, and identify local sources,” said Upadhye. As a result, McDonald’s India has not only been able to overcome formidable obstacles to bringing the famous fries and other Mickey D favorites to millions on the subcontinent, but also has begun to export an innovative product: the McVeggie burger.
With supply chain leaders under increasing pressure to reduce carbon emissions and improve the environmental performance, workplace facilities are another locus for sustainability efforts. Stephen Thompson said Johnson Controls is leading a campaign to help customers reduce consumption and waste and improve the energy efficiency associated with their buildings. Through retrofits and new, smart construction, companies are achieving significant energy savings while reducing their water usage and overall carbon impact, he reported.
Two final presentations demonstrated how embedding sustainability concepts into the very way a company is designed and operated is the wave of the future. Brazil’s Natura cosmetics company has incorporated ingredients from the rainforest into its product lines — which has meant establishing close ties with the indigenous peoples and “giving back” to support the development of their communities. “Our supply chain begins in the forest and goes all the way to consumers,” said João Paulo Ferreira. The company has created a new distribution network that has reduced carbon emissions by 25 percent and encourages customers to refill their old product containers.
For Nike, sustainability has become a business driver rather than an obligation. Nike’s director of global logistics, Dawn Vance, described how from removing toxicity from footwear to turning old shirts into shoes and old shoes into shirts, the company has created an innovative “close looped” business model that is increasingly taking responsibility for its products from cradle to grave. “We want no product to go to landfill,” she said.
In a morning presentation, Stanford surgery Professor Paul Auerbach, Sloan ‘89, said his rapid response team from Stanford Emergency Medicine encountered severe supply chain challenges in Haiti after the January 2010 earthquake. “Now we know what we need to plan for in the case of a disaster,” said Auerbach, whose team treated hundreds of victims suffering from serious injuries.
The conference demonstrated the progress over the past four years that supply chains in a variety of industries have been making to become more socially and environmentally responsible. “Collaboration is really the key to sustainable success in this regard,” said business school Professor Hau Lee, director of the Stanford Global Supply Chain Management Forum. “I was especially gratified to hear at this conference that many such successful collaborations are also happening in emerging economies, like Brazil, China, and India, producing win-win results throughout the supply chain.”
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