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Robotics in the supply chain will enhance humans, not replace them

The mind of the machine

Could automation actually lead to humans enhancing their skills, and ultimately enable them to perform their job functions better?

Could robots replace humans in the supply chain?

Discover how Jon Gibson (Head of Logistics at global supply chain consultancy Crimson & Co) believes the growth of robotics and automation in the supply chain will actually enhance the role humans play, not replace them.

Recently, the government announced its intentions to be at the forefront of driverless technology following the approval of a new code of practice, which will be launched in the spring allowing for testing of autonomous cars. While supporters have been quick to champion the benefits of driverless technology, in terms of road safety, emissions and congestion, there are notable concerns, particularly the knock-on effects for the British supply chain industry.

Last year, a report by the Confederation of British Industry (CBI) underlined the importance of strengthening the British supply chain industry, which could potentially add a further £30bn to the British economy. A key factor within this report focused on addressing the skills shortage which exists amongst British supply chain firms, notably the need for greater STEM graduates inducted into the industry.

In light of an industry skills shortage and the growth of robotics, there have been suggestions that this could be the beginning of the end for humans across supply chains, but Gibson does not believe this to be the case:  

“If removing humans is about driving up productivity through standardising processes, improving design and sharing components across different products, it could be argued that this has always been the case in the supply chain industry. When looking particularly at the emergence of driverless cars, yes, it will mean changes to the industry but to suggest this is the start of a new era in which humans will be rendered effectively useless across the supply chain is very wide of the mark.

“Essentially, the introduction of robotics can do two things – firstly, it can replace humans. Secondly, it can make them do their jobs better. Examples of where humans might be replaced could be for tasks that require greater accuracy, such as precision cutting, or in instances where there is a need to process vast amounts of data. Processes like these are traditionally very labour intensive, so from a budgetary perspective it’s understandable why organisations pursue this route. It can also improve safety while reducing the chance of human operating error, risk of thefts, as well as the need to address wage inflation.

“What is often misunderstood is how robotics can assist humans in doing their jobs better – barcode scanning for example, reduces human error, providing huge cost savings to a business. In reality, organisations automate their supply chain to improve cost efficiencies. This might be to address issues with skills and labour shortages or align budgets – it is not always at the expense of people.”

Gibson continues: “Ultimately, we are likely to see an evolution of roles and responsibilities. For instance, machinery will need to be maintained and this could result in retraining and reskilling staff to do this. Also, in the event of an error occurring during the production line, humans need to be on hand to address this. As we get better at analysing operational effectiveness it will become clear that organisations will need to strive for a balance between automation and human involvement across their supply chain – there is no one size fits all.” 

Is Apple the industry’s whipping boy when it comes to supply chain culpability?

Prompted by a post on Procurious by Kate Nicholl, I sat down and watched the BBC’s Panorama program that discussed some disturbing practices in the much-lauded supply chain of Apple, the worlds most valuable company. The BBC Panorama investigation originally aired Dec 2014, it has since been shown in Australia on ABC’s Four Corners.

The show highlighted that while Apple does a fantastic job of maintaining positive customer relationships, the same cannot be said for those working in the organisation’s supply chain.

Shortly after the original broadcast – Apple senior vice president of operations Jeff Williams sent an email to UK Apple employees stating that both he and CEO Tim Cook were: “deeply offended by the suggestion that Apple would break a promise to the workers in our supply chain or mislead our customers in any way”.

The program sent workers undercover to expose some troubling practices at a factory of a major Chinese supplier (Pegatron) and further down the company’s supply chain by investigating the dangerous, illegal and environmentally worrying tin trade that is occurring in the Bangka region of Indonesia.

The documentary has been criticised by some of being sensationalised and biased against Apple. However, its findings are truly concerning.

Some of the breaches of Apple’s supplier responsibility are listed below:

Concerning findings at Pegatron factory in China

  • Government issued personal identity card were illegally taken from workers.
  • Factory dormitory rooms were overcrowded. Despite making a commitment to only housing 8 staff members per dorm, the documentary shows examples of 12 people being crammed into these very dormitories.
  • Workers are working up to 16-hour shifts.
  • Workers are working up to 18 days consecutively.
  • Workers are so exhausted that they are falling asleep on the assembly line prompting significant health and safety concerns.
  • Workers are routinely working more than 70 hours a week. Apple’s standards state workers work no more than a 60-hour week.
  • Juveniles are working overtime and night shifts despite Apple’s commitment to the contrary.

Concerning findings in the company’s supply of tin included:

  • The detrimental impacts of tin mining sediment on local coral reefs.
  • Illegal tin operations are supplying the companies that Apple buys tin from.
  • These illegal suppliers are utilising child labour.
  • Safety conditions in the tin mines are incredibly dangerous.
  • Workers operate under the constant threat of landslides and death.

Clearly these are complex issues and it’s difficult to determine exactly were Apple’s responsibility begins and ends.

The Industry’s Whipping Boy

Apple and indeed many Apple fans have been quick to point out that the company is being held up as the whipping boy for an issue that permeates across the entire tech industry. Apple’s competitors are all likely culpable of the same indiscretions. I believe however there are legitimate reasons as to why Apple bears the brunt of these accusations.

The sheer size, value and market penetration of Apple means that our collective eyes focus on it. Our expectations of Apple are higher than those of their competition. Apple reported profits in excess of 39 billion dollars last year and the company is valued at half a trillion dollars. As the former US presidential candidate Ralph Nader points out in the documentary, there is no one better positioned to eliminate these sorts of practices than Apple.

Apple also spends a large percentage of its marketing budget positioning the company and its supply chain as sustainable. If the company wants to ride the brand benefits of being perceived as sustainable, surely it must expect some criticism when it is discovered that its commitments are not being followed through.

Keep the criticism constructive

It’s easy to over react to these sorts of programs and proclaim that you’ll never buy another Apple product. The fact of the matter is that as long as consumers want the price of their devices to remain low and as long as company’s like Apple are answerable to shareholders, they will continue to chase the lowest production costs which will unfortunately, more often than not, carry an environmental or human rights cost.

While I think it’s our obligation to continue to hold a spotlight to and criticise organisations like Apple, our criticism needs to remain constructive and cannot be done without mentioning the steps these companies are taking in their commitment to supply chain sustainability.

Last year Apple carried out 633 audits that covered over 1.6 million workers, a 40 per cent increase on the previous years figures. The company is open and transparent with its commitment to supply chain sustainability and what it expects from its suppliers. It also admits that while progress is being made, there is still a long way to go and that supply chain sustainability is something that the company needs to revisit constantly.

An issue of implementation

The most concerning elements of the documentary for me were the means that Pegatron had gone to appease Apple’s sustainability efforts without actually changing its operations.

The documentary shows that employees were ‘coached’ in how to fill out shift request forms (documents used in Apple’s supplier auditing process). Employees that did not respond by saying they were happy to work long shifts, night shifts or shifts where they must remaining standing, were told to fill in new forms, and failure to comply resulted in expulsion.

Another workaround developed for the benefit of Apple’s auditing process is the renaming of ‘overtime’ on employee pay checks to ‘bonuses’, thus hiding the amount of overtime employees have been forced to work.

To me, the Panorama documentary points to a fundamental breakdown in the implementation and execution of Apple’s sustainability project. While the commitments are in place on paper and efforts to implement them have been made, the company has not yet (and I stress the word ‘yet’) managed to instil these practices within its supply chain. If the evasive practices Pegatron has implemented to falsify Apple’s auditing documents are anything to go by, the road to implementing these measures will be a long and challenging one.

What are your thoughts on Apple’s supply chain? Where does its responsibility end? Is it fair that Apple bears the brunt for the whole tech industry? How does your organisation implement sustainability measures in its supply chain?

Chinese New Year – What you need to know

The world’s largest human migration is well underway as more than 3 billion trips are made by students, migrant workers and office employees journeying home to celebrate Chinese New Year.

Spanning a total of 15 days, Chinese New Year – also known as the Spring Festival – is the longest and most important national holiday in China.

Celebrations, however, extend far beyond Chinese borders with roughly one sixth of the world’s population set to welcome the Year of Goat.

Ten years ago, the Chinese New Year holiday had little impact outside of China. But today, the oversized influence of China on global manufacturing and financial markets means celebrations will create significant ripples for business and the world economy.

The ‘world’s factory’ shuts down

The vast majority of Chinese factory workers live away from home, so the New Year – a period marked by culturally important ‘new year visits’ and reunion meals with kin, means that virtually all workers will down tools and embark on (often lengthy) journeys home to celebrate with family.

The complete shut down of ‘the world’s factory’ poses a headache for any business with supply chain operations in China (or any country with a large Chinese-speaking population for that matter), including: Taiwan, Vietnam, Singapore and Malaysia.

And the chaos doesn’t end with manufacturing – pilots, freight workers, stevedores and truck drivers all head home and logistics grind to a standstill. Freight simply does not move for the week surrounding Chinese New Year.

In 2015, New Year celebrations officially begins on February 19th and end on February 25th, although workers are known to take up to two-weeks in advance, to make the long journey home.

Experts advise businesses should plan for no production or dispatches leaving China during the entire month of February, and for reduced output during the first half of March.  FedEx, UPS, and DHL post the expected delays on their websites, so business and consumers alike should utilize that information.

Beware of quality drops

Businesses are also advised to pay particular attention to their QA processes immediately after Chinese New Year, which is a prime time for Chinese workers to switch jobs.

As you’d expect, the impact of this spike in turnover is that inexperienced staff with little or no training often run post-New Year production, and staff shortages can hold-up production.

Global Shopping Spree

The news is not all bad for business: Chinese New Year is symbolically an auspicious time to buy and wear new clothes to signify the New Year. As Chinese prosperity continues to rise, this means big business for luxury brands. Last year, Chinese spending in Britain alone jumped 23 per cent over February as compared to 2012.

British retailers, including Harrods, Selfridges and Burberry, have also been quick to jump on the band wagon and are selling their own branded ‘hong-bao’ or red-envelopes traditionally given to Chinese children at this time of year.

How to join in the celebrations

If you can’t make it to The Bund for this year’s best celebrations, here are just some of the other places you can welcome in the New Year:

London – Join the celebrations on 22 February from 10am to 6pm in Trafalgar Square, which include a parade through the West End.

Melbourne – Chinese dragons, lions and street performers will fill Little Bourke Street on 22 February 10am – 10pm and a weekend of celebrations and heavenly hawker food will be available along Crown Riverfront.

New York – More than 6,000 people are expected to turn out for the Annual Lunar New Year Parade on 22 February which will wind its way through Chinatown.

Singapore – The celebrations go on all month long – just head to Chinatown!

San Francisco – Boasting the largest parade outside of China, catch all the action in Chinatown on Saturday, March 7, 2015 5:15pm-8pm

And so with that: “Gong Xi Fa Cai” to all our Procurious members celebrating in 2015!

Read more about the impact the Year of the Goat has on the world economy here.

Work-life balance & job satisfaction more important than salary to procurement workers

Work-life balance and job satisfaction trump salary as the most important aspects of working life – according to recruitment specialist REED.

Vasin Lee/Shutterstock.com

Breakdown across the ages reveals changing priorities when it comes to work and play.

With research revealing that workers in procurement roles rate work-life balance and job satisfaction as more important than salary, recruitment specialist REED is urging employers to give consideration to their recruitment and retention strategies.

The poll of over 1,600 workers by YouGov, in association with the launch of the REED 2015 Salary Guides, questioned workers on their attitudes to work, career aspirations and regrets.

What really matters at work

Within the findings, REED identified key trends which indicate how UK workers’ priorities change over the course of their career – which could have a significant effect on the talent management strategies of many UK firms.

With 36 per cent of workers in procurement claiming that good job satisfaction is the single most important aspect of working life, followed by the need for good work-life balance (28 per cent), it’s no longer just about the salary package.

Results revealed – what matters most across the ages

18-24                     Salary and benefits (38%)

25-34                     Job satisfaction (31%)

35-45                     Work-life balance (31%)

45-54                     Salary and benefits (25%)

55+                         Job satisfaction and work-life balance (joint top – 32%)

Career carousel

The poll revealed that one in eight workers (13 per cent) in procurement are unsatisfied in their role, with one in five (20 per cent) planning to look for a new job over the next 12 months.

While slightly more than one in ten workers (13 per cent) have stayed loyal to the same employer, twice as many (23 per cent) have moved workplaces more than seven times. When asked why they changed employer, procurement and supply chain workers reported better prospects or promotion (43 per cent), better salary (41 per cent) and boredom with their current role (28 per cent) as the top three motivators.

Gert Nzimiro, executive divisional director at Reed Procurement & Supply Chain, said: “In a candidate-led market such as this, employers need to think hard about how they attract and retain procurement staff. What this research shows is that although salary is very important, now we’re out of the recession it’s no longer just about pay – employers need to consider many other factors, such as flexible working and how they can offer the greatest job satisfaction. 

“Our research shows that in the last 12 months, 29 per cent of procurement and supply chain workers received some form of pay rise, and almost a quarter (24 per cent) received a bonus. However, with 22 per cent having received no benefits, the fact that 20 per cent are planning to look for a new role over the next 12 months, is hardly surprising. Employers need to start taking action and think wider than just the salary package.”

The Reed Procurement & Supply Chain 2015 Salary & Market Insight report can be obtained at www.reedglobal.com/salaryguide

Sustainable and Social Procurement – Are We Doing Enough?

Even though sustainable and social procurement are currently high-profile topics, it’s been hard to get people excited about them. This is down in part to a lack of consensus on what they are and what people should be doing on a day-to-day basis.

The question is how can we, as procurement professionals, change this?

What are Sustainable and Social Procurement?

A good place to start is a brief definition of both. It’s tricky as there isn’t really a consensus, but these are the most common ones.

Sustainable Procurement – The process for meeting the needs of the current generation for goods, services, utilities and works while considering the overall impact on the environment and wider society.

Social Procurement – A strategic approach to the delivery of organisational objectives while delivering social benefit.

The Current Situation

Increasing numbers of organisations have implemented codes of conduct, ethics and sustainability policies and spend targets for social enterprises. Initiatives such carbon neutral operations and ethical sourcing provide good examples of organisations considering the impact of their operations on the environment and wider society.

And consumers have begun to expect this. Around 88 per cent of consumers would choose to buy a product with a social or environmental benefit in a like-for-like comparison, while 90 per cent of Americans say they are more likely to trust and remain loyal to brands backing social causes.

However, recent high-profile examples, such Rana Plaza in Bangladesh and the UK horse-meat scandal, highlight the importance of companies ensuring that these standards are upheld throughout the supply chain.

So what is holding organisations back?

A lack of understanding is one of the key reasons for organisational inaction. Other common reasons inaction include:

  • Increased cost
  • Resistance to change
  • Lack of management support
  • Increased time to undertake sourcing activities
  • Inability to find ‘social enterprises’ or lack of response from them

And the reality is?

The reality is that all these reasons are surmountable. This is where Procurement must step up and take the lead.

As Procurement touches all parts of the organisation, it can help to ensure that the key decision makers are involved from the outset, helping with both executive buy-in and resistance to change.

Working with external stakeholders can provide both innovation and new ideas, ultimately lowering the Total Cost of Ownership for ‘green’ products. Once the processes are seen as part and parcel of sourcing activities, the time cost is lowered too.

Finally, companies can engage with organisations such as Social Enterprise UK and Social Traders (Australia), who can assist procurement departments in getting involved with social enterprises.

The Future

Experts have identified trends in sustainable supply chains for the coming year, including:

  • Better resource management – focus on codes of conduct, chains of custody and supply chain reporting and evaluation
  • Innovative bio-based materials – less use of primary resources and increased use and development of renewable materials
  • Eco-efficient operations – organisations finding a better balance between economics and the environment

Social media will play a key role too. 64 per cent of millennials use social media to address companies about social and environmental issues, and 36 per cent of consumers say they mainly share content to promote the causes they care about.

What can I do?

  • As a consumer, try to buy brands linked to sustainable or social activities
  • When comparing two like-for-like products, choose the ‘green’ option if you can
  • Integrate sustainability and social procurement into your procurement processes
  • Make a case for your company working with social enterprises and having spend targets for them
  • Ensure all the suppliers in your supply chain are signed up to your code of conduct
  • Leverage social media to highlight your success and set a benchmark for other procurement teams to achieve.

Reading and Reference

Loyalty and Trust for Social Causes: http://instamun.org/90-of-americans-more-likely-to-trust-brands-that-back-social-causes/

Social or Environmental Benefit: http://www.conecomm.com/stuff/contentmgr/files/0/e3d2eec1e15e858867a5c2b1a22c4cfb/files/2013_cone_comm_social_impact_study.pdf

Social media habits: http://www.conecomm.com/csr-and-millennials

DHL talk key packaging trends of 2015

Ahead of the UK’s biggest packaging event later this month Paul Young – Head of Packaging Services at DHL Supply Chain, shared his thoughts on future packaging trends with Procurious. 

Taking place at Birmingham’s NEC on 25-26 February 2015, Packaging Innovations 2015 will bring together the very best in the packaging and print industry from right across the globe.

Now in its tenth year, the expo will be home to  over 350 exhibitors specialising in all aspects of packaging from materials and design, to machinery, new technologies and equipment.

Here’s what Paul had to say:

 What innovations are enabling new capabilities for packaging?

From the use of new substrates to digital technology, a number of innovations are enabling new capabilities for packaging. Edible and dissolvable packaging are becoming more prominent as companies focus on their environmental agendas, whilst QR codes have created packaging capable of communicating with the consumer in a more interactive way.

It’s important that packaging solutions should fit the product and company values. Creating edible cups, for example, will emphasise a brand’s environmental credentials and reduce waste, whilst packaging that incorporates a digital element can engage consumers with the wider brand on multiple platforms.

What are the key packaging trends of 2015?

A study commissioned by Tetra Pack found that 89 per cent of consumers prefer to buy products in recyclable packages. This is therefore a key trend for 2015. As consumers are increasingly aware of environmental concerns, they wish to make efforts to cut down on their personal environmental impact.

Digital print is another trend to watch. Currently, labelling has been the area most impacted by digital print, however as the quality of products has significantly improved we expect to see more packaging created in this way over the year.

Is sustainable packaging high on the agenda for many customers? 

Sustainable packaging has a number of benefits for customers. It allows customers to demonstrate their environmental credentials and improve brand perception as well as reducing unnecessary, non-recyclable wastage.

Computer manufacturer Dell, have been using bamboo to ship 70 per cent of their laptops and packaging multiple products in the same box where appropriate. This strategy aims to save Dell US$18 million between 2008 and 2018 as well as generating substantial environmental benefit.

Are there any new ways in which packaging waste is being reduced in the manufacturing process?

Minimising the packaging size for any given product reduces packaging waste during the manufacturing process. Recently, Chainalytics, a supply chain consultation and analytics organisation, reduced the size of packaging for a prepared food product by one eighth of an inch and in doing so eliminated 146 tonnes of paper and cardboard annually.

Creating custom sized boxes for less-than-full-case orders is another way in which packaging waste can be reduced with smaller boxes able to compactly hold products, thus eliminating excess wastage.

Which new technologies are increasing packaging efficiency?

Technology, such as ‘on-demand’ packaging equipment, creates custom sized packaging and significantly improves packaging efficiency.

Office giant Staples has been using this cutting edge technology to create 6,000 to 8,000 custom sized boxes each day so that 30 per cent of the orders the company ships are now custom sized. As well as enhancing the consumer’s experience of the package, this has enabled Staples to accommodate more orders in each delivery, transporting products with increased efficiency.

What mistakes are companies [still] making when it comes to choosing their packaging strategy?

Companies are much more aware of the importance of packaging however some mistakes are nonetheless made. For example, online retailers often do not consider the impact of the packaging they choose for specific products. This can lead to potentially harmful situations for the consumer, for example, liquids packaged in basic cardboard boxes, highlighting the need for effective, product specific packaging.

Many companies still need to be aware of what packaging strategy is most advantageous to their business. Whilst sustainable packaging is of importance to many consumers, re-usable packaging may instead reduce waste further and reap financial better benefits.

Born in the USA: the little phone that could

Will a streamlined supply chain give a small manufacturer just enough of an edge to take on the big boys? 

BLU Products Vivo Air

A new combatant is suiting-up and joining the fierce smartphone battleground…

Wave hello to BLU Products, its newest Android smartphone – the Vivo Air, measures in at an impossibly thin 5.1mm thick and 3.5 ounces in weight.

Making it the thinnest and lightest phone available right now in the US. At just £199, it might just be one of the most affordable little firecrackers out there  – and we’re talking unlocked/off-contract too.

It takes guts to move into a crowded marketplace… BLU Products joins the ranks of Motorola, HTC, ZTE, LG, OnePlus, and Yota (to name but a few) – underdogs they may be, but that doesn’t mean going toe-to-toe will be any easier.

From small acorns…

The Vivo Air comes from an impressive stable – take a cursory glance at BLU Products’ smartphone portfolio (including the likes of the BLU Life One, Dash, Studio, and Life series) and you’ll see the burgeoning manufacturer is cranking out handsets at a spritely pace. BLU Products specialises in targeting developing markets with its range of affordable, high-speed, unlocked Android devices – a USP that is proving something of a success for the new kid on the block.

BLU Products came to life in 2009 and has since gone on to shift 10 million handsets in over 40 different countries. Despite its relatively small size, it’s one of the fastest growing manufacturers of mobile products in the world.

Its Brazilian entrepreneur – Sammy Ohev-Zion, spent 17 years previous in various roles, building essential experience that would later serve BLU Products well.

Take the manufacturers we cited above – the Motorola’s and Samsung’s of the world – Ohev-Zion realised that it doesn’t matter who you are, the price of manufacturing a handset remains a constant. Thanks to multi-million dollar marketing costs, exclusivity deals with mobile networks, and any artificially-inflated extras the manufacturer chooses, the retail price is usually double (or triple) the cost price.

In 2009 the dream came to pass, and with the formation of BLU Products, Ohev-Zion is taking aim at the big boys – he wants to beat them at their own game.

In an interview with The Verge, Ohev-Zion commented: “Previously for a startup company to be able to manufacture — if you weren’t one of these billion-dollar companies you didn’t have the access or the technologies to make your own mobile devices.” The supply chain of suppliers, designers, manufacturers, and retailers required was just not sustainable… Therefore dislodging this status quo was high on BLU’s agenda, and it had some much-needed help when the world slowly emerged from the throes of economic recession. There was suddenly an abundance of readily available components and manufacturers willing to take on production duties.

A healthy supply chain (smartphone or otherwise) also requires adequate means to pay its distributors and BLU Products found itself in an enviable position thanks to Ohev-Zion’s standing with Amazon and Best Buy (among others).

Innovate not imitate

On the face of it, BLU Products mantra is simple – high speed, high performance smartphones needn’t command a similarly high price tag. Consumers shouldn’t have to compromise on quality, design or experience.

In The Verge piece, the BLU founder cites one of America’s biggest manufacturers of affordable flat screen TVs – Vizio, as a direct comparison. Vizio pack just the same impressive technology into their screens, but do away with the costly overheads and the eye-watering RRP.

From its humble base in Florida, it seems BLU Products’ masterplan is paying off handsomely.

The battle for sustainable palm oil

In another life, I was an extra on Home and Away (an Aussie soap opera) something I was put onto by a university friend. Despite receiving critical acclaim (from my mother) for my role as the ‘front desk operator’ at the Summer Bay Gym, I decided to leave the bright lights of showbiz and pursue a career in procurement.

My university friend however, stuck with ‘the business’ and recently starred in the following online commercial for the not-for-profit group Sum of Us.

The commercial, which has now gone viral with nearly 2 million YouTube views, discusses the sustainability of the supply chain for PepsiCo’s popular Doritos corn chips. It starts with two starry eyed lovers sharing their passion for Doritos and ends with a stern message to consumers that PepsiCo’s use of unsustainable palm oil is not acceptable.

Palm oil – The Sustainable supply chain’s figurehead

Palm oil has been at the centre of the sustainable supply chain debate for years now. The production and use of this product in consumer goods has gained notoriety for its lack of supply chain transparency and alarming environmental and social impacts, some of which are listed below:

Environmental impacts of palm oil farming

  • Large-scale forest conversion
  • Loss of critical habitat for endangered species
  • Soil erosion
  • Air pollution
  • Soil & water pollution
  • Climate change

Social impacts of palm oil farming

  • Land grabs
  • Loss of livelihoods
  • Social conflict
  • Forced migration

(Source WWF)

In it’s defence, PepsiCo has refuted the claims made in the Sum of Us advertisement and restated the company’s commitment to ensure all palm oil used in its production is sustainably sourced. The company claims it is making moves with suppliers that will ensure all palm oil providers are compliant with PepsiCo’s Forestry Stewardship Policy by 2016. The organisation has made a further commitment to achieving zero deforestation in company owned and operated activities throughout its supply chain by 2020, a timeline that as drawn some criticism from environmental group.

Sustainability and Brand

The Sum of Us campaign once again exemplifies the inextricable links between supply chain performance (particularly purporting to sustainability and the environment) and overall brand image.

Perhaps the strongest indication of this link can understood through the quote below. In response to questions as to why the campaign focused solely on the Doritos product (and not PepsiCo or the palm oil industry in general) Sum of Us stated:

“We find that focusing on brands that have resonance with members increases the chance of the campaign getting exposure and being effective. Consumers may not know or understand how PepsiCo operates, or a palm oil trader or supplier, but chances are they’re very familiar with Doritos.”

An Ongoing Battle

The battle for sustainable palm oil looks set to continue with Greenpeace claiming the Roundtable on Sustainable Palm Oil (RSPO). The RSPO is a certification standard established in 2004 to minimise the environmental damage done by companies using palm oil, and it is falling well short of its stated goals. In a report, published in February 2014, Greenpeace launched the following – a criticism of RSPO members:

“On the ground, we’ve seen lots of RSPO members still doing forest clearing in the area, which is an indication of weak enforcement and a weak standard. RSPO, from my perspective, has been used for green washing by companies who want to expand their plantations into the forest.” (PepsiCo is a signatory to the RSPO agreement).

Simon Lord – group director for sustainability at New Britain Palm Oil, believes large organisations need to take greater responsibility for their role in the side effects of palm oil production:

“People have hidden behind the easy options and have pushed the problem down the supply chain, and conveniently forgotten that they are a player in the supply chain and have a duty to source responsibly.”

Are the standards for sustainable palm oil production a step in the right direction? Or are they merely a shield for large organisations to hide behind? Leave your thoughts on the palm oil industry below.

Packing for the future: big trends, digital print, sustainability

Stuart Kellock, Owner of Label Apeel shares his thoughts on digital print, the next big trends and whether being sustainable is still crucial for business.

What is next for digital print?

In labels and packaging the next step has got to be educating the end user, the marketeers and the brand owners about what is available to them.

Pumping the market with presses does nothing for the innovation being applied. For me, it will be those who can apply themselves to new and innovative applications that will be the winners. Those who are merely using digital presses to produce labels that could be done using conventional, will find that the unseen costs quickly catch up with them, and that the competition very quickly becomes a bit hot to justify the expenditure. We have already seen this model play out in the commercial sheet fed world with disastrous outcomes for some of the less innovative businesses.

Has personalised packaging had its day?

No, personalised packaging is here to stay. With any amount of luck we can all stop treating it as the be all and end all of what digital has to offer. Yes, coke and Absolute Vodka have done some smashing stuff with personalisation, but is it really innovative? I remember 12 years ago turning up to an event and being presented with a bottle of personalized beer. Personalisation is not innovative; the scale of the personalisation that these companies demonstrated was innovative. Digital has so much more to offer and it is only once we can get past personalization, will we start to develop and understand what that is.

Three big packaging trends and techniques for 2015?

I think that 2015 will see a return to fantastic photography being used in packaging. The last few years we have seen bold colour stamping the mark of brands, I think we could see a return of photographic imagery. The challenge for printers will be to get the consistent reproduction quality that is going to be demanded of the designers.

Digital moving in to wide web packaging is going to be something that will be great to watch for those of us not involved and a challenge for those in the market. A continuation of the drive for tactile finishes and added decoration will be how brands make themselves stand out from the crowds.

Is social media having an effect on the print industry?

Social media is having less effect directly on printers than it is having on our customers. This is particularly true of printers like us, who work with small batch exclusive brands. Prior to digital, these brands could not afford the labelling and packaging of the big boys. Now their packaging looks amazing, fresh and desirable. This in conjunction with far reaching social media as a sales tool means that smaller niche brands are having an impact on the market place.

It is no coincidence that we see large brewers launching their own craft breweries or the distillers doing short run exclusive lines. The little guys are having an impact and eroding the big boys market, they are being forced to respond. Social media is allowing this to happen.

Sustainability – is it still a crucial battleground or are brands less worried about their green credentials?

Brands were ever so worried about their green credentials while it was the printer and other suppliers picking up the tab. Then, came the financial downturn of 2008 and the focus was taken elsewhere.

We have seen a return to a concern for sustainability over the past two years and I think now that concern is far more effective. It comes from a real and pragmatic position, rather than a dictatorial (because the marketing bod says we have got to.) Printers now recognise that by reducing waste and by buying sustainably they are able to improve their own business while delivering the real change the planet needs.

We no longer have half-hearted conversations about recycled paper. Our conversations now are about reducing packaging, reducing waste, eliminating landfill and reducing energy consumption from a position that creates a win for all the stakeholders.

Quantitative Easing: What does it mean for the European economy?

Everything you ever wanted to know about Quantitative Easing but were too afraid to ask…

The European Central Bank (ECB) announced this week it will inject 1.1 trillion (1,100,000,000,000) Euros into the floundering Eurozone economy.

ECB President Mario Draghi suggested the move was made to “address heightened risks of too prolonged a period of low inflation”.

This process, known as Quantitative Easing (QE), is designed to stimulate the Eurozone economy and steer the continent away from another recession – a challenging task in the face of heightened deflation.

It’s a term we’ve heard a lot of in recent years, but what exactly is Quantitative Easing? Fortunately our friends at the BBC have put some time into describing this complex finance play in laymen’s terms.

Now you know what it is, what outcomes should we expect from QE?

James Sproule, chief economist at the Institute of Directors (IoD) provided us with the following comments:

“Ultimately, QE on its own risks setting the Eurozone on the road to Japanese-style stagnation and deflation. QE is not, should not and cannot be seen as a substitute for the kind of structural reforms to labour and product markets that the EU so desperately needs.”

He goes on to say: “The problem across much of the Eurozone is a lack of entrepreneurialism, as rigid and anti-competitive systems hold back enterprise and growth. Much greater liberalisation of product markets is necessary and we must appreciate and accept that the disruption this causes will lead to a degree of creative destruction.”

Sproule also believes that QE will have no discernable effect on unemployment levels across Europe – despite the general good health of the economy. High European unemployment remains a structural issue, and businesses are unwilling to hire because of a desire to avoid the significant liabilities of employment that still characterises Eurozone labour markets.

So how exactly does QE differ to the financial practices adopted outside of the Eurozone?

Sproule explains: “European businesses are far more dependent on bank debt than their American counterparts. In order for Eurozone QE to work, European banks have to use the new cash to lend, which in turn means they must be confident that their existing balance sheet is solvent and that the new loans they make are equally prudent.”

In closing, Sproule makes a recommendation for the European Union going forward:

“Member states need to work quickly to liberalise social and employment law, complete the single market in services and embrace digital innovation. The risk now is that QE blunts the desperate need for wider economic reforms.”