For our final 2016 rewind, we’re looking at the year’s top eLearning modules. How can sustainability help limit the true cost of supply chains?
Fast fashion is the embodiment of unsustainable supply chains and consumerism. Why then does it still have such a following? And what can we as consumers do to change this.
Well, we could all start by watching ‘The True Cost‘ – a film documentary that highlights the very worst aspects of fast fashion. It’s an eye-opening, and at times harrowing, look at how consumer trends are impacting the lives of workers in developing countries.
Procurious were delighted to be able to host one of the film’s team, Lucy Siegle, to the Big Ideas Summit this year.
True Cost of Supply Chains
When it comes to Fast Fashion, Lucy is one of the UK’s primary experts. At the Big Ideas Summit, she delivered a message to the assembled procurement leaders – you are in a position to change this.
She believes that there needs to be a more holistic view of the supply chain. This can start with procurement, but needs to include consumers too.
Consumers can help develop sustainable clothing and fashion brands by investing in them. Instead of buying attractively cheap clothing, we need to consider the true cost of the garment. Your cheap t-shirt could be driving poor working conditions in another part of the world.
So what’s procurement’s role in this? Well, as the key stakeholder in ensuring supply chain transparency, procurement can ensure suppliers are adhering to proper procedure. The profession also has the chance to change fast fashion trends by supporting truly ethical suppliers. Only then can we break the cycle.
You can read more about Lucy’s work on the Procurious Blog. You can also catch up with all the thought leadership from the Big Ideas Summit 2016 on the eLearning Hub. And there’s a whole lot more there to keep you interested too! Happy viewing!
The concept of food deserts is nothing new. However, it’s presenting ongoing opportunities for social enterprises to make a real difference.
Food deserts are not a modern phenomenon – the concept has existed for the better part of 20 years. However, efforts to eradicate these deserts have stalled somewhat, and there are now calls for more work to be done to eliminate them entirely.
The food desert concept was first introduced by the UK Department of Health in 1999. They defined it as, “areas of relative exclusion where people experience physical and economic barriers to accessing healthy foods.”
Put simply, these deserts exist where access to affordable, healthy food is either restricted or non-existent for consumers. This would be due to the lack of stores or supermarkets in the area, within convenient travelling distance.
A report by the US Department of Agriculture in 2009 estimated that 2.3 million people in the USA were living in food deserts. This is the equivalent of 2.2 per cent of the entire population. However, it’s difficult to fully gauge the impact of food deserts, as global figures are less well documented.
Measuring Food Deserts
Food deserts have traditionally been measures as the distance from households to their nearest supermarket. The original measure, still used by the US Department of Agriculture, is for low income households living more than 1 mile (urban), or 10 miles (rural), away from their nearest supermarket.
The map below shows how that looks across the USA today:
However, there is little consensus on which measures should be used to define food deserts. Some studies have used the measures of the type and quality of food available to purchase, while others have focused on the ability or inability of consumers to purchase them.
Other issues lie in the categorisation of stores. In parts of the USA, small retail outlets that sell food are classed in the same category as larger supermarkets. This is done even when the retail outlet in question sells limited, or predominantly junk, food. This has led to concerns that some food deserts are being missed entirely.
Access Only Part of Problem
Controversy also surrounds the simplification of food deserts as an issue over access to low-cost, healthy foods. Critics have argued that proximity alone would suggest that nearly all of rural America would be classed as a food desert.
In one study in Flint, Michigan, even when a local grocery store was introduced to a food desert, community attitudes and practices didn’t change. In fact, the amount of prepared and fast foods consumed during the 17 month study period actually increased.
Other factors that experts have argued for the inclusion of include poverty (it’s widely acknowledged that low income and poor nutrition are directly attributable), and education or attitude to foods (the fact it’s often cheaper to buy chocolate than an apple).
In the UK particularly, there is still a perception that healthy foods are more expensive. There are also concerns that as confidence and skills in creating meals from scratch decrease, junk food habits will rise further.
Social Enterprise Solutions
Definitions aside, it’s clear action needs to be taken in order to combat the issue of poor nutrition.
There are a number of small businesses and social enterprises in both the UK and USA helping to bring affordable, healthy food to communities.
Bristol, in the UK, is one place affected by food deserts. Although the city has been awarded a silver ‘Sustainable Food City‘ award, there are still areas suffering from a lack of access to healthy food.
In light of this, in 2015, small company called Fresh Range was formed. Fresh Range sources directly from producers, enabling them to charge lower prices for fruit, veg, and meat. It even offers doorstep delivery for £1 on orders over £20.
On top of this the produce is all locally sourced, meets sustainability and the highest animal welfare standards. The company also re-uses and recycles packaging in order to keep running costs down.
Fare & Square
In the USA, the baton for combatting food deserts has been picked up by social enterprises. The two which have received the most support and airtime are Fare & Square in Chester, Pennsylvania, and The Food District in Columbus, Ohio.
Both are non-profit organisations, however they offer slightly different services.
Fare & Square is a crowd-funded grocery store operating in a food desert. It has committed to charge 8-10 per cent less for produce than other stores. It also offers a further 7 per cent discount for customers meeting poverty guidelines.
The Food District also offers access to affordable healthy food. As well as creating jobs and ensuring that produce is sourced locally, the Food District offers community education and training programmes to overcome all the causes of food deserts.
Time for Action
There are plenty more social enterprises around the world helping to tackle the problem of food deserts. However, the issue of food deserts is still on the rise. And it’s clear that more needs to be done to help everyone in the world have access to healthy, affordable food.
Why not have a look into what’s happening in your local area? You could help out with, or donate to, your local food bank. Or help local charities who are delivering food to people who can’t get out themselves.
If you have a social enterprise in your area, contact them and see what you, or your company, could do to help? If we all take action now, collectively we stand more chance of eradicating food deserts for good.
Considered by many to be the next key frontier for business, Social and Sustainable Procurement are finally getting the attention they deserve.
Ahead of the Big Ideas Summit 2016 on April 21st, we are taking a look at the key issues facing procurement in the coming years. We have asked experts and influencers in our community to share their Big Ideas on the themes we will be discussing on the day.
Here, our experts and influencers share their thoughts on the Big Ideas impacting organisations in the fields of social and sustainable procurement.
Matt Perfect, Founder of Something Great – “Impact Spending and Social Impact Measurement”
I believe “Impact Spending” is the next frontier for defining ‘value’ in procurement. That is, spending on goods and services with the intention to generate a measurable, beneficial social or environmental impact, alongside economic benefits.
Some might say that the history of procurement can be traced by our broadening definition of value. In the old days, our decisions were mostly price-based with little regard for ‘value’ at all. The evolution of strategic procurement brought with it a greater understanding of the importance of quality and service and the ‘value for money’ equation was born. Increasingly, risk and innovation have been added to the mix, and evaluation models such as Total Cost of Ownership have become much more sophisticated.
It is becoming increasingly apparent (both in theory and in practice) that organisations can no longer separate their profitability and growth, from the impact their activities have in society. As such, procurement and supply professionals must be able to account for, and measure, the impact of their spending.
There is much the profession can learn from the emerging field of social impact measurement. By incorporating such measures as Social Return on Investment and Theory of Change into spending decisions, we will unlock the next wave of procurement value for our businesses.
Regulatory pressure on companies to report on CSR criteria in supply chain is increasing – the UK Modern Slavery Act and the Dodds-Frank Act in the US are recent examples. ISO/DIS 20400, currently under development, will provide clearer guidance about what is expected from organisations wanting to implement sustainable procurement.
Improved supply chain transparency will put pressure on procurement organisations to build category-specific strategies and make sourcing decisions with sustainability in mind. Criteria, such as sustainability and labour ethics, will be increasingly included alongside financial and risk data as factors that go into processes like supplier management, sourcing, and contract management.
Extended information and third party content, specialising in sustainability data for supply chains and procurement organisations, are on the rise. But it will soon be indispensable to have this information deeply integrated into people, process, and technology to make CSR-positive sourcing decisions as easy as possible.
It’s a crucial part of the wider picture of value-based sourcing: developing sourcing decisions beyond the purchase price.
In terms of the now, we are seeing procurement take an interest in what role they play in sustainability. Procurement is realising that they can make a huge impact in the way they source through the supply chain.
This is exciting to procurement professionals as their job now has a new lease on life, and they aren’t just feeling like they are saving money and going through the process of buying stuff. This will shape the procurement profession in the future too, as it becomes more strategic in achieving sustainability goals for the organisation.
In terms of the future, I see the concept of finite resources impacting the way we procure products. Concepts like cradle to cradle and circular economy are driving innovation through material use. Procurement will have to be more innovative than ever as the world shifts to more sustainable materials.
They must be on the lookout for sourcing decisions that make use of alternative resources, reduce waste and reclaim any unused materials. This also goes for materials that are toxic and do harm. Procurement must work to avoid these, and find materials that do not harm the environment.
Do you work in social or sustainable procurement? What are your Big Ideas in this area? Let us know and we could be discussing them on April 21st.
Thirsty for news? Lucky for you we’ve prepared a liquid lunch for your pleasure. So pop-back that ring pull, fill that glass with ice, and drink-in our weekly news update.
Coca-Cola pledges $5bn investment
The Coca-Cola Company and its African bottling partners announced a new investment of $5bn during the U.S.-Africa Leaders Summit in Washington.
The investment, to be made over the next six years, increases its total announced investment in Africa to $17bn from 2010 to 2020.
The Company and its bottling partners anticipate that this investment will fund new manufacturing lines, cooling and distribution equipment and production; create additional jobs and opportunities across Coca-Cola’s African supply chain; and support key sustainability initiatives and programs focused on safe water access, sustainable sourcing, women’s economic empowerment, community well-being and operational efficiency improvements.
KFC’s Indian ambitions hit by quality-control issues
The fast-food chain is already China’s biggest restaurant operator with 4600 outlets, but it appears that opening 2 new stores a day is beginning to take its toll – especially when it comes to quality-control.
KFC is reeling after a Chinese supplier was accused of selling expired beef and chicken to it, McDonald’s and possibly other restaurant chains.
“On the supplier side, people are not well-trained, or there is not good oversight,” said Ben Cavender of the China Market Research Group. “On the restaurant side, they have people checking the products, but they probably don’t have enough people who are spending enough time at the supplier sites.”
APICS has announced that it has completed its merger with Supply Chain Council, creating a global provider of supply chain research, education and certification programs.
“As APICS and APICS SCC, we now have the resources to ensure supply chain organizations are ready to address two of the most important topics in the global economy today – elevating supply chain performance and developing supply chain talent,” said Abe Eshkenazi, CEO of APICS.
The merger creates a global leader in supply chain solutions, poised to benefit members, customers, partners and employees in several ways.
When it comes to sourcing, Kimberly-Clark has set lofty goals. The target is to source 100 per cent of its wood fiber from suppliers who have achieved third-party certification of their forestry activities by 2015.
A 2016 target is to achieve 100 per cent chain of custody certification. All of the Kimberly-Clark tissue mills in North America and Europe are already chain of custody certified.
The company also achieved a 26.4 percent reduction in water use in manufacturing in 2013, beating its 2015 goal of 25 per cent. Further reductions can be observed in areas such as greenhouse gas emissions, and energy use.
World Bank’s procurement process to undergo reform
Under the changes a one-size-fits-all methodology will be replaced with a more tailored approach, with procurement made more “fit for purpose”. Christopher Browne, the bank’s CPO, said: “We’re making World Bank procurement fit for the future.”
The new framework introduces sustainability, use of procurement systems other than the World Bank’s, engagement with strategic suppliers and a more streamlined approach to complaints.
Supply chains becoming increasingly vulnerable to cyber attacks
While natural disasters such as earthquakes, tsunamis and flooding have disrupted supply chains around the world, cyber attacks pose even greater risks as companies rely more on computers and the Internet to conduct their business.
Companies need to be keenly aware of their cyber and supply chain risks as well as the limits of cyber, business interruption and general liability policies when buying insurance.
“Supply chains, especially critical infrastructure supply chains, can potentially be very vulnerable to hacking and malware attacks and, depending upon the attacker’s motivation, susceptible to business interruption and extra expense exposure,” said Ken Goldstein, Hartford, Connecticut-based vice president and worldwide cyber security manager at Chubb Corp.
“Space in warehouses is expensive, but what if somebody takes out your weekly shipment?” said Dena L. Magyar, Charlotte, North Carolina-based vice president and national practice leader in the professional risk group at Wells Fargo Insurance Services USA Inc.
Sasol enjoys 17% profit hike, eyes-up local suppliers
The world’s largest producer of gasoline from coal said full-year profit probably rose as much as 17 per cent as an increase in synthetic-fuels output exceeded its forecast and the rand weakened.
It was recently reported that it was looking to increase the number of local firms in its Mozambican supply chain. Benjamim Cavel, local content manager for Sasol in Mozambique, said the company had to “lead by example” and it was working with local suppliers to bring them up to the level where they can compete with multinationals.
Speaking at the CIPS Pan African Conference in Zambia, he said: “Sasol Upstream Oil and Gas intends to grow the economy of Mozambique. One way is to integrate the local supplier market into supply chain activities.