Green Supply Chain Panel

Blog Post – Alison Mosle, MBA 2013

Michael Mistry – Greenblue/Sustainable Packaging Coalition

Drummond Lawson – Method Products

Jacob Madsen – Deloitte

Tim Kraft – Moderator

A recent New York Times article discussed the poor labor conditions at Apple’s manufacturing plant in Chengdu, China. We often perceive products as green or socially aware, but the impact can go much further than just the product’s ingredients. At the front line of the Green Supply Chain movement is Method Products (http://methodhome.com/behind-the-bottle/biodiesel), a consumer home products company with which we are all probably familiar. They are the fastest growing cleaning product company in the US and today most grocery chains carry their products. For Method, green supply chain includes a focus on the company’s transportation methodologies, labor practices, ingredients within everything from the soaps to the plastic bottles, and packaging efficiency.

In order to take the first step towards greening a supply chain, a company usually starts with a product Life Cycle Assessment (LCA). We must be able to measure the impact of our production in order to set a benchmark for improvement. However, as Jacob Madsen from Deloitte pointed out, it is complicated and expensive to conduct a full LCA on an existing product because your suppliers don’t usually want to provide proprietary information about the contents of their own products. So how do we push businesses to provide better information such that we can conduct LCAs? The panel suggested three incentives:

1. The opportunity to build and grow your relationship with your business partners who are very successful in the industry and the threat that they may turn to other partners.

2. The prospect to leverage your partner’s green supply chain knowledge to develop better products for yourself.

3. Non-profits are able to act as intermediaries between a supplier and manufacturer.

An easier approach to green supply chain creation is to start from product design. Innovate and create products designed to be sustainable. This is not only a cheaper way of “greening” your supply chain, but also creates additional product cost savings realized through decreased utility costs, waste reduction and efficiency in materials.

There was a large marketing push for green products in the mid-2000s as the economy was experiencing significant growth and firms were looking for a way to differentiate their products. Drummond Lawson said that it reminded him of what Greenspan said in 1996 referring to the dot-com bubble, “The economy definitely impacts sustainability preferences. In 2007 there was a little bit of ‘irrational exuberance’ about green products.” With the recession, there has been a reality check, creating change in the industry. Now companies are must ensure that products aren’t just marketed with “green” branding, but are also financially sustainable and can stand up next to non-green options.

We are taught at Darden, and through Net Impact, that it is possible to be a profitable business and a responsible, respectful world citizen. Sustainability used to be a type of product differentiation, but as we improve our technology and benchmarking processes, we find that sustainability can be a precompetitive option. This leads us, as business leaders, to choose innovation in our product design, to not only create more profitability, but also to create a positive impact to our society.