According to the International Trade Union Confederation, the largest 50 companies don’t directly employ 94% of the workforce that produces the goods and services they provide. This disconnection results in these companies and their consumers supporting inhumane working conditions. Consumers are growing more concerned about transparency and care where their products and services are sourced from.
Balancing Ethics and Business: Fair Trade in the Supply Chain
Big corporations like Apple has received criticism for child labour, 60 hour work weeks and discrimination within their supply chain and are working to address these issues. Since then they have responded and Apple has trained over 3 million supplier employees on their rights, although this is only a start. Here are more examples of what your supply chain can do to keep ethics in the equation and avoid negative brand associations:
- Fair trade purchasing power:
The market for fairly traded products have been increasing substantially, with brands like Ben & Jerry’s and Trader Joe’s selling Fairtrade certified products. However, be aware of administration issues involved in the growing Fair Trade movement. This includes certification fees that can be too high for some disadvantaged farmer cooperatives, and pricing have not yet taken account living disparities in different parts of the world.
- Starbucks brewing ethical communities:
Starbucks isn’t just the hip place for young people, they also care about their employees and customizes benefits to meet the needs of their workers around the world. In the U.K., they are the first private company that provide interest free loans to employees and in China they offer a monthly subsidy to help care for aging parents. As a big corporation, they still receive their fair share of criticism and have been accused for gentrification, but they are one of the most active companies to learn from.
- Patagonia’s supply chain transparency and campaigns:
Not only does Patagonia donate 1% of their proceeds to environmental groups, they are also transparent about their environmental impact, including the good and bad of their materials. In addition to supporting the removal of dams which affect the local eco-system and advocating for low-impact energy sources (solar, wind, tidal) they also support employee initiatives like bike-to-work week.
See more examples of how and why supply chains can incorporate more responsible practices here:
Socially Conscious Consumer Trends: Fair Trade – Agriculture and Agri-Food Canada
How It’s Done: Responsible Supply Chains – Supply Chain Management Association
The Supply Chain of Fair Trade Coffee: Challenges, Opportunities & The Future Inside A Troubled Industry – University of Vermont
Inside the Global Supply Chains of 50 Top Companies – International Trade Union Confederation
Global Changes: Cleantech and Stepping into Carbon Efficiency
The carbon footprint of your product or service stretches from the moment its raw materials are harvested until it gets to the consumer. From product manufacturing, distribution to disposal and recycling, carbon saving opportunities can be made across the entire chain. Whether it’s changing the final product or the processes that gets it to the consumer, here are some examples of what companies are doing to increase carbon efficiency and save money:
- Electric vehicles in your supply chain:
Tesla’s electric trucks have already been ordered by companies like PepsiCo and FedEx. Aside from reducing CO2 emissions by as much as 94%, these vehicles are optimized for road safety to reduce crash rates by 40% according to the U.S. gov. Although the Tesla truck costs $200 000, it only costs $1.26 a mile to run compared to $1.51 for diesel so it would be a cost-effective long term investment. Read more about the benefits of electric vehicles in the supply chain here.
- Buying potatoes by the pound creates an incentive to waste energy: Walkers, UK’s largest snack foods manufacturer reduced 10% of emissions and £1.2 million per annum by rewarding farmers for lower water content. They discovered their potato farmers store potatoes in humidified warehousing sheds to increase water content so they get compensated more. Afterwards Walkers fries the potatoes to drive off moisture, spending more money and energy through this process.
- Carbon capture developments in a warming world:
Based on a report completed to the American Association of Costing Engineers guidelines, a carbon capture system at Shand could capture cost reductions of 67% per tonne of CO2 at $45 US/tonne. While there is no single technological solution, government support for carbon capture initiatives is critical. Most initiatives are in early research and development, so it is still important for supply chains to do their part in limiting their carbon footprint. Learn more about commercial use in the future of carbon capture here.
Additional resources for reducing carbon footprints:
Carbon footprints in the supply chain: the next step for business – Carbon Trust
RE100 is a resource for companies that commit to 100% renewable energy.
LEED (Leadership in Energy and Environmental Design) certification for stores and buildings
Tech Vault: Takeaways from Agricultural Advances for Your Organization
Whether your supply chain deals with agriculture or not, farmers feed the planet and your organization can benefit from seeing how technology is revolutionizing the field. While AGtech takes in stats on water and nutrients, tapping into big data can be applied for deliveries and warehousing across disciplines. Organizations that stay connected with their product throughout the supply chain can reduce accidents. Learn more from these examples of innovations in agriculture supply chain:
- Data driven technology predicts yields:
Crop modelling software models the expected growth of crops based on the data farmers input, from rainfall to soil type. This is estimated to save $15-20 per acre tracking experimental hybrids for performance and transitioning crop soil areas is also made much easier. Despite this, farmer adaptation of data collection has not met expectations across Canada, the United States and Europe. Has your supply chain made use of big data to track the efficiency of your processes?
- Precision agriculture drives up profits:
Using technology like satellite imagery, farmers can see what fields need attention much more easily and predict changes to crops. Agricultural drones can scan crops as well, create GPS maps, transport goods and monitor livestock with thermal imagery. Drones can be used in any supply chain that require land surveying, mining, and inventory management. The market for precision farming is predicted to grow from 5.09 million U.S. in 2018 to 9.53 billion by 2023.
- Blockchain for crop chain:
Using blockchain, investors can keep track of the quality of crops from seed to harvest and know exactly what they are paying for. Indigo Agriculture is an example that pays farmers for end to end production contracts that follows certain quality protocol. Companies like Walmart are also using blockchain to track food safety, as we mentioned in our second bluEPrint which gives examples of uses for blockchain in supply chain!
- Vertical farming revolution:
Automated indoor farms gives locals a supply of fresh food, and using vertical space to grow more produce can reduce long distribution chains. When greens are stuck on ships and trucks for weeks before reaching the grocery aisle, almost half of its nutritional value is lost along the way. In our first bluEPrint, we mentioned millennial markets buy more groceries online and vertical farms can differentiate themselves with a fast delivery and more nutritional value. Plenty, a vertical farm startup even claims it can get 350 times the produce out of an acre of land, using 1% the amount of water.
Take a bigger bite out of AGtech here:
How Big Data will Revolutionize the Global Food Chain – McKinsey&Company
Agriculture 4.0: How digital farming is revolutionizing the future of food – Tech Republic
4 Factors for Vertical Farming Success – Brightgrotech
What do you think about these topics? If you have ideas on what you’d like to see or a case study you’d like to share, let us know!