Supply Chain Corporate Responsibilities

From polluting the environment to creating sweat shops, poorly managed supply chains can tarnish the reputation of any company - not only that it makes good business sense. Many global corporations realize this, which is why they have been so progressive in maintaining supply chains that hold themselves accountable for everything from the labor they employ to the eco-friendliness of the parts they use and many actually report on their progress and efforts.

Doing its part, IBM has just released it's corporate responsibility report for 2008 and it dedicates a big part of it to its supply chain. Here are a few highlights from page 32 "Supply Chain Responsibility: A commitment to collaboration":

• During 2008, IBM continued to implement its Supply Chain Social Responsibility initiative across its global network of suppliers. By the end of 2008, we
  had completed a cumulative total of 553 initial audits; including expansion into
  three additional growth market countries (36 initial audits): Argentina, Malaysia
  and Vietnam.
• In 2008, IBM spent $1.5 billion inside the U.S. and $745 million internationally with first-tier diverse suppliers
• In 2008, IBM’s PELM operations worldwide processed 42,302 metric tons of
  end-of-life products and product waste. These PELM operations reused or
  recycled 96.9 percent of the total amount processed and sent only 0.6 percent to
  landfills or to incineration facilities for treatment, versus IBM’s corporate goal of
  minimizing its combined landfill and incineration rate to no more than 3 percent.
  

While the survey's that IBM has conducted with it's suppliers prove that more work needs to be done, I couldn't imagine having a supply chain that didn't take on this challenge. Having $38 billion in spend, as IBM does, gives a company a lot of purchasing power to encourage suppliers to adopt standards and practices that in many established countries are taken for granted. But again it's not just because IBM wants to be a "good-doer" as stated in the report, these efforts will "result in higher quality goods and services for our customers."

Square is now hip for watermelons

With summer now in its first official days I long for tasty sweet watermelons, particularly on those hot days. And while I never thought much about how much space they took up in my parents refrigerator when I put on my supply chain hat I can see where the trouble lies -- they are not easy to store, pack or ship. Until now.

Not only do they weight a lot, but they are oval, making stacking them incredibly difficult. The solution is of course square and for $80 USD in Japan you can buy yourself a square watermelon apparently. The Japanese have figured out that if you put glass containers on the fruits as they begin to grow, as they mature, they will take the shape of the container. Brilliant.

While this is great for consumers, it's really great for green supply chains. No more empty space between oval fruits, now producers can stack them and ship them just like boxes of laptops, i.e. more watermelons in less space, means better efficiency. Now they just need to get the price down to something more reasonable.

The Proof

On the heals of AMR's Top 25 supply chain ranking, which lists Apple at #1 the rumor mill is reporting that AT&T is already sold out of the new iPhone 3Gs. Which begs the question, this is now the 3 iPhone version, market data should be readily available, forecasting should be easy, so why the sell out for the #1 supply chain?

AMR's Top 25 Highs and Lows

It's become almost an annual ritual, similar to the Fortune 500, the top billionaires and the AMR Top 25 Supply Chain report. No joking, what AMR has done with the top 25 over the years has done plenty in getting supply chains the recognition it deserves. Here are some of the highs and lows from my view.

Putting on my IBM hat, it's great to see we are still in the top 5. This year we climbed a spot to #4. I am particularly glad to see the reference to IBM's "people supply chain", which is just as complex as a hardware supply chain.

One company I am glad to not see in the list this year is Zara, the Spanish clothing retailer. While they are second to none in getting clothes from the catwalk to the shop floor, they suffer in quality and anyone that shops at Zara would back me up here.

Apple continues to hold the #1 spot. I still have bitter memories of all the T-Mobile shops in Austria running out of iPhones on the launch day, so I'm not sure how you can be best in class when that happens.

Toyota is also curious at #10. This article in MarineLog reported that "Toyota had to rent a boat in Sweden to store 2,500 extra cars from inventory."

But overall I tip my hat to AMR and look forward to the next top 25 in 2010.

Is WEEE forgetting something?

This weekend I indulged and bought myself an expensive present that I've had my eyes for for about a year. The gift was a pair of Bang & Olufsen earphones. And as I imagined they sound as good as they look. Really, remarkable.

On opening the package just past the instruction manual (why headphones need instructions is beyond me), I found a 10 page guide stating that the headphones are WEEE compliant in about 10 languages.

If you don't recall WEEE is the Waste Electrical and Electronic Equipment act that was passed a few years ago. The basis of it is to eliminate electronics equipment from hitting landfills. It's a big part of any green supply chain for electronics manufacturers. Now don't get me wrong, I am thrilled that my new headphones are WEEE compliant, but did they need to print it on a separate paper booklet? Sure, paper recycles, but doesn't this in a way defeat the purpose? The overall end goal here is to eliminate waste, not create more of it.

So B&O good job on the headphones, good for making them WEEE compliant, but how about savings a few trees while you are at it?