December 2013
Food, apparel vendors go sustainable

Often, companies that manufacture consumer goods find themselves under a particularly unforgiving spotlight. Industry insiders can be tough in their criticisms of firms' sourcing and procurement practices, but consumers themselves are considerably more demanding in their expectations when it comes to sustainability. 

With eco-friendliness, fair trade and other concerns increasingly becoming subjects of public attention - and many individuals displaying very strong feelings about these issues - the consumer products market has little choice but to amend its practices in light of the developments. Two of the most critical segments of the market - clothing and food - have already made considerable headway in this regard.

H&M holds suppliers accountable

Producers of basic, essential goods are easy media targets for failures in sustainable product sourcing, and clothing manufacturers are no exception. Yet despite the problems in supplier transparency and ethics that often accompany offshore manufacturing - a widespread procurement practice in the industry - some companies in this space are making clear that they are serious and committed to their efforts 

Quartz contributor Sarah Labowitz, co-director of New York University's Center for Business and Human Rights, recently profiled the efforts toward sustainable supplier management made by major apparel manufacturer and retailer H&M. In December, the firm announced a plan to ensure that 850,000 employees who work for its strategic sourcing partners, primarily in Asia, would be paid a "fair living wage." H&M is set to begin putting the plan into action with its suppliers in Bangladesh and Cambodia in 2014, and if the model proves successful, it will soon be expanded to 750 more factories. 

"It's an ambitious plan that expands the company's longstanding efforts on workplace issues in its supply chain," Labowitz wrote. She suggested that consumers could feel confident that "this is at least a serious effort" on the part of H&M to hold its supply chain accountable for its business practices.

Food trucks: the sustainable restaurant?

The restaurant industry is another subject of consumer attention regarding sustainability. But the food sector is also a hotbed of trends, and one of the most popular development in recent years has been the burgeoning food truck scene in a number of American cities.

The Kingstonist recently raised the question of sustainability in reference to these "slick mobile eateries," pointing out that their size requires them to be particularly careful about water consumption and energy efficiency.

"They have the potential to be eco-friendly green machines," the source wrote.

Hopefully, 2014 will see increased demand and success for innovative strategies in sustainability among firms in this space.

Durable goods, sustainable transportation may be key to US economic growth in 2014

The past 12 months have seen steady growth for the United States and global economies, and the trend toward recovery is set to continue through 2014. In the United States, domestic manufacturing has been at the forefront of the positive economic growth. The success of companies in the sector may be related to their ability to adapt to the offshore manufacturing trend, which has helped them find new ways to make U.S.-based production a more effective business model. But as the industry bounds ahead next year, sustainability is sure to play an increasingly important role in the distribution supply chain.

Manufacturing ends the year on a high note

As December wound to a close, reports continued to look good for manufacturing growth. According to The Wall Street Journal, the Commerce Department recently announced that demand for U.S. durable goods rose by 3.5 percent in November in comparison with October. Products considered durable goods include cars and aircraft. Meanwhile, orders for manufactured goods other than transportation-related items rose by 1.2 percent overall.

"Stronger orders bode well for both the fourth quarter and 2014 economic growth prospects, suggesting that companies remain keen on increasing investment and expanding capacity as the economy and consumer sentiment improve," said Gennadiy Goldberg, a strategist at TD Securities, according to the news source.

Demand for sustainability, innovation in 2014

Of course, the kinds of improvements Goldberg predicted for manufacturing activity, investment potential and consumer confidence are exactly what companies want to hear as the new year approaches. However, taking advantage of the coming growth won't be a simple proposition for manufacturers. Rather, it will require them to be smart about their business plans, achieving a high level of operational excellence while also reducing costs and considering the sustainability of their supply chains.

Many of the products that fall under the category of durable goods are transportation-based - and while consumers seem to be more positive than in the past about purchasing cars and other automotive products, the transportation industry is undergoing dramatic changes.

In a post for the GreenBiz blog, environmental and business journalist Garrett Hering highlighted the movement toward sustainable transportation that took place in 2013 and the trends that accompanied the development. In addition to a surge in sales for electric-powered vehicles, the past year also saw an increase in peer-to-peer car sharing initiatives launched by startups like BuzzCar as well as major companies like SAP. Meanwhile, biofuel made inroads in aviation, and big data analytics allowed rail and motor companies to create more efficient logistics.

If the durable goods sector wants to continue its growth, it will need to emphasize sustainability.

Productivity, spend management are integral to manufacturing growth

Manufacturing firms continue to benefit from nationwide economic recovery - but business cost reduction is still necessary for companies to thrive and remain competitive.

A recent Dow Jones poll revealed that economists estimate December's manufacturing growth has been generally consistent with the numbers from November, MarketWatch reported. On average, the experts projected an industry expansion rate of 56.7 percent during the final month of 2013. And while this figure, if correct, would represent a slight decrease from the previous month, optimism about the direction of manufacturing and the overall economy in the new year remains strong.

"As we get ready to close the books on 2013, we're not only hopeful but reasonably confident ... 2014 will be the year when the U.S. economy finally shifts into a higher gear," said Regions Financial Chief Economist Richard Moody, according to the news source.

Job creations bring change

The confidence expressed by Moody and other economists is playing itself out in actual companies' operations. The Seattle Times spotlighted the recent recovery experienced by D'Addario, a manufacturer of strings and other accessories for musical instruments. The company's co-president Rick Drumm told the news source that his firm was "about 85 percent back" to the levels of activity it enjoyed prior to 2008's economic downturn.

The recent growth has resulted in job creation - but it's also required D'Addario to adopt technologies that allow its employees to be more productive, the source reported. National Association of Manufacturers Chief Economist Chad Moutray suggested higher employee output would increasingly become a normative spend management practice in manufacturing.

"Because [workers] are so much more skilled and manufacturing is much more advanced than it used to be, it further serves to increase those productivity gains," remarked Moutray, according to The Seattle Times. 

Moutray's comments suggest that even with the continued return to economic strength projected for 2014, it will remain necessary for manufacturers to carefully manage their operating costs.

With PC manufacturers exhausting their "almost as good as a MacBook Pro" ultrabook marketing sometime around the summer, this holiday season was rife with commercials touting convertibles, hybrids, and 2-in-1 laptops from all the big names. Regardless of the name used, this laptop-that-turn-into-tablet body design is clearly intended to be the next big thing in the laptop market, and if the commercials from Microsoft are any indication, they intend for businesses to begin adopting them in large capacities.

So let's look at a few fuzzy areas with these new laptops and see if we can't clarify some things.

1. There are two general types of these devices.

There are two classes of hybrid devices being produced today, and the easiest way to distinguish them is tablet-class and laptop-class.

Tablet-class devices are going to have specs similar to smartphones and, if you're used to PC terminology, the language will sound slightly exotic. Processors will be ARM and sport names like Nvidia Tegra, RAM won't exceed 2GB, and on-board storage likely won't exceed 32GB. These are tablets first, laptops second, and the majority don't include more than a single USB port as a peripheral connection. The tablet-class devices are lighter, feature nothing larger than a 10.1" screen, and treat the keyboard as an accessory, allowing for it to easily mount and dismount without an issue. They're hobbled by software limitations, though, due to their reliance on Windows RT or Android.

Sample tablet-class devices: Microsoft Surface, ASUS Transformer Book, Nokia Lumia 2520

Laptop-class devices, on the other hand, are laptops first, tablets second. These carry standard processors with much more robust RAM and storage options, and have the input/output ports of modern laptops. The laptop-class devices are larger, with 13.3" to 15" screens, and run Windows 8, which makes them more suitable for office work. However, these devices treat the keyboard as a dock rather than a peripheral, requiring a mind-numbingly tedious disconnect procedure before you can use the screen as just a tablet.

Sample laptop-class devices: HP X2, Lenovo Yoga (kind-of)

2. There are two types of Windows.

Every tech magazine and blog has beaten this fact to death since the debut of the Microsoft Surface, but just to reiterate: there are two versions of Windows.

Windows RT comes pre-installed on tablet-class devices, and includes Office. It also has an App Store/Google Play-like storefront for Windows RT applications and developer criteria that ensures a consistent user experience, but is low in total applications. It does not have any of the policy or networking tools that allow it to be secured and controlled in a business environment.

Windows 8, on the other hand, comes pre-installed on laptop-class devices but can be installed on other suitable machines as well. This is what you think of when you think "standard" Windows. It doesn't come pre-installed with Office, but it can run anything you have. There are no limitations from a developer standpoint, so there is no guaranteed consistent user experience.

Big caveat: both of these versions rely on the Metro UI (big colorful blocks) that Microsoft debuted with Windows Phone, and has now pushed across its product line. It is drastically different - like, heavy learning curve even for experienced users - than any previous Windows version in recent history. The design change is as drastic as the change from Windows 3.1 to Windows 95, only the learning curve is steeper.

3. Neither one is business-ready yet

To be blunt, both types of these devices are plagued with quirks that are better described as stupid decisions.

For tablet-class devices, the keyboards are, to the last one, terrible. The Surface has two, a "touch" and a "type", the former relying on immobile "touch" keys while the latter is more traditional. They both have the responsiveness of a pizza box. Other keyboards in this class are akin to typing on gummy-backed Chiclets. Then there's the lack of software, which limits their functionality. Browsers other than Internet Explorer are crippled, and outside of Office, there's not much business software built to run on ARM-backed devices.

For the laptop-class devices, the limitations are all from dumb decisions. Disconnecting the keyboard to use the screen as a tablet? Better find the "Safely Remove Hardware and Eject Media" icon and disconnect it properly, or you get a multitude of warnings. Want the on-screen keyboard to automatically pop-up when you hit a text box - y'know, like it does on every other tablet or mobile device OS on the planet? Unless you're using one of the included Metro-styled programs, it's not happening.

In conclusion, neither set of devices are ready for the business world yet. There's even a third category relying on Intel Atom processors that put Windows 8 in a compact platform -- it's actually the worst of both worlds, and isn't even ready for the consumer market. Some of these issues are hardware-based and some are Windows-based.

If your office is planning to implement these, definitely hardware test and vet for these issues, and double your support team for the first six months. Expect a lot of calls for "Why can't it do...?"

With the promise of a fresh start that each New Year brings, IT managers get to take a deep breath, clear their heads of any residual holiday egg-nog and dive head first into the new list of IT challenges in 2014.

The good news is that with the United States steadily climbing out of the recession, and corporate profits at all-time highs, IT budgets are growing in 2014. recently released a survey of 4,100 IT professionals and the results showed that 65% of them expect a budget increase for the upcoming year.

Where will the extra money go? Productivity enhancements or infrastructure? Software or hardware?

Here are a few of the technology trends that we believe top companies will be embracing in 2014.

Bring Your Own Device

Bring Your Own Device (BYOD) isn't a new trend, but it is one that is catching on by a greater number of companies each year. There are numerous benefits to companies with BYOD, like costs savings, increased productivity and general employee satisfaction.

The downside is that it requires an organization to let go of some of the control that it maintained over hardware and software choices that employees had and that it increases the potential of data loss and security breaches.

As companies implement BYOD policies, they are going to need to develop a set of robust policies around acceptable use, containerization of company data, and retrieval of employer data in the event of employee separation.

Modernizing Data Centers

Companies will embrace green technology as a cost-savings project as well as a public relations initiative. IT departments will lower energy consumption by upgrading servers and systems for better consolidation and efficiency. Also likely are data centers supplement traditional HVAC systems with new technology like chilled water heat exchanges.

Additionally, businesses of all sizes are going to place a greater emphasis on cloud services.

Disaster Recovery

It seems that every few weeks a natural disaster devastates a region of the country. Superstorm Sandy in 2012 woke a lot of executives when they saw their systems knocked off-line when New York City became paralyzed by flooding rains and wind.

Companies will focus heavily on finding the gaps in their disaster recovery plans and develop new strategies for data replication, and utilize services that safely keeps their business critical applications and data far away from their primary facilities.

Big Data

"Big Data", which exploded in 2013 will continue to drive businesses in 2014. Most experts agree that location intelligence, i.e., where a consumer is at any given time, will be extremely important to those in the finance, retail and service industries. Organizations will be looking for ways to converge their online and offline data to better target new and existing customers.

More companies will recognize that being able to provide their salespeople with information pooled from social channels, purchase history, and CRM means arming them with the big data context needed to engage customers and prospects with highly targeted messages." --Andy MacMillan, VP of Salesforce
Source One Management Services is uniquely qualified to help our clients through complexities of sourcing IT services. Whether your company needs a cloud hosting provider or a MSP that focuses on delivering and supporting enterprise level applications, Source One can identify best-in-class suppliers that will help your business lower costs, improve processes, and drive positive results.

Happy New Year

Technology proves central to US manufacturing

It only takes a cursory glance at the current consumer and corporate landscape to determine that technology has become integral to the way we live our lives and conduct business. Sophisticated tools such as cloud computing and big data analytics have proven their relevance even to relatively low-tech companies. Meanwhile, smartphones and tablets are now among the most popular goods in the consumer product market, and mobile technology is finding a place in workplaces, too, as companies adopt bring-your-own-device initiatives and allow employees to do their work on mobile devices.

As the manufacturing sector has returned to its former health and continued to grow over the past year, the industry has been shaped in its own right by these and other technological developments. Not only has the increased need for strategic sourcing in the consumer electronics market resulted in considerable activity for suppliers that specialize in materials for mobile devices, but advanced technology has also begun to change the methods by which manufacturers produce their goods.

National Public Radio recently spotlighted the development of high-tech manufacturing in the United States. The source spoke with Richard Mileika, founder of Machine Inc., a Stoughton, Mass.-based company that produces aerospace parts via a computer-operated milling machine that can shape a hunk of aluminum into a finished product.

"That is our weapon for being competitive - whether it's local competitors or global - being flexible and being productive," Mileika told NPR.

As consumers and governments get smarter, so must manufacturers

Mileika's comments highlight the need for U.S. companies to streamline their operations through technology in order to reduce manufacturing costs and stay afloat despite the trend toward offshore manufacturing.

However, there's also pressure from consumers and government organizations in this regard. As state and local laws enforce eco-friendliness and customers clamor for sustainability, it's become all but necessary for companies to adopt cutting-edge, green technologies.

In the food sourcing and distribution sector, for example, tolerance for low-cost packaging materials that negatively impact the environment is at an all-time low. According to Sustainable Business, New York City recently banned styrofoam and is launching a new program that will require some restaurants to compost their food waste, although others have signed up voluntarily.

At a time when the average citizen is more informed than ever about environmental issues - and likely to make purchasing decisions based on whether or not a brand's practices harmonize with their stances on these matters - technologies that support sustainable product sourcing and production are likely to become vital.

Why companies are looking to SaaS applications for supply chain data
Sourcing and procurement specialists are often concerned primarily with broad operational issues at their respective firms: how transportation can be improved for energy efficiency, for example, or how sustainable supplier management can improve business partnerships and communicate a brand image that is forward-thinking and environmentally conscious. And of course, business cost reduction is always a chief concern.
Given the sheer number of topics that supply chain management executives need to address, it can be easy to become lost in the details or overwhelmed by the breadth of factors at play. Nevertheless, it's important that professionals who oversee their companies' distribution networks take an occasional look outside their direct field and its particular set of concerns. Cloud computing and big data are areas of great growth and development that promise to help supply chain managers do their jobs more effectively.
The problem of data in managing the production supply chain

Companies in the manufacturing and consumer goods sectors are already discovering the benefits of Software-as-a-Service (SaaS) solutions - another term for programs that run in the cloud - for managing their strategic sourcing networks. The primary benefit of SaaS applications in this regard is their ability to analyze and deliver data in more powerful and efficient ways.
Being able to access the right kind of information is integral to supply chain optimization - but it is not always as easy as it should be. In a column for Manufacturing Business Technology, E2open Chief Marketing Officer Michael Schmitt suggested that data is a double-edged sword when it comes to maintaining healthy and profitable business-supplier relationships.
"Better information leads to better decision-making. But incomplete, inaccurate, or untimely information can be worse than useless - it can be actively damaging to your business. Demand instability is a perfect case in point. In this environment, success hinges on the ability of the entire trading partner network, not just the brand owner, to reliably and cost-effectively manage demand volatility," Schmitt wrote.
Data is crucial to the risk management process, and as companies' information sets grow to a volume that could be considered big data, high-capacity, cloud-based analytics applications will become necessary to help executives understand how they should tailor their operations based on that data.
Looking to cloud applications for enterprise resource planning

What's more, those decisions need to be made as quickly as possible so that the proper courses of action can be taken. And in order to make decisions both quickly and accurately, real-time data is essential.
Many companies are turning to cloud analytics platforms in order to obtain continually updated insights into their suppliers. Kenandy CEO Sandra Kurtzig explained in a recent post for InformationWeek how cloud-based applications allow manufacturing companies to stay agile and adaptive in a dynamic, changing market.
"Agility is the ability for a company to react quickly to changes in business conditions without a lot of disruption. That means the ERP system has to be easy to use, customize and integrate with existing technologies. It has to offer continuous visibility. The agile manufacturer needs to respond quickly when requirements change," Kurtzig wrote.
Kurtzig gave the example of a manufacturing supplier running out of a particular part. In order to effectively bounce back from this situation, the company needs to be able to determine in a very short amount of time where else they can obtain the item so as to avoid letting productivity suffer and losing revenue. Alternatively, cloud-based enterprise resource planning tools can also let companies know when a part becomes available for a lower price with another supplier.
As the American manufacturing sector begins to regain traction, having fast access to the kinds of insights that SaaS solutions make available may prove to be the determining factor in a company's ability to stay at the top of the field.
India is on track to be the world’s most heavily populated country by 2025 and there needs to be a plan of action to feed the country and prevent shortfalls in the future. With a growing population and a reluctance to import agricultural products, India and other countries need to rely on changes in their policy, culture and diversity of food products to look to make an impact on feeding this growing population.

It is difficult to export products to India based on the country’s viewpoint on importing agricultural products. In many cases, India views importing food as a sign of failure or inability to grow products in their country which results in large tariffs on imports. To illustrate the lack of imports, in 2012 US agriculture exports to India were $881.5 million which is a minimal amount of exports for the US. When reviewing the top 15 US agriculture exports destinations, the 15th top export country is Vietnam, importing $1.65 billion from the US (1). India’s current top US imports include products such as fresh fruit, with apples being the leading crop, almonds, pulses, and dried peas. Currently, India is producing surpluses of rice and wheat and research has indicated that this will continue to be a trend in the future for this country. The South Asia Director of the International Food Policy Research Institute is an advocate for Indian farmers and lowering the minimum export prices so that India can become competitive in the marketplace.

The culture of India and their pride on growing their own agriculture products can cause a disruption in the exporting and importing of products. The Indian culture can be very protective of their products which can cause random bands on exporting product. Politics also impact this country where the small scale farmers are treated with special care and politicians do not want changes in imports and exports that could potentially threaten them. Decision making is slow in India when it comes to agricultural products and trade favors are part of the political culture making it difficult to lift barriers in this commodity area impacting import and export controls.

Bringing a diversity of food products to India is another important factor to the growing population. This country is comprised of cultural diversity that impacts the agricultural market; therefore when countries are looking to export their goods to India it is important to understand that the products they demand are diverse. Experts indicate that the way to impact India is not directly through the consumer but through building relationships and demonstrating your willingness to work with India on a long term basis. Allan Mustard with the USDA Foreign Agricultural Service indicates "we cannot look at India as a mass market of 1 billion consumers. The needs and cultures are diverse. Selling California Almonds may penetrate half a billion of the population while California wine may impact 25 million people".

Overall there is opportunity to build relationships with India, especially with importers to take advantage of the growing population. Relationships in a supply chain on a local and global basis are important factors to consider as population continues to increase and sources for food become a greater challenge across the globe.
How the US manufacturing landscape is changing

Manufacturing remains essential to the United States economy, but like most industries, it's experienced its fair share of setbacks in recent years. One of the primary issues the sector has had to deal with is that the global procurement landscape has undergone considerable changes since the turn of the century, and many of these developments have picked up speed in the last five years. Companies began moving to offshore manufacturing - a type of outsourcing specific to the industry - in order to meet the challenges of an economically difficult period that required firms to cut costs wherever possible.

Outsourcing is, of course, a contentious topic, but regardless of one's take on the issue, one thing remains clear: Manufacturing in the U.S. has to adapt to the changes in the production supply chain or risk falling behind the offshore competition. The worst course of action would be for domestic manufacturers to simply pretend as if the trends weren't happening.

Luckily, that's not at all the choice that U.S. companies have made. The signs are looking up for nearshore manufacturing. However, firms have had to change with the times in order to find a niche in the current market. 

A different kind of labor

The need for small, sustainable production is one that U.S. manufacturers are particularly well poised to meet. In a column for, Global Supply Chain Solutions President Philip Odette discussed the increasing emphasis being placed on skilled labor. He noted that in light of emerging factors - not the least of which is a global shift in consumer purchasing habits - economic regrowth promises new opportunities for manufacturing in the U.S.

"The only thing missing is enough skilled workers to maintain the momentum," Odette wrote.

The sector's renaissance in America stands in contrast to other Western nations. According to the Financial Times, new data from the United Kingdom's Office for National Statistics revealed that manufacturing fell from 18.7 percent of the UK's total economic output in 1997 to 10.3 in 2011.

Odette noted that a partnership between the National Association of Manufacturers and GE Appliances CEO Chip Blankenship seeks to ensure that through technology, the U.S. can capitalize on the potential for continued growth.

"One of the biggest focuses will be encouraging students to study technology that relates to manufacturing and engineers. The U.S. can become a hub of innovation for developing and building the robots that may operate the manufacturing lines of tomorrow," Odette noted.

And with more of an emphasis on skilled production, small business manufacturing is likely to play a more integral role as well.

When I was a kid, my dad ran one of the handful of electronics shops my incredibly small southern hometown could support at the time (this was early '80s - Walmart's electronics section was an aisle, not a department). As the '80s gave way to the '90s, the commoditization of TVs had taken hold, and the market was flooded with upstart no-name brands (Goldstar is the one I remember from the time; you now know them as LG) that were available at incredible prices. Unable to compete on price, the big-name legacy brands focused on quality, and then that argument began to falter. Now, the marquee brands are shells. When's the last time you saw a Magnavox? Or considered buying an RCA product? Or even remembered that Quasar existed as Panasonic's upscale cousin?

I tell that story, not because a bit of my childhood died when I learned that Quasar - the brand my dad was the exclusive outlet for in Selma, AL - is now being slapped onto cheap, third-party manufactured flatscreens, but because that same type change is happening all over electronics now as patents expire and overseas manufacturing becomes more skilled. If you read any technology news on the underpinnings of web successes like Facebook, you'll see that IT equipment is rapidly being commoditized and undercut with no-name and generic suppliers. But what's uncanny is that the concerns that plagued the early days of TV commoditization are being repeated, almost word-for-word, with these insurgent IT equipment providers.

Quality? Reliability? Service? Warranty? These are all big questions that you hear in an attempt to mitigate the appeal of much-cheaper no-name equipment, so it's again a question of price vs. quality. Here, though, quality holds a much higher place. In the '80s, if your cheap, no-name TV went out, you were out $200 and your bratty kid couldn't watch A.L.F. for a few days until you went and bought a new one. Buying off-brand or no-label IT equipment offers tremendous value opportunities, but it's much more risky than buying a cheap TV. There are quality of service questions throughout the process:

- Is your IT team capable/skilled enough to determine needs and specs to the point that they can order equipment directly from a manufcturer?
- Is the manufacturer reliable enough that you will receive the equipment that you actually ordered, and receive all of what you ordered?
- Will the equipment be reliable in the long run, or will it fail more often, increasing the TCO?
- Will your network be built robustly enough to accommodate for equipment failure, or will you need rapid replacement service from the supplier? Does the supplier offer any type of service package?

All of these are big questions right now, and are big enough to still sway purchases towards the big legacy brands like Dell and HP. So while there are tremendous cost savings available from no-label equipment manufacturers if your IT budget is large enough and your IT team skilled enough, it's still not a universal route for savings.

Manufacturing growth and sustainability go hand in hand

With the year drawing to a close, it's become increasingly clear that 2013 has seen continued signs of economic renewal in the United States and abroad. At the same time, it's also apparent that sustainable product sourcing has become vital to the manufacturing supply chain. And in 2014, these two phenomena are likely to be intimately related.

The domestic energy boom

Energy has been a center of new economic activity in the United States, and the sector proved more productive and promising than ever in recent months. A report by the National Association of Manufacturers (NAM) revealed that domestic oil and shale gas production has been behind a recent economic and job creation spurt, and much of that growth has been focused on forward-thinking methods of energy sourcing. The study found that the unconventional gas and oil supply chain contributed $284 billion to U.S. gross domestic product in 2012. Furthermore, innovative domestic energy activity currently supports 2.1 million jobs overall.

"This report confirms that manufacturers' best days are ahead and that the shale revolution could spur economic growth and job creation for years to come," commented Jay Timmons, president and CEO of NAM.

Sustainability is key to growth

The energy boom promises to benefit companies in all sectors, including a wide range of manufacturers with disparate specializations. But the danger lies in setting aside sustainability in the name of growth.

Many companies are putting ecologically sound procurement and distribution practices at the core of their operations. In CF Industries' most recent corporate sustainability report, the fertilizer manufacturer highlighted some of its successes in implementing environmentally friendly production practices and green logistics last year. At one of its U.S.-based facilities, it reduced gas usage per ton of ammonia produced to its lowest rates ever.

Much of the firm's effort in sustainability is geared toward providing farmers with the resources they need to meet the challenges of a changing global food landscape.

"The demand for more food is being driven not only by an increasing population but also by a shift to more nutritious, protein-rich diets as nations develop," the firm wrote.

Nation development also means that overall food demand will be increasing in the coming years. CF Industries noted in order to provide sufficient nutrition to the world's population in 2050, farmers will have to raise their food output by 70 percent.

As global economies develop and demand patterns change, managing a sustainable production supply chain may prove the deciding factor between a company's ability to keep up with the growth or fall behind.

Solar, geothermal energy initiatives are on the rise

Energy efficiency is a core component of sustainable product sourcing. There is a host of reasons why companies are increasingly looking to minimize gas consumption - and while reduced environmental impact is a worthy end in itself, there's also a more immediate business benefit to finding alternative energy sources. While the initial investment in green logistics can be considerable, it ultimately promises to save companies money in transportation and production costs.

Solar panels have become a common sight in recent years, and their popularity is poised only to grow. According to the Solar Energy Initiatives Association, the third quarter of 2013 saw the second highest number of solar energy installations overall out of any period on record in the United States. It was also the single most active quarter ever in terms of new photovoltaics - the technology by which solar radiation is transformed into electricity - in private residences. That puts solar second only to natural gas in terms of new energy capacity created this year.

"We've now joined Germany, China and Japan as worldwide leaders when it comes to the installation of new solar capacity. This unprecedented growth is helping to create thousands of American jobs, save money for U.S. consumers and reduce pollution nationwide," SEIA President and CEO Rhone Resch commented.

The implications of this growth for businesses are twofold. First, with sustainable energy on the minds of so many consumers, they're more likely than ever to make their brand decisions based on companies' electricity sourcing. Second, businesses can take advantage of cutting-edge power sources in order to reduce manufacturing costs and stay level with competitors.

Looking toward geothermal energy

While solar remains the most popular green energy source, it's far from the only option. Indeed, companies may soon find that their sustainable energy programs need to leverage a variety of methods in order to remain viable in the long term.

Geothermal energy has also seen development and innovation recently. In a post for GreenBiz, environmental and business journalist Garrett Hering noted that while harnessing subterranean energy sources has remained problematic in recent years, scientists from the Lawrence Livermore National Laboratory, Ohio State University and the University of Minnesota have discovered a method for implementing geothermal power plants in new, more efficient ways.

"There's an opportunity to deploy geothermal in many more places than possible with traditional plant designs," Lawrence Livermore National Laboratory geoscientist Tom Buscheck said in an interview with Hering. The method utilizes carbon dioxide that other types of plants discard.

Hopefully, the impacts of the discovery will prove both positive and wide-ranging for business spend management and energy efficiency.

How the consumer goods industry is emphasizing sustainable production

A large portion of companies' efforts toward sustainable sourcing and manufacturing happens behind the scenes, out of the public spotlight. Often, consumers only become aware of the environmentally conscious practices of the firms they patronize by reading product labels or  from the occasional sustainability-focused advertisement. 

But companies are now competing more hotly for customers' attention when it comes to matters such as energy efficiency and green manufacturing. As a result, sustainability has become too important a consumer concern for people to remain content with easy-to-make assurances that ingredients are locally sourced and production processes don't harm the environment. The public is getting smarter, and businesses in the consumer goods space need to become more vocal about their sustainable operations.

Hershey moves toward eco-friendly sourcing

More companies are now opting to make real, measurable commitments to which customers can hold them accountable. Food industry giant Hershey recently announced that it plans to ensure that 100 percent of the palm oil it sources for its products is sustainable and traceable by the end of 2014.

"The Hershey Company is committed to continuous improvement and transparency in our sustainable sourcing efforts," Hershey's Vice President of Global Commodities Frank Day commented. "Our move to source 100 percent traceable palm oil is the latest step forward in our efforts to ensure we are sourcing only sustainably grown palm oil that does not contribute to the destruction of wildlife habitat or negatively impact the environment."

The company said that it intends to exercise sustainable supplier management in this endeavor, working with its global partners to ensure that the goal is met. The emphasis that Day's comments place on transparency will have to go two ways: between Hershey and consumers, as well as between the company and its supply chain.

The consumer conscience boom

Hershey's recent efforts couldn't come at a more opportune time. Customers are expecting an increasingly high standard of visibility into the way their foods and goods are sourced - and those on the ground floor are noticing the change.

In an interview with The Guardian, Kath Dalmeny​, policy director of food and farming nonprofit Sustain, discussed the demand for more intelligent choices on the part of retailers.

"When surveyed, most shoppers say that, on key ethical food issues, they want their supermarket to make those choices for them, before the product even reaches the shelf," Dalmeny noted, according to the news source.

Spend management and sustainability have a natural kinship - Dalmeny pointed out that cost-effectiveness is a primary feature of companies' eco-friendly initiatives - so firms can find ways to meet consumer demands without breaking the bank.

Having goods made overseas, or buying commodities from overseas producers, has traditionally been the easiest way to save money and pass savings on to your customers. But it is frought with a major concern: dependability.

The language barriers and the loose industrial regulations of traditional offshore manufacturing hubs make it very difficult to rectify any mistakes, as your complaint will likely be ignored or misunderstood, and there is no legislative backing to make the producer fix their mistake. Hence the common problem from ordering from overseas - you're never sure you're getting what you think you're getting.

When ordering consumer goods, this is acceptable to a point. You think you're ordering cotton socks, they send polyester. You still get socks. The issue is now that higher-end goods - like entire network servers - are being manufactured and distributed by nameless companies, tempting buyers with the same type of low prices that originally lead commodity manufacturing overseas, but offering none of the delivery guarantees or warranties that more established companies offer. It's a gamble.

This inconsistency and unreliability has now made its way from the supply chain to the food chain.'s blog details the DNA-verification process that goes into identifying imported seafood, and drops a staggering figure. Roughly 1/3rd of all seafood is mislabeled. The mislabeling/fraudulent packaging is so prevalent, that in many labs, there is no guarantee that the DNA samples used to identify the fish haven't themselves been mislabeled. Common mislabelings include Nile perch being passed off as grouper, swordfish labeled as mako shark, and farmed salmon sold as wild. In a dangerous case, hundreds of people in Hong Kong were sickened when their "cod" turned out to be stomach-churning escolar.

Newer DNA testing labs are using samples gathered from fish identified by specialists and marine biologists prior to their fileting, which better vets the food. Back in the commodity markets, anyone buying from overseas is best served to heavily vet their potential suppliers, establish terms that allow for thorough testing prior to acceptance, and develop the resources that can effectively bridge any communication gaps.

They'll also do good to avoid the escolar.
More often than not, if an issue arises during a sourcing process, miscommunication or a lack of any communication for that matter is the root cause.  Suppliers invited to an RFP will likely not participate if the conversation does not begin with a phone call.  Overall, internal and external communication checkpoints need to occur during a sourcing initiative in order for the process to generate positive results.  And these days, the various modes of communication allow for these checkpoints to happen easily.

Written communication can consist of a letter, but most of the time is in the form of an e-mail or text.  Verbal communication can be a face-to-face discussion, a WebEx conversation, or a phone call.  Other channels exist as well and regardless of the method used, communication is critical when working with others to reach a certain objective.

Internal discussions that take place among a project team conducting a sourcing process should clearly outline each team member’s roles and responsibilities and establish a primary contact that will communicate directly with suppliers during an entire sourcing engagement.  In the event that this contact will be unavailable at times, other team members’ contact information should also be shared with suppliers.  Depending on the sourcing process timeline, frequent internal checkpoints should take place to ensure that the process as a whole is on track.  Any challenges that the primary contact is facing while working with suppliers should be relayed during these status meetings and the internal team should collaborate to determine how to address each one.  Also, depending on the scope of the project, the amount of suppliers involved, and the timeline, the project team may need to ramp up and ramp down.  If this is the case, each team member must fully understand their roles and responsibilities and what is expected of each throughout the process.  And overall, delegation of tasks should be clearly outlined as well.  The breakdown of internal communications is commonly known, but in some cases, is overlooked when assumptions are made and certain team members are also assigned other projects. 

In terms of external communication that takes place during a sourcing process, there are certain milestones in which a phone conversation with a supplier is more appropriate than an e-mail.  As mentioned earlier, the initial conversation with a supplier should always take place over the phone and most communication that follows should entail additional phone conversations.  Aside from the initial conversation to introduce a sourcing opportunity, project updates, negotiations, and feedback discussions/award notification calls are a few examples of where a phone call should be arranged with a supplier. 

I usually make the statement that there is no such thing as over communicating.  However, Fred Zimmerman, a contributor to the StarTribune, has some interesting thoughts he shared earlier today on some instances where there may be such a thing as “too much communication.”  Zimmerman states that “companies do need some communication, of course. But successful and unsuccessful companies handle communications differently. The formula isn’t magic. Successful companies insert more work between meetings.”  Along similar lines, there also may be too many people involved in the conversation.  Therefore, it is important to determine at the beginning of an initiative who should weigh in with approval and when.  Checkpoints may not be needed as often as some may think and more work can get done before touching base again.

Zimmerman continues to expand on his insights stating that “after a while, large fractions of an organization’s employees spend nearly all of their time communicating with one another. Little actual work gets done.  This is why companies, governments, universities and other organizations flounder and often ultimately fail — too many people are communicating.”  The involvement of “dignitaries” in each team meeting may also slow up the process; therefore, make sure the team members make sense and represent all the different angles that need to be considered when carrying out a particular project.  Certain individuals may need to stay informed but they may not need to be included in each project discussion.

Zimmerman then closes with the following statement that rings true when it comes to internal and external communication: “The major goal is to systematically accomplish work between meetings. Otherwise there is nothing to talk about.  Gauge the time lapse since your last conversation with a supplier.  Maintain a tracking sheet that details the last touchpoint with a particular supplier.  E-mail threads help with this as well.  Recurring meetings on the calendar are crucial for internal team meetings; however, make sure the frequency makes sense.
Check out some additional thoughts shared by Zimmerman, he goes on to walk through five (5) reasons that may lead to too much communication tied to too little results.
Since there is only a few shopping days left until Christmas many people are frantic, bouncing around from store to store trying to get last minute gifts. With money being tighter these days everyone is trying to save as much as they can while still crossing off all the items on their family's wish list. Obviously technology has greatly helped with that. With their smartphone or tablet in hand, people are able to access a number of tools and apps to help them determine which store has the best deal and the item in stock. It has been a tough season for retailers as competition has become increasingly tight. They are well aware of this and many have had to adjust some of their pricing policies to stay in the game.

In the past, the price listed is how much something costs - period. Price matching is nothing new. Many retailers will lower the price of an item if you're able to prove another store is selling the same item for less. When Best Buy realized people were using their brick and mortar stores to learn about specific items and then leave to buy them cheaper elsewhere, they needed to change their policy to match competitor's prices.

Some retailers, desperate for sales and customer loyalty, have taken it a step further and are willing to haggle on pricing. They have begun training their employees on the art of bargaining. They want to empower their employees with doing everything they can to ensure the customer has a good shopping experience.

They don't advertise it, but many retailers are usually willing to come down at least 10% on an item. With having a background in retail management myself, I know that if a customer pushed I would usually take 10% off an item. I was so busy that I didn't have time to go back and forth with them, especially if I knew the item had a solid margin. There are usually even coupons just sitting behind registers or customer service desks that are available upon request. If there is any kind of imperfection - a scratch, a dent, a tiny rip - getting a discount is easy. Obviously I wouldn't offer any customers the discount, they would need to ask. Even on items that are perfectly fine, many retailers will gladly give you a discount knowing that 9 times out of 10 you have a lot of other things in your cart to buy.

Of course it's important to make sure you are talking to the right person, which may need to be a manager. It's also important to be confident and polite. Employees are more willing to give a customer a discount if they seem to know what they are talking about and are courteous.

Customers are able to not only bargain on the price, but also on other costs like extended warranties, delivery, and installation. Being able to get free shipping is becoming more and more common.

So this holiday season make sure to ask for a discount on that fancy new quesadilla maker. What's the worst that could happen?
During a sourcing event prior to entering negotiations, it is important to benchmark suppliers against the current market. One way of doing this is through a Request for Proposal (RFP). By soliciting multiple bids through the RFP you are able to gauge competitive market rates on a line item basis. However, typically suppliers do not submit their best price in their initial proposal and have padded certain areas of their proposal to reflect a heavier profit margin. Conversely, your job is to drive the best price possible, and chip awat at the supplier's profit margins without comprising the quality of the product. This can be done by developing competitive targets that are still in line with the market.

Analyzing supplier pricing and developing targets can be done using three steps prepare, align and calculate.


  •  Prior to reviewing suppliers' bids you must make sure that you have a clear template created to calculate savings. It is important to have an understanding of what went into the baseline cost and a deep understanding of each element that may affect unit pricing such as unit of measure (UOM).

  • This goes back to preparation and the need to understand what is affecting the baseline price. When bringing in each supplier's bid it is important to ensure that all line items are an "apples to apples" comparison to the baseline.
    • This can encompass many different factors such as, is shipping included in the baseline cost and has it been included in each supplier's bid? Is the corresponding line item bid in the same unit of measure as the baseline?
    • For example, in a janitorial supplies RFP the baseline UOM for bleach is a case of 12. However, the bidder supplied pricing for a case size of 4. In order to compare the bidder's price to the baseline the pricing must be adjusted by multiplying by 3.

  • After each supplier's bid has been brought into your savings analysis and everything is aligned in an "apples to apples" comparison to the baseline it's time to determine your savings.
    • Before developing targets it is important to see savings on a supplier level basis or which supplier prior to negotiations has the best single offer. 
  • Once savings is calculated on a supplier level basis it is time to determine the Best Alternative to a Negotiated Agreement, or BATNA.
    • What this is; is the best pricing per line item incorporating the baseline price. Essentially you are consolidating the best elements of each supplier's proposal into a single offer.
      • What this really shows you is the maximum savings the market has to offer prior to negotiations. You will find that certain suppliers are able to provide better pricing on certain products or product categories than others. This can be due to many different reasons, but commonly it is due to the supplier's relationship with the distributor or manufacturer and the current pricing agreements in place.
      • It is important not to apply the same percentage straight down for each line item. Suppliers will notice this and it will limit the adjustments of their pricing. Also if the target price is below the supplier's cost the supplier will know that the targets are unrealistic and will not provide the best price available. In order to provide accurate and competitive targets it is important to have a deep understanding of the product category that you are sourcing and the competitiveness of the current offers. One your analysis is complete develop a methodology to incorporate into your target development based off of your BATNA.
Strategic sourcing trends to watch in 2014

Executives who specialize in procurement and supply chain management have likely already begun looking ahead to the challenges they'll face in 2014. Although the considerations that come into play when developing a sourcing strategy for the coming year are many, three trends stand out from the rest.

Firms looking for innovation

As supplier networks become more complex, companies may begin to seek out more sophisticated freight sourcing and transportation methods. In a column for Supply Chain Digital, DHL Supply Chain's Vice President of Innovation and Product Incubation Mark Patterson predicted that 2014 would see a rise in demand for creative solutions that add real value to businesses.

"Innovation is already at the heart of supply chain risk management, which has grown in importance during the past 12 months," Patterson wrote. He also noted that innovative solutions for dealing with natural disasters are likely to become more essential as climate change continues.

Costs need to be managed

Another result of supply chain complexity is increased expenditure. As such, procurement cost reduction has become an area of considerable focus. Patterson noted that the most universal trend in distribution management he has seen this year is the concern for cost-efficiency. Prioritizing spend reduction may prove essential to developing a sourcing network that can keep pace with the competition.

Focus on sustainability

The increasing emphasis on sustainable product sourcing is likely to become even stronger next year. In a post for EBN, science and technology writer Susan Fourtané discussed the challenges facing companies that have developed keen consciences.

"The concept of corporate social responsibility has hit the supply chain management with increasing intensity. Now OEMs have to navigate the complexity of getting the supply chain on board," Fourtané wrote.

Executives that want their operations to stay ahead of the trends should find new, more streamlined ways to implement green logistics in the new year.

Study finds higher supplier expenditure doesn't mean greater risk

In mapping out strategic sourcing plans, one of the foremost issues that executives face is the level of risk to which they expose their companies when they establish supplier relationships. That worry, of course, is well-founded. In the manufacturing sector, a firm's ability to generate revenue is dependent to a considerable extent on procuring the resources and raw materials it needs to create and deliver its products to consumers.

The degree of risk associated with a supplier is determined by the monetary impact that would be caused by a temporary halt in the distribution chain. As such, it's easy to make the assumption that the partners to which a business pays the most money would cause the greatest amount of damage in the event of a disaster or other disruption.

New research, however, may cause supply chain executives to change the way they approach risk calculations.

According to Massachusetts Institute of Technology, Professor David Simchi-Levi recently performed quantitative analysis to determine whether or not a real correlation exists between the amount of money that a manufacturer spends with a supplier and the level of risk that partnership brings with it. His findings indicated that the widespread assumptions are wrong: Higher-spend supply chain relationships are not necessarily accompanied by greater losses in the event of disruptions.

Simchi-Levi analyzed the Ford Motor Company's distribution partnerships and found that the suppliers that provide the company with relatively low-cost components would cause the greatest drop in profits if the supply chain were halted. Reporting on the study, the Wall Street Journal gave the examples of valves and o-rings, which are relatively inexpensive to procure but for which Ford has fewer alternative options in terms of suppliers.

"This helps explain why risk in a complex supply network often remains hidden," Simchi-Levi said, according to MIT. "The risk occurs in unexpected locations and components of a manufacturer's supply network."

Manage sourcing intelligently

The primary takeaway from the research is that evaluating risk in the supply chain goes beyond assessing raw material costs. Developing an well-rounded risk management process is integral to effective sourcing practices.

"The ability to manage and respond to supply chain disruptions is becoming one of the critical success factors of executives," remarked Hau Lee, a professor at the Stanford University Graduate School of Business, according to MIT.

Because of how integral supplier relationships are to the success of firms in the manufacturing sector, business leaders simply can't afford to let these risks be improperly evaluated.

If you're like most executives, your desk or bag probably contains at least one smartphone, one tablet, and a laptop, if not more. The problem with these multiple devices is they all do a lot of the same things, so you think you'll finally be able to carry fewer things around, but then each have their own little silo of things they do uniquely or significantly better than the others and you still end up toting them around. In an attempt to unify processes and streamline what we carry, we end up carrying more. A new service - Android-only for now, but others may appear down the road - has unified common phone tasks to the point that you may no longer need to keep it with you at all times.

PPL Connect offers "your smartphone in a browser", and here's how it works:

- Download the app to your Android-powered smartphone and open it.
- Create an account.
- It will send a confirmation SMS, then sync your phone's information to its' servers.
- Logging in to gives you access to your phone.

Once you're logged in, you can text from any device as if it originates from your phone -- whether that device is a computer, a tablet, or another person's smartphone. You can also call anyone from any device so long as there's a microphone attached, but there's a fee of approx $.03/minute for North American calls, but they give you $2 in starter credits.

There are two big caveats here.

The first is that, like a lot of cutting edge products and services, this is in Beta right now. That means bugs can still pop up - I tested the software this morning and was apparently sending duplicate messages for over an hour - and some features are not fully available. For instance, MMS (aka: picture/video messages) are not yet supported, and there is no way to add additional money so you can make more calls.

Secondly, there are other services in the market that do some or all of these features (though not as well as PPL Connect). The one that comes to mind is Google Voice, which also offers the ability to send texts, manipulate contacts, and make phone calls from a web browser. The differentiators between the two are that Google Voice (under most circumstances) requires you to create a separate phone number, whereas PPL Connect works only with your existing phone number.

The ideal piece of software is one that fully replicates the user experience across devices, applications, services, and settings and all, which would certainly allow for a device consolidation. We're not there yet, and until we are, services like PPL Connect are taking those baby steps to get us there.

Image courtesy of

With economic growth on the horizon, companies must prioritize sustainability

Recent signs that the United States and global economies are regaining some of their former strength undoubtedly have many businesses feeling positive about their prospects for next year.

Yet despite the benefits that companies hope to enjoy from the projected economic recovery, growth inevitably brings change along with it. It's important to note that the current business landscape is quite different now than it was in 2008, when the Great Recession hit. The topics that business leaders are most concerned about have changed, as have the challenges they face. Environmental impact, for example, has become a much more widely discussed topic over the past five years, and as such, sustainable product sourcing has become vital.

Of course, firms have been adjusting to the developments gradually - but as growth occurs at a more rapid pace, so will the changes. It's key, therefore, that firms keep a careful eye on the economic predictions and plan ahead for the new challenges they're likely to encounter.

Investors optimistic about 2014

One of the key indicators that the economy may be on the up-and-up is the positive sentiment that has become more prevalent among major investors. A recent study by Bank of America Merrill Lynch found that a considerable majority - 71 percent - of respondents in the financial sector believe that the worldwide economy will grow stronger next year.

While that figure still leaves just under a third of investors who remain unsure or less than positive in regard to next year's growth, it represents a dramatic increase in economic optimism when compared with last year's figures. In December 2012, just 40 percent of respondents to the survey said that they expected the economy to strengthen in the coming 12 months.

What's more, the prevalence of positive sentiment reflects a global perspective on the economy. Bank of America Merrill Lynch noted that the investors it surveyed "demonstrated a strong preference for Europe and Japan."

Getting proactive about supply chain sustainability

Investors' sensitivity to globalization reflects the mounting complexity of supply chain management. Increasingly, businesses and their suppliers are connected across international lines. The cost and energy expenditures necessary to move goods and raw materials across the globe are considerable, as are the complications that can arise in logistics.

With so much for companies to take into consideration when managing their supply chains, sustainability won't simply happen by itself - but it's an effort that firms still need to make, as it has a direct relationship with brand image and spend management. Environmental Leader recently pointed out the importance of developing supplier relationships that are centered around eco-friendly practices.

"A brand needs to be the kind of partner itself that it would want to deal with if a supply chain relationship is to endure. Policies such as sharing technology, best practices and being flexible create a culture that breeds innovation and a culture of improvement," the source suggested.

Fostering such partnerships can help provide the support necessary to achieve sustainability.

The benefits of third-party logistics

Many firms are also taking a bit of the pressure off themselves by outsourcing some of their distribution management needs to third-party logistics providers. In a column for, Linkex Chief Operating Officer Jamie Wyatt discussed the insights and advantages that such partners can bring to the table in a business environment that increasingly emphasizes green logistics. One of the foundations of relationships between businesses and third-party logistics providers is transparency.

"The increased focus on a green supply chain makes sustainability and visibility into emissions and fuel rates important to every person or company that touches the product," Wyatt wrote.

Third-party logistics may become an increasingly viable and popular option, especially for small to medium-sized businesses who need help planning for sustainability,

Energy efficiency needs to be evaluated across the supply chain

Across sectors, companies have become increasingly aware that reducing their energy expenditures is not an option but a necessity. And while cost reduction is a driving factor behind improving energy efficiency, the benefits of such initiatives don't end there. 

A recent study by the University of Minnesota's Institute on the Environment tackled the problems that arise from companies' attempts to create more energy-efficient and environmentally sensitive supply chains. The guiding premise behind the research was that sustainability has now become a center stage issue in the contemporary business landscape.

"Rising energy prices, new governmental regulations and incentives, increases in corporate environmental responsibility and customers' increasing ecological awareness have pushed energy-efficient manufacturing and production into the spotlight," the research team wrote.

The web of energy usage

While it's true that energy efficiency has become a mainstream issue and receives a generous amount of attention from companies and thought leaders, that doesn't mean that it's become any less complex a proposition. Quite the opposite, in fact: The Institute on the Environment found that as supply chains have grown more multifaceted and complicated, so have the efforts necessary to implement sustainable energy usage.

One of the key issues that arose during the research was that energy consumption and environmental impact go far beyond companies' in-house operations and extend well into their supply chains. The institute cited statistics that showed merely 14 percent of greenhouse gas emissions across businesses' entire operations could be accounted for by the company's own manufacturing processes. This means that the vast majority of emissions come from suppliers.

It's imperative, therefore, that companies committed to sustainability implement green logistics to the furthest extent possible by calling upon their suppliers to adopt similar practices.

Who's responsible for sustainability?

Nevertheless, it remains difficult to judge where the responsibility for energy efficiency lies. While major companies have the resources to insist on accountability throughout their entire operations and practice sustainable supplier management, firms in the small business manufacturing space may find this endeavor much more difficult.

In a recent post for engineering and architecture firm Gray's official blog, supply chain veteran Karen Wilhelm discussed the problem of energy efficiency across supply chains. She noted that many experts have pointed to business-supplier relationships as potential sources for solutions.

"Some say that industry collaborations should do more to attack the supply chain problem," Wilhelm wrote.

That effort will need to be undertaken bit by bit - Wilhelm suggested agreeing on a shared set of best practices, which seems a good start. Total energy efficiency is, and will continue to be, a moving target, and it will require real-time data and analytics if it is to be achieved.

If you thought Google’s foresight was uncanny before, you might be downright scared to learn they’re buying up robot firms left and right. Just when people thought the capabilities of location recognition freaked them out, Google bought a military robot company and leaves many puzzled on how any of these super-bots will fit into their focus. It would make sense if this technology was centered on intelligence seeking; however Forbes points out these robots boast capabilities like hurling cinderblocks 17 feet and outrunning Jamaican Olympian runner, Usain Bolt. John Markoff of the New York Times claims, “The deal is also the clearest indication yet that Google is intent on building a new class of autonomous systems that might do anything from warehouse work to package delivery and even elder care.”

As critics point out, it seems ironic that within Google’s mission-type statement known as “Ten things we know to be true,” the company asserts “It’s best to do one thing really, really well.” In Google’s defense, the third point of the ten emphasizes “Fast is better than slow” and any aid in the company’s efficiency aside from searching itself, can be helpful—even if it is a robot making the changes. CEO Larry Page seeks to free humans from repetition and there is high probability that these bots can be the answer.

One unique portion of the recently acquired robots firm, Boston Dynamics’ business, is the company’s development of tools for human simulation. Although it was only exercised in military applications during its time with Boston Dynamics, there is the potential for uses in functions like self-operated cars and endless smart technology applications.

Although no one knows the real future of these speculations, Google can freely use profits to research into these areas, even if it is outside their scope of business. The risk of a pursued technology not being useful is a price Google is willing to pay for the chance of a ground-breaking redefinition of the company. Until then, it is amazing to watch what these robots are capable of on Boston Dynamics YouTube channel.

Photo Courtesy of:
Sustainable food certification allows for greater sourcing transparency

The growing popularity of restaurants and retailers specializing in organic produce and grass-fed meats is a testament to American consumers' increasing awareness of the way their food is produced. Demand for sustainable sourcing within the food industry has risen dramatically in recent years and now has arguably become mainstream.

In light of the trend, there is a real need for chefs and grocers to be forthright with customers about the practices that underlie their culinary supply chains: where the food comes from, how animals are raised and crops are grown, how energy efficient suppliers' operations are and what transportation methods their businesses use. Accordingly, efforts to make the necessary level of transparency more easily achievable have grown more popular.

According to Sustainable Business, the United States Healthful Food Council recently launched the Responsible Epicurean and Agricultural Leadership (REAL) certification program, which allows restaurants to increase visibility into their sourcing and food preparation practices. It also aims to help consumers make more informed decisions about where they eat.

Through third-party auditing services, the USHFC will give REAL certification to food services businesses - including both restaurants and caterers - that can demonstrate both the healthiness and sustainability of the food they serve.

What does REAL mean for the food supply chain?

The new initiative comes at an opportune time for the industry. In its 2014 Culinary Forecast, the National Restaurant Association cited locally sourced meats and seafood as well as locally grown produce as its No. 1 and No. 2 hot trends, respectively, for next year. Meanwhile, hyper-local food sourcing ranked No. 6, and sustainable seafood came in at No. 9.

But REAL certification is a double-edged sword for the food sector. On one hand, it makes it easier for restaurants of all sizes to be open about their practices. Yet at the same time, the greater consumer awareness the program promises to create will inevitably raise the bar on sustainability. Soon, competition in sustainable product sourcing may become stiffer than ever.

Ultimately, the network created by the REAL program may prove to be its most beneficial component. Sustainable Business noted that the USHFC is already attempting to orchestrate REAL-certified restaurants with approved suppliers that can offer them discounts.

"This will provide a net benefit to all involved: Restaurants will be able to access higher-quality ingredients at a discount, and suppliers can secure new business from REAL-certified restaurants," the organization said, according to the news source.

Hopefully, REAL can make good on its potential to create business-supplier relationships centered around sustainability.

Corporations worldwide increase sustainability reporting

Accountability is one of the hallmarks of the contemporary business landscape. Increasingly, customers want to know whether the companies they support are in line with their personal values, and that means ethics and sustainability are often just as important as quality products. Apple's recent efforts to show consumers that it had demanded more ethical practices from its suppliers are a vivid example of this trend. With 95 percent of its overseas business partners now limiting employees' work weeks to 60 hours, according to the tech firm, Apple has proven its dedication to corporate responsibility. 

Sustainable sourcing is essential in this consumer climate - but it's equally vital that firms foster trust with their customers. New research suggests that companies are becoming increasingly aware of the need to be transparent about their sustainable practices.

KPMG's 2013 Survey of Corporate Responsibility Reporting recently revealed that 76 percent of companies based in the Americas publish corporate responsibility (CR) reports. Among European firms, that figure stands at 73 percent. Asia Pacific was the area that saw the most dramatic increase in CR reporting, with 71 percent of companies in the region now releasing information on their sustainability and related practices, up from 49 percent in 2011.

Silence is no longer an option

In light of how predominant sustainability reporting has become, firms that aren't transparent about the environmental responsibility of their corporate practices risk falling behind. Among leading enterprises, openness in regards to this issue is even more widespread. KPMG found that 93 percent of the 250 largest corporations in the world have adopted CR reporting.

John Hickox, KPMG's head of climate change and sustainability for the Americas, told Sustainable Business News that companies should publish CR reports even in cases where regulations don't require them.

"Companies that do not publish these reports need to ask themselves whether it benefits them to keep swimming against the tide," said Hickox, according to the news source.

Of course, not all firms have the internal resources to conduct the research necessary to compile CR reports on their own. As such, auditing services are becoming an increasingly important tool for companies. Not only do third-party audits take some of the burden off the company, they can also be more compelling to consumers, as they suggest greater impartiality. According to the KPMG report, 59 percent of the world's 250 largest companies take advantage of external audits when conducting CR research.

Given the prevalence of sustainability reporting, green procurement and logistics may quickly need to become an integral part of companies' business models.