IGEL’s Greening the Supply Chain Conference Report

(Post by Caroline D’Angelo, IGEL’s Communications Coordinator and editor and Staff Writer for Oikos International) The Initiative for Global Environmental Leadership’s annual conference-workshop on April 26, 2012 was themed around “Greening the Supply Chain: Best Business Practices and Future Trends.” The conference featured presenters from corporations and non-governmental organizations who spoke about sustainable management of corporate supply chains. From technology to transportation, and deforestation to chemicals, presenters urged the audience to think of sustainable supply chains as a smart business move. (Read an overview of the best business practices from the conference from Student Reporter Sharon Muli.) This post provides an overview of the conference presentations and provides links to more in-depth discussion, interviews and slides.

Eric Orts, the Faculty Director of IGEL and Guardsmark Professor in Wharton’s Legal Studies and Business Ethics department, and Wharton Executive Education Vice Dean Jason Wingard provided welcoming addresses to highlight Wharton’s commitment to sustainability. Panel one, “Innovative Opportunities for Greening the Supply Chain,” was moderated by Howard Kunreuther, Professor at the Wharton School and expert on catastrophic risk management. Professor Kunreuther invited the audience to take a wide-lens view of supply chain. Panelists discussed the impact of product design, radical transparency, supplier assessments, policy and subsidies on supply chains.

Professor Howard Kunreuther moderating panel one

Penn State professor Dan Guide warned that sustainable supply chains requires innovation in product design.  He explained that true closed-loop supply chains find uses for all components and materials of a product but many products fall short for various reasons. However, he argued that closed-loop supply chain mangement has enormous economic and environmental potential. Doing analysis of supply chains and products is key, he said, because sometimes the product that you think is ‘green,’ is actually not. (Click here to listen to Student Reporter Yaowen Ma’s interview with Professor Guide.)

Sustainability Hall-of-Famer Gil Friend then discussed the Open Data Registry project and used examples from his career as CEO of Natural Logic to argue that corporate transparency is key to sustainable supply chain management and consumption. Open Data Registry seeks to help consumers and companies make better decisions about how to make, buy and sell goods, using transparency, comparable benchmarks and statistics, and responsible management. (Click here to watch Student Reporter Sharon Muli’s interview with Gil Friend.)

Rajat Kapur spoke about data-driven improvements in the supply chain that stemmed from GE’s supplier assessments.  Analysis of the assessments found 16,000 issues, or, to put it differently, 16,000 opportunities.  A noteworthy point that Mr. Kapur made is that GE is now working with suppliers to help them become more efficient and profitable, especially in energy efficiency. (Click here to read Student Reporter Meg Schneider’s post on Mr. Kapur’s presentation.)

Steve Bogart, Partner in CSC’s Global Environment team, dived into regulations and polices and their effect on corporate supply chains. (Click here to view slides.) Regulatory compliance is still a major driver of sustainability initiatives, he said. He argued that global companies must keep on top of highly-influential regulations around the world such as the European Union’s REACH.

Panelists Dan Guide, Gil Friend, Rajat Kapur, Steve Bogart, Ruben Lobel

Assistant Professor at the Wharton School, Ruben Lobel, discussed the solar industry and subsidies as an example of the importance of government policy on supply chains. He argued that overcomplicated and unpredicatable subsidies are confusing the solar market throughout the world. Governments should commit to longer-term policies, which would allow industries to invest in solar panels and energy conservation. (Watch Student Reporter Yaowen Ma’s interview with Professor Lobel here.)

Lunch keynote speaker Edwin Keh, a lecturer at Wharton and the former Senior Vice President of Global Procurement at Walmart, entertained the crowd with stories about his time spent managing supply chains. He boiled down sustainable supply chain management to four focus areas: (1) product quality; (2) waste & packaging; (3) legal compliance; and (4) energy reduction. (Read about Mr. Keh’s presentation from Student Reporter Kimi Takamatsu and watch Student Reporter Sarah-Beth Vaughn’s interview with Mr. Keh here.)

Keynote Speaker Edwin Keh

Bob LoBue, Vice President of Services Partner Operations at SAP North America, moderated the second panel entitled “Best Business Models and Case Studies in Supply Chain Management.” He opened the panel by explaining the importance of research and sharing best practices in the corporate sustainability field.

Technology and data management are an important part of sustainable supply chain management, argued SAP Senior Principal Alex Markevich.  Mr. Markevich said that optimizing companies’ supply chains and information flows using SAP business services is a key way that SAP contributes to global environmental sustainability. Using a case study, Mr. Markevich showed that technology and data management is a way for companies to meet and exceed environmental regulations, creating competitive advantage. (Click here to view slides.)

Darren Gross, Global Supply Chain Director at Dow, shared that more than 300 sustainability projects at Dow resulted in an $85 million benefit to the bottom line, as well as a 400,000 ton reduction in CO2 emissions. To achieve targets, they use a priority system to reach important goals first, such as reducing the amount of hazardous materials shipped. He also stated the importance of having employee and leadership buy-in to sustainability. (Click here to view slides.)

Darren Gross

Charlene Wall-Warren of BASF also talked about the importance of adding sustainability to the corporate mission and supply chain. Now, BASF’s motto says that BASF “creates chemistry for a sustainable future.” Sustainability initiatives include greener batteries, concrete, container board, food stuffs for developing countries, and more. Data is also extremely important to BASF, and it has created several tools to manage and analyze its suppliers, material flows and partners. (Click here to view slides.)

Wharton Professor Eric Orts

Tom Carpenter, Director of Logistics for Global Supply Chain Operations at International Paper, spoke about transportation as a necessary area to address in the supply chain.  By rethinking transportation options such as rail and optimizing their transportation network, IP was able to increase efficiency in transportation while reducing their miles traveled. He also pointed to the importance of policy, saying that policy should be designed to allow efficiency, such as reducing overall trips by allowing higher-weigh trucks on highways.

Incentives and innovations are hugely important for supply chains, argued Nate Morris of Rubicon Global.  By viewing waste as a resource, Rubicon Global aims to transform and modernize the waste management industry. The company works with clients throughout their supply chains to create more efficient packaging, logistics and purchasing, which helps reduce waste. Rubicon Global aligns incentives through its fee structure to create win-win situations for clients in waste reduction and recylcing increases. (Read Student Reporter Meg Schneider’s overview of Mr. Morris’ talk here.)

Managing Director of the Nature Conservancy’s Climate Change program and Wharton grad, Sarene Marshall, spoke about deforestation and carbon intensity in corporate supply chains. She used the Conservancy’s programs in Indonesia and Brazil, which focus on logging and soybeans respectively, to show that NGO partnerships and third party verifications can help companies green their supply chains. (Read Student Reporter Kimi Takamatsu’s coverage of Ms. Marshall’s presentation here.) Thinking about the environment is a smart business move, she argued, because it can help a company lower risk, become more efficient, and be a better corporate citizen. (View Student Reporter Sarah-Beth Vaughn’s interview with Ms. Marshall here.)

Sarene Marshall of the Nature Conservancy

The evening’s keynote speaker was Alice Henley of National Resources Defense Council’s Green Sports initiative. She pointed to the sports industry’s sustainability efforts in arenas and materials as a way to educate consumers, build a better brand, and create more efficient supply chains.  Using certifications like LEED and tracking metrics has helped companies with branding, public relations and return-on-investment analysis. Both professional and collegiate sports are realizing the importance of sustainability, she said. (Read Student Reporter Marissa Rosen’s interview with Ms. Henley here.)

Photo

Penn Professor Bob Giengengack during panel discussion

Audience members included students, faculty, representatives from government and business, and IGEL sponsors and Corporate Advisory Board members. The depth of panel discussions and audience engagement showed enthusiasm for the subject. Questions from the audience included whether sustainability is always profitable or whether there are financial trade-offs, whether solar is on the way out, whether there is too much supply chain data to track efficiently. Discussions continued into the post-conference reception and beyond, as reflected in the Knowledge@Wharton report Greening the Supply Chain: Best Pactices and Future Trends. Wharton Magazine interviewed several attendees and created this video (watch below) and wrote a blog post on the conference.  We invite you to read the reports, posts and interviews, and watch the video. Let us know what you think by commenting below or sending us an email.

Wharton Magazine video:

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