Tag Archives: Innovation

The Supply Chains of Tomorrow; Rajat Kapur of GE

Meg Schneider is a junior at Penn majoring in Environmental Studies, with a concentration in Sustainability and Environmental Management. She is currently researching behavioral solutions to environmental problems with Professor Dana of Penn Psychology for her thesis.

Rajat “Raj” Kapur of General Electric brought a wide-angle lens on corporate sustainability to IGEL’s Greening the Supply Chain Conference, discussing how GE handles sustainability across its industries. Making products as diverse as jet engines to healthcare, the company has tens of thousands of individual suppliers and competitors. As customers and clients began asking for more environmental disclosure, data, and overall information in the 2000s, GE realized it needed answers about all of these suppliers and quickly.

Raj explained that they began with 2600 assessments of its suppliers in developing countries, including not only environmental issues but also of basic human rights and regulation adherence. This turned up over 16,000 issues, offering immense opportunity for improvement. Although Raj offered some basic advice about flexibility and data collection, he was most inspiring when speaking practically about business direction. “Improving current systems of supply and distribution are not enough”, he emphasized. One must also start with sustainability at the design and tech team level. The products designed today will be used in the supply chains of tomorrow, he continued.

Another novel point of Raj’s presentation was that suppliers must also have value added to their business as a result of sustainable processes. For example, they found that only 10% of suppliers currently monitor energy. By reducing energy use, both the supplier and company can win – suppliers save on cost and the supply chain becomes greener. Conversely, if GE is the sole company to reap value, suppliers will be less likely to adhere to changing processes and systems. Although many discuss the intersection of economic opportunity and sustainability, the supply chain’s value creation is often ignored in the conversation.

Indeed, it is easy for a large corporation to ignore any unflattering assessment rather than confront and take steps, as GE has with its Green is Green training programs. Consumers should continue to ask questions and demand information about the source of the goods they use everyday. Even the project manager of GE’s Ecoimagination team, admits that the process would have never gotten to this point without consumer pressure. Thus, consumers should feel empowered about their market influence in improving supply chains.