Archive for July 31st, 2018

What happened to the Green Supply Chain? by Dave Owen

In 2012 I wrote a whitepaper on the growing opportunity and in some cases requirement for companies to build a green supply chain. The premise was based on growing customer desire to understand where their products came from – and the reaction by some leading companies to use their best practices as an advertising opportunity.

The market moved quickly at the start of the decade – promoting sustainable sourcing and efficient transportation. Take for example the three apparel brands with PR moves in 2010-2012:

  • H&M Conscious Collection
  • Timberland’s Green Index
  • Patagonia’s Footprint Chronicles

Considering these moves today – they seem to have met very different results. On the H&M side, the company’s brand would likely receive low marks for sustainability given recent news. Timberland may come in quite neutral if customers were asked. Patagonia, on the other hand, has a brand synonymous with sustainability. That said, their Footprint Chronicles had very limited success/impact.

The speed at which the market was changing at the turn of the decade was quite remarkable. There was a window where eco branding was going mainstream. So what happened? While many eco-brands have taken hold as alternatives to the most popular brands, in most segments the eco option has not won the market as many predicted.

Business trends are definitely part of the story. I’d argue much of the shift has to do with the rise of our Amazon-culture. The equation changes when products are delivered in ubiquitous brown boxes compared to walking out of the store with the green packaging. The price spread between the most generic and eco-product now is greater in online environment. And, fads change. The 100-mile diet was a thing in 2010. Not so much anymore.


Google Trend

However, there have been market shocks that have made consumers wary. And those shocks relate more to data than to product. Take for example Volkswagen. The emissions scandal of 2015 was all about data. In effect, the company manipulated engine test data to cheat pollutant requirements. The story is one that’s unique. In fact, Nissan admitted this month that it had faked emissions data as well(1).

Back in at the time of the rise of green supply chain data there was a highly publicized event, where a sweatshop collapsed in Bangladesh that killed 112 in 2012. That factory manufactured for Walmart(2), Benetton(3), and others. I can recall at the same time hearing stories about conditions of factories where my new iPhone came from.


Aftermath the Tazreen Fashions Ltd. fire in Dhaka, Bangledesh on November 25th, 2012. Source: AP/Polash Khan2

The data component of this story is quite interesting to consider. I believe many things were at play in the evolution of the growth of sustainable supply chain reporting five plus years ago. Part of which had to do with companies realizing that the financial benefits weren’t equal to the costs, and that the reporting was best limited to annual sustainability reports. However, from a consumer perspective I am compelled to believe that a few events changed the public perception in trust in the system. As customers became warry of information and attentions moved to other areas, the ability to build a lasting system also changed.

These hypotheses are difficult to prove out. I believe further investigation in the limited impact of green supply chain thinking will help inform how the green supply chain 2.0 emerges (which I believe it will). The lesson is one that is relevant to data oriented systems. Trust in the system is paramount – designing with this trust in mind is an important job of the data scientist.

References:

1. (10 July 2018). “Nissan says emissions data for 19 models had been faked”. The Straits Times. Retrieved 25 July 2018

2. (26 November 2012). “Wal-Mart: Bangladesh factory in deadly fire made clothes without our knowledge”. CBS News. Retrieved 25 July 2018

3. Smithers, Rebecca (29 April 2013). “Benetton admits link with firm in collapsed Bangladesh building”. The Guardian. London. Retrieved 25 July 2018.