In a country where 90% of our consumer products become waste in about 6 months, sustainability is becoming a more pressing issue for companies operations. A great example of a company that implements sustainable operations is Method a company that makes house-hold cleaning supplies, most popularly carried by Target. Method attempts to implement sustainability in their products, their process and their company itself. Their most important achievement in operations sustainability is being Cradle to Cradle certified.
Cradle to Cradle is the concept that a company can re-design products and change their manufacturing process in order to maximize positive impacts environmentally, economically and socially, where a company is less dependent on raw materials and energy and the supply chain is naturally more eco-efficient. Most manufacturing processes are linear and considered Cradle to Grave, which is when a company uses raw materials to create a product, the consumer purchases the products and then eventually puts it in the trash where it is taken to a landfill or incineration. Cradle to Cradle attempts to create a cycle where a company pools materials to be re-used and products are returned from consumers and recycled back into products.
Method displays on their website their Cradle to Cradle certification and explains how they are certified in product design, product manufacturing and social responsibility. Method’s product design is evaluated by their ingredients which are comprehensively assessed for safety and environmental health and their packaging design and materials are evaluated for safety, effects on the environment and recyclability. Method’s manufacturing processes are evaluated regarding their use of water and energy and their material recovery. Method’s social responsibility is evaluated through governance, ethics and transparency.
These are many ways companies can be more sustainable and the Cradle to Cradle certification is a great way to remain consistently sustainable. It also helps prove to consumers that your company is actually sustainable, rather than using the “going green” trend as a marketing ploy, which many companies have done.
Although Cradle to Cradle may be ideal for sustainable operations, it can also be very expensive, from redesigning products to tracking manufacturing in more granular ways. It almost attempts to challenge and change business models and the way products are produced. The only way to fight these challenges and expenses is to incorporate these practices from the beginning into the first business model. Which is why we should always challenge flaws in current business models and ask ourselves how we can create evolutionary business models.
Intelligentsia is a coffee and tea company that directly sources coffee from coffee bean farmers, such process can also be referred to as direct trade. Direct trade is completely different from what most companies do, which normally consists of buying coffee through brokers at the lowest market prices unaware of the coffee beans exact source. The direct trade label is also regarded as more effective than labels like fair trade, in which a 3rd party is involved to determine quality, a process that has received a lot criticism. In an article about direct trade in the New York Times it was stated that, “Direct trade coffee companies…see ecologically sound agriculture and prices above even the Fair Trade premium both as sound business practices and as a route to better-tasting coffee.” On Intelligentsia’s website it explains their buying philosophy as believing in the quality of coffee and doing so by working closely with actual producers. Intelligentsia explains that in order to manage such exceptional quality they must follow the direct trade criteria. The direct trade criterion not only defines Intelligentsia’s quality but it also shows who is responsible for it, which demonstrates managing quality. The 6 points of criteria, as listed on their website, are as follows. 1. Coffee quality must be exceptional. 2. The grower must be committed to healthy environmental practices. 3. The verifiable price to the grower or the local coop not simply the exporter, must be at least 25% above Fair Trade price. 4. The grower must be committed to sustainable social practices. 5. All the trade participants must be open to transparent disclosure of financial deliveries back to the individual farmers. 6. Intelligentsia representatives must visit the farm or cooperative village at least once per harvest season, understanding that we will most often visit three times per year: pre-harvest to craft strategy, during harvest to monitor quality, and post-harvest to review and celebrate the successes. As we’ve learned in class it’s important to globalize companies for many reasons, a few include reducing costs and improving supply chain management which will naturally overlap with the critical decisions, like management quality and again supply chain management. Not all companies who globalize, manage the quality of their source and instead look for the cheapest prices, inter this can result in sourcing from places with unethical practices. In my personal opinion to reduce costs by sourcing from a source that under pays their employees or doesn’t ensure a safe a work environment, is not a justifiable or ethical trade-off. I believe examples of company’s operations like Intelligentsia can demonstrate ethical and responsible globalization, not only in quality but also within the supply chain. Of course the price of their coffee doesn’t come cheap, it is more of a luxury, but in perspective not more of a luxury than buying Starbucks daily.