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The Expert Talks- Sustainability

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 About The Expert

 

Vijayaraghavan Krishnamurthy is a Principal Consultant working with Digital and Integration Services at Infosys. Vijay has worked extensively across areas spanning Supply Chain Planning and Execution. He is based out of Hyderabad, India and is closely associated with the ECO group at Infosys, working on sustainable practices. Read on as Vijay shares with us his insights on Sustainability in the context of Supply Chain Management.

 

1. Thank you Vijay for being a part of this discussion, good to know about your interest in the area of Sustainability. What according to you best defines a Sustainable Business?

A sustainable business is one that balance the three essential P's - People, Profit and the Planet. In an organizational context, it is a business model that involves practices that are commercially viable and meet the customer needs, and all this while ensuring the environment is treated well.


2. Being an SCM professional how do you relate SCM with Sustainability?
For an organization, Sustainability in the supply chain is recognized as a key component of corporate responsibility. For a Supply Chain to be sustainable, organizations need to employ the right manufacturing and distribution practices in a way that creates an optimal synergy of environment, business growth, and the society. Sustainability is being perceived as an essential element to deliver long term profitability as it minimizes the social, economic and environmental impact on the society. Also, in today's increasingly competitive market, for organizations to survive, I think sustainability would become a key differentiator.


3. Supply Chain being a network of organizations, how could one single entity decide and implement Sustainability?
Organizations cannot claim its sustainability unless it has an end to end coverage across its value chain. No one is an exception in the sustainability exercise, with this I mean each and every participant within the supply chain including manufacturers, suppliers, logistics etc. I have seen companies encourage suppliers to integrate and drive sustainability into their business and sometimes even partner with them to overcome the barriers to improvement, it's a shared priority you see! 
One can't miss the classic case of a leading FMCG company which is working on sustainable sourcing of palm oil. On learning that some of its suppliers were involved in unethical practices causing significant environmental damage, they swung into action with a slew of focused programs. The programs ensured that suppliers adhered to sustainability principles to prevent reoccurrence of such instance. The company, in this process also realized that it is beneficial to work along with suppliers to help and persuade them to move to a more sustainable agricultural methods. It is commendable that they decided to partner with them to achieve this instead of abruptly ending the relationship, otherwise I think they would have left the suppliers with no room for improvement. 

 
4. According to you, on which all areas can an organization can pursue Sustainability?
In many areas, in fact I would say, practically in all the areas within the purview of any business. Ideally, the theme of sustainability should resonate throughout the organization in everything it does. For an organization to stand out, the strategies need to be sustainable. Not only strategies the Policies, processes, systems practices you name it and they ought to be sustainable. Sustainability has become a magic mantra for organizations to maintain their reputation, profitability, and even their license to operate. Traditionally organizations viewed the impact on society, the local economics in which they operated, and the environment as 'Risks' that needed to be mitigated. However, lately, organizations are beginning to realize that corporate responsibility is about embracing these elements instead


5. We hear critics associate Sustainability  with "Eye Wash", " Corporate Gimmick" some even call it as "Green Washing" , do you think there is any content to this claim?
I certainly do not agree with these claims, I don't think this is just an eye wash, at least it is not worth treating this as one. Yes, there could be organizations who may be trying to practice Sustainability without even knowing what it is. Have you seen plastic bags available in the supermarkets with "Environment Friendly" stamp on it, tell me how can this be even closer to being environmental friendly! In this age of abundance information and the kind of media attention, these kind of pretense will not last long. These guys can't fool their stakeholders for long as once these are exposed, the reputational damage is much more serious.


6. Maybe these "Plastic Bag" folks do it to maximize their profit by overlook sustainability, brings up a questions- Are Profitability and Sustainability mutually exclusive?
Liked the term- "Plastic Bag folks"!  Well, I do not think you can separate out profitability from sustainability. Yes, some business execs think that sustainable practices will hurt the profits, but it's not the case. You can still commit to environmental sustainability without compromising on your business. A leading South American paper manufacturing company is currently doing that. Inherently, a paper manufacturing business thrives on natural resources to a great extent. However, in case of this company, they have shown their immense commitment to environmental sustainability by seeding plants at the right time and harvesting them on time to coincide with the manufacturing schedules. This works well for them and at the same time minimizes the impact on the ecosystem. Similarly, online retailers these days are extending their commitment to sustainability by making use of efficient cartons which can be re-use and recycled after the products are being delivered to their customers.

7. Could you please share some more cases where you have seen organizations benefit from Sustainability?
A leading networking companies based out of the USA uses packaging for their networking products which includes individually wrapped parts and cushioning for protection. This wrapping includes a mix of plastics, metals, polystyrene and paper and it was not always easily recyclable. On top of this, customers immediately discarded product manuals and complimentary accessories included in the package. The excess environmental waste and costs associated with the packaging and fulfillment of the company's products were always there. However, the realization seeped in only when the organization started to view the whole thing through the prism of sustainability, the equation changed completely after that. Here's what they did to ensure minimal wastes on the manufactured product, accessories and documentation while enhancing the overall customer experience.
a. Reduced amount of corrugated cardboard, paper, plastic and metal material that ships with products,
b. Replaced the materials with more environmentally friendly materials or with components that enable recycling or reuse,
c. Removed as much non-essential material as possible
Through these constructive- sustainability measures they were able to save a huge amount of cost as well as waste.


8. This case seems to be real motivator for other as this company seems to be doing great with Sustainability initiatives, do you think their customer also could benefit by tagging along such sustainable organization?

Yes of course, customers prefer products and services which are made or sourced legitimately. Each and every node in the supply chain needs to be sustainable if an organization wants to claim that it is adopting sustainable practices and succeed in it. By tagging along organizations like these, customers ensure that they are part of the sustainable business model which in turn helps them to position better vis-a-vis their competitors.

 
9. What do you think are the common pitfalls an organization should avoid while pursuing Sustainability?
The most important aspect that companies need to focus on is to develop a business case by understanding the external landscape and the business drivers. Typically organizations who fail in their sustainable initiatives or hesitate to pursue it are the ones who are not able to fit in to a business case.


10. The way you see it, do you think organizations operating in the SCM domain are doing enough, what would be your advice to them to stay focused in the journey towards Sustainability?
I don't think they are doing enough, seems like they are still a long way to go. But I am sure, organizations are taking some serious measures and are working towards it, to me that's what is important. To build a sustainable tomorrow we need to make our supply chain sustainable today. In fact, I firmly believe that increased sustainability in the supply chain reduces risks and increases profits for all organizations and stakeholders. So, in order to be competitive, responsible and more importantly improve the survivability, Organizations need to revisit their business model and ensure it is sustainable. Companies need to track the performance against the sustainability goals that they have set and look out for opportunities for improvement. Make the sustainability exercise a profound one, include all important stakeholders and by this I mean the customers and suppliers as well. Kris, our ex-CEO, while speaking on sustainability said that "We live in an increasingly resource aware and resource constrained world. We need to live within our means and not borrow from the future", according to me, this reference of sustainability can't get any better!

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