The Sustainability Supply Chain Marathon
As I was reviewing the financial headlines of the day, I noticed Nike’s Q2 earning posting and decided to peruse their corporate website for more information … on their progress in sustainability. Nike has been a leader in tackling all dimensions of sustainability, including those across their supply chain. I was a little disappointed when I couldn’t find an updated version of their Corporate Sustainability Report online and the first word that pop in my head was: marathon.
Let’s use Nike’s environmental goal for inbound logistics and transportation as an example. Their target: 30% absolute reduction from a 2003 baseline by 2020. Pretty aggressive specially with a growing business. A 17-year supply chain marathon has started. First, they went through the effort of measuring all their transportation carbon emissions from their factories across the world to their various markets. Since the boats and airplanes that move their products are not owned by Nike, they had to collaborate with several logistics service companies, which most likely needed to gather data from hundreds of partners in order to map thousands of shipments across the globe to reach a single number to track (check some of their charts). With this information, areas of improvement are selected and changes in their supply chain are rolled out… and, the same process needs to happen year after year. So for Nike to be able to track, report and ultimately reduce their inbound logistics emissions, all their supply chain partners need to consistently provide this information. In other words, for Nike to achieve its logistics sustainability goals, EVERYONE in their supply chain should be willing to go the distance in measuring and reporting, at the same time as they add efficiencies along the way. And don’t forget, still need to publish it in their website for stakeholders (or just curious observers like me) to check.
Going back to my disappointment, their last update of their inbound logistics emissions was in 2009. Does this mean they have quit the race? Probably not. I am aware that Nike keeps working on logistics improvements not only because its good for the environment, but also because, in the case of transportation, less emissions usually translate to less cost (they even highlight this in their website, pretty refreshing). The challenge is to maintain the pace of your supply chain throughout 17-years (including tough years like the last couple ones). You set targets and deploy initiatives, but most importantly, you need to embed all the measurements in the normal business processes within your company AND with your supply chain partners. That’s the only way to finish the race.
Nike (and others with similar supply chain initiatives): stay hydrated and keep going. It’s tough but we’ll be cheering along the way. See you at the finish line.