Being ‘environmentally friendly’ was once a niche business pursuit but things are changing; consumer knowledge, expectation and media exposure means that environmental responsibility should be at the forefront of every company’s agenda. In a recent Ipsos MORI Poll it was revealed that 92 per cent of consumers believe that it is the retailers’ responsibility to ensure that each of their suppliers around the world is behaving properly.
It’s fair to say, therefore, that the years of burying our heads in the supply chain sands have long gone. According to the study, ‘58 per cent of consumers claim that they are more likely to choose one retailer over another if they know they take their social and environmental responsibilities seriously’.
Retailers and brand holders are subsequently faced with a huge and complex task, particularly within the fresh produce supply chain; global supply is now commonplace and factors such as large numbers of small-scale growers, diversity of geography, cultures and an increasing trend for fresh produce to be packed at source must be accounted for.
When it comes to environmental responsibility, the issue of reducing waste across the entire food industry is critically important. Consumers are witnessing an increase in the price of food and yet programs me like The Great British Waste Menu communicate excessive food waste as product is being rejected for being the wrong shape or size. This media exposure and incidents like the Gulf oil spill continue to raise questions around the world about the responsibility every business carries to the customers, colleagues and communities it serves.
A report by the Waste and Resources Action Programme (WRAP) in the UK has put the costs associated with waste generated in the UK food and drink supply chain, and households, at around £17 billion a year; £5 billion of which comes directly from the supply chain, before the food has even reached the supermarket shelves.
In tonnage, this amounts to 7.5 million tonnes, or 50 per cent of food wasted within the supply chain every year. Not to mention the 18 million tonnes of CO2 this level of waste produces. This doesn’t sit well with the whole supply chain efficiency element or the long-term sustainable agendas that many retailers are wishing
The impact of this on the retailer is becoming even more significant as they continue to take ownership of the problem with own label produce. As the retailer becomes the brand, any scrutiny relating to methods of supply, availability and cost can seriously affect their reputation.
To guarantee standards are being met and their brand integrity remains intact, retailers and brand holders are implementing their own standards to enable benchmarks to be set. For example Marks & Spencer has its ‘Field to Fork Assessment’ to monitor supplier behaviour, while Unilever has ‘Growing for the Future’ to measure supplier performance against its ten sustainability indicators.
As part of Unilever’s campaign to highlight its sustainability credentials to consumers, the company put the Muddy Boots Software audit management system in place in 2007. The software can be used to monitor areas such as social accountability, environmental impact, corporate governance, food safety, ethics and health and safety, and can be adapted to accommodate virtually any inspection protocol.
Having software systems in place to consolidate data which documents geographical spreads, supplier size, waste management and the use of renewable energy can be used to identify supply chain issues and to measure the success of green initiatives. Ultimately, much like Marks & Spencer and Unilever; once a brand holder or retailer is confident about the quality of its produce, it puts itself in the firing line and communicates this.
Using technology to harness better business information throughout the supply chain is key to that drive for efficiency. Better planning and forecasting, whilst difficult, must play a significant part in this process. Accurate specifications should be communicated between the retailer, supplier and primary producers, to ensure that time, energy and cost efficient quality and quantity expectations have been met. This planning and forecasting will lead to more informed and accurate decision-making, which will reduce waste and increase profit.
The environmental impact of the supply chain will escalate if retailers and brand holders do not challenge these areas and the efficiency throughout their supply chain is not improved. Without this, production costs will continue to rise and there will be more price pressure. Crucially, software systems can put better check controls and work-flow controls in place to ensure that the process of rejection happens at the
initial stages of the supply chain, before the environmental and financial impact
of freight and packaging have been incurred.CASE STUDY
By 2030 world food production will have to increase by 50 per cent to meet the growing need for food within a growing population. This will have potentially damaging effects on the environment.
Unilever has been working to manage its environmental impact for over a decade and it enlisted the help of Quickfire from Muddy Boots Software in 2007. The objective was to quantify suppliers’ progress against ‘Growing for the Future’, its long-standing 11-point sustainability programme. Three years on and this is the story so far...
For Unilever to achieve its ambitious growth and sustainability objectives, the company’s environmental impact had to be reduced throughout its supply chain. The key focus is sustainable supply; raw materials, production process and distribution had to be managed in-line with the company’s sustainability agenda.
To achieve this goal, the Quickfire audit integrity software from Muddy Boots was deployed across Unilever’s fresh produce supply chain. Loaded with the Unilever Sustainable Agriculture Code, the tool has enabled Unilever and its suppliers to create evidence- based improvement plans.
David Pendlington, sustainable agriculture manager, Unilever said: “Quickfire from Muddy Boots Software enables our suppliers to self-assess themselves against Unilever’s Code and identify good stories or areas for improvement. The Quickfire Reporting Tool allows us to spot trends in the industry that can be broken down by individual supplier, country and product. As a result, we are able to see what the issues are and what needs to be improved, without having to interrogate endless paper-based records.
“Understanding we have to make a real difference in sustainability terms and being able to communicate this through our brands is leading us to create new ways of working with our suppliers. By introducing the sustainable initiative to fresh produce, our communication down the supply chain has significantly improved. We now know how many suppliers we have, their locations and what they are supplying to us; this level of transparency is key to that drive for sustainability.
“So far, over 100 of our key suppliers are reaping the benefits of Quickfire and we are now actively working with Muddy Boots on improvement plans and future implementations. We aim to have 350 suppliers on board by the end of 2012,” concludes David.
Jonathan Evans is the managing director of Muddy Boots Software, a leader in traceability and quality assurance solutions for sustainable food and farming. The Muddy Boots range of software seamlessly links information from grower to retailer and monitors the consistency of product quality. This improves operational efficiency for businesses across the retail, manufacture, food service and produce supply sectors.
For more information, please visit www.muddyboots.com