Panelists:

Lisa Morales-Hellebo - Refashiond

Olcay Silahlı - Fazla Gıda (Whole Surplus)

Kai Kuramoto - Cleanbodia

Thomas Marinelli - Signify

July 21, 2021: LINK

In this panel of the What’s Wrong With (www/) series, we have focused on the chronic issues that are appearing in different stages of traditional supply chains and its management processes. In an one-hour diagnostic session with a diverse group of panelists, we tried to explore the obvious and hidden answers to the question: What’s wrong with supply chains?

When we are talking about supply chains, we mean a complex, interconnected, and multifaceted journey of goods and services to the end-users. The process consists of a variety of international sources, stakeholders, and organisations, fueled by logistic and production activities happening simultaneously in between these actors. If we were able to stop the time and take a cross-section from any supply chain, we would see an incredible number of outputs and inputs traveling between various locations while human beings and computers try to manage and keep track of all that is happening worldwide.

Current priorities in the traditional supply chain

Managing such a multi-layered system of transportations, transactions, and transformations can be considered a success for human civilization. But all the steps towards a more ‘developed’ and ‘civilized’ society come with their challenges. Since our current economic system is built on growth, all the subsystems glorify and prioritize speed and cost reduction while neglecting the values related to the non-tangible aspects of humanity, ethics, and nature. With this common blindness to non-physical values and the tendency for short-term thinking, we face multiple pain points in the whole supply chain management system.

All the multinational firms want to be more sustainable. But the challenge is, when it comes to their second and third-tier suppliers; firms seem unable to control suppliers’ actions towards the environment.

While the main decision makers in the big companies try to optimize the whole supply chain process in the fastest and cheapest way, they prefer to delegate production efforts to the developing countries, where natural sources and human effort are cheaper. Even though a multinational company claims to put the environment as its priority, it is hard for them to contain a green standard throughout the whole supply chain. Especially when it comes to the n-tier supplier in a developing country, where harsh economic, social, and political conditions and a lack of basic needs are making it difficult to focus on green production and environmental issues.

In our global climate crisis, multi nationals have to step up and take overall control of their supply chain, and create a fully transparent map of their supply chains, solving the issue of accountability, and answering questions such as who is responsible for unsustainable production, when a multinational company’s fourth-tier supplier pours the pollutants into a river? Is it a corrupted law in the supplier’s country and the worker in charge? Or does the company take responsibility?

Bad habit: Cheap goods

While some people are trying to fix environmental and ethical issues in the supply chain, on the other hand, we also have to raise awareness on the need of having green demand chains among our global consumers, who are addicted to buying cheap goods in a fast way. Nowadays, we are used to buying a t-shirt for $2, even though its raw materials came from far away. The system doesn’t put the real ethical costs on the tags of produced goods. And what price can we connect to mistreatment to nature and inhumane working conditions? These are long-term prices that we do not pay or care for when buying that $2 t-shirt. But we will have to pay the real price at some point.

If you want consumers to demand something you need to trigger them. You need to acknowledge them on what can be done. Where do we need to expect the change to happen first? Top to bottom, bottom to top? Whether it is individual awareness or organizational action, it has to happen now.

The supply chain is a demand chain. When a crowd demands the ‘right thing’ companies have to do the right thing. If you are a company and you want your customers to push you towards better decisions, do not be afraid to acknowledge them on what you can accomplish together for a better future.

Circular economy: Re-monetizing the assets

Thinking about the waste in the whole supply chain, we can see a big potential of re-monetizing the in-between assets. While this is good for the environment, it is also good for the finances of a company. Maybe the main magic here is to find sweet spots that will bring revenue in different ways. Getting financial benefits from doing the right thing is possible.

Disruption & innovation always comes from the collaboration between different sectors / cross-disciplinary, global collaborations

How can we boost such important environmental beneficial changes to happen? There is one thing that we know from the experience: disruption and innovation always comes from the collaboration between different sectors, on a global and interdisciplinary scale.

Decisions start from the design

The production journey of any good starts from the design process. Design has the power to tweak the whole supply chain. Decision on material and form can determine how ethical and ecological the whole production process is. Companies should empower sustainable design more and invest more in the topic while emphasizing the long-term gains throughout the company.