Green apple. Image credit:Aztec International, Inc. candle making scents.
Those of you who have read my previous missives on personal electronics know I have little use for the like of Greenpeace's electronics rating scheme and am anoyed by the constant hectoring of Apple by NGO's. Often they are chasing trailing indicators and pushing protocols that miss the big picture. Continuing along those lines, I recently congratulated Apple's Board of Directors for opposing shareholder demands that Apple publish an annual "sustainability report."
I've taken pro-Apple positions on these subjects because I have seen strong indications that substantive progress was being made where it counted most: carefully managing product design and supply chains. More evidence supporting this view now has been made public.Most impressively, to me, Apple has been auditing it's supply chain partners on a wide range of health, safety, and environmental subjects for several years and holds them accountable for improving performance. Environmental Leader has nicely summarized some key pieces of Apple's supply chain audit program.
To ensure that its suppliers are in compliance, Apple has a monitoring program that includes factory audits, corrective action plans and verification measures. The computer maker conducted onsite audits at 102 facilities in 2009, up from 39 facilities in 2007. Facilities included all final assembly manufacturers, first-time audits of component and non-production suppliers, and 15 repeat audits of facilities that had a core violation.Over the years I have have conducted and followed up on many similar audits myself. Let me tell you, you are not a warmly received caller when these audits are announced; and, no wonder, as the upshot could be a bite out of a supplier's short term profit. Let me illustrate how this goes with a stretch analogy. I'm hoping it works for those of you who have not walked the supplier audit walk (from either end of the trail).
'We want to audit your lifestyle.'
Suppose you had been telling your friends that your lifestyle is getting "greener" and that you are saving real money and that you feel good about it. Plus, you thought your extended family was inspired by your example - all except for maybe the ones who watch way too much of a certain cable TV channel.
Now imagine how you'd feel if you were informed that a team of 3 or 4 total strangers were going fly halfway across the world to audit your lifestyle and that of your extended family to see if your arguments hold water, and that they'd be spending maybe three days with you and your clan - beginning at your home and possibly fanning out to the grandparents and to the children who live elsewhere. Party time: NOT.
You would be told up front that an exit interview will be held at the end of the visit, during which specific recommendations would be made by the audit team and that you'd all have to conform as time goes on "or else."
Before the visit, you would also be told that you would have to provide this audit team with the last year's records of medical visits, energy bills, water and sewer bills, contracts with service vendors and operating manuals for all major appliances and HVAC systems in use. 'So have this ready for when we arrive.'
The visitors also would want to see written descriptions of who was responsible for what household task, especially maintenance, and so on. Fire up the word processors.
Think that would go over well with your family?
Were it not for the desire to maintain the supply contracts with a world class corporation, supplier audit visits, such as Apple is conducting for sustainability sake, would not happen.
For some of the suppliers visited, serious and expensive change will become a requirement of holding onto the contract.
The three facilities in non-compliance with Apple's hazardous waste rules had to hire certified vendors to handle their disposal and undergo a review of their systems for managing hazardous substances via a third-party company, as well as perform inspections of their wastewater discharge systems.Sending audit teams to hundreds of factories every year adds up to a pretty big bill, year after year after year. And there are other interesting potential ramifications and caveats.
- A supply chain audit program is likely to keep going only as long as the sponsor is profitable overall.
- Unless contract suppliers are held accountable, year to year, for improved performance, those factories located in nations where government standards either don't exist or are largely ignored (you know who they are) will lapse quickly back into cheap and dirty - shortly after an audit program ends.
- If two competing electronics companies audit the same facility, the site has to meet whichever corporate standard is the highest. Therefore, the auditing firm with the highest standards for suppliers and which requires the most frequent accountability reviews always trumps the firm with more more lenient programs.
- Firms that design products by increasingly specifying more sustainable materials of construction can avoid supply-chain partners with especially hazardous operations. (These are the ones you want your competitor to be stuck with.) This design paradigm results in reduced audit costs as well as a smaller environmental footprint due to increased recycling and reduced hazardous exposures.
Relative to this last point, I'd like to interject a bit of context. There exists a generally stable recycling market for aluminum and for glass, world-wide. There is no such thing for the engineering polymers typically used to make computer shells, screens and keyboards. See how the material choice and supply chain management dots interconnect?
I have no Apple, Inc. stock. My home has one 5-year old Apple iBook, two rebuilt Dell desktops which are around 4 years old (purchased used), and one HP laptop of recent vintage, plus a couple of iPods and a 4-year old Brother laser printer we all share.
I could probably write an equally favorable sounding post about the sustainabilty programs of each of Apple's competitors. My point in focusing on Apple for this one was to get readers to see things from the industry point of view and to appreciate the effort it takes to manage far-flung supply chains for sustainabilty. This viewpoint also helps illustrate, I hope, why Walmart is to be commended for it's recent supply chain management efforts.