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Retail Supply Chain Sustainability Needs a ‘Hub’

adkins & fisher, west monroe partnersThe retail industry has reached something of a watershed as corporate demands for more efficient supply chain operations intersect with rising consumer demand for sustainable retailing.

Despite the opportunities, though, retail supply chain sustainability still lacks clear direction and progress. One key factor may be the lack of a literal and figurative hub to serve as a source of innovation and motivation—like Silicon Valley has been for the high tech industry or the Boston area for life sciences. Where does retail sustainability fit on the map?

How about Columbus, Ohio? With a core of leading retailers that call the Columbus area home, as well as pioneering local “green” initiatives, the city has a unique opportunity to lead a transformation in retail supply chain sustainability.

A growing case for change

The goal of a “sustainable” supply chain is to operate successfully without vulnerable dependencies, while minimizing the impact of business activities on the environment and society.

As retailers grow and use more global suppliers, more issues pose risks to their operations: the resilience and effectiveness of political systems, concerns about global climate change, rising populations, food and water scarcities, pollution, human rights, waste, and much more. At the same time, few have a clear line of sight throughout the supply chain, limiting their ability to understand, for example, the use of potentially controversial human labor and environmental practices or unsafe materials.

Several recent studies highlight the importance of retail sustainability:

  • Cotton Incorporated’s Lifestyle MonitorTM data and 2013 Environment Survey revealed that 23 percent of consumers always or usually buy clothing marketed as “sustainable”—the second-highest purchasing stipulation behind only “Made in the USA.”
  • The Road to 2020: Corporate Progress on the Ceres Roadmap for Sustainability, a 2012 evaluation of 600 US companies conducted by sustainability advocacy firm Ceres, found that only 20 percent of retail companies have broad oversight of sustainability and only 45 percent currently enforce green procurement policies.

Since the retail sector is such a vital cog in the modern world, its supply chains—and especially those of the largest retail enterprises—have the opportunity to positively impact millions of people beyond their direct customers by making changes with sustainability in mind.

Sustainable practices go hand in hand with more efficient supply chains, so it is in the industry’s best interest to accelerate the transformation—but “business as usual” is typically easier than being the first company to “take the plunge.” This is where the idea of collaboration could take form. And where better to accomplish this than in a city that offers a foundation for such collaboration and can also benefit from it.

Why Columbus?

Columbus, Ohio, occupies a unique position as a retail “capital” of sorts, home to leading industry players such as Limited Brands, Big Lots, Abercrombie & Fitch, and others. Moreover, Columbus-based retailers have a tradition of leading the pursuit of game-changing ideas. For example, Victoria’s Secret was one of the first major chains to introduce e-commerce, luxury department store Henri Bendel was an early adopter of pop-up shopping and Big Lots was one of the first successful “closeout” retailers.

Columbus also is a pioneer in the area of sustainability with its “Get Green Columbus” initiative. Now eight years old, this initiative is well established with councils, events, and action items targeting green buildings, recycling, renewable energy, resource protection, and transportation. Many of the city’s retail organizations have become involved with “Get Green Columbus.” Limited Brands won a “GreenSpotLight” award as one of the initiative’s top participating companies in 2010.

A logical next step would be to blend the city’s societal commitment with the goals of a sector so vital to the local economy. Such collaboration not only would be good for advancing retail supply chain sustainability, it would also be good for Columbus as a community. Cities with notable specialization in specific areas attract new citizens and enterprises with related skills. It also provides an opportunity to engage the knowledge, creativity, and resources of the academic communities of The Ohio State University and other local and regional institutions.

So the stage is already set with the green initiatives and concentration of retail enterprises. How can we start to take advantage of this confluence of interests to advance retail supply chain sustainability broadly?

Making it happen

Real transformation will take years, but we must start somewhere. A good and meaningful first step would be to convene a council representing Columbus’s retail-sector enterprises, as well as representatives from the city and the local academic community. The council can consider mutual goals and brainstorm ways to drive real change—such as a development of a universal scorecard for retailers seeking to improve supply chain sustainability or of supporting municipal incentives.

Columbus has the unique confluence of interests to promote retail supply chain sustainability. Let’s get the conversation started.

Sean Adkins is a managing director with West Monroe Partners and leads the firm’s operations excellence practice. Kate Fisher is an experienced consultant and industrial engineer with West Monroe Partners. Both are based in the firm’s Columbus office and can be reached at 614-372-7300.

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