Five years ago I had the crazy idea of asking companies to publish their supply chains on the web. I was teaching a new sustainable product design class at MIT and in the process of equipping my students with the tools to make sense of sustainability, I ran into a wall: there was no way to account for labour, pollution or other measures of impact, without core information about what things are made of and where they come from – the basic information behind supply chains. And almost none of this is available.
As an architect and an inventor I know that designers have an outsized influence on product offerings, because they can create desire for new goods and services. If the students in my class had no access to this kind of information, how many other people were making decisions without understanding their social or environmental cost?
Earlier that year I had investigated the supply chain of my laptop computer, only to find that many links in the global supply chain were completely missing. Through a combination of investigative journalism, reverse engineering and what little data exists on mineral production and the carbon footprint of industrial processes, I drew a map showing the likely origin of each raw material and calculating the overall carbon footprint. Together with a team of brilliant programmers at the MIT Media Lab, I made this kind of supply-chain mapping and footprinting possible through an open-source website called Sourcemap. That’s when I started asking students, colleagues and companies to publish information about supply chains and began to build a crowdsourced directory of sustainable practices.
Understanding the supply chain
Looking back, there were already signs that supply-chain transparency was a good idea. Many products have a well-known origin: specialty foods and beverages like Parmesan or Champagne and craft goods such as Harris tweed. And industries associated with environmental issues had started to introduce new ways of communicating transparently with their consumers. In 2006, US apparel maker Timberland added an ecolabel to shoeboxes detailing the environmental and social footprint of each product; in 2007 outdoor clothing company Patagonia published the Footprint Chronicles, an interactive map that tells the story of its manufacturing processes and their environmental footprint.
Despite some proactive efforts towards supply-chain transparency, tremendous costs have been incurred as a result of not knowing where things come from. The worst of these was arguably the crisis of mad cow disease in the UK in the 1990s, which prompted farm-to-table traceability of all beef sold in Europe and Japan. Putting the spotlight on supply chains may also help to reduce social and human right abuses in supplier communities. Ethical sourcing means, for example, that the electronics industry is requiring smelters to disclose the source of raw materials to ensure that they do not come from conflict-ridden areas of sub-Saharan Africa. Elsewhere, the pharmaceutical industry – in the face of disastrous medicine recalls due to contamination and counterfeiting – has instituted a program to share supplier lists so that audits can be targeted better. Transparency is in the best interests of the consumer, and all kinds of problems can be prevented by greater knowledge and awareness.
What is Sourcemap?
Sourcemap’s origins lie in the work I did with colleagues during my time at MIT Media Lab. In brief, it is the first software designed to provide supply chain transparency to the general public. It shows the origins of a product visually, on a map of the world, and relies on the efforts of volunteers to develop profiles of individual products.
It operates through a website that allows anyone – suppliers, producers, even the general public – to share information about how things are made, from the specific locations of factories and farms to photos and videos of manufacturing processes, even the costs and carbon footprints incurred.
But there’s more to the website than that. How much does it cost – in terms of carbon emissions – to hold a meeting in Chicago? More or less than in Denver? Do you want to trace back the sources of your product’s components? Or identify the environmental impact over their life-cycle? The website also provides a set of tools to allow users to develop their own maps of travel, traceability and life-cycle impact.
Sourcemap has the added benefit of making supply chains social, so that they can be exported in a variety of formats and integrated in all kinds of websites, where people can discuss and verify them. In this way, a stronger understanding of the social, environmental and economic costs of products is built up.
Sourcemap has now left the stimulating environment of MIT Media Lab and set up independently. We work with companies to help them gain insight into their supply chains and communicate with suppliers and stakeholders, including the general public.
A tool for trust
The first user of Sourcemap wasn’t a multinational or an environmentally recognized brand: he is a Boston caterer seeking to build a trust-based conversation with his customers. Robert Harris runs Season to Taste Catering, a ‘food first’ company dedicated to high-quality, locally sourced ingredients. They use Sourcemap to print weekly maps showing the farms and factories where ingredients are sourced for every meal – both the local farms with which they have long-standing relationships, and the sources of ingredients that are unavailable in New England, such as olive oil and citrus fruits. Robert has several reasons for creating these maps: they reinforce the company’s mission to provide high-quality food; they provide traceability information to customers concerned with supplier practices; and they serve as a discussion topic for him and his colleagues, inspiring them to find new uses for local resources. The maps are also valuable for marketing: they are viewed by thousands online and embedded into external web pages, including blogs and press websites.
And it’s no wonder Robert wants to give his customers more information on the quality of ingredients. The explosive growth in organic food sales in the US points to a consumer base that is increasingly concerned with the quality of produce. Even beyond food there is a growing concern with the quality and sustainability of products, as exemplifi ed by the proliferation of ecolabels on product packaging: stickers and seals that assert compliance with a set of environmental standards created by governments and NGOs. These include ‘certified organic’ and ‘fair trade’ for food products, along with the Forest Stewardship Council and Marine Stewardship Council schemes and the US Environmental Protection Agency’s Energy Star and the EU’s Ecolabel on a variety of other items. Ecolabels influence consumer choice at the point of sale, in part because they link a product with a trusted organisation. At the same time, they rarely provide insight into the specifics of suppliers or their practices, which makes it easy to confuse them with other, less reputable claims of greenness (also known as ‘greenwashing’).
Companies are looking to go beyond eco-labels to offer more transparent claims of sustainability. That’s why Office Depot, which provides office supplies and services around the world, approached Sourcemap: to tell a story about their post-consumer recycled paper beyond the ubiquitous eco-label already on the package. Instead, customers will be able to scan a QR code using their smartphones in the store, and be taken on an interactive journey through the life cycle of the paper they’re holding in their hand. QR codes are growing in popularity: 14 million people in the US scanned them in June 2011. They open up a world of information beyond what traditionally cramped packaging is able to do. A single 1×1 inch QR code can take users to a mobile website that shows them exactly how the paper is made, tracking the supply chain from its sources – municipal waste facilities in the American Midwest – through pulp processing and paper-making into national distribution networks that, although vast, represent less than 2% of the paper’s carbon footprint. Taking consumers on this interactive personal journey shows them just why recycled paper is a sustainable choice.
Extended supply chains
In 2010, Season to Taste was named best catering company by Boston Magazine. Their early adoption of Sourcemap already showed a focus on quality and on building long-term relationships with suppliers and customers – indicators of strong management and strategy. Companies everywhere are being scrutinised as to the ways they manage the externals of their business, including the impact of their extended supply chain. This is one of the outcomes of the Carbon Disclosure Project (CDP), an initiative that asks large industries to report on their carbon footprints. More than 80% of Global 500 companies participate by reporting their CDP score, a measure of the completeness of their carbon accounting. Not coincidentally, these scores appear on all Bloomberg bank terminals, and financial experts have begun to look to them as an indicator of overall performance.
The CDP is now urging companies to report on their extended water footprint; similar initiatives ask for accounting of land use and plastic pollution. Carbon, water, land and waste are all externalities, meaning that they have not traditionally been accounted for (and may have little or no direct cost). In global manufacturing, most environmental impacts can occur outside a company’s direct control, in their extended supply chain – a network of first-, second-, third- and fourth-tier suppliers who do not always have a direct relationship with the buyer. In order to start accounting for them, it becomes necessary for a company to identify its direct and indirect suppliers, which depends on their ability to see into their own supply chains.
Companies have been approaching Sourcemap to leverage the website’s ability to ‘crowdsource’ this information. Monitoring extended supply chains is usually a top-down process: global brands hire auditors or build in-house teams to visit and report on supplier facilities around the world. Nike uses this approach to audit nearly 80% of its direct suppliers for compliance with its supplier code of conduct. However, in many agricultural supply chains there can be hundreds or thousands of suppliers. Staples like cocoa and cotton are grown by thousands of smallholders: farmers who grow crops on the small parcels of land where they live. The same is true for commodity minerals such as tantalum and tin, which are often mined in artisanal ways that are nearly impossible to monitor or trace using traditional methods.
How can we reach the extremities of such an extensive supply chain? Sourcemap was built as a social network – just like Facebook and Twitter – meaning that it can get real-time updates from people around the world accessing the site through computers, tablets and smartphones. Crowdsourcing plays an important role in democratising media, enabling ordinary people to contribute aspects of their personal experience. There are many success stories of crowdsourcing, including collective intelligence websites like Wikipedia, citizen journalism efforts such as the Huffington Post in the US and citizen science initiatives like radiation.org (to track radiation levels in Japan following the Fukushima nuclear disaster). In each case, open access to information technology enables ad hoc groups of people to create something more powerful than any individual organisation can achieve.
Sourcemap leverages crowdsourcing to reach new levels of insight into supply chains, especially in emerging markets and where those lines of procurement are extensive. In anticipation of a switch to bio-based jet fuel, Airbus maker EADS approached Sourcemap to create a crowdsourced directory of all the bio-fuel producers in the world so that they could begin to gather data on the environmental impact of different options. As with any social network, producers create profile pages to describe their methods and link to their ‘friends’ – in this case, potential buyers such as Airbus (although this sourcemap will be publicly available, so that all suppliers benefit from the added visibility). Producers can use their profiles to specify the methods they use to produce fuels and publish detailed environmental assessments or LCAs (life-cycle assessments) using the site’s multimedia features. In turn, global brands will have up-to-date insight into the marketplace of alternative fuels and may be able to plan out new logistics based on the additional information about supplier locations and footprints. We’re expanding the same platform to gather information on the social and environmental practices of smallholders in remote places like India through SMS-based surveys and automated phone calls.
Of course, the crowd-contributed nature of Sourcemap makes it possible for erroneous information to be reported (a potential weakness of any reporting medium). The difference with Sourcemap is that our methods and the data are published transparently (and open-source) and can therefore be verified by anyone – verification can be much more difficult with eco-labels and certifications, which are often based on proprietary information.
Supply chain transparency will ultimately involve participation from all stakeholders – not just established first-tier suppliers, but emerging as well as marginalised participants who can benefit from being recognised as part of the community of producers. This far-reaching transparency into the lower tiers could benefit global brands. Increased insight into supplier practices could reveal conditions on the ground in real time and allow a trouble-shooting approach, even helping to reduce volatility in the availability and price of raw materials.
Sustainability
Above all, this type of visibility provides a huge boost for sustainability. It is only once we understand the impacts of what we do today and the direction we should head in tomorrow that we can properly provide for future generations. This means seeing the bigger picture while caring about your own business.
In one of the first Sourcemap case studies, we worked with a brewer in the Highlands of Scotland who was concerned not only about her business but also about the long-term economic health of the industry and the region. She revealed that all the breweries in these remote parts of the country were dependent on a single bottling plant located in central England and that this represented a great cost to the productivity and efficiency of the entire sector. Taking the perspective of a single individual brewer and her supply chain, it was clear that the bottling plant represented only a small part of the costs; but when we took the wider picture and drew a map of all the breweries in the region, the cost of doing business with this distant bottler was shown to be staggering. Shifting bottling to a new plant in the Highlands would reduce the overall distance for freight by over two-thirds, making the regional industry more competitive and creating jobs. Working with the local government, the brewer was able to gather support and build a new bottling plant locally.
Major industry consortia have been formed in the past few years to enable information-sharing about supply chains for long-term sustainability, both environmental and economic. Among them are the Sustainability Consortium and the Sustainable Apparel Coalition, which both seek to spread common accounting methods for environmental impact across major brands, resulting in shared metrics for evaluating suppliers and informing consumers. They are developing shared tools and databases through which suppliers can assign ecological footprints to their products, adding up to overall product footprints that retailers can use to create eco-labels for consumer benefit.
The electronics industry’s EICC (Electronic Industry Citizen Coalition), the pharmaceutical industry’s Rx360 and the Fair Factories Clearinghouse have all implemented systems that help brands to share supply chain information with each other in the interests of auditing suppliers more effectively and preventing counterfeiting. These pioneering initiatives are rooted in sectors with complex supply chains where the costs of not knowing where things come from can far exceed the costs of business as usual.
We have seen cases of companies repeatedly auditing some of their well-known suppliers, while neglecting second- or third-tier ones. In an effort to improve quality, these industry groups are forging agreements whereby member companies can exchange the names of their suppliers in order to target shared suppliers with more thorough audits. In the fragmented world of supply chains, even competitors are banding together for supply chain transparency to ensure stable supplies of quality materials.
Conclusion
Supply-chain transparency brings a whole string of benefits. It may prevent disastrous consequences to health and safety – where a poorly monitored supply chain has led to product contamination – as well as enabling strong relationships between customers and brands to be built. Brands, and even whole industries, are empowered by transparency and emerge as leaders in the marketplace, at the same time making choices with significant, long-term sustainability benefits.
In our early work at Sourcemap, we are already seeing the results for companies who have greater visibility into their supply chains. They are better placed to make more sustainable choices for society, the environment and their bottom line. But the most important discovery has been that so many consumers and companies, all around the world, want to know where things come from, what they’re made of and, by association, who they are linked with in the further reaches of global supply chains. Sourcemap was founded for exactly this reason: to connect consumers with the communities of producers behind the products they buy so that one day soon the choices we make can be informed by the larger impact they have on society and the environment.
This article is adapted from a piece I wrote for GDR Creative Intelligence. The original pdf can be downloaded here.