A couple of weeks ago, I attended Körber Supply Chain’s Elevate User conference. While it was originally scheduled for San Diego, the ongoing Covid pandemic pushed it online once again this year. My colleague, Clint Reiser, wrote about Körber’s ongoing supply chain transformation, highlighting the company’s three main focus areas for 2022: 1) investments in assisting Körber customers’ journey to SaaS, 2) bringing a new product, named Universal Control System (UCS) to market, and 3) offering warehouse modeling for operations. Aside from these key areas, sustainability remains another important issue for Körber and its customers.
One session that I found interesting was a presentation from Patrick Noonan, Chief Product Officer at SanMar. In this session, Mr. Noonan revealed the emphasis the company places on sustainability, revealed the lessons learned along its journey, and highlighted a roadmap that others can follow.
SanMar was founded by Marty Lott from the basement of a Seattle office building in 1971. SanMar is the largest wholesaler of apparel into the corporate identity, promotional product, and ad specialty space in the United States. The company works globally across 22 countries and import a little over 10,000 TEUs per year. When he founded the company, Mr. Lott built it upon two core principles: tell the truth and be nice. From a sustainability standpoint, these two principles are instructive in the company’s journey. According to Mr. Noonan, telling the truth means they should have a transparent supply chain, and being nice means they care about the people who are making the garments around the world. While sustainability has been a core part of the company’s DNA from its founding, it started evolving about 30 years ago when it launched a private label offering.
Prior to that, SanMar was a wholesaler of other people’s brands that bought in bulk and re-sold individual pieces. This meant the company did not handle the product development or sourcing. With the launch of its private label brand, SanMar began product development, sourcing, and working with global factories. At this time it became apparent that there were real challenges in sustainability that needed to be addressed. Fast forward to the last five to ten years, and SanMar has built out a sustainability team, which includes compliance managers and a team to ensure they do business the right way. To be successful, this team had to define what sustainability meant at SanMar.
Sustainability Lessons Learned
Mr. Noonan highlighted five key lessons the company learned in its sustainability journey.
Define what is important to you. The answer to that question will be different to every different company. To understand what is really important, companies can look to senior management to develop a shared vision of sustainability or survey customers to see what they want in terms of sustainability. At SanMar, the answer was a three-pronged approach of people, planet, and product. Each of these three pillars is then broken down into internal operations, global supply chain, and reporting (accountability). This creates a 9-box framework for how the company defines and measures its sustainability efforts.
Get the entire organization involved. Sustainability is too big of a challenge to be outsourced to the compliance team. It requires front line operation personnel to be part of the solution. SanMar has committed to third party audits for every factory they do business with. This involves an outside firm to ensure that factories are paying workers fairly, are not creating unsafe working conditions, and that all factories are compliant with local building and fire codes. One tangible result of the feedback process was a move for the company to re-use boxes, thereby eliminating waste. The GM of the DC that had the highest box re-use rate was awarded the Box King award at the annual General Manager’s meeting. Now, the company is re-using or re-purposing over 1 million boxes per year, which saves the company over $1 million.
Get some early wins to build momentum. The key is to show you can make a difference in sustainability and deliver results for the bottom line. Being sustainable should not mean that you are not able to be more efficient and effective in how you run the business. Companies need to demonstrate through the small things that it makes sense to tackle the bigger issues as well.
Dream big (and don’t be afraid to talk about it). Over the last year, SanMar has signed on to the Science Based Targets program. SanMar is committed to reducing its global greenhouse gas emissions in line with achieving global warming targets of less than 1.5 degrees Celsius. This means the company will need to use much more sustainable fibers and use renewable energy sources. While the company is not sure how it will achieve the goal, it knows that it has to aim high. SanMar’s most successful sustainable product is the re-tee. The re-tee takes recycled cotton that is gathered from cutting scraps, broken down, spun into yarn, and turned into new shirts. The shirt is the color of the scraps, so it is more sustainable since it is never dyed.
Just start. Even though you have defined the problem, got the whole company on board, got some early wins, and are dreaming big, sustainability is a big problem. The key is to just get started on an initiative, and build on it from there.