Logistics will be of exceptional strategic importance in the inexorable transition to honest and responsible business. By advocating and promoting fair and responsible logistics, we contribute to a sustainable future for all.
Introduction: The Need for a New Business Paradigm
But how does fair and responsible business differ from what we've seen in traditional CSR. An integral part of the business model: social or environmental value is the core of the business model.
Early Signs of a Responsibility Transformation
Limited connection to the business model: Aimed at reducing the negative social or environmental effects of the business model and/or adding positive effects through voluntary programs. The report showed that between 2010 and 2013, the revenue of the studied companies from fair and sustainable products and services grew six times faster than the total revenue of the company.8.
Growing Demand for Fair and Responsible Businesses
Fair and responsible businesses are increasingly creating a competitive advantage in terms of consumer decision-making. Adopting a fair and responsible business approach is therefore essential to meet customer demands of today and tomorrow, and to ensure long-term resource availability.
The Role of the Logistics Industry in the Transformation
There are a number of companies from various industries that have successfully implemented fair and responsible business practices. It can also help identify possible approaches to fair and responsible business in logistics.
Creating the Circular Economy
In this section, we explore a number of inspiring examples currently found in various industries that demonstrate fair and responsible business approaches that can be transferred to the logistics context. In 2010, 152 million mobile devices (including cell phones and tablets) were disposed of in the US. Consumers can easily recycle their devices at one of almost 1,900 kiosks in the US while receiving an instant cash payment.
Project Ara smartphones consist of reusable functional modules, such as cameras and sensors, which can be replaced at the user's discretion if newer modules are available. These measures have a visible effect - in the USA, for example, 87% of used tires are diverted to landfills and this proportion is steadily increasing. Rubicon has established an online network of independent waste haulers in the US, each competing to collect and recycle trash from corporate customers such as 7-Eleven and Wegmans.
Local governments and administrations play an important role in the success of circular economy approaches on a systemic scale. It is an effective low-cost care solution for premature babies that can be used in a clinical or community setting, and for baby transport. It uses an innovative wax incorporated into a sleeping bag to regulate baby's temperature and can be reused up to 50 times.
Creating Fair Access
While the wealthy can afford to spend money to keep a stock of FMCGs on hand, say a "normal size" bottle of shampoo, many people in the developing world do not have this luxury. And having experienced negative public reactions to poor animal welfare standards in its supply chain in the past, Walmart has also recently made significant progress in improving animal welfare in the consumer industry. The digital transformation is affecting every aspect of the global economy, and thus access to the Internet is increasingly important.
Until now, about two-thirds of the world's population does not have access to the Internet, and this fact provided the basic idea for Google's Project Loon. Fairphone, a smartphone produced by an independent social enterprise in the Netherlands, is one of the most prominent examples of attempts to create fair production conditions and fair sourcing of raw materials in the electronics industry in recent years. Founded in 2013, Fairphone aims to design and manufacture a completely "fair" smartphone that increases transparency in the sourcing of raw materials, manufacturing, distribution and recycling of electronics and - most importantly - transparency in working conditions.
On Fairphone's website, their complete supply chain and cost breakdown is displayed to demonstrate the importance of traceability and transparency in the electronics industry. Intel Conflict-Free Technology is the chipmaker's approach to applying fair principles to metal sourcing for electronics. Intel is working on authenticating the sources of specific metals used in its products to ensure that profits from Intel-sourced metals are not funding human rights atrocities in the Democratic Republic of Congo.
Creating Fair Production and Trade
Fair and responsible sourcing is not only a challenge with minerals and metals, but also with some basic ingredients used in the consumer goods industry. This chapter has presented more than two dozen cases of best practices for fair and responsible business in the context of the circular economy, fair access and fair production and trade. The principles of fair and responsible business practices we see in the examples above serve as the seeds of inspiration for the logistics use cases in the next chapter.
We've taken a look at some of the leading examples of fair and responsible business best practice today, but what does this mean for the logistics industry. The logistics industry forms the backbone of global trade, and is therefore uniquely positioned to support the circular economy, create fair access and facilitate fair production and trade. To achieve fair and responsible business models, logistics providers must leverage the very nature of the industry.
The logistics industry is resource-intensive and can therefore seek new ways to optimize efficiency and reduce impact on the environment. And because logistics providers manage trade networks and supply chains on a global scale, they are uniquely positioned to enable fair and responsible business approaches in other industries. It is clear that the logistics industry can play a decisive role in making the responsibility transformation possible.
Use Cases: Circular Economy
Recyclable items such as clothing and old electronics can be brought into the hub for inspection; depending on each item's recyclability, it can be delivered to the next owner for refurbishment or recycling. Logistics providers can take advantage of these networks to establish an integrated collection and resale service. By implementing fair and responsible business practices, logistics providers can develop more eco-friendly and efficient packaging solutions.
Logistics providers are ideally placed to leverage their networks and their position as supply chain managers to enable more efficient material flows. Logistics providers generally have a good overview of local businesses, their activities and even material flows. This information can be used by logistics providers to establish a B2B platform that coordinates material flows and activities, similar to the concept of Rubicon Global in the previous chapter.
It can also use the platform to offer 4PL services that improve the efficiency of industrial and commercial waste management. Other waste management companies can be integrated on the platform to expand the range of recycling services. DHL leverages its existing expertise and infrastructure to develop various long-term recycling and waste management solutions for companies.
Use Cases: Fair Access
As consumers demand greater access to fairly produced goods, logistics companies can provide their own infrastructure designed to transport products locally. With this L2L (local to local) concept, logistics providers can greatly contribute to the development of local businesses and thus the community, promoting access to fairly produced goods. The idea behind this start-up is to simplify access to regional products for those who don't have time to visit farmers' markets but still want to shop locally.
When people lack access to logistics services, whether they live in developed or developing countries, they are effectively cut off from the exchange of physical goods over long distances, and this hinders local economic development as well as access to health care. . This need to connect people and businesses represents an opportunity for logistics providers – they can develop discount delivery options that provide affordable access to logistics for low-income customers. Providing access to affordable basic services is a good way to establish a company's presence in an underdeveloped region.
Opening small plants like this in developing parts of the world would contribute to greater SME activity and create jobs. As mentioned above, remote rural areas in developing regions often lack basic logistics infrastructure, especially for road and air freight transport. This is especially true for disaster-prone areas, often in some of the world's poorest regions.
Use Cases: Fair Production and Trade
Certified fair logistics products and services will demonstrate the commitment of each logistics provider to fair and responsible practices. Additionally, a certification initiative will provide valuable differentiation from competing offerings – companies will be able to clearly demonstrate to stakeholders their commitment to fairness and responsibility by choosing a fair logistics provider. In B2B relationships, significant added value can be achieved by increasing transparency in the supply chain.
For example, when comparing packages of frozen shrimp in a supermarket, there is generally no way to know the exact source of the product, whether it was sourced sustainably, how it was transported, and whether workers in the supply chain are being paid fairly. A promising business model for fair and responsible logistics would be to offer this type of smart tagging and provide end-to-end monitoring of smart tag usage. Online marketplaces that sell only products sourced and produced in a fair and responsible manner and offer fair delivery options.
The logistics industry can use its position at the heart of supply chains to play a more active role – it can help create fair conditions in production and trade by building an online marketplace for fair products. But this integration can be a catalyst for fair and responsible business, as the logistics provider will begin to manage the entire supply chain – from end to end. Therefore, we call on all stakeholders in the global supply chain to play a proactive role in realizing the full potential of fair and responsible logistics.
Success Factors
URL: http://www.dpdhl.com/en/responsibility/corporate_citizens- hip/disaster_management/disaster_response_drt.html. URL: http://www.kpmg.com/Global/en/IssuesAndInsights/Articles Publications/ceo-outlook/Documents/global-ceo-outlook-2015-v3.pdf Malo sonce (2015).
