Kellogg´s sustainable supply chain strategy

Though many farmers are part of Kellogg´s efforts to move sustainability through its supply chain, the company does not employ farmers directly. Farmers sell to mills, which in turn sell to Kellogg’s. Nonetheless, farmers such as Justin Krick, whose farm grows soft winter wheat in Michigan for Kellogg’s, is a partner in the Kellogg’s Great Lakes Origin program. In this program, Krick, Star of the West milling company and Kellogg’s cooperate in training other farmers on using sustainable practices such as the use of precision tools and conservation methods. Precision agriculture devices made by Syngenta allow Krick to use electronic soil reading gadgets as well as GPS mapping to reduce the amount of fertilizer used as well as cut costs and receive maximum yield.

Kellogg’s has managed to exert its influence as one of the leading 200 companies in the World Business Council on Sustainable Development and is committed to supporting COP21, the United Nations Climate Change Conference. Furthermore, as part of the “We Mean Business” coalition, Kellogg´s is taking an active role in limiting the increase in global average temperature to 2 degrees Celsius, encouraging governments to commit to COP21 and removing commodity driven deforestation from its supply chain by 2020. Chief Sustainability Officer of Kellogg’s, Diane Holdorf, believes that Kellogg’s programs add tangible value across the supply chain, not only for Kellogg’s but for farmers, mills and processors. With sustainability tools being introduced to Kellogg´s overseas suppliers in Bolivia, Thailand, the Ivory Coast and Mexico, it is clear to see that deeds here are more important to Kellogg’s than the use of moral rhetoric for environmentally aware consumers.

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Accenture: Living wages and supply chain human rights

The recent report published by the World Economic Forum and Accenture called “Beyond Supply Chains – Empowering Responsible Value Chains” highlights the wage inequality of garment sweat shops along the garment industry supply chain. The research indicated that garment workers in Bangladesh earn a mere 14% of the living wage with no changes seen between 2001 and 2011. India saw wages grow for the garments industry from 20% in 2001 to 23% in 2011, meaning that the average worker will earn a living wage in 112 years. China has witnessed the best results of globalization with their workers´ wages increasing from 16% of the living wage in 2001 to the 36% in 2011; with this sustained growth, Chinese workers will receive a living wage in 12 years.

Currently, a worker in Bangladesh would receive 0.6% of the price paid by consumers for a T Shirt sold in Germany. The supply chain is designed to make the retailer 42.6% of the price, 12.5% for the brand and 4% for the factory sub-contractor. Though there seems to be room to relocate some of the profit to the “sweatshop” workers, firms don’t appear to be in a rush to change the status quo. Under article 23/3 of the Declaration of Human Rights it states that everyone has the right to a just and favorable remuneration. Nevertheless, it is the responsibility of corporations, not their sub-contractors, to maintain these inalienable human rights. This can however only be achieved when firms and governments are on the same side of the fence.

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XPO Logistics secures long-term retail distribution agreement with B&Q

The UK´s largest home improvement and garden center, B&Q (part of the Kingfisher Group), has awarded its long-term logistics agreement to XPO Logistics. B&Q has a workforce of 30,000 and more than 40,000 products in its product line. The company seems to have found a reliable partner to handle these products in XPO, which already has an established relationship with the Kingfisher Groups French DIY retailer Castorama as well as B&Q´s reverse logistics business in the UK.

XPO will be responsible for the planning and national distribution of a variety of goods to over 300 B&Q stores. This will include the management of a fleet of 220 tractor units as well as 750 trailers equating to 3,200 retail and horticultural deliveries per week in peak season. XPO Logistics Solution Managing Director Richard Cawston mentioned that he looks forward to working closely with B&Q and to delivering industry leading solutions for the DIY products provider. In conclusion, XPO is a top ten global provider of logistics solutions with 195 locations in the UK and 3.5 million square meters of warehousing as well as 15,000 employees.

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Have a nice weekend!