How a Holistic Approach Makes Cisco's Supply Chain Green
In implementing its green supply chain initiative and its overall green effort, Cisco Systems starts with a holistic view. The company's EcoBoard brings together senior executives from almost all of the company's functions, ensuring they're all working towards the same vision, even if their actions might differ.
At the supply chain level, one group oversees Cisco's global supply chain, covering most of its operations from end to end. Edna Conway, the EcoBoard's supply chain strategist and Cisco's senior director of global supply chain management, ensures that Cisco's supply chain efforts are in line with the company's overall goals.
"Look at every stage of the supply chain. After you have your foundation of compliance (with regulations) and your end-to-end supply chain...drive down to specific targeted impactors," she said during a supply chain webinar hosted by Supply & Demand Chain Executive magazine.
Cisco's supply chain uses five impactors that serve as guideposts for making changes. The impactors are: carbon emissions, energy use and availability, water availability and quality, land use and waste, and hazardous materials.
Any new activity is deemed worthy of being done if it positively addresses one of the five impactors and has a clear businesses benefit, such as cost savings or manufacturing efficiency, Conway said.
Companies that take a broad look at their external supply chains need to copy that view and apply it within themselves, she said. "Think holistically internally as well as externally. You have a lot of people to convince in your entity."
Having a comprehensive understanding of your supply chain is increasing in importance as regulations worldwide change and grow. The European Union's REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) legislation started going into effect last June, and discussions are taking place over what should be the first chemicals addressed by the law. Another E.U. law, the Restriction of Hazardous Substances Directive (RoHS), is undergoing a revision, soon to oversee additional substances.
Supply & Demand Chain Executive magazine had surveyed more than 150 companies, finding that although 79 percent of them are based in the U.S., more than half said 10 percent or more of their sales are in Europe. That means more than half of them are highly affected by REACH and RoHS, and any of the companies that don't have direct sales in those countries could be affected if they sell into supply chains that work in the E.U.
"In the majority of cases, your supply chain will be impacted in some way," said Tom Keyserlingk, director of North American compliance, product lifecycle information services practice for information-provider IHS.
Legislative mandates like RoHS were named by 44 percent of companies are the most important design mandate and by 38 percent as the most difficult design mandate, with fewer companies saying that customer requirements were most important or difficult.
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