Ep. 99: Sustainability & Supply Chains (Ft. The Association for Supply Chain Management)

Definers, we know Amazon is known for speed and scale, but did you know that same approach now drives their sustainability efforts? Guided by Data and Science and powered by invention, Amazon works backwards from ambitious targets to drive measurable progress. Amazon has delivered 1.5 billion packages by electric delivery vehicles globally. They're also building the largest carbon-free energy portfolio of any corporation globally, with over 700 carbon-free energy projects worldwide. Every delivery and every data center is an opportunity to move forward, and you can learn more at sustainability.aboutamazon.com. Hello Definers and welcome to episode 99 of Sustainability Defined. I'm your host Cecilia. And I'm Nathra and Definers. We are excited because today we are doing something we have genuinely never done before. We have a guest joining us for our intro. And this is huge Definers because the intro is kind of Nathra and I sacred debrief space, but today it felt right because we have someone who belongs in this conversation from the very first second of the episode. We're joined by Abe Eschkenazi, the CEO of the Association for Supply Chain Management, also known as ASCM, one of the largest and most respected supply chain organizations in the world. Hi Abe and welcome to the podcast. Welcome. How's your business joining you both? And ASCM also has a wonderful series out right now, Abe, which I know we're going to be chatting about called the chain. So Cecilia and I have been watching. It's only six episodes, but we've already learned a lot. This docu series basically unravels the complexities of the global supply chain. And it was such a great docu series to watch Definers. If you have been following along to our hot commodity series, this truly is the perfect docu series to pick up in your spare time because it really illustrates the supply chain from raw material to waste like we've been talking about on this podcast. So you see images of the landfills, the raw materials being harvested and extracted, the transportation and the distribution. The docu series truly paints the picture to what we've been talking about, but on the screen. So stay tuned Definers because after our interview portion with Abe at the beginning here, Nathan and I are going to take you down a supply chain journey. Think of it as a storytelling experience inspired by one of the episodes in the docu series. We will make sure to link the series in the episode description as well as the newsletter and our social media posts. So make sure to follow us @sustainability to find on Instagram and LinkedIn and sign up for our newsletter on our website. Exactly. So a little context for why Abe is here at the beginning of this episode and not the end. If you've been following us lately, you know that Cecil and I have gone down like a full supply chain rabbit hole. A full supply chain rabbit hole. We've been a little obsessed, but consequently so have you Definers. We have been loving all your feedback and commentary on our hot commodity series. Please keep it coming. This has been one of our favorite projects on the pod and it's where we pick a single commodity and break it down completely. We break down the full lifecycle, the history of how it became what it is today, the human stories behind the product and the environmental impact. So far we've done like matcha, chocolate, bananas, and now we're into a deep dive on sugar with our most recent episode with Fair Trade America. So check that out. And each time no matter what commodity we're looking at, we keep running into the same thing. The supply chain is basically so much of where the story lies, right? The carbon emissions, the labor conditions, the land use, the water. It's all happening somewhere in that supply chain invisible to us and often far removed from the end products sitting on the shelf that we know. And yet, and this is what hit us, we've done all the reporting on all these different niche commodities and we've never actually paused to explain the supply chains themselves. Like what they are, why they're structured the way they are, their challenges and why understanding supply chains is actually one of the most important things you can do for sustainability. It's actually so funny when I think about it that we've yapped so much about each commodity, but we've never actually defined what we truly always yapping. Always yapping. So here's the thing, when most people think about a company's environmental footprint, they picture the factory, maybe the office building, potentially the delivery trucks, but the reality is that they're, but the vast majority of impact of a company's carbon footprint lives upstream and downstream of all that. So for today's episode, we are bringing in someone who has spent their career thinking about supply chains functionality and that's Abe and he's with us here today. Abe. May the an eye figured we would bring on a true expert and flip our normal format this time. So before we get into everything, Abe, can you tell our listeners a little bit more about you and why you are interested in this industry and what AACM does? Yeah, give us the full breakdown. Thanks. First, once you start to see supply chain and the experiences that you have, it's stuff not to see supply chain and everything that you do after that. Oh, it really is an unseen activity, but you have the impact is on every aspect of our lives. I've been at the organization for 20 years in supply chain terms. That's probably 100 years, considering what's occurred over the past five to 10 years. The organization itself really started with a focus on the individual competency capability recognition reward, preparing individuals for the jobs and supply chain. And as most of us have experienced over our lives, it was really unseen. We really didn't understand how a product got to our doorstep and how we got sprawl varies in the middle of the winter when we shouldn't have these products. And so the organization really did focus on the individual, but we recognize what's our true purpose as an organization. If we train the entire world, if they didn't perform that they didn't enable an organization to respond to the consumer, to respond to the patient, we really haven't done anything. So we moved from just the individual to the organization and they had brought on the score framework. What is reference as the supply chain operations reference model. For most individuals, it's the Bible on how supply chains are designed for us like people. It's the planning, the sourcing, the making, the delivering and the supporting and the reverse logistics. It's every function within the supply chain. And as you pointed out, these are people. These are systems that affect what we do. And so today supply chains have gone beyond the back office and they're now part of a conversation in every boardroom and every kitchen table. And it isn't because we've responded appropriately. It's because the threads that are holding our supply chains together are all being pulled at once. And oftentimes they're breaking. And we've sought during the pandemic and we've seen it subsequently during the wars and some of the blockages, whether in the Suez Canal or now in the street of war moves. These disruptions and these, the systems that we built for speed and efficiency are under a tremendous amount of stress. And today supply chain is a strategic function for individuals as well as for organizations. So we rapidly move from the focus on the individual to the consumer, the patient, and the employee as well as the economy and the ecology. Supply chains affect every aspect of our lives. And what we're trying to do is not only make it more understandable because most people's understanding of supply chain is I ordered it and why doesn't it be already? Yeah, I can't believe it's not here in 24 hours. Absolutely. They don't understand all the things necessary for the most basic items, whether it's a pen or a coffee mug. They really don't understand and we don't make it easy for them to understand what that journey looks like. It's hidden. It's definitely a hidden journey. And I have to ask you how did you become an expert in this and what led you to care? I had done some supply chain cost reduction back in the 90s when the hospital and the entire health care system went from cost plus to capitated care and we helped hospitals become a little bit more efficient. So we didn't call it supply chain then. It was cost optimization or product rationalization back in the day. Supply chain is a term really didn't come into the fore until after 2000. And while we identified the activities in terms of planning, sourcing, making, delivering, it really didn't recognize as an industry for not only for the organization but for everything that the company does. It was really in the back office and the only time that we really recognized it was when there was a problem. When the product didn't arrive, when the raw materials weren't available or labor wasn't available for the product. So for the journey in terms of the supply chain in terms of my getting into it, it started off in some cost reduction but I'm a finance guy. I came out of consulting and I was a turnaround guy. And this was a turnaround opportunity. I had planned to stay about three to five years, turn the organization around and go do something else. I fell in love with the people. I knew you were hooked. Oh my gosh. As you talked before in a truck, once you see supply chain and once you get involved in it, it's tough to unsee it and more importantly, you tend to see the opportunities that we have to make a difference in people's lives. In our economies, in our communities, and in the economy, Supply chain can make a difference. We talk about this a lot in the Hot Commandity series about the hands that have touched every aspect of the supply chain. I have to ask you, how would you define a supply chain to the Definers listening? Yeah, if you think about any product that you use, try to trace its story, try to trace its journey from the raw materials that were extracted, whether we're talking about a panorcopy or a shirt, then the transformation that product goes through and who touches it. So we start off with some very basic questions that anybody should ask and pick up any product again to our listeners, any product at all. And tell me its story, where did it come from? What raw materials were used? How were they extracted? What's its journey? Who touched it? What happens to it after I'm done with it? These are very fundamental questions that we should be able to answer fairly straightforward on anything that we buy. But yet when you start to unravel the supply chain and you'll see extraordinarily complex, take for example a pen. The ink may have been from Saudi Arabia, the pen itself or the plastics may have been drilled out of a different company. The clips and the screws, everything comes together. It's probably touched a dozen hands before it ever got to your desk. And when you start to really see the activities that surround it, it's almost unbelievable that things are as inexpensive as they are. And yet one of the challenges that we have is that we have built systems for cost and efficiency. So we're trying to respond to the consumers desire for low cost and rapid delivery. Those are the hallmarks and it used to be the hallmark of a very efficient supply chain. But we used to call just in time, reduced inventory, very efficient systems. You don't have excess products in the supply chain. But that requires that everything works efficiently. And if there's a disruption as we've seen over the past three to five years, it has a ripple effect on everything. Whether we're talking about toilet paper or whether we're talking about vaccines, there is a rhythm to meeting the demand signals with the supply. And as long as we have consistent demand, we're pretty good at responding. What we don't do really well is when the demand signals are irrational. And we saw that during the pandemic, for example, in toilet paper. We didn't know what the problem was. I remember that. In the pandemic that we had before the pandemic, we had the same number of bottoms to work. Yeah, I don't understand what happened there. What is the thought process? It wasn't that we weren't prepared for it. It's just that the demand signal spiked. And then what happens in the supply chain is that as that demand signal spikes, everybody says, I have to get mine. And the perception of scarcity, when we go to a grocery store and we see a dozen products on the shelf, we'll take one. If we go to the grocery store and you see two products that are left on the shelf, more often than not, they'll take both. And so this perception of scarcity that I have to get mine in the supply chain because we have had disruptions because we have had shortages. We've created a perception of scarcity for individuals that if I don't get mine, I'm going to be left out. And so the demand signals that we're trying to respond to and supply appropriately when it's needed, where it's needed a reasonable cost, that's been under a tremendous amount of strain. And the pandemic really did expose a lot of the gaps that we had within supply chain, specifically invisibility. We did not know who or what was in our extended supply chain. We knew who our primary supplier was. You know, for your major products or your major materials, but you didn't know your supplier to your supplier to your supplier. And that's where the challenge occurs in trying to see that extended supply chain. Wow. It seems like there's a whole episode we could do just on the psychology behind the supply chain. Whether it's like the dangerous precedence that we've set with like demanding low prices or this scarcity mindset that we all seem to possess. But there's a stat that's really been stopping both to Celia and I in our tracks. And it goes along the lines of that there's something like 70% of a company's carbon emissions that live in the supply chain. Can you help our listeners understand why sustainability and supply chains are basically inseparable? You know, it's a really good point, I thought. And that when you start to take a look at the product journey, you start to see that what we call scope three emissions. And that identifies the entire supply chain. Scope one is what happens within your factory. And so we know how to measure that. Scope two now includes your vendors in terms of transportation in terms of getting the product to your factory. Scope three now includes everybody in your supply chain. So we've been working really hard first to identify everybody in our supply chain. Because of the gap that we had in visibility during the pandemic, systems and companies who work really hard to identify everybody and everything in your supply chain. So there's not a supply chain professional today that can walk into the C suite and say, I don't know who or what is in my supply chain. That is off the table. So that's the good news. The bad news is that you now know who and what is in your supply chain. And you're not as resilient, you're not as sustainable, you often have labor issues in there, whether forced labor or child labor in certain areas, whether you have raw material extraction that harms the environment. There are whole host of challenges that we're now finding in our supply chain. And now that we know about it, now we need to do something about it. And so when you start to take a look at sustainability, the footprint that the organization has manufacturing anything from the raw materials, as you said, to the transportation, to the packaging, to the end of life of that particular product, the disposal, everything in that activity adds up to the sustainability footprint that the organization has to respond to. And as you indicated, that's the majority of a carbon footprint that organizations have is in their supply chain because that's where the product journey starts with raw materials all the way to recycle, reuse and waste. Abe, I want to go back to how fragile supply chains have proven to be with events like pandemics, climate disasters, geopolitical tensions, disrupting the balance of the supply chain, also highlighting some of the challenges that have been previously invisible to us. So the question I have is, can sustainability actually build resilience for businesses instead of being just an ethical choice? And how should businesses be thinking about the relationship between doing the sustainable ethical choice or the right thing and protecting themselves from the sort of risks that we've seen in the last three to five years? Shout out to toilet paper. It's a really great point to deal with. I mean, that is part of the challenge of organizations are facing right now. If we talk about sustainability, we talk about resilience and the ability to respond to the shocks that we've had in the system over the past three to five years and really kind of 15 years. And if you want to take it back even further, we've had the ash cloud, we've had the tsunami in Japan, we've had a variety of disruptions. We've responded. We've rebalanced the supply chains to respond to those disruptions. So today's sustainability and resiliency are increasingly the same conversation. It's the same point. And that is the ability to maintain your operations irrespective of, and there's that blank line of what? And that's no matter what occurs, you need to find a way to make sure that your organization is resilient and it can withstand the shocks that we've experienced in the system. So today, sustainability isn't just a buzzword. It's a strategic imperative for organizations that want to remain not only agile in terms of how they respond to the challenges in the marketplace, but continuity that we can maintain our operations and we can respond appropriately. The one challenge that we have is the information, and this is where it really, the rubber hits the road for sustainability. Today it's taken a little bit of a backseat, whether it's the political environment doesn't seem to be as responsive to the concept of sustainability as an ecological imperative for a lot of organizations right now. It seems to have taken a little bit of a backseat. I will tell you, companies are still focused on being a sustainable organization. They may not be talking about it as much today. They are focused on being sustainable. Why? Because it's continuity. It's the ability to maintain your organization irrespective of the risks that you're all facing in the marketplace today. So the impact, as you see, as you brought up, whether it's the warn you, crane or whether it's the disruption in the Suez Canal, we need to find ways to enable our supply chains to respond to these shocks right now. And we built a system for speed and efficiency. And right now that is under a tremendous amount of stress because of the complexity of supply chains and the disruptions that we've encountered, both from a ecological perspective and a geopolitical tariffs. They're having a tremendous impact on the availability and the cost of goods across the supply chain. Today, technology is ubiquitous everywhere. Information is everywhere. Why can't I know everything about the product that I buy? Why can't I know where it was manufactured? Why can't I know who touched it? How long did it travel to get here? What happens to it after I'm done? And these are fundamental questions that we should, we do have the answers for it, but yet it's extremely difficult for any consumer to look at a product and say, "I want to know its journey before I buy it." And that's particularly hard today. Definitely. My dream is to have a QR code on the side of every product that just literally tells me the names of the people and exactly what you said, the Myles. The carbon emissions. Yeah. That's the traceability part. Million dollar idea right there. Quite literally, it would be a million dollars. I'm also curious just like, as a consumer, I feel very bold. I'm nervous because I'm like, "I don't know what's going on. I'm putting all of these things that I believe in and the choices that I'm making in the hands of the company that I really can't understand what they're doing behind the scenes." Do you have any examples of great changes that you've seen just in your work? I think one of the areas is data information. It is ubiquitous. We now, digital natives, people that are coming into the workforce today are very aligned with technology being everywhere and there's no lack of data. The challenge that we have is providing information so individuals can make informed decisions. Every day we make purchases without thinking about the signal that we send with that purchase. And so if we want to buy ten dollar t-shirts, we got to be okay with somebody making fifty cents a month because at the end of that supply chain, somebody has to be making very little for us to be able to afford a ten dollar t-shirt that travels thousands of miles and touches dozens of hands before it gets to the shelf. But the availability of information so when we go to a store and you see two products, cereal. One is sustainably grown. It's used packaging this recycled and it's indicating to you that it's not harming in any way the planet. And then there's one that's 75% cheaper and it wasn't built sustainably. There is a choice that we all make and every day when we buy something, we send a message. If we want to buy products that aren't sustainable but are cheap and that are waste, that we could really dispose of them without considering the impact, companies are going to continue to make those products. If we buy sustainable, responsible products that we know that they were sustainably resourced and manufactured and delivered, companies will provide products that are sustainably manufactured delivered and supported. We determine what the supply chain looks like. Very few companies can force a supply chain on us. It's a bad business model to make products that people don't buy. Yes, very true. And some more companies are making products that we buy and when we send a signal that we are buying these products, companies are going to make more of those products. So as consumers, we need to be aware of the signals that we send, both intentional and unintentional about the supply chains. We say there's a lot on throughout our hot commodities and really every podcast episode here, we always say. Every episode. Vote with your dollar. But that explanation that you just gave a really does paint the picture well and empowers the consumer to make a difference. And when talking about all these complex sustainability issues, I tend to feel overwhelmed a lot of the times. And so there's a little bit of hope right there. So I'd love to hear it. And this ties into how hyper-globalized this model is. Everything is offshore, near-shore, whatever it is. And lately we've been hearing a lot of these regional supply chains starting to become localized. Is this a shift you've been seeing as well? Is it real and sustainable in its nature? And if it is or it isn't, what does it mean for sustainability and climate mitigation? Yeah, you're really hitting on something that's starting to become a much bigger issue over the past three to five years. And that is the global nature of our supply chains. First, we have to understand some basic facts. First, there is no country that is self-sustainable for everything that can be in no country in the world. So there's a lot of dependencies that we have. It depends on your focus. And so for the past 20 or 30 years without sourcing, our focus was on cost and efficiency. How quickly and how cheaply can we make a product and get it to market? And that worked for a long time. As long as everybody agrees and that you have trust in the system in terms of if I purchase from you, I'm going to be able to get my product from you without any concern without any risk. That worked well for a long time, the pandemic, the wars, the tariffs, all the disruptions that have now impacted supply chains. We're starting to see a multi-polar world as opposed to a global world. So we're starting to see blocks. So the European block trying to be self-sufficient. We're trying to see North America with Mexico and Canada how quickly or how aligned are we in terms of our resources and our supply chains as its own block. So we're starting to see not necessarily a movement away from the global supply chain, but more of a regional supply chains now as opposed to we can source from anywhere anytime with anybody. And so we're recasting the supply chain. Shorter is better in a lot of cases. We see what products doesn't have to travel as far as what's carbon footprint, but availability of resources. We don't have everything necessary to provide what we need. So apparel, the apparel episode, we're talking about the documentary. Apparel is not coming back to the United States. We don't have a labor workforce that would provide the cost efficiency compared to where we're sourcing from today. So there are industries that may come back. I mean, we're indicating that chips are in our national interest in our national security eb batteries. Again, the government is incentivizing different manufacturing in terms of where companies are willing to invest. But a facility to your point, we're slowly migrating or moving towards a multi-polar world where there are different regions of supply chain and that you are trusting with your friends, you know, friends shoring or nearshoring discussions that I trust you. So I will work with you. It may increase the cost because we're now no longer just cost and efficiency as our primary objectives. We're now focused more on the relationship side that I will only deal with these partners that may increase the cost, but it may increase reliability. It may increase the, you know, decrease the transit time. There's a lot of trade-offs to be done. This is not a single lever. You're going to see it across the board. So as we've seen with, you know, the, even the, the Warren, you know, Iran right now, the collateral impact of the disruption is going to take a extraordinarily long time to unwind. In some cases, three to five years to unwind some of the disruption that we've experienced right now in the S3. Right. Yeah, I think you said it best. I just don't think it's possible to not have a globalized system. Like I, I literally think about the drink that I had this morning, a strawberry matcha. And it's like, yeah, matcha from Japan. Oh, it's Obilke from Canada, strawberries from California. It's just quite difficult to think about what that would look like. Another thing that I've been, a question I want to turn over to you is like when we've been diving into the supply chains, right? A lot of the cost savings are unfortunately at like the expense of people's livelihoods. We were talking about those 50 cent wages. Do you think that the current supply chain model is almost anchored in keeping people in poverty? Because in order for us to get that $10 t-shirt or that really quick prime delivery, we are doing that at the expense of people's salaries and livelihoods. How do we respond to that? Let's take a look at it from two perspectives. First, let's take a look at the outsourcing that occurred in the United States in the 70s and 80s. We did it for cost efficiency. We found cheap labor across the globe in China, Indonesia, Bangladesh without concern about the workers that we left behind. We displaced a lot of workers without any retraining without any reentry. We moved into regions where the labor cost was very low, but it provided them at least some income, or as before they had no income. The level of their economic opportunities were raised in these countries, but not necessarily a living wage. We provided some benefit to the regions, whether in Bangladesh or India, for the textiles and the apparel. It did provide them an opportunity to have income where they didn't have it before, but yet we're still focused on cost and efficiency speed. Most of the labor arbitrage is because of the cheap labor that we can access across the globe, and we can transit for almost pennies to get it to our doorstep. We take advantage of those opportunities, but yet my concern is how sustainable is that. We need to pay people living wages. We need to ensure that we don't have child labor in our supply chains. We need to ensure that we don't have forced labor, which reduces the cost. A lot of the issues has to do with traceability. How are you able to, you know, you pointed out before in your coffee, all the things that you were able to trace that in ingredients in there? Are you able to trace all the activities and the disability and where the materials come from, who's touching it, what their labor conditions are. Today it's no longer acceptable, say we don't know. We need to know and we need to take action on these issues, not just optimized costs, but reducing waste emissions and reducing our disruption risk. And so the extended supply chain, when it works well, it is extraordinarily efficient. When there's a disruption because of how reliant we are on the efficiencies and reducing waste every step along the way, we don't have a lot of flexibility. And so this is the challenge that you have in today's environment. The fight right now between the CFO and the organization and the chief supply chain officer is raging. And the CFO went lower cloth, they want efficiency and I don't want to take on excess inventory. The supply chain, professional and manner one is this. I need more vendors, I need greater trade-offs, I need greater inventory buffers, all costs. And right now, the challenge right now because of the short term nature of a lot of the disruption, the CFO is winning right now. But as we had talked in the beginning of the discussion here, sustainability is a key on resiliency, on efficiency for an organization. If you're not sustainable at a certain point, you're not going to be able to maintain your operations. Right, it's a very good point. And we always strive to make the podcast actionable for our listeners as well. What is something that the listeners should understand outside of voting with our dollars and influencing these consumer trends? Which else should they understand about supply chains to sort of incentivize these innovations that you mentioned are necessary? What really, you know, should hit home for everybody is that supply chains impact every aspect of your life. You know, from the food that we eat to the clothes that we wear to the medicines that we receive without the supply chain, we are unable to maintain the quality of life that we have today. And it goes oftentimes unseen and expected that we will always have abundant products and services, which is not the case across the globe. We have scarcity across the globe for basic needs on essential medicines or vaccines. In certain areas, we have an over abundance of certain narcotics in certain areas across the globe. We have a just a huge gap in terms of accessibility. So while we have a supply chain that has, you know, responded to our, you know, needs as consumers and patients, there are places across the globe that do not have drinking water that don't have the basic needs that supply chains should provide for them. So in our focus, our efforts are to ensure that supply chains not only supply what the global North needs, but that we're doing so in a responsible, accountable and efficient manner that does respect not only the people, but the planet in terms of how we're extracting and using the resources that we have. Right. The triple bottom line. And from my perspective, I feel like when these things hit the consumer shelves, it's honestly too late. Like when we have choices as consumers, some of us will make the right choice. But often we're motivated by the dollar. How do we even prevent these, you know, the sheens, the team is of the world from even getting to the consumer. Like how is there policy changes that we can make are there regulations to prevent this from even being manufactured? So that way, like all of our choices are just better to begin with. Price is a huge determinant. And in certain cases, socio-economic conditions for a lot of individuals will prevent them from ever considering anything but price. I think it has to do with information. We need to inform individuals so that they can make more informed decisions. You talked about the QR code. Make it easy for me to understand the journey of their particular product. Don't make it hard for me. Provide the information that I need to make an informed decision. Does that mean everybody is going to do it? No. Hardly. I mean, whether we're talking about socio-economic or price, you know, sensitivity on particular products or scarcity on other products, that's always going to fluctuate. But more importantly, provide the information I need so I can make an informed decision about the products and the impact that I have on the ecology with the products that I use. Yeah. And tying this into the chain, the docu series, it does a great example of, you know, making you ask those questions. And so, definers, here we're going to have to bring in the chain, the docu series, because it feels like a kindred spirit moment for us. A.S.C.M. recently produced a docu series, also streaming on Amazon Prime, that puts supply chains, front and center. We love the approach of taking something incredibly complex and making it genuinely watchable and enjoyable. Yeah. What made you want to make this documentary? What was the intended audience and what was the purpose of the docu series? Exactly. You did the scraps. Most people really don't understand the journey any product takes. And what we wanted to do was demystify it. Yeah. And the fundamentals and the show really does reflect how supply chains affect humans and the impact that it has on our planet and then not just business outcomes. This is, you know, the taking a look at the individuals who touched, the individuals who planned, the individuals who were sourced. And it brings it on home in a very relatable manner. It does not over the head. These are relatable stories because they're products that we use every day. And so it provides that insight in terms of what that journey, the journey of that particular product. And oftentimes it is an aha moment when you go, "Oh my God, I didn't realize that this is where I think." Truly. The football episode really had me being like, "Whoa, I'm never telling football in my life. I don't play sports in my life." Right. It's just like, "What? That's crazy." This is true. I mean, the apparel episode will change your life. It will change the way that you look at your clothes and what you buy and what you do with it. It really will. The food episode is a little bit sad because of the availability or the in availability of food across the globe. We have an abundance of food. The healthcare episode I love because it is one of the clearest examples of how, you know, healthcare and the pharmaceuticals, how powerful and they show how supply chain decisions affect access, affordability, and even the quality of life. These are critical decisions that are being made. But more importantly, they're consumer facing. It is a story because it helps people understand that sustainability is not just a hamstracked issue. It is something that we build into everything that we do. And a series of choices that we make every day. And it allows individuals to say, "Wait a second here. I didn't know that." And so what we're trying to do is inform individuals and in a very, you know, non- you know, serious manner in a very conversational manner. Right. While the focus wasn't for supply chain professionals, it was focused for the consumers to understand supply chain. Right. And that's what we do on this podcast. We encourage listeners to learn more about the choices that they make in their everyday lives and ultimately vote with their dollars. So, Definer, please go to Amazon Prime, watch the DocuSeries. Let us know what your aha moment was. We'd be happy to hear it. Right. This DocuSeries sort of reminded me. This is a stretch here. But like, if you've seen the Twilight series. Oh, this is a stretch day. This is a stretch. Just say with me, one of the main guys in the Volterie has this power. Like one of the vampires when he touches someone's hand, he can see their entire life story. Like this is sort of like, "Oh my god, I, unlocks literally that. I'm there with you. I got it." Touching my sweatshirt and I'm like, "Does supply chain like, yeah?" Yeah, you could see it all flash before your eyes. Exactly. I'm getting this like perfect montage. That's so true. That's so true. The chain reminds me of in a weird, weird way. I love it. What a marketing like, "angle." I love it. That was perfect. Just to wrap up the episode, we have a tradition on the show called the Party Fact. So Abe, if you were at a party, maybe you talk about supply chains at parties, who knows? But if you were at a party, not a supply chain conference and actual party, and you wanted to absolutely floor someone with a supply chain fact, what would you say? I do exactly what you did in that thought. And that is a cup of coffee. That you had. Just talking to them. I'd ask them, "What can you tell me about that cup of coffee?" Such a good question. Where did the beans come from? Where did the packaging come from? Where did the sweetener come from? And wash them stutter. Where did the milk? Where did the cap come from? Where did the cup come from? Where did the lid? Where did the machinery that made the product? Yeah. You could go on and on and on. And it's like, "Oh my god, leave me alone." You must be the life of the party. When you start to break it down and you say, "You know what? As you had done it in terms of your coffee, wait a second." This strawberry is in January. Where are we getting those from? It's eye opening. Right. We fully expect when we walk into any store to see every product available to us. We don't know a lack of products. And that's what in the Western world abundance is a fact of life. You go on to the grocery store. or we probably have 10 times the variety of products that you would find in Europe in terms of availability. And so having that understanding of the products that we use on an everyday basis, to your point, that cup of coffee, having them understand that it all comes from different places and it touches different people and that simple product is not so simple and that activity and all the people who touch it, it's amazing that it's as inexpensive as it is. Maybe not the hype of the party, but it starts thinking and that's what we're focused on, having knowledgeable informed people making better decisions. How privileged are we? This has been a great conversation, Abe. Honestly, it has rooted me a little bit more in the privilege that I have to be able to have this insane access to everything that I could possibly want. I think we forget about that a lot. And I just really appreciate that part of this conversation, truly. This is true. Thank you both. I've really enjoyed this. More importantly, thank you to all the supply chain professionals and the consumers who care because you're the ones driving the industry, you're the ones making a difference into the consumers out there, be curious, be inquisitive about the impact of your decisions and more importantly, the nature on the facility, I know that you talk to people about voting with their dollars every day you make a vote for the type of world that we live in and supply chain really does define how the world works. Yeah, there you go, Definers. You heard it from the expert himself. We finally got someone to back us up on that. So thank you Abe. Thank you so much for the incredibly insightful conversation. Yes, appreciate it. My pleasure. All the best. At Amazon, scale means operating thousands of buildings from the data centers that power streaming, shopping and AI services that we rely on daily to the fulfillment centers to process your orders. And with that scale comes responsibility. That's why Amazon is more than halfway to their goal to be water positive in their data center operations by 2030. They're innovating to reduce water use and partnering with utilities to upgrade infrastructure so they can use reclaimed wastewater in data centers. Also, the water use in their data centers is already five times better than the industry average. Learn more at amazon.com/sustainability. All right, Definers. Now that we have zoomed out and unpacked the fundamentals of supply chains with our guests, it's time to zoom way in because today we are taking you on a journey of the life of a cotton t-shirt. Cecilia and I just finished washing the apparel episode of the chain. And let's just say it's one of those stories that completely changes how you look at something so simple. What seemed like a basic wardrobe staple is actually the end product of a global complex and very messy supply chain. And we're talking about cotton farms, water use, labor, manufacturing, transportation, all of it, and all the invisible steps in between that rarely make it onto your clothing tag. So in this segment, we're going to break it all down. The first stage of a cotton t-shirt is production. And this is where our t-shirt quite literally starts in the ground. And I think a lot of people hear the word cotton and assume it's automatically sustainable because it's natural. It comes from a plant. But that's not exactly the case. Cotton is actually one of the most resource intensive crops out there. It requires huge amounts of water, often in regions that are already water stress. And on top of that, you've got pesticides and fertilizers, which can have serious environmental and human health impacts. So right away, before this is even a shirt, when the shirt is in the ground, like Nathan said, there's already a footprint. Exactly. So take away number one. Natural doesn't always mean low impact. But growing the cotton is just the first step. After it's harvested through intensive labor, cotton must get processed before it is a fabric for t-shirts. And this is where things start to get more industrial and energy demanding, as the episode showed us. And what happens in processing, you may ask? Well, cotton fibers that are hiked are separated from the seed, cleaned, and then spun into yarn. And all of that requires machinery, energy, and infrastructure. Nate Thrad, this is one of those invisible stages that we were talking about that we don't really think about. But emissions are already stacking up here. So far, Definers, we've got production and processing, requiring large amounts of land, water, and energy. The International Science Council actually estimates that 2.5 percent of the world's arable land is used for cotton production, consuming around 200,000 tons of pesticides and 8 million tons of fertilizers, accounting for 16 percent and 4 percent of global use respectively. I mean, that's a lot. Those are big numbers, and that is just the land usage. For water, one cotton t-shirt requires around 2700 liters of water, which are about 713 gallons, equivalent to what could sustain a human being for 2.5 years. I mean, that is crazy for one cotton t-shirt. That's scary. That's a human beings' water usage for 2.5 years for one shirt. Oh my god. It is insane because think about how much water you're using in just one day. And when we talk about cotton and water use, it can feel a little abstract, like just another statistic on a page. But there's actually a really powerful real world example that shows just how extreme this impact can be. One of the most stark cases is the Aero Sea, a massive saltwater lake that once sat between Kazakhstan and Uzbekistan. The Aero Sea used to be the fourth largest lake in the world. But starting in the 1960s, the Soviet Union diverted the rivers that fed it to irrigate cotton fields. And over time, the water just started disappearing, losing about 90% of its volume, according to the International Science Council. 90% Wow, Neythra. That is also a big number. That stresses me out. No, right. So by the 2000s, this lake was no more. She was a goner. She used to be a thriving ecosystem with fisheries, communities, livelihoods, essentially collapsed, leaving behind dust and pollution that have been linked with serious health concerns in this region. So one of the main environmental impacts is the heavy water usage and land usage, which is connected to broader environmental concern. So the Aero Sea has basically become one of the clearest examples of what happens when water-intensive agriculture like cotton goes unchecked. And all of that environmental impact happened before we even, again, had the piece of fabric itself. It's stressing me out how it's not even a fabric yet. This is just from cotton growing. And that brings us to the next stage of the journey after processing is manufacturing. This is where the yarn becomes fabric. It gets dyed and treated and eventually becomes a t-shirt we all know and love. The amount of free t-shirts I've gotten over the years, Neythra from Event. The science is just stressing me out right now. I'm thinking about that water usage because why does every single event that we go to give out a t-shirt that I will respectfully never wear? No, I will disrespectfully never wear that t-shirt because I am so tired of getting these t-shirts. I never use them. They're ugly. They're stiff. They don't fit me well. They're ugly. They're boring. And I'm so mad about it Cecilia because I have them all just sitting and collecting in my house. I don't know what to do with them. Nobody wants a thrifted t-shirt that says like Science, Olympiad, 2022. No one wants that. It's not to yourself. Keep it to yourself. No, but you actually have a solution. No, Neythra, you were telling me about this earlier? I do. Yes. So I have been collecting some of my more beloved high school t-shirts and trying to turn them into a quilt. Apparently there is a company that takes it and makes them into a blanket. So each shirt is like a patch on the quilt, but it's still not necessarily a solution, but it's at least a creative way to keep them around. If you are in charge of your company's merch and you're listening to this, please stop making t-shirts. Stop making keychains, stickers. Please, we're begging you. Make something useful that people need. Give us useful merch. Yeah. Reuseable utensil kit. Plant a tree in my name. I don't care. Just do not give me any more stuff that I need to accumulate. And for God's sake, don't give me a coosie. Keep the coosie to yourself. Not to the rest. That is such a threat. I have never seen anyone use a coosie. Like imagine you're at the pool. Someone offers you a drink and you're like, wait, hold on. Let me get my coosie out first. Like, bro, no, I've never kept a coosie on me ever. Oh, God. Anyways, back to manufacturing here. Dying the clothes is actually a big and more complex part of the supply chain. And this is where globalization really shows its complexity here at this stage. Because there is always someone somewhere paying the price in these systems. Vote with your daughter. Yeah. So, I'm going to say, if you were a ghost instead of being like, whoo, you'd be like, vote with your daughter. Yeah, you'd hear me. You'd hear me in your halls. Love it. But of course, we have to plug that in. Vote with your daughter is so important. But before we get into the social and economic side that this docu series touches on, let's start with the environmental impact of the dying process. Ah, yes. The dying process. It's actually considered one of the most environmental damaging stages in a T-shirt's life cycle. Again, it uses massive amounts of water, but also the toxic chemicals involved, many of which are discharged into local waterways, and are not regulated to be filtered. And the docu-series shows that this isn't happening in isolation. A lot of the production has been outsourced to countries like Bangladesh and India, where environmental regulation can be weaker, and production and cost of labor is significantly cheaper. They do this with intention. Right. And that's where this story takes a more human lens in the docu-series here, because the episode shows Bangladesh as one of the largest hubs for garment manufacturing in the world, and the pressure to produce quickly and cheaply, especially in this past two decades, has real human consequence, and this demand and pressure has been increasing. So the episode actually touches on the history of major factory disasters in the country of Bangladesh, where the cost of fast outsourced production suddenly became impossible to ignore. Those events really force you to ask, what's the point of efficiency in low cost if it comes at the health and expense of literal people's lives? So what happened in Bangladesh? Well, let me tell you, the episode does a really good job of describing the sad history. And one of the most well-known examples in the docu-series points to the collapse of the Rana Plaza building in 2013. And I remember this because this was pretty international news across South Asia, and I'm Indian, so we heard a lot about this. But it was an eight-story commercial building that housed multiple garment factories, producing clothing for global brands, and it collapsed. And what is devastating is that the day before the collapse cracks had already appeared in the building, and workers were actually told not to come in, but the factories were still pressured, you know, by the global north to keep operating. Yeah. And this was something that many, this specific establishment had many complaints against it. Workers' rights complaints were coming out of it. And unfortunately, the next day, this collapse killed over 1100 people, injuring thousands more, and what became one of the deadliest garment factories in history. And I think that's something we really have to sit with because this isn't just about clothing production and supply and demand. These are real human consequences, and it really forces you to think about what cheap clothing actually costs and who is paying that price. So the next time you open up that Sheen app for affordable fashion or your Halloween costume, or whatever it is, think about Bangladesh and let this image sink in. And it makes it so much harder to look at those five dollar tops because you know that somebody paid the price somewhere. And I want to point out that it's not just Sheen. The same factories that provide to Sheen, which I mean, we all have like demonized it, we all know about it. They've been prepared to so many other brands. So look at that when you think about Amazon fashion. Look at that when you think about the princess Paulies, the fashion overs of the world, like these suppliers go under different names and they can even charge more money making you think that they're more premium and luxury, but they're still unsustainable. Yeah, and I got to say, you know, I've spent like $40 on a princess poly shirt, okay, in my life. It fell apart. Like, no. Yeah, price tag doesn't mean better quality. Yes, exactly. And clothes should never be that cheap. And I think this is where it becomes really important to zoom out right here because there's nothing just about one factory or one moment. It's about the system that creates constant pressure for cheaper, faster and more production. It's like if you're working and someone's just telling you faster, faster, faster, that's what really wanted to like, no. Terrible. And this pressure exists due to demand. So we have real impact here. We can vote with our dollar. We have the power here, Definers. And what's really interesting is that after seeing the pressure on cotton supply chains like this and these, you know, devastating moments, the industry didn't slow down. It actually shifted because instead of trying to fix the system around cotton and, you know, make it resilient, sustainable. A lot of brands started looking for alternatives that were cheaper, faster and easier to scale. And that's where polyester comes in. Oh, no, not polyester. The enemy. The enemy. What's seriously, rather than slowing down production or rethinking sustainability, the industry pivoted, like Cecilia said, away from natural fibers like cotton and towards synthetic materials like polyester because it's cheaper, more durable and way easier to mass produce. And it's also not relying on a system that is falling apart. Cotton was really challenged due to climate change. So at least, you know, they can produce this in a, in a really fast and crazy way without relying on a crop. I'm just going to cut it and say, go for it. I hate polyester. Okay. I'm putting that out there. Go off. It is everywhere. All my, like every time I'm shopping and I'm just trying to find a nice little t-shirt. I just, it's everywhere. I cannot seem to get away from it. I don't think it's more durable. You know, I'm just going to shout out a company here. If they come from me, they come from me. But allo, everything is made out of polyester. And I'm going to my yoga glass and I'm sweating and it feels terrible. Yeah, it's not breathable. And polyester is actually disguised under so many different names to like spandex, nylon, rayon. Like they're all just polyester. So they're, they're trying to re-brand, but it's not, it's not working. It's not working, girls. I don't want to put any more plastics and oil on my body and sweat in it. Please. Agreed. Someone do something. Someone. Correct. We've talked about production, processing, dying. And after that comes finishing, we're not done yet. The fabric is treated and prepared for use. And then we get to garment manufacturing where everything is cut and designed and sewed and assembled into the t-shirt that we wear and recognize. And from there, it moves into distribution and retail, which includes a lot of different impacts and touch points like truck loads and shipping and all of that. And it finally reaches us, Cecilia. Oh my god. It finally reaches us. My god, Nathan, what a process. And now that we're here, we have the t-shirt. We've talked about all the t-shirts, that we get for free. I mean, what happens after we're done with the t-shirts? Well, we often do this sustainable thing and donate it. And this is quote unquote. Right. This is what leaves me to the second hand clothing markets in Ghana. And this was actually what I thought to be one of the most powerful points in the episode we watched, Neythra, because the episode opens with the striking images of these huge bales of clothes, just pouring into the ports of Ghana from the global north to be resolved. And on the surface, you're probably thinking like, this sounds like a great thing. I mean, reuse, circular economy, second hand, all of that. But the docuseries shows us it is actually much more complicated. Not everything that gets shipped over is actually wearable or able to be resolved. So buyers in these markets are taking a genuine risk. They're buying bales of clothes without fully knowing what's inside and they're sorting through all of it and trying to sell it in these markets. And a significant portion of those clothes just end up in the trash. Either dumped or burned, which creates huge environmental challenges locally for the air, for the water, for the people. And here's some numbers so you can get a sense of how big this market really is, defining. In 2021, Ghana imported 214 million dollars worth of used clothes. And like Cecilia mentioned, buyers in the second hand market are buying mystery bales of clothing. So they don't even know what they're getting. Every Thursday, new bales arrive to the port and then are distributed through the capital city, mainly by female migrant workers who carry these 120 pound bales on their next inbox for a whopping two dollars a day. And each Thursday, about 15 million pieces of clothes are coming in just influx and influx and influx and other people have to handle it. So we buy it, we like it, we try it on for a season, it's a trend and then we dump it and someone else and some other country has to deal with it. And I'm going to make another controversial point here in Etra. I hate trends. Done. I think you should have your own vibes. Like you don't have to be buying trends. Like you should just dress for you. Okay. That's just what I have to say. Anyway, I agree. Definers, if you need help letting this image sink into your brain. Again, check out the docuseries episode on Amazon Prime. These images of the second hand market and these bales pouring in will be seared into your brain. It's a lot of clothes. I mean, 15 million pieces that women are carrying to sell. And this amounts to almost 300,000 tons of clothes a year. We could make a whole other episode on overconsumption and just talk about this alone. So as a society, we need to calm down and as people who make choices, we need to be more aware. We need to think about, okay, if people are not buying X amount of clothes, we need to cut that from production. Cut it. I just feel like there's so many ways to innovate here. But for some quick numbers to just kind of tie this image together for you. Consumers buy over 80 million tons of new clothes every year. A four-fold increase from just two decades ago. I remember my mommy said, tell me that they would just get new clothes every Vibolly in India. So that would be the time that you would get like two or three new pieces that you would then wear with your old clothes. - Yeah, and trends, maybe that. - Now we're just ramping up like it's nothing. So the second hand markets are really experiencing an influx of material and we can do better and it starts with awareness. So I really appreciated this documentary for that reason. - Yeah, it was a really good documentary to really show us through images and storytelling, the actual life of a cotton t-shirt that we don't see. And I'm excited to tap into the other episodes of this six-part series as well. Definers, please check out this series on Amazon Prime. It's called The Chain, How the World Works. And let us know which one was your favorite industry to follow. Let us know your thoughts, your concerns, what overwhelms you, what excites you. We'd love to hear from all of you DM us on Sustainability Defined on Instagram and LinkedIn or write to our email on our website at sustainabilitydefined.com. - And I'm your host, Nathira. See you next time on Sustainability Defined. (upbeat music) (upbeat music)