Sustainability plays an essential role in shaping the future of supply chains – take your first steps to going green here.

In this episode, hosts Scott Luton and Kim Reuter engage with seasoned experts Paul Delbar and Bart Verbruggen from OMP to illuminate the complexities and opportunities of sustainable supply chain planning.

Throughout their discussion, they emphasize the proactive steps required for meaningful sustainability initiatives, the challenges of integrating sustainability into traditional models, and the importance of educating and empowering teams to drive change. Whether you’re responsible for supply chain operations, interested in sustainability, or looking for ways to meet increasing consumer and investor demands for greener practices, this episode offers valuable insights and actionable advice to help you navigate your sustainability journey.

Narrator [00:00:04]:

Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott W. Luton [00:00:32]:

Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton and the one and only Kim Reuter here with you on Supply Chain Now. Kim, how you doing today?

Kim Reuter [00:00:41]:

Lovely. Excited to be here. One of my favorite topics.

Scott W. Luton [00:00:44]:

Definitely one of our favorite topics. We had a great panel. We got great artwork right behind you there. I love it, Kim. But the show today, Kim, the show today. We got an important show here today. Everyone, folks, as we all know, are demanding more progress and action and outcomes when it comes to sustainability. Consumers, investors, employees, you name it.

Scott W. Luton [00:01:07]:

Now, today we’re going to be sharing timely expertise and perspective. Been there and done it. Perspective on how chief supply chain officers and their teams can better reach their sustainability goals and then some. And if our global supply chains can make more progress when it comes to sustainability, we can really, together, working together, really move the needle. Kim, should be a great show, huh?

Kim Reuter [00:01:30]:

Absolutely.

Scott W. Luton [00:01:32]:

All right. So if you enjoy today’s conversation, be sure to share it with a friend or your network. They’ll be glad you did. All right. So, Kim, you buckled up? Ready to go?

Kim Reuter [00:01:41]:

I am, as always.

Scott W. Luton [00:01:43]:

As always. Let’s get to work. And welcome in our distinguished guests here today, Bart Verbruggen, green planning lead with OMP and his colleague Paul del Bar, senior marketing manager, also with OMP. Hey. Hey, Paul, how you doing?

Paul Delbar [00:01:59]:

I’m very good, thank you. Scott and Kim, thanks for having us on the show today.

Scott W. Luton [00:02:02]:

Great to have you here. And Bart, how you doing?

Bart Verbruggen [00:02:06]:

I’m fine, thanks, coach. Hi, Kim.

Scott W. Luton [00:02:08]:

So, Kim, you and I, we’re keeping for Paul and Bart, we’re keeping an eye on the Belgium match, the football match, right. So we’ll give updates throughout. We got a lot to get to here today. Paul, Bart and Kim, great to have you all here. So I want to do this. Let’s start with a little fun warm up question, because today is an important day in history. So on this day, June 26, back in 1974, at Marsh Supermarket in Troy, Ohio, you all remember this stuff. For your next trivia match, a universal product code, aka the barcode, was used at a cash register for the first time.

Scott W. Luton [00:02:44]:

The first item ever to be scanned, you may ask, it was a ten pack of juicy fruit gum. If you remember that back in the day, that barcode and the whole process that followed forever revolutionized the customer experience for sure. So with that in mind, Paul, Bart, and Kim, I want to ask you, and, and Paul, Imma start with you. What’s one of your favorite retailers that really focuses on the customer experience? Like our friends at Marsh Supermarket up in Ohio way back when.

Paul Delbar [00:03:13]:

I’m going to not quote a name, but it’s a supermarket chain in Belgium that has always been at the forefront of that. Way before the barcode, they used to have punch cards per product on the shelves. And you need to collect the products and the punch card that were read in the punch card reader. Yes, I’m that old at the checkout register, so they were way ahead of the competition there. But I like it because it’s a pragmatic, down to earth shop, not much frills, but I, the right level of automation and good things for the customer.

Scott W. Luton [00:03:45]:

You’Ll have to let me know because I’m a big, I love practical, pragmatic experiences as a consumer as well. So that’s a good starting point there. Paul. Bart, what would you add?

Bart Verbruggen [00:03:57]:

I would add a small shop in my local hometown where even though technology might seem important, it’s more about, I think, personal relations. I might think some people related that I get a shopping list from my wife and a lot of things you cannot find. And you ask them, and they look, even on their notes, and they say, let me look in the back. And because we’re out of stock, we might be out of stock. Let me look in the back. And they just go look in the back without looking in the system. They come back and they come back with what you need. That is what I would say going the extra mile without all the technology that is involved.

Scott W. Luton [00:04:29]:

They know their customer and that they invest in that relationship that you mentioned. Bart. Love that. All right, Kim, what’s your take?

Kim Reuter [00:04:38]:

Well, I would have to go with Nordstrom. As you guys know, I spent a little bit of time there, and from a customer service experience, the salespeople, in just the whole way that Nordstrom thinks about the customer is really above and beyond, and they’re very famous. A book was written. They wrote one of the older Nordstrom’s. I can’t remember which one I think it was. Bruce wrote a book called leave it better than you found it, and that it really encompasses. What Nordstrom thinks about is try to make everything better with everything that you do.

Scott W. Luton [00:05:06]:

Leave it better than when you found love. That’s a universal golden rule. We should all, we should all embrace. I think good stuff there. Kim, Bart, and Paul, thanks for playing along. So we got a lot of good stuff to get into here. A really important discussion. I think a lot of companies are out there are struggling, and their supply chains are struggling with how to make bigger and better gains when it comes to the sustainability imperative, as I like to refer to it.

Scott W. Luton [00:05:31]:

So let’s start with this. Paul, Bart, and Kim, let’s start with some context. We can’t get enough context in this ever fastly moving world. So, Paul, if you would briefly tell us about what OMP does and a little bit your background.

Paul Delbar [00:05:45]:

Okay, so OMP is a global provider of supply chain planning systems. So we provide to the larger corporations the people that you, whose products you see in the shelves, the products you drive, the products that make the cars you drive, that fuel the cars you drive. We provide planning solutions all the way from detailed scheduling short term, to the strategic planning in the long term, all the way from supply to demand. We try to make our customers more effective, more efficient in that, and very happy to do that. My job here is I’m a marketing manager. I have to tell the story of what we do and also the story of our customer successes. But in this case, in terms of sustainability, share what our customers have taught us about their challenges and the way we’ve been able to help them become more sustainable.

Scott W. Luton [00:06:31]:

I love your focus on storytelling, and I love what you mentioned on the last part of your response about listening to our customers stories. That’s how we can do more together. I love that. Paul, Bart, if you would tell us about your background.

Bart Verbruggen [00:06:46]:

My background, I worked since more than 20 years with OMP. I’m mainly focusing in paper, packaging, forestry and related industries, where you already see for a long time sustainability, FSC, those kind of things, playing a role in these industries. I do more strategic advisory, commercial roles in some high level projects. And since late last year, this year I took on also the green planning elite, which is our solution on how can we help companies embed sustainability into their supply chain planning. We’ll come to that. Maybe one note my personal motivation. That is an old native American saying which says, we don’t inherit earth from our ancestors, but we borrow it from our children. That really speaks powerful to me, and that’s a bit my personal motivation behind this.

Scott W. Luton [00:07:32]:

Bart, well said. Very well said. We do in here borrow it from our children. Indeed. Kim, we’ve got, I think we’ve got an incredible one two punch here and some deep thinking. I think we’re going to have a great conversation. Kim, huh?

Kim Reuter [00:07:46]:

Yes. Sustainability and green planning is. Every company needs to be thinking about this right now. If they are nothing, the level of efficiency and cost savings that can be achieved by really perfecting the sustainability and green planning is measurable, and it’s something that everybody needs to be looking at.

Scott W. Luton [00:08:04]:

Excellent point, Kim, because it’s not one or the other. When you do it really well, you can make a lot of people happy across the ecosystem. It’s a great point there. All right, so, Bart, you mentioned green planning earlier, right? Let’s, again, to level set, let’s define that terminal and what it means. Bart, tell us more.

Bart Verbruggen [00:08:22]:

So, to put it simply, if you look at supply chain planning, you have the traditional triangle where you make decisions, which is cash cost service, and you do kind of trade offs between the three or try to optimize some of the tree. And this could be building inventories. It could be putting some things extra in stock, having longer lead times for certain products you don’t want to make every day and don’t want to store. And actually, what green planning is that? This already complex puzzle has become more complex because you could see a fourth dimension or a different framework, sustainability, coming into play and influencing, at least reporting, but also later on, decision making in supply chain planning. And so what green planning is, it’s embedding your current supply chain planning with planning on sustainability metrics. So it’s embedding it, your digital twin, with the impact on sustainability metrics. That’s what we see, which is really important in the first stage. You want to report on it to say, hey, guys, we have a plan.

Bart Verbruggen [00:09:22]:

We do want to improve on certain metrics. And then later on, you could say, okay, the next step, we start on really doing these trade offs or optimizing for CO2, whatever, carbon emissions, those kinds of things.

Scott W. Luton [00:09:34]:

Love it. Kim, I’m hearing Bart unpack that for us. We’re going to dive more into it here momentarily. I envision how we can bake sustainability into more and more all of our decisions we make when it comes to our supply chain management approach each and every day. What did you hear there, Kim?

Kim Reuter [00:09:52]:

I heard data. I heard reporting and making sure that you were reporting on the right things and that you were measuring your success in sustainability and green planning, because if you don’t know you’re succeeding, you’re probably not getting any greener.

Scott W. Luton [00:10:07]:

That is right. And if you’re not measuring, you got nothing to manage. Good stuff there, Kim. All right, so Bart and Paul and Kim, we’re going to dive a little deeper here. Explore this topic. Explore this opportunity. More importantly, as more companies are looking hard for how can we get more outcomes and make all these stakeholders happier? Because we’re demanding. This is the sustainability imperative.

Scott W. Luton [00:10:31]:

So how can we equip our supply chain teams around the world to be more successful? Let’s start with this. So, Paul, how ready are companies to really embrace green planning and what’s either driving them or holding them back? Paul, your thoughts?

Paul Delbar [00:10:46]:

What we hear from our customers is that over the last 12-18 months, the focus has shifted from trying to sweet talk around the lofty goals by being carbon neutral by 2035, 2040, something diving into what comes out of the reporting initiatives and analyzing where in the supply chain you have most of the contribution to your ESG objectives. Today, I think we’ve turned a page on making a decision on whether to go green or not. Most companies that we talk to say it is no longer an issue we debate. It’s more about how we can make it work. Now we find the balance between the different strategies. We can build new factories, change raw materials, make different products, change our distribution policy. All of that happens sort of above the heads of a supply chain planning team. They just have to implement the impact of that.

Paul Delbar [00:11:39]:

What green planning is looking for is ways to, from the planning realm, make a difference in a couple of ways. And that’s what people are asking for. They’re ready to get going with something concrete. They’re kind of getting tired of the, I’m not going to say greenwashing per se, but about the absence of actionable insights and strategies that they can put to bear. So they’re getting a little anxious. And are they ready? Yes, they’re definitely ready. And it kind of differs by industry. But as BARC pointed out, some of our customers have been doing this for 15-20 years, sort of as a shadow effect or a side effect of optimization.

Paul Delbar [00:12:20]:

If you reduce waste and you optimize capacity usage, you’re going to use less energy per item. But now they’re looking at ways of saying, how do we balance it all? How do we make it unsustainable and profitable? What’s driving them? The traditional things. It’s depending on the industry, the people closest to consumers. It’s consumer demand. People ask for greener products, not always ready to buy them in bulk, but there are certain demand that goes beyond just the branding or the greenwashing on the packaging. In some cases, it is really a necessity that if you are a packaging provider or metals company, you need to provide greener products with certificates with sort of responsibility for recycling. Those are things legislation and regulation, of course, the limitation, the financial impact of not following certain guidelines of too much emissions, for instance, or local legislations on waste and pollution of the water stream using scarce materials. But also the social aspect.

Paul Delbar [00:13:23]:

Let’s not forget that sustainability is also about not putting in the extra night shift or weekend shift, week after week after week. So you burn out your people just because you want to have 0.1% additional sales.

Scott W. Luton [00:13:36]:

Right.

Paul Delbar [00:13:36]:

What’s holding them back? It’s really a guidebook, a practical guideline to do it. Exactly. So what we’re trying to do is get people together to learn from each other. And we’ve tried to sort of bring that into the green planning framework to say these are the best practices and it is not a done deal per se, but it’s what we hear are practical steps to do that. So, yes, they’re ready. It’s really, they need a guide. They need somebody, a Sherpa to guide them on that sustainability journey.

Scott W. Luton [00:14:04]:

Paul, you beat me to it. Sherpa. I love that. That’s come up in a lot of different shows. Hey, Kim, a couple of things I heard there from Paul. We got to avoid that supply chain sweet talk. I love that. And I love also he said, more and more companies and their leaders.

Scott W. Luton [00:14:18]:

It’s not about if we do it, but how can we do it? Like Paul just mentioned, sustainability and profitability. They don’t have to be arch rivals. They can be great neighbors. Right. And one last point for get your take, Kim, is folks, hate to break it to you. If you don’t like the regulatory gains we’ve made in recent years, you’re going to hate what lies ahead because there’s going to be more regulation driving more action. Kim, your thoughts?

Kim Reuter [00:14:42]:

I agree with everything you said. And also the companies that are resisting, they don’t know how to take the small bites of the elephant. And I think that’s what OMP can bring to a company and help them understand what do we have to do first? What do we have to do second? How do we make it efficient? How do we make it affordable? How do we make it repeatable? And how do we make all of this a sustainable whole solution versus just getting some recycled corrugate and trying to call that your green packaging solution, but everything you import comes in Styrofoam. So I think having a whole solution, and it really is, companies really struggle with, how do I even start?

Scott W. Luton [00:15:21]:

It’s so true. It’s not even the first step, it’s like the first motion in some cases. Right. So Bart, I want to switch over to you so that readiness, or lack thereof, perhaps Paul was speaking to there, how does that readiness compare across industries? And Bart, how can industries learn from each other here?

Bart Verbruggen [00:15:44]:

If you look at the awareness across industries, we are in like five to six main focus industries. There is a difference, of course. As I said, some industries are already facing sustainability requirements, legislation for multiple years. Think about the FSC in the paper and packaging industry. So some industries were already hit with legislation and you see that coming more and more, especially here in the EU where we are based, of course, legislation is getting very rapidly, much stricter. So we have to build in all kind of constraints in your supply chain planning to take into account these kind of legislations. So there, I think some industries already further than other ones, being future proof, being ready for the changes in legislation. If you think about really improving your sustainability metrics, then again, you see some industries where by design, like paper and paper based packaging, you’re already in kind of a circular business model.

Bart Verbruggen [00:16:41]:

The circular industry, the same with metal. You can reuse it and you can recycle it or reuse and or recycle. And we see now other industries learning from that. Recycling plastics, for example. Plastics has a bad name, but if you can recycle it, and some of our customers want customers really into that, and I can talk a bit more on that later, that’s also learning from each other and improving your sustainability. Of course, things like, if I reduce waste because that’s important in my industry, because it’s driving my profitability and it’s also improving your sustainability. So a lot of industries we have seen already planning improvements to improve profitability, which, as Paul said, was aligned with sustainability even long before we talked about sustainability.

Scott W. Luton [00:17:26]:

Yes.

Bart Verbruggen [00:17:27]:

Now it’s more on how can we make it further, how can we make it feasible? Because we can make visible what is the impact on profitability, but how do we make visible what is the impact on sustainability? That’s one. And the next ten is at some point there might be trade offs to be made between a more sustainable choice, which might be a bit more costly, and then what we see also, and that’s often interesting within the one p customer base, we have a lot of supplier, customer end to end full supply chain relationships. Think about consumer goods or food and beverages with buy from packaging. Think about metal producers who then sell to steel producers who make the wires, who then go into tires, who then sell to the automotive industry, and there you see that it’s been already for a long time that people want to share their planning information to get rid of the bullwhip effect and make sure that inventories are great, are well managed for your service level, but on top now you have to exchange scope three emission information between the companies. And I think there’s a lot of potential value to learn from each other, to connect and to improve sustainability by making conscious choices on both sides.

Scott W. Luton [00:18:41]:

Yes.

Bart Verbruggen [00:18:42]:

A good example there is the paper industry, where for a long time they already do this kind of trades or swap deals. I have a paper mill on the east coast. You have a box print there. Who needs paper? But I have a box print on the west coast, and you have a paper mill there. So I need your paper. So we just agree to do a swap trade instead of shipping our own paper across the country.

Scott W. Luton [00:19:02]:

You know, you share so much there, and I would just pick one thing out. Kim. And if we can have less tactical conversations and bringing the whole ecosystem together and have really true, full, holistic, strategic conversations to unlock some of those opportunities and that potential value bart spoke to. But Kim, we got to do it with lots of trust in the room. Otherwise, no one’s going to be sharing data. No one. I mean, you know, it’s all in the approach. I think one of the big important things there.

Scott W. Luton [00:19:30]:

Kim, your thoughts?

Kim Reuter [00:19:32]:

So we kind of started the conversation with the industries and who’s been leading, what industries do we think they’re leading and what we think that can do better. We touched a little bit on Europe, and we look at a lot of the CE regulations that have happened in Europe in the last five to ten years, really regulating electronics, the disposing of electronics, the recycling of electronic parts. We recently passed legislation saying that everything has to be repairable. The right to repair, that’s huge for sustainability and green. Previously, you had to throw it away. And so those are opportunities that we can learn across the board, across all industries. And the one industry I think that can really do a lot of improvement is fashion. Fast fashion has become a huge drain on our disposable systems.

Kim Reuter [00:20:17]:

We’re filling up landfills, and it’s an industry that really hasn’t taken onto this whole sustainability and green thing yet. So I think there’s a lot of opportunity for us to learn from what’s been happening around, specifically around electronics and how we’re reusing things and how can we apply that to other industries, specifically around fashion.

Scott W. Luton [00:20:35]:

Well said, Kim. Well said. So much to do, so little time to do. It. I want to take that. I want to kind of direct the conversation and really focus explicitly on supply chain planning. But what I want, where I want to start, Bart and Paul, is with these common objections. I bet when y’all approach supply chain planners, they got so much going on, they’re like, oh, we’re going to include sustainability now in our supply chain planning processes.

Scott W. Luton [00:21:03]:

Oh, my gosh. So what are some of those objections that you are getting, Paul, and how do you respond to them? Because that’s really important part of this transformation and this progress. Your thoughts there, Paul?

Paul Delbar [00:21:15]:

Yeah, before I get into that, I want to pick up on one important word of trust that you mentioned, Kim. I think the sustainability debate and the fact that the reporting includes scope three, like upstream and downstream impact, kind of took the whole supplier relationship out of the, I’m going to say, clause. Sorry for your procurement folks on the call, but typically it was very siloed. You know, supply chain needed something. Procurement set suppliers are ours. We need to negotiate better rates, long term volumes. Now we’re getting more factual information about what each contribution of each material is into the final footprint. So that changed the ballgame a bit.

Paul Delbar [00:21:55]:

Make it more sort of objectivates the discussion, makes it much more visible. Which actually brings me to one of the objections that we, and this is not something we’ve invented. This is literally quoting what our customers say. Our CSO customers say when I go to my executive board and I say, I think we need to do this, or they come to me and say, let’s not do this, because what is first and foremost it is, it’s going to cost us money. It’s going to cost too much. The answer to that, the comeback, is, well, that’s not necessarily true. It is going to take the same kind of investment as, say, and I’m going to steal Bart’s example that he typically gives here, quality. When decades ago, quality entered the state of mind of supply chain and production, it was like, I mean, all these sampling, all these tests is going to cost time and we need more people.

Paul Delbar [00:22:47]:

It’s going to take a lot of waste. It’s going to cost us money today. You cannot operate a company that does not do quality assurance. One customer at the conference that I mentioned earlier is that he said, we are currently not measuring anything. We know that customers are willing to pay about 1015 percent more for a green equivalent product, and it costs us about 30% to 40% more. This is a year ago to make, he says, but if we do not sink that cost, we will be irrelevant in five years.

Scott W. Luton [00:23:17]:

Wow.

Paul Delbar [00:23:17]:

So it’s a survival, it’s a market share. It’s a relevance discussion, not how you do this. Everybody’s going to go through the same cost differential. It’s the one that embraces it that is going to be coming out ahead of the market. I will leave it with this one objection, because it’s the one that is first and foremost. The advice is try to debunk that. What is cost? What is opportunity cost? What is investment cost? What are alternatives? How can you estimate the impact of a plan or a decision or a future decision to make sure you balance it against the real future, which is one where you are not sustainable in five years and what that does to your business.

Scott W. Luton [00:23:57]:

Well said, Bart.

Bart Verbruggen [00:23:59]:

I want to jump in, because again, coming back, there are a lot of examples that we’ve seen where profitability and sustainability are aligned, and you win on both sides. If you do better transport planning, you reduce the number of trucks, kilometers, miles that you drive. You also reduce the CO2, you get sustainability improvements for free, as a matter of speaking. So try to first look at those budgets, and then the objection of saying it’s going to cost us is not relevant. If you look further, then, like Paul also said, and that’s a statement from Gartner, no company wants to be in a news headline for supply chain sustainability failures. At some point, don’t want to be in a newspaper. So what Gartner is also seeing, and we’re also seeing is forward looking companies already including like an internal carbon cost or carbon tax, whatever you call it, is a financial metric in their planning. Maybe not yet for decision taking, but at least for visibility, because a carbon cost, a carbon tax will come maybe in one year, maybe in five years, and then you’re already ready.

Bart Verbruggen [00:24:58]:

So it’s taking small steps to make sure you’re prepared and not sitting or waiting until all of a sudden this carbon cost is hitting you.

Scott W. Luton [00:25:04]:

Kim, I’m coming to you here, and there’s two quick thoughts. I just want to level set with everybody. It’s not good to be irrelevant. I think we can. We can all establish that. And number two, the best supply chains don’t appear in the headlines. I think I stole that a little bit from Bart and a little bit from my friend Greg White. Kim, mortal, would you hear there in terms of the deer planners, which we got to love on and enable and empower, make their life easier, what did you hear in terms of the objections and how we can approach them?

Kim Reuter [00:25:31]:

There Kim, the objection, the first objection is always going to be cost. Because the truth of the matter, if we just look at just packaging, not even getting into sourcing and manufacturing practices and transportation practices, when you just look at the cost of packaging, you are looking at a 30% to 40% increase in your cost of packaging if you want to go fully green. Right? So corn starches, recycled papers, all of those things are very expensive. The consumer knows that. Now, the consumers are very educated on this. And to your point, some are willing to pay an extra 15, maybe even 20% to get a green product from a company that they know is supporting green practices. But you have to get past that cost objection, because to everyone’s point, there is an opportunity cost as well. It’s just not the hard cost to the supply chain, but there’s also the consumer trust, consumer preferences.

Kim Reuter [00:26:26]:

We don’t want to be in the newspaper. There’s all kinds of other costs associated with this. So bringing all of those to the table and laying those up against just the cost of changing your supply chain are always going to weigh out. The other thing that came up, which is a really good point, is start with the low hanging fruit. Clean up the waste in your supply chain will automatically make you greener and make you sustainable. So just those exercises alone can be meaningful.

Scott W. Luton [00:26:52]:

Well said, Ken Paul, you’re going to have some.

Paul Delbar [00:26:55]:

Yeah, if I can add just one more example, because we talk a lot about the consumer impact and the consumer perception. Let’s not forget a whole section of the industry is behind the scenes of the consumer facing companies. If you are a steel maker today, you have to deliver greenhouse steel, steel that is connected with certificates. Automotive buyers or companies will not buy steel unless it is green. So to them it’s no longer. They’re already in the world where they need to be relevant to be able to sell because they don’t have a green product, and not just one with a sticker on it, but one that they can certifiably show uses greener technology. They do not sell. So the consumer is one element of but upstream in the supply chain, the raw material providers and the heavy manufacturers are way ahead of you.

Paul Delbar [00:27:43]:

Just to quote one number, we talk about steel as a big energy consumer and a big CO2 emission sort of participant in the greenhouse gas emissions. Recent survey shows that most of the steel plants or steel companies are going through decarbonization projects, fundamentally changing their technology. The bulk of those slated to be operational in 25 and 26. That means they’ve been planning for this for four, five, six years, because it takes that long to find the investment and to get the permit to build it. So these industries have been preparing for a long time, which is why I think we’ve seen a lot of examples over the last decade of companies already very much involved in sustainability, even before it was. Let’s call it fashionable.

Scott W. Luton [00:28:28]:

Yes. So I want to shift gears here because I want to get into Bart kind of how to do it, which came up earlier. And what’s that actual approach to start implementing green planning. So, Bart, let’s talk actual approach, how we can get started today implementing this massive opportunity. That’s green planning. Your thoughts?

Bart Verbruggen [00:28:48]:

Yeah, it should be a structured approach. You first have to know what you’re doing. So that is really aligning your supply chain planning approach with your sustainability strategy that you have. You could make a business case, a value case, but you need to ensure that these are the goals of targets, whether it’s science based or whatever that you want to reach. Where could supply chain planning help and make sure that this is aligned. Once that is clear, they also need to look at, and often forgotten, whether it’s normal supply chain planning and sustainability. People and processes. How will the processes look like? Who can make decisions? How do we make sure the decisions we take on a higher level are really executed upon? I think that is an important one.

Bart Verbruggen [00:29:30]:

Also, empowering your planners to make decisions and to also include sustainability as an extra dimension in the already complex puzzle they have to solve. So that’s kind of a starting point. Then the next is, and it sounds simple. And in practice, it could also be simple. You are embedding your current supply chain model, let’s say your digital twin, embedding it with sustainability metrics and with sustainability drivers, I would call it. So, as an example, if you take carbon emissions, CO2, if I buy from this supplier, this product, this is the amount of CO2 equivalent. If I produce this on this machine myself, this is the amount of CO2 equivalent. If I ship from here to there, this is the amount of CO2 equivalent.

Bart Verbruggen [00:30:14]:

So you need to get this data and you extend your model with this data. And once you have that, you can at least already run analytics on your current plan. How does my plan compare in different scenarios? How do they compare with each other on also CO2 emission? And then as a next step, what we see companies doing, or what I would see as a logical approach, is then you start applying some weight measures. Could be cost, could be some other weight measures to really do the trade offs and to balance the sustainability metrics with the cash cost surveys and other kind of inventory cost, inventory levels, those kind of metrics that you have. So it’s kind of a stepwise approach.

Scott W. Luton [00:30:54]:

Bart, I love it. And to pull a couple things out there, Kim, get you to comment on what you heard there as well, not only embedding those sustainability metrics and the data into the supply chain planning processes, but also empowering our planners to make decisions. I love that we’re talking about planners or many other folks that make up and make things happen across our supply chains. How can we put the information at their fingertips and then do what we want, you know, to do what everyone wants to do. They won’t be looking over their shoulders. They won’t be making decisions and empower them to do make successful, timely, and faster and confident decisions. But what did you hear there in Bart’s structured approach?

Kim Reuter [00:31:31]:

Kim, the number one thing is you need to know where you are today. Where are you starting from? What is your carbon footprint now? How much, you know, how much emissions are you working with? Like, how bad is it? And you have to know that because I can’t tell you how many companies I talked to who achieved something, and not necessarily in this space, but they’re like, oh, we reduced our cost by $10,000 a day. Isn’t that fantastic? Well, it is, but what is the cost that you reduce? Well, it’s 500,000. Well, okay. Well, 10,000 isn’t such a big deal now, right? So I think the most important thing is figure out where you are today so that you can measure that you are actually succeeding. Otherwise, you’re just making up numbers as.

Scott W. Luton [00:32:13]:

You go, and no one wins there for sure. Bart, quick follow up there, because as you laid out that structured approach, the more proactive we can be, the easier it is for our teams and make those critical trade offs and advance and get more results as we move forward. Bart, your thoughts there?

Bart Verbruggen [00:32:31]:

In my perspective, supply chain planning, it’s all about proactively making decisions and being proactive, anticipating running scenarios that you could think of. And often a lot of industries, you see, it’s just they want to be reactive. The firefighting and so on, I solved today problems I don’t look forward. That’s my personal view, proactively being already able to see, to visualize, to report on this is the impact of my current plan or these multiple scenarios on sustainability metrics, on our important sustainability metrics, because not each industry, each company needs to take all of the potential sustainability metrics into account. You might only look at carbon emission and greenhouse gas, other greenhouse gases or water consumption or air pollution, but just to proactively see. Okay, guys, this is where we’re going. You run a couple of scenarios. Is this a plan we want to go for? We know that we have these targets, we know that next year we want to reduce by 5%, but actually with the current plan we go up by 2% because there’s more volume.

Bart Verbruggen [00:33:30]:

What are we going to do? At least ask the critical questions higher up and somebody has to make decisions. But then well informed of well thought of decisions.

Scott W. Luton [00:33:39]:

Yes. Well, speaking of higher up, let’s talk about earlier we were talking about obstacles or objections we’d get. Let’s talk about chief supply chain officers and some of the challenges they’re going to face as they look to implement this great opportunity and approach. You’re talking about what challenges will they face and how can cs overcome those challenges.

Bart Verbruggen [00:34:02]:

Bartley yeah, so the main challenges we see, and we also asked the same question to our participants of our sustainability council a couple of weeks ago, what came out is everybody will come with data. Where do we get the data from? Do we have the data at the right level of detail or right level of aggregation? Personally, my view on that is there’s so many companies out there who gather CO2 data and emission data and whatever. You could take industry average data. But knowing that especially, even the EU, all of these companies will have to report anyway on the sustainability metrics, you already need to have the data somewhere. So I think it’s better to not look outside, take data in and then afterwards, when you want to compare plan with actuals, you’re comparing how you call it in English, apples with lemons, apples to apples, right. Well, you want to compare apples to apples and that’s not what you’re doing.

Scott W. Luton [00:34:51]:

Then we want to avoid apples to celery.

Bart Verbruggen [00:34:59]:

So, but then people are saying, yeah, but we don’t have it at the right level of detail and think there. That’s where companies like OMP can help with data analytics. If you have kind of a CO2 emission by machine or by factory, you can then look at analytics, how much time, production time and so on. And energy is this product family consuming on this machine when we run it? And in that way get to the the right level of detail where you make your supply chain planning decisions. So then you have the data that available and that goes for production, for supply. Of course you have to ask your suppliers and normally they, with the current legislation, they will have to be able to provide this to you. And there’s a lot of opportunity for improvement and for calibration and on transport, I think that speaks for itself. You can just take an industry average.

Bart Verbruggen [00:35:45]:

If you know the type of truck and fuel it drives and the distance, then normally you can take an average and you don’t make a big mistake.

Scott W. Luton [00:35:53]:

Okay, Paul, you’re going to add something there.

Paul Delbar [00:35:55]:

Yeah. If I may add my storytelling interest. Your best friend as a CSO is your chief sustainability officer. Somebody whose job is to make the impossible happen has absolutely no leverage in any operational department. So they will jump at the occasion to work with you to give you all the input and also to be able to report that at least they have something that they manage to impact in the company that is real and tangible and visible. Second idea is that start with what you do know. Yeah, I only know my energy bill for the entire plant.

Bart Verbruggen [00:36:25]:

Okay, good.

Paul Delbar [00:36:25]:

That’s a good beginning. Can you knock off 10%? Can you discuss strategies to do that? I don’t know what it is, but I know I can be 10% better and I can see the cost. Also, planning is about looking into the future. Suppose you have a new technology coming in, in production, greener machine or. And you have another supplier of greener raw material that you can use, but they’re like six months apart. You’re doing a one and a half, 18 months, one half year, 18 months snop plan. You need to have these delayed plans. I’m going to use the other greener supplier until my greener technology is available.

Paul Delbar [00:36:59]:

But I need to do that now. I need to look 18 months ahead, knowing what is going to happen. So the challenge for CSCO is to understand what options are on the table, because a lot of these options, as I said, or strategies, are defined by executives. We’re going to change the product packaging. We’re going to only ship full trucks. We’re going to change our DC structure. Yes. Here’s the news.

Paul Delbar [00:37:21]:

Now deal with it. But nobody really calculates through what the actual impact is. You may be just shifting costs. Just like when you introduce new products, you may be shifting demand from one product to the next, cannibalizing your own children. CS with green planning have the ability to advise their executives and the sustainability strategy on exactly will this work? How much will this work? Even if you use high level aggregated numbers. And that’s the true power of green planning, decision making. Not just to make sure green planning is followed by green execution, but the green decision making at the strategy level is also somewhat reality based.

Bart Verbruggen [00:37:56]:

Yes.

Scott W. Luton [00:37:58]:

Kim, really quick jump in here before we go to the importance of collaboration and reporting in general, but also for green planning. I’m coming to you next, Paul. But Kim, what you hear there, one of the things I heard certainly is the sense of urgency as he pointed the 18 month timeframe we talked earlier about. The steel companies have been planning for five and six years. We got to start today if we want it next year almost. Kim, your thoughts?

Kim Reuter [00:38:23]:

Yeah, so we started the question with what’s the biggest challenge that chief supply chain officers are facing when it comes to green planning and sustainability? And I think it’s the thing that we keep touching on here is that it is such a big effort and it touches so much. And most of the time, supply chain is on the receiving end of it. Like they’ve already gone green. And by the way, you need to catch up. And so it’s a big pill to swallow for supply chain. And a lot of times CSO’s feel like they have to rebuild from the ground up. We have to find all new vendors, we have to find all new transportation partners. They have to start completely over.

Kim Reuter [00:39:01]:

And it becomes an overwhelming exercise, all while the executive team has already signed off on it. And so it’s going down your throat, whether you like it or not, is sort of the situation. But you know, what we keep hearing in these conversations is start small, start with what’s available, start with the existing waste in your existing supply chain, and start with data, good data. That is where you need to start.

Scott W. Luton [00:39:26]:

Excellent point. Start with what you know, which is one of the things that Paul mentioned. So let’s, let’s shift gears here. We’re going to have a fast and furious finish. Paul, Bart and Kim. Paul, tell us about the importance of collaboration across NN supply chain, which is obvious. I want you to speak to that a bit, if you would, and especially when it comes to reporting and green planning. Your thoughts there, Paul?

Paul Delbar [00:39:47]:

It’s very simple. You can’t do it without your collaboration, your suppliers and your customers. Don’t forget, we’re in each other’s scope. Three, reporting. You need to take action anywhere on that supply chain, whether it’s your raw material suppliers, your transportation inside your network. And to be honest, one factory supplier is the other one’s customer. Right. So that it brings about this kind of end to end view, because the reporting is end to end.

Paul Delbar [00:40:16]:

You need to engage with your suppliers in an open debate, which kind of surpasses the. I have a six month contract for a certain volume at a certain rate, and I’m going to squeeze you to get another 3% cost reduction out that will no longer work. Companies who still work in that framework, pretty much like logistics departments, run with forwarders, put them on a two to 3% decrease for the next six months if they want to stay in a contract or in a tender. We need to break that paradigm. That is not the way we’re going to make this happen. It is an end to end collaborative as a whole, operators, one model that we need to practice. And to be honest, as I said previously, the reporting data that you need to get brings it on an objective level. It brings it forward.

Paul Delbar [00:41:00]:

And you can have a discussion. We have in our council packaging providers talking to their consumer goods customers, actually leading their consumer goods customers into coming up with better ways of leveraging the packaging investments they’ve done. We have chemicals companies doing the same thing for other companies. So everything is connected is a true global supply chain. And the global playing field of the green element makes that very apparent. So yes, the trust, but it starts by having an open conversation. Let’s partner on this. Let’s go green together.

Paul Delbar [00:41:34]:

Basically.

Scott W. Luton [00:41:35]:

Yes. Paul, it doesn’t start with that very old fashioned annual cost down. I don’t miss some of those conversations in my previous journey. All right, so I’m going to keep moving. Kim, I’ll come back to you after we pose this next question to Bart here because I want to get to examples and stories, especially to those chief supply chain officers and their teams that have really embraced and executed green planning and have driven remarkable outcomes. Let’s use those shining examples. Bart, what comes to mind?

Bart Verbruggen [00:42:03]:

Yeah, I’ll cover a couple. The first one is more on how supply chain planning can help decisions made to change your supply chain, to make it greener, to make the best of those kind of investment or changes in the way to operate. This is a large food and beverage consumer goods company, very well known, a big name, where they actually changed their whole supply chain model to say, instead of from a factory producing, I’m going to give the names of the, well, the products now, the types of product, diapers and shampoo and washing powder. Each day truck leaves with full truckload of one individual product or a couple of skus in different packaging sizes to some of the local distribution centers or enter the supermarkets. And that of course means that I have to keep stock for one week. It could have shorter shelf life. And I also have more transport because I have to drive to all of these points every day. And what they did is they made a shift there in their supply chain model to say let’s run a full truck of different products every day so we can reduce stock levels, but we also reduce our transport miles that we drive.

Bart Verbruggen [00:43:11]:

And it’s not so much that green planning was a trigger to make this trade over this decision. It’s more a supply chain planning executive decision to change the business model or the execution model. But then you need supply chain planning to really make sure that you make the best of that and you grasp all of the potential out of it. So that’s a nice example to say you do some changes on a high level. And supply chain planning, including green planning, needs to make sure you get the best out of it. Both from your typical supply chain planning, KPI’s cash cost, service and inventory levels, but also from a sustainability point of view, less products you have to throw away because they’re over their shelf life and less transport, so less CO2 emissions. Another one is a metals company where both in tactical and operational planning, making decisions on where to produce also better, how you call it, raw materials as scrapped. The blend ratio of the raw materials you put in the.

Bart Verbruggen [00:44:08]:

But also your production campaigns to have better efficiency on your machines. They managed through a combination of technical operational planning decisions to reduce their CO2 emission with 18% without any negative effect on the rest of the bottom line. So, meaning no effect on cash cost or service. And that’s huge. But that’s by being willing and able and daring to make decisions on a tactical level, but also to embed this and include this CO2 metric. And just seeing the low hanging fruit, like Kim was saying, just seeing the low hanging fruit already and taking that if you don’t see it, the low fruit, you’re not going to get it.

Scott W. Luton [00:44:47]:

That’s true. Well said Bart.

Bart Verbruggen [00:44:49]:

And then a third example, maybe to finish off, it’s a very big company in chemicals. It’s actually even more starting in a circular business model doing huge investments in machines to recycle plastic. But this recycled plastic, you get certification for that. And based on that, you also need to find the market. The market is a bit lower margin than your aversion plastic still, but you need to sell a certain amount and you need to use a certain amount of recycled plastic to keep your certification. And there we help them to keep this balance between supply and demand to make sure that you keep your certification with all the impact on the. He didn’t talk about that. Financial markets are also looking at your sustainability metrics.

Bart Verbruggen [00:45:33]:

You get lower credit rates, you have investors who want to spend more money in companies who are very well scoring on sustainability. So that’s one part. And the second is we help them to look at should we invest in more of this capacity strategically of recycled plastic. And that’s where they made a decision. And then you can simulate what would be the impact. Where do we need to look for different markets? Where should we cut off? Maybe some version plastic market try to replace it with recycled plastic.

Scott W. Luton [00:46:01]:

So, Bart, man, we gotta have another show to dive more into all those examples. All right, so, Kim, I try to keep up. Bart, I love those stories. Eliminating miles less waste, less emissions, better oee. And as he’s starting to mention there at end, one things that we didn’t just call out is probably increase sales because study after study show that folks across generations will spend more or more and more, spending more on brands that are making real, driving real sustainability gains, and you’re driving that stickiness, that brand appreciation and brand love. That’s not the word I’m looking for. But, Kim, I think you know what I’m talking about. What you hear in those examples, Bart.

Kim Reuter [00:46:39]:

Just shared, I heard a lot. I think the biggest one that I heard was really about collaborating, corporate collaboration and collaborating across all of the silos in a company to make this successful. And sadly, I have a good example of where this wasn’t done. You know, we do everything to source a green product, bring it in green. Big CO2 initiative around this particular product for a retailer. Super excited. Everybody’s jazz. We’re measuring it, and then all of a sudden, the merchant team decides that to really make the consumer happy, we’re going to overnight airfreight for free every package.

Kim Reuter [00:47:19]:

So, well, all that carbon neutral and all that work we did to make this a green product just completely went out the window. And then the consumer also kind of sniffed it out because the customer was like, well, I thought this was a green product and you’re going to overnight air it. To me, you know, all of the CO2 savings is basically gone when you did that. So you got to collaborate and you got to make sure everybody understands the initiative and what we’re doing to reach it.

Scott W. Luton [00:47:44]:

Well said. And that communication, the emphasis, what’s old is new. Again, we got to be able to communicate the why and communicate the how, and again, empower our teams to go out and manage this change, which, because we’re changing how business is done for all the right reasons. All right, so we got so little time, so many other questions. But again, folks, Bart and Paul will welcome your conversations. Let’s make sure folks know how to connect with y’all. Paul and Bart. Paul, let’s start with you.

Scott W. Luton [00:48:13]:

How can folks connect with you and all of your wonderful stories and your passion for what you do?

Paul Delbar [00:48:18]:

The easiest way to connect to me is at LinkedIn. You can find me at Paul Delbar, which is very straightforward. We do have an email address, greenplaningp.com. if you have more specific technical questions, we’re gonna also share the link to an ebook we created that gives a little bit more detail and more stories if you like them, to read to the kids at night. I just want to end with one. To quote the famous frog who says, it’s not easy being green. It actually is easy being green. You need to get started now.

Paul Delbar [00:48:51]:

And if you have any need for pointers, we’re more than happy to help you there.

Scott W. Luton [00:48:56]:

Oh, I love that. Paul, we’re quoting Kermit the frog here today. And hey, we all need these Sherpas, right? Clearly, OMP is doing it. They’re helping organizations do it with outcomes, helping helping their teams navigate through the change in how business is done, which consumers, investors, employees are demanding and meeting that imperative. So love that, Paul. Bart, how can folks connect with you, my friend?

Bart Verbruggen [00:49:22]:

Yeah, I got just a question running in my head to frock. Is it born green or does it get green?

Scott W. Luton [00:49:31]:

That’s a great question. I have no, I’m a big muppet enthusiast. I don’t know to answer that question.

Bart Verbruggen [00:49:35]:

Me neither. So yeah, folks can reach out through LinkedIn or indeed the green planning or just my namep.com. and I’m always looking forward to have chats on how we can make this more applicable in the industry and what companies are doing and exchange some experience, some thoughts, because we are also looking at how do companies apply this? How can supply chain planning even further improve the sustainability metrics and help companies in reaching their targets? So, always interested to have a chat.

Scott W. Luton [00:50:03]:

Love that. Check, check that you’re one click away from connecting with these leaders that are helping organizations drive good change. Needed change out there. So we covered a lot of ground. And as Paul mentioned, we need four more hours, especially all the stories and outcomes our guests and their teams are really driving.

Scott W. Luton [00:50:28]:

But what was one clear cut, key takeaway that our audience has got to leave here with?

Kim Reuter [00:50:33]:

The one is just do it. You can do it. You can start with the waste that exists in your supply chain today that will automatically make you greener and more sustainable. Just start. You don’t need to wait until you have all the answers.

Scott W. Luton [00:50:47]:

That’s right, Kim. I love that. Get the work today. Massive opportunities and there’s so much demand. It’s only going to get bigger and expectation even more than the man. So a lot of good stuff there. We dropped the link to that guide, y’all. Check it out.

Scott W. Luton [00:51:03]:

You’re one click away from doing that. The CSO guide to green planning. You’ll learn more about what Paul and Bart have been talking about here today. Hey, Paul, just a quick heads up. It’s halftime. Ukraine and Belgium, they’re tied at zero. So I know that you are probably looking at down your end as well, but they are tied at zero. Hey folks, connect with Paul Delbar and Bart Verbruggen, both with OMP.

Scott W. Luton [00:51:27]:

Thanks so much for both of you all being here, folks. Connect with them. Check out that resource. Most importantly, I’d say, hey, do what Kim said, get started. Let’s take action. Let’s start driving them those meaningful dialogue with trust that will lead to lead to real action and answering the sustainability imperative. But Kim, always a pleasure. Knockout shows with you.

Scott W. Luton [00:51:48]:

Thanks for being here.

Kim Reuter [00:51:49]:

Love being here. Thank you.

Scott W. Luton [00:51:51]:

Thanks to Paul and Bart with OMP. Thanks to all the folks that tuned in and we’ll wrap with this, folks. As Ken mentioned, take action. Take one thing, one thing that Paul and Bart dropped here on us here today. The brilliance they brought and put it into action. Deeds, not words. Don’t fall. What would Paul say? The supply chain sweet talk. Don’t fall for that. We have enough lip service. Leadership we got take action. Our teams are demanding. And all of that said on behalf of the entire team here at Supply Chain Now, Scott Luton challenging you to do good. Give forward, be the change that’s needed and we’ll see you next time right back here at Supply Chain Now. Thanks, everybody.

Narrator [00:52:28]:

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at supplychainnow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts, us and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.