Sustainability is a hot topic in supply chain management, with more companies making efforts to reduce their carbon footprint every day. The tire manufacturing company Michelin is the latest brand looking to go green. Leaders of the business have made public their disdain for the environmental impact of current rubber acquisition practices. Michelin vowed that its supply chain will lead the change.
Michelin's Role in Tire Production
According to the company's North American website, the brand brings in a revenue of $10.76 billion a year, employing 22,000 workers across 19 plants. Consumers can find just about any type of tire they're looking for through Michelin. The organization sells tires for anything from bikes and cars to airplanes and farm equipment.
That much production requires quite a bit of rubber. In fact, according to Public Radio International, Michelin is one of the largest purchasers of raw rubber in the world. While the brand doesn't do the actual harvesting of rubber, it indirectly supports the groups that do, which links Michelin to highly controversial environmental issues.
The Impact of Extracting Natural Rubber
The process involved in manufacturing tires starts well before Michelin's plants take over. Natural rubber must first be extracted from Hevea brasiliensis plants, referred to as rubber trees. According to the Food and Agricultural Organization, the harvesting method can be done in a way that allows the tree to continue growing. Called tapping, this strategy requires individuals to make a cut in the tree, being careful not to damage the cambium, the tree layer responsible for producing wood and bark. The latex sap drains out and is collected in a bucket.
However, this sustainable practice is offset by the deforestation of other plant species to make room for rubber trees. According to 2015 research from the University of East Anglia, to meet the growing demand for tires, raw rubber suppliers will have to develop more than 21 million acres of Hevea brasiliensis tree plantations in Southeast Asia by 2024. This requires significant deforestation which has consequences for native plants and animals.
"The tire industry consumes 70 percent of all natural rubber grown, and rising demand for vehicle and airplane tires is behind the recent expansion of plantations," said lead researcher Eleanor Warren-Thomas. "The impact of this is a loss of tropical biodiversity."
The main impacted areas include Sundaland, the Philippines, Wallacea and Indo-Burma. Water birds, banteng, deer and primates are just a few of the animals facing extinction from this practice. Meanwhile, destruction of trees also causes conflict in these areas as many locals earn their livelihood by harvesting products, such as nuts, from the trees getting chopped down.
It's not just the forest and those who call it home that suffer from the rising demand for rubber. Those who clear the trees often burn them, which releases greenhouse gases like carbon dioxide into the air. Speaking with PRI, Etelle Higonnet of the advocacy group Waxman Strategies said the impact is substantial.
"For 26 days in a row, the fires in Indonesia released greenhouse gasses that outstripped those of the US economy," said Higonnet. "It was just an incredibly serious climate change catastrophe."
In an effort to curb these consequences, study leaders have urged companies like Michelin to make changes in their supply chains. Michelin is answering that request.
Michelin Looks to Adjust Supply Chain Practices
According to the World Wildlife Fund for Nature, Michelin responded to pleas from environmentalists by announcing a zero deforestation policy, and companies aiming to be supply chain partners with the brand must comply. Specifically, Michelin pledged to abide by all forest protection laws. It will also identify and protect areas of high conservation value and high carbon stock.
Michelin's website said the brand also aims to respect inhabitants of Southeast Asia by improving working conditions and encouraging peaceful resolutions to land ownership conflicts. Efforts in this endeavor include combating corruption and starting conversations between local and outside stakeholders.
The company bolstered sustainability efforts in more than just natural rubber procurement. It also plans to comply with chemical use rules during production in processing.
Michelin's 2016 Sustainable Nature Rubber Policy said it will achieve this in part by increasing traceability. The tire company plans to map out the supply chain to highlight social and environmental risks. This way, Michelin can ensure tier two suppliers and beyond adhere to its policies. Meanwhile, those in supply chain management will promote transparency with more effective communication, third-party verification and stakeholder investment.
Leveraging Change in the Supply Chain
Major changes, such as reconstructing natural rubber acquisition practices, require adjustments in the supply chain to achieve alignment. As Michelin explained, it plans to increase transparency and communication with suppliers and other stakeholders. The tire brand will need the appropriate tools to reach these new goals.
Automated data collection, particularly with mobility solutions, is a great place to start. Companies revamping their supply chain don't want productivity to suffer in light of these disruptions. RFgen's off-network mobility solutions can streamline processes, eliminate the need for paper-based workflows and improve accuracy among workers in the field.
With these mobile devices, employees can update inventory levels right from the job site and access data in real time. Having new procedures may take some getting used to, but having access to step-by-step validation in mobile form ensures workers follow appropriate workflows and safety procedures, limiting potentially costly mistakes and injuries.