3 Reasons We Need to Bring Product Stewardship Back

Posted by Paul Leavoy on Fri, Mar 20, 2015 @ 12:43 PM

supplychainqualityOnce upon a time, product stewardship entered the corporate lexicon as a term that essentially asked producers to take responsibility for the complete lifecycle of their products, particularly from an environment, health and safety (EHS) perspective. But somewhere in the process, "product stewardship" got lost as an all-encompassing term describing how we approach the cradle-to-grave impacts of the things we generate. No longer should this be the case.

To be fair, the term “product stewardship” entered discourse before enterprise sustainability management and even holistic sustainability and sustainability reporting were a big part of corporate mandates. But at some point, product stewardship—which used to be simplified to something as basic as having consumers pay a container deposit for bottles, for example, in order for the manufacturer to facilitate re-use and recycling—became a stodgy, old term, lost somewhere in the wake of sustainability management and product lifecycle management (PLM).

But if we look at the term ‘stewardship,’ it covers all of the concepts and impacts associated with generating something and putting it out there in the world. In other words, it incorporates every impact and aspect one product will generate, not only from the time it has left the plant, but from the very inception of its planning and creation.

With that, let’s look at three reasons product stewardship as an idea is as (if not more) relevant today than it has ever been.

1. Consumers are more aware than ever of manufacturers’ end-to-end sustainability performance

Somewhere between the advent of the 24-hour news cycle, the exposure of information across the internet and mobile devices, and the traction and impact facilitated by social media, consumers became more aware than ever about how leading manufacturers performed, particularly when they failed. Negative events such as Apple’s Foxconn factory suicides to Rana Plaza factory collapse tuned people in virtually instantly to the negative impacts of a manufacturer’s EHS performance across its supply base. Consumers took action, but not just in traditional ways.

Individual buyers decried the abhorrent conditions frontline employees faced at these facilities and questioned the integrity of the products they used from an ethical perspective. And they did it on Twitter, Facebook, LinkedIn and other avenues that have immediate traction. And manufacturers noticed, and did damage control accordingly. For example, Apple committed to improved worker conditions across its Asian suppliers, and the Brands reliant on Rana factory textiles committed to reparations for impacted families and a re-evaluation of how they source their products.

While we can address these problems reactively or process-by-process, it is far more advisable to have a complete product stewardship program in place. This will ensure we identify and aggregate all relevant EHS and sustainability issues into design, procurement, marketing, etc. on a proactive basis.

2. Product stewardship is a big-picture approach

In recent years we have seen regulations call upon OEMs to better account for exactly where every individual part, product, or service behind their own products has actually come from. Take conflict minerals, for example. Suddenly, manufacturers of commonplace mobile devices, for example, have to account for exactly where the tungsten, tin, tantalum and gold (minerals all highly essential to the development of the devices they sell) actually came from, and whether these individual sites fueled ongoing militia conflicts in the Democratic Republic of Congo (DRC) and its nine adjacent nations. Conflict minerals is but one example. We’ve also seen legislation, particularly across North America and the European Union, pertaining to cotton, hardwood lumber, waste electrical and electronic equipment (WEEE), and so much more. The content of all of these requirements differs, yes, but the spirit and structure remains the same.

Manufacturers are being increasingly called upon to account for how their products are developed, not only within the four walls of their business, but across their supply chain and consumer base, in a cradle-to-grave kind of way. It’s no longer acceptable to abdicate responsibility for the impacts of a product after it has left the plant and entered the market. Instead, eternal lifecycle costs from a compliance, business, and brand perception standpoint need to be factored into the production equation.

Individual compliance requirements are increasingly pointing to the ‘spirit’ of a certain approach to manufacturing. Responding to emerging individual compliance requirements (which generally occurs on an ad hoc, reactive basis might be fine for the sake of meeting individual compliance requirements, but how does it serve our business? And from a strategic perspective, since all these new compliance requirements generally point to the same thing (e.g. robust visibility of supplier activity, materials acquisition, etc.), shouldn't we find internally driven and progressive best practices and process frameworks that address these common requirements before they are enforced? 

Between the ideas of product compliance, materials compliance, supplier management, and beyond, to some extent we’ve parsed the whole idea of product stewardship too much, since it tends to encapsulate much of holistic sustainability performance and we shouldn't view each of these elements of product stewardship as siloed aspects of performance. Which brings us to our next point: designing for sustainability.

3. Designing for sustainability helps us build better products and better ROI

When we design for sustainability, we face so few of the consequences of poorly executed product stewardship outlined above.

In an ideal world, we would take product stewardship outside of the realm of a reactive/compliance-based model and learn to actually design for sustainability in the long term from the very inception of the idea of a new product. From a planning perspective, when we know what materials need to be sourced, where they need to be sourced from, how and where they need to be manufactured, to how and where they need to be processed and delivered, then product stewardship as a reactionary exercise is eliminated.

And when we manage the negative impacts of product stewardship gone wrong, we don’t have to encounter the potentially staggering costs surrounding product recalls, brand damage, worker morale and productivity (internally and across the supply base), and sheer efficiency losses and compliance costs associated with all these problems.

Consider Ford’s move to design its F-150 with an aluminum frame. Up front, the pound-for-pound cost of aluminum against steel is nearly twofold, and the company also took a $1 billion hit to retrofit facilities to make the new truck. However, Ford likely saw the bigger picture. The result is a lighter (by about 700 pounds) and far more fuel-efficient vehicle (in addition to a lighter weight, Ford also gave the F-150 its new EcoBoost engine with enhanced fuel economy). And both of these factors align with Ford’s Blueprint for Sustainability, not to mention the fact the vehicle is upholstered with fabric made out of recycled plastic bottles. The new truck has significantly reduced environmental impact, has components that are easier to recycle and reuse, and in spite of the upfront costs, involves overall reduced lifecycle costs, improves brand perception by conforming to Ford’s sustainability mandate, and better prepares the company to proactively meet compliance-driven product stewardship requirements.

In the end, businesses shouldn’t react to isolated compliance requirements that ultimately lead to the same conclusion: that is, comprehensive product stewardship will foster better products, better customer relations, better brand image, and better profit. Thoughtful, strategic planning, rounded out by a solid and well-integrated product lifecycle management (PLM) system can overcome and ultimately anticipate emerging and forthcoming compliance requirements.

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Tags: Sustainability, Environment Health and Safety