Whether it realizes it or not, Wal-Mart has triggered the need for a transformation in how we collect, store and communicate supply chain data.
With the help of a Sustainability Index Consortium, Wal-Mart will use lifecycle analysis to rank every product it sells for sustainability based on manufacturing, distribution and transportation processes. In addition to using data on greenhouse gas emissions, solid waste and water use, the sustainable product index will also attempt to measure social impact using intangibles like “social compliance.” (For details about the Wal-Mart mandate, read Wal-Mart’s Green Mandate)
Wal-Mart's ultimate intent, which it says will come to fruition in five years, is to create a product labeling system that will allow consumers to make purchase decisions based on sustainability.
John Fleming, chief merchandising officer for Wal-Mart, outlines a scenario in which consumers use hand-held devices — smartphones or PDAs, for example — to instantly download a product's sustainability information. Fleming says a label on a cotton shirt could reveal the field where the cotton came from, how much cotton was used to make the shirt, how much energy went into transporting the shirt and maybe even a picture of the farmer who raised the cotton. He compares the index to nutrition labels.
For Fleming's vision to become reality, we need to collect reliable data from the ever-changing supply chains associated with Wal-Mart's 100,000 worldwide suppliers. Data collection must be continuous, supply chains must be traceable and entirely transparent, and labels must store and communicate an almost incomprehensible amount of information.
Recent research led by Edgar Blanco, a scientist at the MIT Center for Transportation and Logistics, illustrates the inherent difficulty in executing this process. According to Blanco, “Even a simple product like a banana has a complex supply chain, hundreds of farms with different agricultural practices, a variety of trucks and ocean vessels, multiple logistics flows and distances, varying time spent at refrigerated storage and multiple sources of electricity at stores and warehouses.” If a shipment of bananas arrives at a port in the Gulf of Mexico, is stored in a regional warehouse and is then shipped in refrigerated trucks to final destinations throughout the U.S., a banana sold in Minneapolis would have a 75% larger carbon footprint than a banana sold in New Orleans, the research concludes. In Wal-Mart terms, a banana at a Minneapolis store would have a lower sustainability rating than a banana in a New Orleans store.
Putting that data on a label is an entirely different challenge, and MIT researchers have done work in that area, too. Recently, they unveiled a prototype replacement for a barcode called a “bokode.” It measures only one-tenth of an inch but can contain thousands of times more information than a barcode. It's like putting a world of data into a grain of sand.
In the lab, bokodes were read at a distance of 12 feet, but researchers say they could theoretically be read from 60 feet away. And, they can be read with a run-of-the-mill digital camera, even the kind built into cell phones. MIT researchers say consumers could download a food product's entire nutritional content by simply pointing an ordinary camera at an item's bokode.
That's the kind of advanced technology we need to bring Fleming's cotton-shirt scenario to life. But real-world implementation often carries a hefty price tag. Each bokode, for example, requires a built-in LED light source and lens, and initial estimates put the cost of a single bokode at $5. So, behind all the technology hurdles lurks another question: How much are consumers willing to pay to hold the world in their hands?