The importance of sustainable supply chains in manufacturing
Global giants Google and WWF turned heads this June after announcing the details of their , a joint initiative which aims to tackle harmful emissions and waste across fashion industry supply chains. This will allow fashion brands to source raw materials and track their sustainability, providing them with greater transparency over the environmental impact of their supply chains.
The same issues with unsustainable supply chains can be felt across every industry. For decades, major corporations have outsourced their environmental impact to other companies, and in some cases, other countries. Supply chain emissions are up to – but until recently, a lack of transparency and accurate data prevented us from seeing the full picture.
Now the tide is starting to change. In the UK, we are seeing pressure being applied across the supply chain by a growing number of companies, both big and small, as they align their business strategies with the nation’s . This has led to a radical shakeup of the traditional tender process, with many companies now listing sustainability, including the use of renewable energy, as a prerequisite for doing business. Suppliers with a poor environmental performance now risk being struck off in favour of competitors with greener credentials.
Take Sainsburys, for example, who this year in a greener future for the whole business. As well as reducing its use of plastic packaging, this also includes ensuring that its suppliers are committed to reducing their carbon emissions. Consumers are now directly influenced by a company’s sustainability policies and are aware of how this impacts their commercial performance. According to , a third of consumers now choose to buy from brands who they believe are doing social or environmental good. The research also found that ‘sustainable brands grew 46% faster than the rest of the business and delivered 70% of its turnover growth.’
Customers are also increasingly willing to do their own research, with data playing a greater role in consumer decision-making. Apps such as provide consumers with more transparency into the brands they are engaging with, giving greater insight into the products they are buying and their carbon footprint. Many of these apps give brands a rating based on their corporate responsibility, including how carbon conscious they are.
We are in the midst of a revolution in how we work, with more and more businesses now putting sustainability at their core. Despite great progress in recent years, the urgency for increased transparency in supply chain sustainability has never been greater. As countries around the world continue to wrestle with the financial and social impact of Covid-19, supply chains are becoming increasingly fragile. Widespread disruption to manufacturing and logistics has seen many companies rush to reroute or find alternative sources, running the risk of partnering with the wrong suppliers. On-site audits are being cancelled due to travel restrictions and quarantine rules, and so sustainability standards are now at a risk of being compromised to meet new demand.
Companies must be proactive in their due diligence and mitigation strategies to ensure that any progress made so far has not been in vain. At the same time, they must encourage/enact change across their operations and accelerate progress towards a zero carbon economy.
Canoo Awards Manufacturing Contract to VDL Nedcar
Canoo, a trailblazing company in the electric vehicle (EVs) manufacturing industry, has officially announced owned and contract manufacturing plans that will ensure the company manages to deliver on its promise to consumers of production and delivery of vehicles in Q4, 2022.
During the company’s first Investor Relations Day, Chairman & CEO of Canoo, Tony Aquila, named VDL Nedcar as its contract manufacturing partner. VDL Nedcar, which I’m sure many of you will already have heard of, is the only independent Vehicle Contract Manufacturer in the Netherlands and has enjoyed fifty years of growth under owners, including Mitsubishi Motors and Volvo cars. According to the report, Nedcar will manufacture the Lifestyle Vehicle for the United States and European Union markets, while Canoo builds a US-based mega micro-factory.
"We conducted an exhaustive search, invested significant amounts of time and resources that span the globe, in our search for our Phase 1 contract manufacturer. VDL Nedcar is the right partner," said Tony Aquila, Investor, Chairman and CEO of Canoo, Inc. "They are the top trusted European manufacturer building high-quality products for leading OEMs, and they significantly outcompeted the other contenders. VDL is also independently owned by the van der Leegte family of entrepreneurs - which aligns with our commitment to support businesses that form the backbone of communities. This strategic partnership will enable us to deliver vehicles to market while we build our Phase 2 factory in Oklahoma. It also strongly positions us for geographic expansion in Europe and builds a lasting relationship with VDL Groep of companies. Our investment will help us scale quickly and fulfil our mission to bring affordable, purpose-built EVs to Everyone."
Canoo and VDL have already gotten to work on vehicle manufacturability and production planning so that Canoo can successfully lay the groundwork for its upcoming US manufacturing operations expansion, which will be completed in Oklahoma in 2022. The Nedcar facility currently expected to produce around 1000 units for both the US and European markets in 2022, with an additional 15000 targeted for the following year.
"Canoo's bold approach to designing and building electric vehicles makes them an ideal partner as we work together to shape the future of mobility," said John van Soerland, CEO of VDL Nedcar. "This partnership advances our strategic vision to provide a contract manufacturing solution and expand our expertise in the EV arena."
Currently, Canoo is entering its GAMMA phase of development and is on track to start production soon. The company intends and expects to launch its Lifestyle Vehicle in Q4 2022, closely followed by the Multi-Purpose Delivery Vehicle and Pickup Truck.
Watch this space.