Partnering with our logistics service providers on sustainability is critical. We rely on logistics service providers for all of our transportation and much of our distribution center operations and work with them to drive efficiency improvements and innovations to make our supply chain more sustainable.
Since 2012, we have been making significant strides in elevating sustainability as a priority within the air and ocean freight logistics industries.
Our Global Operations and Logistics team has developed the Supply Chain Sustainability Index (SCSI), which sets clear and consistent minimum sustainability requirements for logistics service providers who do business with us and drives innovation discussions.
The SCSI takes a holistic evaluation approach and rates each carrier on environment, human resources, safety and community standards. We leveraged the approach we took with our Manufacturing Index, which evaluates cost, quality, on-time delivery and sustainability of contract manufacturers equally. This means, we now evaluate our logistics service providers’ sustainability practices alongside cost, service and risk.
We’re also leveraging the SCSI to manage providers to improve their sustainability performance through recognition, partnership opportunities and volume allocation. In September 2017, we gave out our first ever Supply Chain Sustainability Index awards to the highest rated air freight provider and ocean freight provider. As part of the award process, those providers participated in sessions with the Global Operations and Logistics team to identify collaboration and innovation opportunities.
In FY17, the SCSI was deployed with our inbound air freight and ocean freight providers. In FY18, we began a phased deployment for outbound freight providers (road freight, small parcel), as well as with third-party distribution partners. Our goal is that the SCSI covers all logistics services by May 2019.
As the use of the SCSI continues, we’ll develop more stringent minimum requirements for sustainability to drive continuous improvement and innovation with providers.