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Bite-size Case Study

Ariel Gel: harnessing sustainability for competitive advantage

Published on August 30, 2018 Originally recorded 2010   2 min
0:04
Let's look at some strategies for managing supply chains in a sustainable way. I think the first thing we've got to consider is risk mitigation. We really have got to look through the whole of our supply chains, to see where we are at business risk. Here, things like reputational risk, are the most important. You may well find that you're doing good things in your supply chain, only to find that some of your upstream suppliers are doing operations in an unsustainable way, and this may have an impact on your brand reputation. The next level is cost-minimisation. There are now thousands of examples, where looking through the lens of sustainability, we can take cost out of our operations.
0:45
Building on risk and cost, is of course then competitive advantage. How can we look at supply chains in a different way, to give us competitive advantage?
0:55
For some suppliers, it may mean a revolution in the type of products that they're going to bring to market. For example, Ariel, the traditional way of buying it was in packet soap. A huge great box, which is the marketeer's dream, sat on the shelf, everybody could see it, you'd pick it up and take it away. Of course, today it's different. Ariel Gel. It's taken them three years to develop this product, 5 million trial formulations. That's a lot of R & D, just to get a product that you can now wash at 15 degrees centigrade, that is concentrated, it comes in a recyclable pack. Because this is what's selling these products. It's not about how cheap it is, is not even how white your products are, they're marketing purely on an environmental standpoint. But again from supply chain, let's just have a look at this. The product is concentrated, therefore it uses less water - that's a saving to the company. It's in a much smaller pack, so the material is going to cost less. The transport economics are much better for shipping this smaller product around. So there's a number of benefits. The company can charge a nice margin, and they can have savings in supply chain. But more importantly, they're meeting what the customer wants.
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Ariel Gel: harnessing sustainability for competitive advantage

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