The Problem

Sustainable business practicesincluding green business, environmental responsibility, minimal impact on global or local environment, and the use of renewable clean energy sourceshave become more than just a good idea in many industries. History has taught us that non-sustainable business practicessuch as early settlers killing off bison for their hideslead to the rapid decline of an industry.

Tectona grandis, or teak wood, is a prizedand expensivematerial due to its elegance and durability. Teak is a tree native to the tropics in the Southeast Asian nations of Thailand, Burma, Malaysia, and Indonesia. Historically, it has been found only in the homes of wealthy and powerful families. A tree takes about 80 years to reach maturity and be ready to harvest. Even then, only the heart of the tree contains the best wood for building furniture. Given the length of time required to replenish a forest, it is critical for the teak furniture industry to use sustainable practices.

Most teak farms are independently owned, and they operate based on traditional practices rather than current knowledge about how to efficiently manage a forest. Historically, they have not been connected to the global supply chain. As a result, they might not understand the impact of their decisions on the overall industry. This situation, however, is beginning to change. Dipantara, a company engaged in Sustainable Community Forest Enterprise Management, works with the growers to emphasize the importance of maintaining their natural resources. Dipantara is particularly interested in teak.

In addition to the teak farms, several other parties are involved in this industry. First, there are independent, nonprofit organizations such as the Forestry Stewardship Council that promote the responsible management of the world's forests. FSC also provides industry certifications that a farm has pursued sustainable management practices. Second, European, U.S., and Australian timber regulations have been established to prevent companies from doing harm to the forests. Finally, customers want assurance that their purchase is not harming the global environment.

These sustainability issues create challenges along the supply chain from the retailer to the root (quite literally). They require a coordinated effort to develop and maintain a consistent sustainability effort.

The IT Solution

The Forestry Trust is an NGO that focuses on the entire supply chain ecosystem, where all needs must be considered for the industry as a whole to operate and exist sustainably. TFT identifies transparency as the key to establishing this sustainability. To support this level of communication and transparency, the NGO developed a set of tools called SURE Technology that provide its members with transparency dashboards, supply chain management, and product stories. SURE is designed to help growers and companies throughout the supply chain to plan, understand, and communicate.

TFT members use the SURE Technology system to balance the interests and requirements of several external stakeholders. The only way any company can meet the demands of its external stakeholders is to obtain information about the practices of the suppliers of their raw materials. The SURE supply chain management module maps companies' products all the way to the source to help product manufacturers ensure that their orders are the products of legal, responsible, sustainable harvesting and use of the forest.

The SURE Technology allows raw material providers (such as members of the Dipantara community forests in Java) to identify their social and environmental values and track their progress on adhering to those values through dashboards. This information is available to potential buyers, who require confirmation that the materials are provided in a manner that is consistent with their values.

The Results

Maisons du Monde is an environmentally focused home decoration retailer based in France. As a member of TFT, the firm works with Dipantara community farmers in Java, who supply the teak for some of their furniture. MdM has access to information on the forestry practices of the entire supply chain through its TFT membership and the SURE Technology tools that are part of that membership. The result is that more than 50% of MdM products are labeled with one or more industry certifications affirming that the product is not contributing to deforestation. Further, MdM sells more than 1100 products that carry the FSC logo that confirms that the products were manufactured by responsible sources and can be traced all the way to the tree stump.

How is this possible? The answer is the use of the industry supply chain system provided by TFT. The SURE Technology tools bring together all of the supply chain parties into a single platform to create a more transparent, environmentally friendly use of our natural resources.

Questions 1.Describe the role of information technology along the teak wood supply chain. 2.Is the SURE system a strategic information system for Maisons du Monde? Why or why not? 3.How would the Internet of Things help The Forestry Trust in its mission?