Real World Case Study: Sustainability as a Path to a Better Business Model

A special partner report on how PCH plans to progress the tech industry’s notion of sustainability, workforce relations and manufacturing in China.

This is the first article of a 4-part series that investigates the findings in the latest sustainability report from PCH. Produced in partnership with PCH – click here for the full report.

In a perfect world, ‘sustainability’ is weaved into the entire life cycle of the products we consume. It’s a method of production that considers everything from the energy source powering a manufacturing line to the communities a factory touches and eventually, the very the fabric which makes up our products. Socially conscious consumers attuned to these larger issues often ‘vote with their wallets’, but on the flip side of this equation are the brands and manufacturers producing goods at a global scale that hold the keys to the most impactful change. As a global community we have simply come to expect more from the products we own, and that’s a good thing.

One company pushing their sustainability agenda at a global level is PCH, a company providing sustainable product development and supply chain management services for a diverse range of businesses. As part of a larger series on sustainability, PSFK will be exploring this topic through the lens of the initiatives of PCH, specifically its manufacturing in China as detailed in its recently released sustainability report.

2-Liam.Casey-PCHLiam Casey – PCH

Since founding the company in 1996, Liam Casey has never separated sustainability from the bottom line, seeing the health of both communities and environments where production takes place as inextricably linked to profit margin:

“Sustainability at PCH is about committing to investing in and developing not only the balance sheet of our company, but the society and environment in which we operate as well. We believe that profit and sustainability go hand-in-hand; but beyond that, we believe it is the right thing to do. When your people, the environment in which you operate, and your communities do well, your business will prosper.”

At PCH, better business means a commitment to sustainability, but it is also a commitment fraught with its own unique challenges including difficulties around employee retention (associated with a labor shortage in Southern China) and environmental issues such as suppliers not managing materials and processes as safely as the company requires. Liam elaborates:

“Our company purpose used as a guide is: “developing partnership and delivering peace of mind.” We constantly balance the needs of our customers with those of our suppliers. In maintaining this balance, we face many sustainability challenges, notably those related to production ramp cycles, reliance on temporary dispatch workers and the short-term nature of product lifecycles. While our own direct operations are not energy intensive, one of our main challenges is monitoring and optimizing manufacturing processes to improve the efficiency of our suppliers. PCH is unique in that we manage almost every step of the supply chain, which brings a distinct opportunity and responsibility to address these challenges the best way we can.”

3-PCH_245Libi Tan – PCH

On the environmental side, PCH is building out suppliers’ capacity to process dangerous chemicals and materials safely as well as working with designers earlier in the production cycle to eliminate these harmful substances from product lines altogether. The company is beginning to see progress, but there are issues that simply cannot be fixed overnight. However, despite these perplexing challenges, PCH views itself as being in a unique position to have a positive effect on the communities where they operate. Liam further explains:

“We are in an influential position to address the sustainability challenges faced across our supply chain. But we are in no means perfect and we face obstacles. Our customers, investors, employees and partners trust that we endeavor to do the right thing at every stage of our business.”

When it comes to sustainability, there is often a gap between intention and reality. PCH is first to admit that ‘sustainability’, particularly in China, is not easy and there are still many tough questions to be answered. Furthermore, it doesn’t have answers to all these questions just yet, only learnings to share from experience. Alan Cuddihy Head of Sustainability, comments:

“Our unique vantage point helps us to understand and tackle the complex issues faced in any global supply network, and the company is committed to finding progressive ways to integrate sustainability into daily operations. We have learned a lot over the years on the ground and in the factories, but of course we don’t have all the answers. PCH bridges the design and manufacturing bases to bring people together and drive progress.”

4-PCH_032Wei Zhou / Xiaomei Hu / Hedong Zhang – PCH

As they work towards meeting these evolving consumer and producer demands, PCH applies two key criteria to its sustainability programs. First is that projects must be a core competency of the business and second, they must add value to the business. Through its social and environmental initiatives the company strives to continually measure and improve its performance. For PCH, the biggest impact lies in the early stages of a product, where it is able to collaborate with factories and clients in the design phase so that it may minimize negative social, economic and environmental impacts.

The value-add component to implementing these sustainable practices can offer its own form of competitive advantage. It is also essential to securing the buy-in of suppliers, employees and clients, as well as managing the expectations of all stakeholders. Alan Cuddihy comments:

“We are essentially removing waste from the supply base. That can be in the form of reduced energy, materials, water or processing cycle times. This saves cost and makes us more competitive. Clients and consumers have ever-growing expectations and do not tolerate harmful, wasteful processes and materials. Consumers want transparency, and PCH acts as our clients’ interface to their supply chain.”

5-Image02_AboutPCH PCH

With years of operational experience in China under its belt and a firm commitment towards sustainable practices, PCH’s initiatives are gaining traction amongst suppliers, producers, employees and shareholders alike. Over the next few weeks we’ll explore in detail how these principles manifest in the supply chain and workforce to help make better business. Finally, a thought from Liam on the future of sustainability at PCH.

“To be a truly sustainable company, we work to integrate sustainability practices across all facets of the supply chain; our greatest social and environmental impact is in China where we operate our supplier network, but we see great opportunity in incorporating sustainable practices in product design. This will eliminate much of the risk that currently arises at the manufacturing stage. With this in mind, we are working with our partners to understand and establish those best practices. “

This is the first article of a 4-part series that investigates the findings in the latest sustainability report from PCH. Produced in partnership with PCH – click here for the full report.

Images – Gareth Brown

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