As supply chain director at manufacturer and importer of tiles and building products Pilkington’s Tiles Group, the word uppermost in Warren Dow’s mind is sustainability.
”Sustainability questions are increasingly being asked by our clients,” he says. ”They and their customers want to see more sustainable products, and the question is how we drive that into the market place and at the same time, meet the cost challenges.
”We’ve worked closely with emerging markets for several years to achieve the optimum lowest cost of ownership as opposed to lowest buying price, and this has led us into supply markets such as China, Vietnam, Malaysia and India.
”But at the same time, we have to ensure we work with companies that meet our ethical and environmental standards.” This implies a degree of negotiation or education with clients.
”We try to do everything in the best manner,” says Dow. ”Clients say: “You are shipping product 10,000 miles. There must be a sustainable alternative.” We would argue that our sourcing is more sustainable than if we sourced from, say, mainland Europe. Sea freight has a much lower carbon footprint than road or air and when product reaches the UK, it is moved by rail from Southampton to Manchester, so in that whole 10,000 miles there are only 30 miles of road transport. That”s very sustainable.”
The company’s UK ceramics factory is now running at full capacity, giving the lie to the canard that UK manufacturing is not cost-effective. Dow says that Pilkington”s has changed the way products are brought to market, driving efficiencies in the factory. This in turn allows better recovery of overheads and decisions to be made on marginal costs of production.
”Clients are getting much more interested in UK manufacturing because it answers some sustainability issues,” he adds.
With natural stone products there are other issues. Clearly, you can only source from a location where the material exists.
”But we have opportunities to educate clients that the material specification for a development need not be inflexible,” adds Dow. ”Clients are more open to suggestions for alternative materials. For example, they may be prepared to take marble from Spain rather than India despite the cost disadvantage, if that ticks their environmental boxes.” Despite this, Dow notices that many contracts that try to specify materials generically are not generic in practice.
”Sustainability is high on our agenda but so are ethical requirements,” he says. ”As a supplier to blue chip companies as well as a brand leader in our own right, we have to protect their reputations and our own but we also have an obligation to ensure we are carrying out our own business in an ethical way.”
These things are rarely straightforward. Pilkington”s works closely with organisations such as Business Trading Ethically but doing the right thing is complicated. Dow cites the Indian quarrying industry, which is often highly seasonal (the quarries flood during the monsoon) and involves entire families leaving their fields to work in quarries. Visible or invisible, this implies a lot of child labour.
”We can try to improve health and safety standards for children but eliminating child labour may not be culturally possible. In many emerging market supply chains, it is difficult to get good visibility.”
Pilkington’s will only work with selected supply partners and invests a lot of time in evaluation, investigation and monitoring.
”We use our own people, auditing first tier suppliers, but we recognise we haven”t always got the local knowledge to know what” going on beneath the surface, or away from our inspections,” says Dow. ”It”s like the old joke that the Queen thinks the world smells of fresh paint. So we employ a series of individuals to look at the second tier, get to know the factories, work in partnership with them and build sustainable relationships and most importantly, trust.
”Trust and mutual understanding are critical. It can’t be a case of imposing British regulations. We have to ensure local regulations are observed and where we need further improvement, ensure this is done in a managed way that benefits individuals and the local economy. You can”t just walk away from the only employer in an area as the effect on the local economy and the villagers who depend on our support would be devastating.
”So we take representatives from our supply partners to the UK to visit our marketplaces. They can see what our customers’ requirements are and then understand why we ask for improvements,” he adds. ”But it’s a long journey with few quick wins.”
Warren”s supply chain career started in the off-shore oil industry, and became procurement manager with Brintel Helicopters, out of Aberdeen, for three years.
Warren then moved to BAe Systems Marine, at Barrow, where he was supply chain manager, responsible for major equipment procurements, on the ”Astute” submarine build.
He joined Pilkington”s Tiles Group as a sourcing manager in 2003, and has since been promoted to his current role of group supply chain director.