How One CEO Finds Competitive Advantage Through Sustainability

Many U.S manufacturers struggle to balance sustainability and the desire to make products at home with the need to reduce costs and boost their margins.

Footwear manufacturer Okabashi has sold more than 35 million pairs of sandals since 1984 and has annual revenues of more than $20 million per year. Sara Irvani, who took over the role as CEO in April, told Chief Executive that keeping jobs in the U.S. and operating with an eco-conscious and responsible mission also can be good for growth.

“Sustainable, eco-conscious manufacturing is not only about a ‘feel good’ or CSR, it is about not wasting,” says Irvani. Okabashi has grown its web sales by 500% in recent months by not only promoting its sustainability efforts, but in recycling its own products to reuse materials and reduce costs. Irvani says there are no large trash containers at the company’s plant with nearly all excess materials now put back into the process.

While many sandal manufacturers make ethylene-vinyl acetate shoes that are non-recyclable, Okabashi worked with its U.S. suppliers to create an innovative soy-based material that the company could easily regrind and reuse. Excess materials from starting up the injection molding machines and shoes that don’t meet quality control are often repurposed into up to 20% of shoes that hit the market.

Irvani says an added bonus was they found that shoes with recycled materials performed better than those with 100% virgin material. “Our sustainability practices are paying for themselves in the short- and long-run,” Irvani said. “If we outsourced our manufacturing and were a brand that only bought shoes from the cheapest global source, I could see how sustainability would factor less in the decision making.”

“Our sustainability practices are paying for themselves in the short- and long-run.”

Okabashi also has realized benefits by keeping production close to home to more quickly meet the needs of the U.S. market. In one instance, Irvani said the company was able to deliver a 30,000-pair order for a supplier in only three weeks, something that would not have been possible with an Asian supplier. Okabashi’s Georgia facility offers fast access to the logistics hub of Atlanta and enables the company to be more responsive for the growing number of buyers who demand more real-time reaction to market trends.

Irvani said manufacturing management decisions that have a long-term view often tend to be more responsible in terms of the environment. She said the fact that Okabashi has operated in a company-owned factory for 30 years and will be there indefinitely gives it a vested interest in long-term sustainability. “We can’t afford to waste or to harm our surroundings…The combination of consumer appreciation and real cost savings means that eco-conscious manufacturing is a no-brainer for us,” Irvani says.

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Craig Guillot
Craig Guillot is a business writer based in New Orleans, La. His work has appeared in Wall Street Journal, Entrepreneur, CNNMoney.com and CNBC.com. You can read more about his work at www.craigdguillot.com.

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