Leather Value Chain Continuity is a Choice

Hans van Haarst, CEO Royal Smit & Zoon

Urban myth has it that if you put a frog in a pot of boiling water, it will instantly jump out. But if you put it in a pot of pleasantly tepid water and gradually heat it, the frog will remain in the water until it boils to death. This metaphor describes the failure to act against a situation that will increase until reaching catastrophic proportions.

There are several circumstances in the leather value chain which have a parallel with the above metaphor: tightening legislation and regulation, changing end-consumer preferences, societal demands for circularity and all aspects of ESG, changing supply chains due to geopolitical and macro-economic circumstances, and so on. Even though there are many excellent initiatives along our supply chain, change, and adaptation, in general, are too slow and too little.

The social benefits of innovation

The argument which is often used is “cost” or – better – “too high price” of a certain chemical, process, or procedure. In most of these arguments, one forgets to look at the total societal benefits of innovation or change in the chain and just focuses on the cost – or price – at the individuals’ part of the value chain. I recognize that it is not easy to take such a broad (societal) perspective and that redistribution of profit and margin along the value chain is needed to facilitate change. But in the meantime, the pot of water is heating up…

Is compliance an issue?

“Compliance is still a competitive disadvantage” is a message I often use during speaking opportunities. How come we accept measuring with two measures and products without proper certifications and specifications still make it into the end consumer products? How come those certain products are only allowed in the chain with full life cycle analysis and others seem to go through without too many questions asked?

Mostly, the answer is quite simple: it is cheaper from one’s perspective, easier to look in the other direction, and pass the problem to the next stakeholder in the value chain. Moreover, the high level of fragmentation of our industry at all stages certainly does not help in this respect, and consolidation into a modern, transparent, and efficient system would mean a tremendous leap forward.

Change is key

I urge you to embrace change in 2023, seek collaboration with others in the value chain, and ask “how it can be done, together” instead of spending time, money, and effort on resisting change. We can influence the future and destiny of our value chain, there are options and there always are choices to be made. 

 Make the right choice, and don’t let us collectively be the frog in the boiling water.