If we are all agreed that Supply Chain is absolutely critical in driving the corporation’s direction, strategically and operationally – what role does the supply chain play in ensuring that the organisation continues to thrive under all conditions?
We would say that building a competitive, sustainable supply chain is the best way to deliver this, but what does that really mean and how would we do that?
Here are the 5 key questions that need to be asked and answered by the corporation regarding building a competitive sustainable supply chain.
- “What does building a competitive sustainable supply chain really mean?”
Supply chain sustainability is a business issue affecting an organization’s supply chain (including logistics network) in terms of environmental impact, risk, and waste costs. There is a growing need for integrating environmentally sound choices into supply–chain management.(Wikipedia)
- “How do we become more aware of issues affecting supply chain sustainability like environmental issues, risks (of all types including disruption) and waste?”
We need to understand our supply chain’s environmental impact (e.g. carbon foot print), risks (including vulnerabilities to disruption) and waste. For instance, these could be areas such as, energy (if we are dependent upon fossil fuels) and a competitor has already moved to battery powered, wind or solar powered facilities, their costs will be substantially lower than ours. How will we compete? Isn’t it already in our best interests to be seeking alternative energy sources as a way to reduce risk and potentially drive a far more cost competitive supply chain?
This thinking is not new. Multinational companies – Du Pont, in the early 90’s, made their own mission the reduction of CFC (chloro fluoro carbon) emissions to 0 by 2000. You may recall that CFC’s caused the hole in the ozone layer. They were successful in their mission. Similarly, Proctor and Gamble made it their mission to make the Earth a greener place to live in by requiring suppliers to follow their lead and be more caring of the planet.
We need to seek expert advice and have an audit undertaken, to identify environmental impact, risks.(including vulnerabilities to disruption) and waste. This advice needs to also include, understanding relative to each cross functional activity and area in our supply chain our readiness to be disrupted and the likelihood of being disrupted.
- “How do we produce more sustainable products?”
Isn’t this simply a matter of contiguity? If we are continuously striving for a sustainable supply chain, don’t we simply need to be looking for greater sustainability in the products we are making, moving, storing, distributing and selling?
There are many examples of this around and sometimes they are not even presented as examples of driving greater sustainability but that’s one of the initial drivers and outcomes! One good example is how cleaning companies have found ways of introducing sustainability in their product lines and at the same time, turn it into a marketing platform. Another good example of the impact of this question is how detergents these days are now more concentrated versions of formulas that have been around for several years. By making detergents more concentrated, there is a reduction in the total weight of a product,(inc in density) because we are not moving water or even air. This means the moving task is reduced by moving more dense products, leading to a reduction of a manufacturer’s total fuel consumption.
- “Are we ready to appoint our very own internal leader to drive greater sustainability into our Supply Chain?”
Most initiatives that take the organisation forward, need a leader, who is tasked with the job to specially focus on the area that needs improvement. Remember the days of continuous improvement, or lean processes, or six sigma? Is it time to appoint our very own internal leader to ‘hold the torch for improved sustainability’—and potentially integrate greater levels of sustainability into corporate culture.
- “How do we instill sustainability in our suppliers?”
How do our suppliers even know we care about sustainability in our supply chains if we never speak about it internally, don’t have it in our contracts, haven’t ever discussed it with them and don’t measure it?
So, the process goes like this, we run an audit, we determine where the organisation is most vulnerable to environmental damage or factors, risk (inc disruption) and waste.
We select the greatest value, highest ease initiatives, these are the ones that with least effort generate the greatest results. We set up a project, Appoint a PM and team, set targets, and governance. And get going!
We engage the suppliers as and if necessary however our initial focus is cleaning up our own backyards as a priority before we try to tell anyone else what to do.
Our suppliers will soon get the idea of what’s acceptable and what’s not! How does one even know that they are not already ahead of us if we haven’t bothered to ask?
Last words from Lisa:
I admit that when I was a supply chain manager and operative, I often thought that driving greater sustainability was simply driving more cost into my supply chain and that was the last thing I wanted. This was certainly the case once upon a time. Sustainability was seen as a luxury that only a few could afford but it’s not now. I see driving greater sustainability into our supply chains particularly when it comes to energy sources, distribution, and water sources, as an imperative for supply chain competitiveness and survival in a rapidly disrupting and changing world.
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